[*PG381]SOLVING WORKER ABUSE PROBLEMS IN THE NORTHERN MARIANA ISLANDS

Karen M. Smith*

Abstract:  The garment industry has long been criticized for treating workers poorly. Despite the attention that this problem has received in recent years, abuse continues to occur, even in a territory of the United States (U.S.), the Northern Mariana Islands. This Note considers two legislative solutions that have been considered in the United States Congress, applying to the territory (1) U.S. minimum wages laws, and (2) U.S. immigration laws, and argues that better control over immigration to the Northern Marianas may reduce the problem significantly.

Introduction

In recent years, interest in combating unfair labor practices has increased in the United States.1 For example, in response to its observations of labor in the People’s Republic of China, the Clinton Administration authored a set of Model Business Principles for U.S. companies to follow when dealing with overseas manufacturers.2 Similarly, the Apparel Industry Partnership was created by U.S. labor, consumer, industry, and human rights representatives for the purpose of fighting sweatshop conditions in overseas workplaces “related to the U.S. apparel and footwear industries.”3 Finally, U.S. multi-national companies such as Levi-Strauss, the Gap, Wal-Mart, and Nike have established internal codes of conduct that define standards for working conditions to be met by their suppliers.4

[*PG382] Despite these efforts, the very kind of labor abuses that these groups have tried to eradicate continue.5 However, not only do they occur in foreign countries, but they also occur on U.S. soil.6 In the Commonwealth of the Northern Mariana Islands (CNMI), a group of islands which the U.S. acquired after World War II and which became a U.S. territory by popular vote in 1976, the Asian garment industry has set up shop.7 Owners of factories there enjoy duty-free exports to the U.S. and can claim that their products have been “Made in the U.S.A.,” creating consumer confidence that the workers who produced them are protected by U.S. labor law.8

In reality, these manufacturers are not always held to typical U.S. standards, and workers’ rights are continually abused.9 Evidence of worker abuse has prompted lawsuits against several U.S. retailers, most of whom have reached settlements out of court.10 But these problems in the CNMI have been a recurring subject of Congressional debate, as U.S. lawmakers have discussed whether tighter federal control is the remedy needed.11 Two specific recurring issues are (1) the CNMI’s exemption from parts of the Fair Labor Standards Act, and (2) the CNMI’s exemption from U.S. immigration laws.12

From one perspective, the current laissez-faire approach has provided roots for economic growth and prosperity.13 One supporter of that view has referred to the islands as “a perfect petri dish of capital[*PG383]ism.”14 The other side, in contrast, points to the costs of such unfettered industry, noting that the lack of federal control has resulted in a lack of protections for workers, especially for the majority of workers who are nonresident aliens with little, if any, legal recourse.15

Part I of this Note presents a brief account of the history of the CNMI, its political relationship with the United States, and a synopsis of its present-day problems. Part II describes proposed federal legislation that would have attempted to remedy labor and immigration issues, and explains why such legislation has consistently failed thus far. Part III concludes that sufficient labor laws do exist via U.S. as well as local legislation. However, in order for those laws to have their intended effect, immigration to the islands must be more effectively controlled by extending the federal Immigration and Nationality Act (INA) to the CNMI; otherwise, labor abuses will continue.

I.  Background

A.  The Road to U.S. Territory

1.  History

The Northern Marianas are a string of fourteen tropical islands bordered on the east by the Western Pacific Ocean and on the west by the Philippine Sea.16 Saipan, the largest of the islands, is approximately twelve miles long and five miles wide, covering an area of forty-seven miles—only 1/22 of the size of Rhode Island.17 It is roughly 3300 miles from Hawaii and 1260 miles from Tokyo.18

The islands were discovered by Ferdinand Magellan in 1521 and officially came under Spanish rule in 1564.19 They were later con[*PG384]trolled by Germany, and then by Japan until June of 1944.20 The bloody Battle of Saipan then took the lives of 3426 Americans and 27,586 Japanese, wresting the island from Japanese control.21 Roughly 9% of the people native to the islands were also killed, and most homes were destroyed.22

