Gov. Pedro P. Tenorio on Friday signed into law the Omnibus Labor and Business Reform Act of 2000, saying this is a step to help the private sector at this time of economic difficulties while safeguarding the local interests.
“We must continue to balance the need to protect our local people and the need to revitalize our ailing economy,” he said in signing the Omnibus which now becomes Public Law 12-11.
“The businesses are crying out for assistance, and we have an obligation to explore ways to improve our economic climate, but at the same time to protect the needs of our local people,” added the governor.
But he prodded lawmakers to amend some provisions of the new law to avoid confusion on which government agency is responsible for issuing business license.
The measure under HB 12-39 drafted by the Legislature delegated that responsibility to the Department of Commerce, which is contrary to an existing law that states that the Department of Finance performs such function.
Sponsored by House Speaker Benigno R. Fitial, the new law came two weeks after both chambers hammered out a compromise version that included concerns by the Senate and the executive branch.
But its enactment took more than five months of public hearings and several meetings as well as revisions from the original proposal approved by the lower house.
PL 12-11 was the version reached by a bicameral conference formed by the House and the Senate last month following disagreement on some of the provisions.
Underscoring the importance the legislation in boosting the islands’ stagnant economy, a conference committee report also stressed the need to retain control over local labor and immigration.
“We feel that this compromise bill will provide for economic revitalization, encourage business development, protect the needs of our local people and is politically realistic,” stated the report.
Three major provisions were changed by the bicameral committee in response to concerns raised by the business sector.
From the initial requirement of 30 percent ratio of U.S. citizens in the managerial and supervisory positions in garment manufacturing firm, the committee agreed to lower it to 20 percent.
This is on top of the 20 percent ratio of locals compared with the nonresident workers of each company on the islands under existing law.
A “phase-in” period and “flexibility” will be implemented to ensure compliance with the new requirement that will take effect after 180 days.
The committee also removed a Senate proposal seeking to increase the cap on the number of guest workers in the apparel sector by allowing the island municipalities of Rota and Tinian to have additional 1,000 workers each for their own garment manufacturing industry.
This means that the cap will remain at 15,727 which is the figure put in place last year by the government.
The law also restricts transfer of workers in the garment sector to another industry until the completion of their pending employment contract.
On the flexibility put in place by lawmakers for businesses to meet the $100,000 security deposit requirement for new foreign investments, the Omnibus narrows options to two — either through cash or a bond.
“While the old requirement of $100,000 cash was counter-productive, we felt that certain additional safeguards should be put in place when an investor satisfies this requirement using a bond,” the committee said last month.
“By requiring that all bonds be of the sort acceptable for federal projects, and eliminating the use of letters of credit, we feel that the interests and safety of the public are protected,” it added.
The original version passed by the House had included repeal of laws deemed restrictive in doing business here, such as the hiring ban imposed on guest workers under Public Law 11-6, the three-year stay limit on nonresidents and the garment cap.
During its deliberation in the upper house, most of these proposals were axed in favor of giving flexibility instead to businesses amid concerns by the administration that the bill could affect ongoing labor and immigration reforms.
Noting that compromises were drawn up in enacting the legislation, lawmakers said that they feel that “passing it is the right thing to do, and that it will be for the benefit of us all.”
The Omnibus is one of key economic measures laid out by the House under Mr. Fitial’s leadership amid the prolonged crisis that has hit the CNMI since 1997.