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Bill seeks orderly phase out for garment firms
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Posted on May 22 2006
A new bill was introduced in the House of Representatives to standardize the process for winding up garment manufacturing operations in the Commonwealth.
Rep. Jacinta Kaipat authored the bill in light of the 2005 expiration of the international textile quota system, which has caused a decline in local apparel production and factory downsizing or closures on the islands.
House Bill 15-131 seeks to ensure that closing garment manufacturers meet their tax or employee repatriation obligations before they remove assets from the islands.
Specifically, the measure would require factory owners to provide prior notice to workers before terminating or laying them off.
Terminated nonresident workers must also be repatriated and given due process in resolving outstanding labor complaints. In addition, the complaint process must be expedited.
In some cases, laid off garment employees would be permitted to transfer to another employer if suitable work is available. The guest workers would be allowed to transfer within a clearly defined period of time.
The bill maintains that its provisions should be adopted in addition to federal and other rights of terminated workers.
“We need to be proactive in handling the garment situation. Workers are being displaced and we must act to protect them and the Commonwealth. I feel confident that the Legislature will pass this bill,” Kaipat said.
Currently, there are 17 garment factories on Saipan—half the number in 1999.
Richard Pierce, the governor’s special assistant for trade relations, said Saipan garment exports, as well as user fee collections from the apparel industry, had decreased to levels of decade ago.
He reported that sales for March 2006 totaled only $37.3 million, with user fee collections netting only $1.382 million in revenue.
The March 2006 sales represented a 35-percent decrease from the $57.2 million sales in the same month last year.