When the war ended, control over the islands was delegated to the United States Navy.23 From that time until 1975, the islands were administered by the United States as part of the Trust Territory of the Pacific Islands, a United Nations Trusteeship (“Trusteeship”).24 Under this agreement, the U.S. was responsible for promoting: “(1) self-government or independence, as may be appropriate; (2) the economic advancement and self-sufficiency of the inhabitants; (3) the social advancement of the inhabitants; and (4) the educational advancement of the inhabitants.”25 The U.S. was criticized for failing to sufficiently address the second objective—economic development.26 Its first solution was to increase financial assistance to the area, but economic growth remained stifled, and so the Northern Mariana Islands began to pursue other solutions.27 By 1972, the Northern Mariana Islands had decided that its goals were not in line with those of the other islands within the Trusteeship, and that it wanted a closer relationship with the U.S.28

After three years of negotiations, the U.S. and the Marianas Political Status Commission signed the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States (“Covenant”).29 In June of 1975, 78.8% of the Northern Mariana Islands population voted in favor of the Covenant, which was then approved by a Joint Resolution of Congress on March 24, 1976.30 The CNMI then became the first territory to join the [*PG385]American political family by negotiation, rather than by purchase or conquest.31

The CNMI governs itself under its own constitution, and its federal relationship with the U.S. lies somewhere between that of a state and a territory.32 It has a non-voting “Resident Representative” to Congress and is bound by some parts of the U.S. Constitution, as well as by some U.S. laws.33 The most notable exemptions from U.S. laws relevant to this Note are the minimum wage and immigration law exemptions.34

2.  Political Status

The CNMI’S relationship with the U.S. is very different from that of other territories, largely because of the way that its relationship with the U.S. developed.35 Until the twentieth century, the U.S. acquired territory with an eye toward eventual statehood and retained complete control over the conquered land’s government.36 Today the U.S. has a few different types of relationships with different areas.37 For example, Guam, the Virgin Islands, and American Samoa are unincorporated territories,38 meaning that they are held indefinitely under complete U.S. control under the Territorial Clause.39 In contrast, the Marshall Islands and Micronesia are areas of “free association” and, as sovereign nations controlling their own foreign affairs, they are virtually free from U.S. control.40 Their people are not U.S. citizens, but they have the ability to enter and leave the U.S. as they wish.41

[*PG386] As each part of the Trusteeship established a new political partnership with the U.S., it negotiated its status with the U.S., and two types of relationships emerged.42 The Marshall Islands and Micronesia each entered into a “free association” with the U.S., as discussed above.43 The CNMI, on the other hand, established the Covenant, assuring its residents U.S. citizenship and ceding control of foreign affairs to the U.S.44

The terms of this latter relationship are important because they control what federal laws apply and how they may be enforced on the islands.45 The Covenant explicitly affirms the CNMI’s right to self-government as established by the United Nations Charter and the Trusteeship Agreement, but grants the U.S. limited sovereignty as well.46

B.  Present-day CNMI

When the Covenant was first adopted, the CNMI was an undeveloped, isolated group of islands.47 In fact, four years later the 1980 U.S. Census found that the population on Saipan, the largest and most densely inhabited island, totaled less than 15,000.48 “Gross island product” was $45 million in 1978, with tourism constituting the leading industry, followed by commercial fisheries and agriculture.49

As of July 1999, the population had increased almost eight-fold, reaching 79,429.50 By 1995, gross island product had soared to $1.5 billion, with roughly two-thirds of those revenues coming from garment factory exports.51 In other words, in just eighteen years, revenues grew to more than thirty-three times what they once were.52

[*PG387]1.  The Garment Industry

The first factories were established on Saipan in 1983.53 By 1990, there were over twenty factories employing 6000 workers who were primarily from China, Korea, and Thailand.54 As of July 2000, 70% of the island’s twenty-nine factories were foreign-owned.55

Annual exports to the U.S. have increased exponentially over the last fifteen years.56 In 1985, they were valued at roughly $5 million.57 By 1991, exports rose to over $200 million, and by 1998 reached $800 million.58 As of July 2000, the garment industry alone shipped $1 billion worth of goods to the United States.59

The economic explosion has been triumphantly welcomed by some; however, such growth has come at the expense of those less fortunate.60 Recently, substantial attention has been drawn to the methods used by CNMI factory employers to reach these sky-rocketing export dollars.61 Manufacturers on Saipan have been sharply criticized for horrific working conditions,62 failure to pay wages owed to employees,63 forcing female workers to have abortions,64 and refusing to allow workers to attend religious services.65

