SGMA suspends Eurotex

The Saipan Garment Manufacturers Association’s (SGMA’s) Board of Directors has unanimously voted to suspend Eurotex (Saipan), Inc. from its membership for violations of the SGMA Code of Conduct and for administrative sanction under the organization’s bylaws.

On Friday, the board suspended Eurotex under the SGMA Association and Committee Rules based upon its Compliance Committee’s recommendations. They cited non-compliance with the SGMA Code of Conduct, substantial and persuasive evidence of a willful disregard of the code, and prima facie evidence of non-compliance.

As a condition of membership, all SGMA member companies have adopted practices to improve and stabilize Saipan’s garment industry, to eradicate unfair trade practices, to work for the fair conditions of labor and employment, and to provide for the common welfare of its membership.

The Eurotex factory and management practices had been under Committee investigation since May of this year. At that time, reports were received of non-compliance from federal authorities as well. Eurotex was temporarily suspended for administrative matters by SGMA on Aug. 6,2000.

According to SGMA, the association’s priorities are to implement immediate steps to have the factory’s employees relocated to compliant SGMA member companies as allowed under newly-enacted Public Law 12-11, to assist in the recovery of any lost or unpaid wages entitled to the employees, to assist both local and federal authorities in any investigations, and assist buyers and retailers in relocating all remaining orders of the factory to qualified, compliant SGMA firms. The association also reaffirmed its commitment to work with the remaining SGMA member firms for compliance with all local and federal laws.

SGMA is comprised of 30 of Saipan’s 33 apparel companies. Since the SGMA Code of Conduct was adopted in December of 1998, four members have been suspended and are no longer affiliated with SGMA. Major U.S. mainland buyers report they adhere to corporate policy to not place orders with non-SGMA companies.

Eurotex (Saipan), Inc. petitioned for SGMA membership in 1998 after being incorporated in 1986. According to SGMA officials, the company is not an SGMA/OSHA Excellence 2000 partnership firm.

In its decision to suspend the company from membership, the SGMA Board of Directors also recommended that the local government institute adequate financial bonding and any other form of guarantee to safeguard against failure of domestic corporations.

“SGMA member firms are not immune from financial ruin. It is not just the small companies in Saipan that cannot withstand the economic downturn. The association has predicted, and we will see again, smaller companies unable to adjust to the competition, market demands and the expectations and costs of full compliance with the laws of enforcement offices,” the group said in a press release.