Refine business reform proposal

The Senate Committee on Resources, Economic, Development and Program will amend HB 12-39 or the Omnibus Labor and Business Reform Act to fine-tune several provisions that its chair described as “problematic” following the first in a series of public hearings yesterday.

REDP chair, Senate Floor Leader Pete P. Reyes, said at the same time that the comprehensive measure will not create jobs for locals as it will provide only easier access for businesses to hire and retain nonresident workers.

Committee members also cited the need to address concerns raised on the legislation, underscoring the importance to reach a compromise on the issue while striking the delicate balance between the business sector and the community in general.

Government agencies, while expressing support for the bill offered by House Speaker Benigno R. Fitial due to the economic benefits, recommended changes to the language to clear intent of some of the provisions.

“We are going to take a look on the bill and some of the inputs that we have. It’s pretty clear that based on the testimonies that we have received, there seems to be major problems with the bill,” said Mr. Reyes.

Changes

Possible amendments will include clarification regarding transfer of business license in the garment manufacturing industry; the three-year stay limit; implementing guidelines required in the fair compensation law for resident workers; and restrictions on job categories, among other things.

For instance, Attorney General Herb D. Soll said the six-month mandatory exit period for alien workers at the end of the three-year stay on the island is too long that it could be cut to only 30 days.

Finance Sec. Lucy DLG Nielsen, in her written testimony, suggested that the Department of Labor and Immigration should be permitted to make quarterly check to garment factories to determine whether they comply with proposed requirement in the bill to employ U.S. citizens to comprise 30 percent of their management pool.

Andrew Clayton, DOLI legal counsel, provided a comprehensive analysis of each section of the bill, noting both the upside and downside of the proposal.

“The benefits of this bill are clearly economic,” he said in his testimony as he cited its positive contributions to doing business here as well as government revenues.

“The problems of this bill are also known. This bill would most likely see a return to the types of problems which were present before the reforms enacted in the past several years,” Mr. Clayton added.

“An increased number of nonresident workers in the CNMI would also strain current governmental resources allotted to dealing with the situation. It is unclear if the economic benefits outweigh the anticipated difficulties.”

Balance

Tinian Sen. Jose M. Dela Cruz, a member of the committee, emphasized that while it is important for the CNMI to attract investments, lawmakers will have to come up with measures beneficial to both the business sector and the community.

“If we all work together to strike that balance, if we can go one extra mile, we can do something,” he told the three-hour hearing that stretched up to lunch hour.

Sen. Ramon S. Guerrero from Saipan, on the other hand, urged business leaders to come to an agreement whether they support the bill as passed by the lower house or they want changes.

Senate Vice President Thomas P. Villagomez called for comprehensive review of the minimum wage as it applies to resident workers as the hearing tackled potential impact if the fair compensation act is repealed.

According to REDP chair, the repeal of that law is one aspect of the bill the committee needs to study. “If language in the law is difficult to enforce and there are no regulations, we can remove the requirement for regulations and just make it effective without regulations where there will be equal advantage for locals to compete for jobs,” he said.

Responding to criticisms that the Senate is holding up passage of the important legislation, Mr. Reyes stressed he wouldn’t want to risk a veto by the governor who has already expressed reservation on some of the provisions.

Acceptable

He said the committee may even have to breakdown the bill so that approval of the proposed reforms that are “absolutely necessary” will be expedited.

“I would like to see that the bill is clean and acceptable to the governor who is going to ultimately make the decision whether to sign it or not. It will be crazy to send a bill over to the governor when we know it would be unacceptable,” Mr. Reyes said.

“There are a lot of interests on this bill and a lot of people are misinformed that this bill will create jobs when it is not. It will perpetuate stay of nonresident workers. We need to clarify that. We have to stop politicizing this particular bill,” added the senator.

Reiterating that he is “pro-business,” he asked the lower house to act on a Senate bill scrapping the $100,000 security deposit imposed on foreign investments if it wants to meet its commitment to fast-track economic bills in the Legislature.

The bill, one of the first passed by senators, has been pending with the House since Feb. 3, but the Committee on Commerce and Tourism has begun review as it solicited comments from the private sector and government agencies.

The hearing on HB 12-39 continues today on Rota and on Monday on Tinian.