[*PG388] One researcher for the Global Survival Network (GSN), an international human rights advocacy group, went undercover into several factories.66 He witnessed “squalid” working conditions, fire hazards, air unfit for breathing, and unsanitary water conditions.67 Other observers warn that there are “serious concerns regarding the CNMI’s ability to protect the workers against crimes such as battery, rape, and forced prostitution.”68 These concerns have caused several foreign governments to complain to the U.S. about how their citizens are treated while working in the CNMI.69

In 1999, the U.S. Department of Labor found that over $8 million in wages was owed to 2600 workers employed by thirteen different companies.70 Based on the CNMI minimum wage, this translated into approximately 1000 hours of unpaid labor per worker.71 In one particular case, workers had not been paid for long hours of work over a twelve week period.72

Also in 1999, there were several major incidents of food poisoning affecting workers living in company-owned barracks.73 For two of those outbreaks, the Occupational Safety and Health Administration (OSHA) reported that drinking water and kitchen facilities were contaminated by fecal coliform (E-coli).74 In March, approximately 1200 workers became violently ill just a day after OSHA was denied access to the barracks for inspection.75 It is not uncommon that employers [*PG389]require that workers live in this type of housing, and often confine workers to their quarters except during work hours.76

A major criticism of the CNMI garment industry is that it is merely an outpost for the Asian garment industry, set up for the sole purpose of taking advantage of the tax breaks set up by the Covenant.77 The problem is that foreign companies are reaping the benefits of manufacturing within the U.S., but are not burdened by the requirements of U.S. law.78

2.  The Nonresident Alien Population

One problem noted by the Northern Mariana Islands Commission’s report to Congress in 1985 was the high percentage of the labor force employed by the public sector.79 The Commission explained that a certain number of public sector employees are needed no matter how large or small a population is served.80 For example, maintenance of roads requires the same number of construction workers regardless of the number of people travelling those roads.81

This initial concentration in the public sector left few CNMI residents available for private sector jobs.82 With little labor to fuel the economy, the CNMI always has had to look elsewhere for workers.83 Conveniently,  503 of the Covenant explicitly exempts the CNMI from U.S. immigration law, making it possible for nonresident guest workers to enter and leave as necessary.84

In 1973, 27% of all workers were aliens; by 1982, that number had risen to 39%.85 At that time, alien workers were employed mainly [*PG390]as construction workers, entertainers and maids.86 As of 1999, that number had jumped to 77% of all workers, and 90% of private sector workers.87 This dramatic increase directly correlates with the rapid expansion of the industry as a whole.88

To entice immigrants to the CNMI, “recruiters” allegedly exaggerate tales of going to America.89 They collect large sums of money from prospective workers (ranging from $1,500 to $12,000) to pay for transportation and to essentially buy their jobs.90 Usually, this results in workers arriving in the CNMI burdened by huge loans (at interest rates of up to 30%); in order to repay these loans, workers enter a sort of debt-bondage relationship.91 Often it is an employer who loans the money to the worker, and repayment is taken directly from the employee’s paycheck.92 Under this arrangement, the worker must remain with the same employer, no matter what the conditions of employment, until the debt is entirely repaid.93 At the CNMI minimum wage of $3.15 an hour, repayment usually takes years.94 Moreover, certain contracts between employers and workers (“shadow contracts”) frequently include clauses under which workers waive basic rights, such as the freedom to date or marry, have children, and practice a religion.95

The effective result of the CNMI’s demographics is a large pool of impoverished, unskilled workers who rarely enjoy the same rights as CNMI residents.96 Few aliens step forward to report crimes, and [*PG391]aliens especially do not report labor abuses for fear of losing their jobs—which they simply cannot afford to do.97

I.  Congressional Proposals for Reform

A.  Generally

The two themes that recur throughout discussions of how to deal with the CNMI are immigration and minimum wage.98 Some U.S. legislators argue that tightening control of who can enter and work in the CNMI would create a group of workers with stronger rights and with the ability to better protect themselves in the workplace.99 They maintain that workers empowered with more rights will have the ability to escape the exploitation that they now endure.100 Other legislators argue that strong progress would be made simply by extending the full Fair Labor Standards Act to the CNMI, thereby providing workers with the same minimum wage as that received in the fifty states.101

In recent years, there have been a few attempts to put either of these ideas into practice.102 Several bills have been introduced and debated, but no new legislation has been enacted.103 For example, one bill proposed a plebiscite on the islands to determine whether the people of the CNMI would like their government to comply with U.S. immigration and wage laws.104 Another proposal, the Northern Marianas Human Dignity Act, would have established working condition requirements that would have to be met before a “U.S.A.” label could be affixed to any garment or before a manufacturer could enjoy duty- and quota-free exports to the U.S.105 Additionally, a series of bills [*PG392]have attempted to apply varying degrees of immigration and wage laws to the CNMI, but to date none have been enacted.106

An interesting side effect that has resulted from the existence of Congressional debate has been to prompt some reforms at the local level in the CNMI.107 For example, legislation passed in the Senate, and supported by the Clinton Administration, would have raised the CNMI minimum wage by thirty-cent increments until it reached federal minimum wage.108 No further action was taken at the federal level, but the CNMI instituted a limited increase for all industries except for garment manufacturing and construction.109

A February 1996 visit to the islands by Members of the Senate Committee on Energy and Natural Resources was one catalyst for such proposals.110 The visit was followed by an oversight hearing in June of the same year to address some of the specific concerns.111 The Committee discussed its observations, such as unpaid Bangladesh security guards living in substandard conditions.112 Additionally, the U.S. Commission on Immigration Reform conducted a site visit to the islands in 1997 to determine whether federal action should be taken.113 They concluded that the CNMI was in need of help in restricting immigration, and that even if it made the decision to exercise more control, it did not have the resources to do so effectively.114

[*PG393]B.  S. 1275 and S. 1052: The Proposed Northern Mariana Islands Covenant Implementation Acts

1.  The Proposals

In June 1998, the Senate Committee recommended adoption of the first Northern Mariana Islands Covenant Implementation Act (S. 1275).115 Like previous bills, it targeted immigration and minimum wage in the CNMI and would have required that: (1) all provisions of the INA be extended to the islands one year after enactment of the law; (2) CNMI minimum wage be increased from $3.15 to $3.35, and then raised annually by increments of thirty cents; and (3) manufacturers using the “Made in the U.S.A” label and taking advantage of free access to U.S. markets employ at least 50% American citizen workers.116

The Committee conditioned its 16–3 recommendation on certain amendments.117 First, the CNMI would have one more chance to improve its immigration policies before the INA would apply fully.118 The AG would establish benchmarks for the CNMI to meet; then after a one year probation-like phase, he would determine whether the CNMI had the “institutional capacity” and a “genuine commitment” to meeting the standards.119 Second, rather than mandating wage increases, special industry committees, as are used in some other island territories, would be established to determine the feasibility of higher-paying jobs in particular areas.120 Finally, there would be no specific restrictions on how many factory workers could be guest workers.121 After the Committee’s recommendation was reported in the Senate, no further action was taken.122

More recently, in May 1999, Senator Charles Murkowski of Alaska sponsored the second Northern Mariana Islands Implementation Act (S. 1052).123 This proposal again asks for immigration reform, but [*PG394]omits any reference to increasing the minimum wage.124 As introduced, it set up a similar immigration scheme as S. 1275, but passed in the Senate only after several amendments.125 The amended bill removes the discretionary role of the AG, and provides for definite extension of a modified INA gradually over a ten-year period.126 It defines a statutory scheme that would establish requirements and procedures for admitting temporary alien workers and immigrants, and provides for nonimmigrant investor visas.127 A significant part of the program would include a technical assistance program run by the Secretaries of the Commerce and of Labor to assist employers in locating workers legally.128 The new plan would enable employees currently working in the CNMI to stay under the “one-time grandfather provision for certain long-term employees.”129

In February 2000, S. 1052 passed in the Senate, and as of January 2001 remains under consideration in the House Committee on Resources.130 Both the Senate and House Committees have heard testimony on the immigration and wage issues.131 Representatives of the CNMI local government, federal officials, and some individuals living in the CNMI have presented several arguments regarding whether federal action should be taken.132 Their testimonies reveal the important considerations that will determine the best course of action.133

2.  Arguments for Stronger Federal Control

a.  Immigration

Generally, proponents of stricter immigration laws argue that the garment industry is being protected, but powerless foreign workers [*PG395]are not.134 Since guest workers do not receive the same rights as permanent U.S. residents, they do not have the protections they need.135

One argument for extension of the INA to the CNMI is that the immigration exemptions for the CNMI were never designed to be permanent.136 Rather, they were intended to help a struggling territory acquire the labor capital necessary to establish a self-sufficient economy—not to provide a foreign industry with an endless supply of fungible, powerless workers.137 Ironically, another frequently-cited reason for the immigration exemption was to protect the islands from an influx of people that would be allowed by federal immigration laws, but that is exactly what has resulted from the exemption.138

Another argument is that U.S. immigration policy has always reflected the “American tradition—and American values” of employing U.S. workers in order to promote the growth of the middle class.139 The CNMI, on the other hand, imports and exploits foreign workers without permanent ties to the community.140 Employers, rather than the government, essentially control the terms and conditions of workers’ stays in the CNMI, and workers never become part of the political process.141 A constant flow of people who have relegated their political voices to their employers does not do much to encourage a balance in political power in the island communities.142

The lack of control exercised by the CNMI in the area of immigration has taken a significant toll on law enforcement there in two ways.143 First, many immigrants to the islands arrive as victims of fraud.144 As discussed earlier, those who are swindled by recruiters or enter into “shadow contracts” with employers are forced to stay on the islands, working for at best $20 to $30 per day, in a place where the [*PG396]cost of living is comparable to that of Hawaii.145 The dire situations in which they live, as well as the fear of losing their jobs, often cause them to “shun law enforcement.”146 Additionally, several come from countries where law enforcement is not trusted, leading to distrust of CNMI law enforcement as well.147

Second, CNMI immigration policies directly facilitate the entry of criminals.148 The U.S. uses a “double-check” system of immigration, which means that arriving aliens are screened twice by trained officers (once abroad, and once at port-of-entry).149 The officers have access to both international and American “lookout information.”150 That is, they have access to information from law enforcement agencies that helps them to weed out dangerous criminals.151

Without these safeguards, however, the CNMI continually allows convicted criminals to enter and to create problems on the islands.152 The CNMI has no comparable database to screen immigrants and does most of its screening upon arrival.153 The islands cannot expect to stop the flow of drugs, guns, or trafficking in women and forced prostitution unless at least the known criminals are kept out.154

b.  Labor Laws and Minimum Wage

Arguments for stricter enforcement of labor laws, as well as for increased minimum wage in the garment industry, are driven by the notion that American traditions of fairness and human rights are routinely violated in the CNMI.155 One individual’s testimony before the Energy and Natural Resources Committee noted that the CNMI is “mak[ing] a mockery of our government’s reputation as a leader of human rights.”156 Thus, there is concern that deplorable treatment of foreign workers on U.S. soil will reflect badly on the U.S.157 Indeed, [*PG397]some nations, including Nepal, Bangladesh, Sri Lanka, and the Philippines, have complained about treatment of their workers in the CNMI.158

In addition, despite the fact that there are laws on the books that protect workers from abuse, enforcement of those laws is ineffective because workers are intimidated and do not report violations.159 Workers who are illegally in the CNMI are completely at the whim of their employers, but even legal aliens do not step forward because they are afraid of losing their jobs.160 One testimonial explained that “once a worker is branded as a ‘snitch’ he or she is blacklisted and will unlikely be legally employed in the CNMI again.”161 CNMI politicians and CNMI-based businessmen have the upper hand for a number of reasons: “(a) the local government agency in charge of investigating labor abuse, the DOLI, is less than diligent in investigating allegations; (b) the US Dept. of Labor has limited authority; (c) they have learned that mere window dressing for U.S. visits is enough to prevent new legislation; and (d) they feel they have close friends in high places.”162

Another meritorious argument for increasing the minimum wage is that the standard of living in the CNMI is roughly equivalent to the cost of living in Hawaii, where the federal minimum wage applies.163

3.  Arguments for Local Control

a.  Immigration

First, the CNMI does not view immigration as solely a federal issue.164 While nominally a federal power in the U.S., one CNMI official argues that it is essentially controlled by the states through their representatives in federal government.165 The CNMI, however, merely has a “resident representative” with no voting power in Congress, and ab[*PG398]sent that power, it is argued CNMI should be allowed more local control and flexibility in handling its own issues.166

The prime consideration of local CNMI officials in attempting to maintain local control over immigration, however, is simply the bottom line for the industries that have taken root there.167 In order to sustain the growth that has occurred in recent years, the industries need an increasing amount of labor which the small American population cannot provide.168 They need access to guest workers.169 Looser immigration standards allow for the entry of enough workers to cover the tourist, hotel, and construction industries in addition to the growing garment industry.170

Nonetheless, the CNMI claims to be controlling immigration effectively through its own new legislation in three ways.171 First, the Moratorium Act places limits on hiring foreign workers, and local officials claim it has resulted in approximately a 23% reduction in the number of guest worker permits issued from 1998 to 1999.172 They predict that the number of such permits will continue to fall.173 Second, the CNMI imposed a maximum length-of-stay rule which requires any guest worker to leave after three years.174 The provision is based on the notion that it is not potentially sound to allow guest workers to stay indefinitely without a voice in the political process.175 Third, the CNMI passed legislation that would strengthen the pre-screening of guest workers before their arrival in the CNMI, and before they are granted work permits.176 Local officials planned to use [*PG399]the same sources as the U.S. Department of Justice in screening immigrants for disease and previous criminal activity.177

A specific concern regarding S. 1275 was that it merely “at first blush appears even-handed.”178 A closer inspection reveals that it opens the door for a series of subjective determinations by the AG.179 For instance, the AG sets up immigration control standards which the CNMI must meet in order to retain local control.180 The CNMI, however, argues that it should be involved in shaping the standards that it has to meet.181 Additionally, the new law would give the AG the authority to make an essentially subjective judgment in determining whether the CNMI has the “institutional capacity” and a “genuine commitment” to control immigration.182 Officials in the CNMI worry that the federal government has “already determined for itself that the Commonwealth neither has the institutional capacity to administer nor the genuine commitment to enforce an effective system of immigration control.”183 Rather than hold the CNMI to this kind of “we’ll know it when we see it” standard, CNMI officials feel that it would be more effective to negotiate benchmarks and work together.184

The CNMI claims that part of the problem is the lack of “genuine commitment” on the part of the federal government.185 For example, the U.S. owes the CNMI $700,000 for assistance provided in handling an incident where several individuals attempted to enter Guam illegally by boat; Juan Babauta, CNMI Resident Representative, explained that “ironically, [the CNMI is] unable to proceed with deportations under [its] own law because [its] deportation fund was exhausted paying the expenses of the US INS.”186

b.  Labor Laws and Minimum Wage

The words “federal takeover” instill fear in business-owners because they believe any such action would stunt the economic growth [*PG400]that has occurred in recent years in the CNMI.187 Those in charge insist that local control has led to stronger democracy and an economy that has in ten years tripled the islands’ standard of living.188

Specifically, business-owners worry that an increase in the minimum wage would be costly and would lead to slower job creation, fewer hours worked, and lost jobs.189 They argue that the entire Asian economy is currently in recession and that the Asian economy is more indicative of the CNMI’s financial position than that of the U.S.190 Imposition of a 100% increase in minimum wage could destroy businesses.191

Testimony of supporters of local control challenges the accuracy of reports of horrific working conditions, religious persecution, and forced abortion.192 For example, Dr. Christian Wei, pastor of a Chinese Bible Church testified before a House Committee in 1999 that “allegations of so-called religious persecution and forced abortion are untrue.”193 At the same hearing, Rev. Raymond Kinsella presented a similar view, noting the CNMI’s “deep-rooted history of Catholicism” and “growing evangelical community.”194 He cited existing laws that make abortion and prostitution illegal, and claimed that neither actually occurs.195

Local officials maintain that the U.S. already has imposed laws to protect workers, but those laws are not enforced.196 Again, a significant factor is the lack of federal commitment to problems in CNMI.197 For example, the U.S. Attorney assigned to the area filed only ninety-five cases over three years, and won only forty-eight.198 Of these convictions, 60% were for narcotics violations which CNMI [*PG401]officials argue illustrates that federal labor laws that should be enforced by the federal government are ignored.199

Local CNMI officials conclude that heightening cooperation between federal and local government would be more effective than a complete federal takeover of immigration and labor policies.200 They insist that U.S. regulatory officials are “overreacting” and “treating the CNMI like [a] misbehaving child.”201 Instead, they would rather be viewed as a government competent enough to resolve its own issues.202

In addressing its ability to deal with its own problems, the CNMI points to legislation that was already enacted in an effort to curb labor abuses.203 For example, the Moratorium Act placed a temporary ban on hiring foreign workers.204 Additionally, a minimum wage review committee was established.205 Finally, the government authorized funding for uncollected administrative awards and travel expenses home under the Commonwealth Nonresident Worker Relief Act.206

Moreover, the local government has been making unannounced visits to factories since early 1998.207 Firms not complying with regulations are cited and fined, and repeated violations result in revocation of business licenses.208 According to local officials, these programs have drastically reduced the number of complaints by guest workers.209

Finally, local officials argue that the garment industry is not one to be proud of in any area of the world.210 The Saipan Garment Manufacturers Association (SGMA) has adopted an industry code of conduct, similar to that practiced by garment factories in the United States.211 But the industry as a whole has always been accused of abuse, even U.S. states such as New York and California, and it is unfair to hold the CNMI to a different standard.212

[*PG402]III.  Looking for Solutions

The federal government has the ability, if it so chooses, to play a significant role in combating worker abuse in the CNMI.213 However, the islands need a program that is tailored to meet their unique needs, and to encourage cooperation between federal and local government.214 In considering the legislation that has been proposed, it is important to recognize the many differences between mainland U.S. and the CNMI, and to keep in mind the type of relationship that exists between the two.215 One explanation for the lack of action at the federal level thus far is that the proposals have been too harsh.216 They are seen by those in power in the CNMI as a threat, rather than a solution.217 The result is hostility toward any federal legislation, a lack of cooperation, and thus no improvements for workers.218

Until the most recent Congressional bill, the proposed federal solutions failed to meet the CNMI’s needs. They attempted to impose mainland U.S. standards on an area that has some very different characteristics that should be taken into consideration. Regarding the two areas discussed in this Note—minimum wage and immigration—the best course of action would be to (1) use special industry committees to evaluate wages, rather than mandate a wage that is too high, and (2) apply federal immigration laws to the CNMI with some flexibility to allow for the islands’ needs.

A.  Special Industry Committees to Determine Minimum Wage

A sweeping increase in the minimum wage across all industries could have a devastating effect on the economy of the CNMI.219 Such increases would be overinclusive.220 Because employers in the CNMI often provide services such as housing, meals, transportation and [*PG403]child care, several costs normally incurred by mainland U.S. workers are already taken care of in the CNMI.221

A better solution is to create special industry committees, as currently used in American Samoa.222 In that territory, businesses are divided into categories including hotel, tour and travel services, construction, printing and publishing, health care, and financial services.223 Each group is evaluated by a committee that closely inspects the industry to determine what kind of increases it would be able to withstand, thereby alleviating concerns that a mandated wage across all industries would wreak havoc on the economy.224

The real problems are worker abuse and failure to pay wages, not how much those wages are supposed to be.225 Increasing the minimum wage would not aid workers in those areas—it would only serve to weaken businesses, lowering their bottom lines, and potentially leading to more abuse.226 What is needed regarding labor is simple enforcement of the laws already on the books.227 Such enforcement requires a strong commitment from both federal and local government to keep their eyes open, and to encourage workers to report problems.228 The CNMI appears to have demonstrated such a commitment through the legislation it has enacted in recent years.229

B.  More Effective Control of Immigration

1.  Improving Conditions for Workers

Imposing stricter limits on immigration to the CNMI would attack labor abuses in three ways. First, it would take power away from employers and so-called recruiters who now decide who may enter and who may leave.230 Second, it would empower workers by enabling them to come to the CNMI on their own terms, rather than on the [*PG404]unfair terms set by employers.231 Finally, it would curb the number of criminals entering the islands with the intent to defraud the powerless workers who reside there.232 The federal government has better resources and more experience in accomplishing these goals than does the CNMI, and therefore should be allowed to exercise more control in this area.233

By establishing and enforcing immigration through the government, power would be taken away from recruiters and employers.234 Currently, whoever is willing to take on exorbitant debt with a promise to work for meager wages is welcome,235 but comprehensive immigration laws could eliminate this situation.236

The legislation most recently proposed, S. 1052, creates a statutory scheme that articulates the requirements and procedure for allowing various types of immigrants to enter the CNMI.237 It also provides for a technical assistance program run by the Secretaries of the Interior and of Labor to help employers to find workers who are either U.S. citizens or lawfully admitted aliens.238

These are standards that ensure that immigration is permitted on a neutral basis, and ensure that workers who come to the CNMI are on more equal footing with employers.239 It makes sense to take power away from employers because the decision-maker on immigration issues should be a disinterested party such as government, rather than manufacturers with a pecuniary interest.

Setting up a formal procedure for entry will give guest workers more solid footing on which to enter the CNMI.240 They will be assured legitimate work upon arrival and will have some leverage to be able to report labor abuses.241 Rather than fearing loss of the only jobs they can get, and potentially harsh punishment for failure to repay loans, workers will be in the CNMI on their own terms, as well as [*PG405]those set up by the federal government, as opposed to being solely at the whim of their employers.242

One of the problems described earlier in this Note is deception by recruiters who collect fees and send workers to the CNMI to jobs that do not really exist.243 One of the goals cited by the Senate’s report on S. 1052 is to “ensure access to workers in legitimate businesses.”244 The new legislation proposes to protect only legitimate businesses.245 For new temporary workers, this could mean the end of being deceived by recruiters who promise jobs in exchange for a lifetime of indebtedness.246 Allowing workers to enter under federal law would permit job mobility; it would create competition among employers to provide better conditions to retain workers.247

A worker who has secured a job through legitimate means will have less of a disincentive to report labor abuses than one who is forced to be loyal to the employer.248 Reporting problems is not completely unheard of, but it sometimes has unfavorable results for those who step forward.249 For example, one worker who equates Saipan with Communist China, reported to the Senate Committee that he worked as a printer, was promoted, and worked twelve hours a day, six days a week.250 But when he helped a friend who complained about her employer, the Marianas Garment Company, officials threatened that he would go to jail in China for twenty years.251 After he was ordered to his barracks, he was able to escape and contact local officials.252

2.  Meeting the CNMI’s Unique Needs

The second Northern Mariana Islands Implementation Act illustrates that it is possible to modify federal immigration laws in a way that takes into account the special characteristics of a small island community.253 The bill succeeds in setting up a plan to enforce immi[*PG406]gration, but at the same time remains sensitive to labor needs.254 It seeks to encourage diversification and economic growth, to recognize local self-government by engaging local officials in implementation, to provide opportunities to work in the U.S., and to guarantee the ability of local officials to continue to make policy decisions regarding the economic development of the islands.255

One way in which the law would accommodate the CNMI is through an exemption from numerical limitations on some categories of temporary workers.256 Additionally, while there will be some limits on how many other individuals may enter, exceptions have been carved out for labor sensitive industries such as construction, as well as for unskilled worker visas in times of labor shortages.257

The plan also includes a strategy for helping businesses adjust to the new rules through a technical assistance program.258 The program would provide funding and training for employers regarding how to find legal workers.259 First, the Secretary of Commerce would receive funds to consult with local government, local businesses, regional banks, and other economic experts.260 Additionally, the Secretary of Labor would consult with the CNMI governor, local businesses, and the College of the Northern Marianas.261 This plan ensures that local voices are heard, and that immigration policy and laws are responsive to these voices.

Conclusion

By mainland American standards, there have been serious violations of human dignity in the Northern Mariana Islands. Some have profited as a result, but more have suffered, and some action needs to be taken. Reforming immigration policies will make significant progress toward counteracting the abuses that have occurred.

People not born on the islands have played a major role in shaping the CNMI’s history. In that way, it is much like the history of the [*PG407]United States. Like those who arrived at the CNMI first, early colonists in the U.S. began on equal footing. As time progressed, and some gained more power and influence than others, the newly arrived were often exploited.

Hindsight is twenty/twenty, and the U.S. should use that vision to look forward and address the problems that unrestricted immigration has caused in the Northern Marianas. Other territories that have not seen the type of economic boom that has occurred in the CNMI eye its immigration policies as the key to that “success.” However, before the CNMI becomes a model, its own problems should be repaired.

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