Northern Mariana Islands

Transcription

1 Northern Mariana Islands Despite a more conciliatory and less confrontational administration in Saipan, relations between the Commonwealth of the Northern Mariana Islands (cnmi) and Washington continued to deteriorate. Third-term governor Pedro P Tenorio ( Teno ) inherited a major fiscal quagmire from his predecessor, Froilan C Tenorio ( Lang ), and the Asian financial crisis that started in October 1997 continued to batter the economy. The shrinking tourism sector left the garment industry as almost the sole provider of tax revenues for the government, which also had to face mounting social problems. An estimated two thousand businesses closed down, teachers contracts were not renewed, and many other public services had to be scaled back. By year s end, there was even serious talk of reducing work hours for government employees. Meanwhile, the legislature passed several measures affecting the presence of guest workers, and a seemingly coordinated campaign to close the garment industry down resulted in a spate of negative media publicity. This resulted in increased pressure for Congress to adopt legislation to federalize immigration and the minimum wage, and even the customs territory of the Commonwealth. Governor Teno inherited a severely depleted treasury. The new administration found that the tax-rebate holding account (holding withheld tax money for eventual rebate to the taxpayers), which was supposed to contain $34 million, contained only $2 million. The missing $32 million has never been identified. In addition, the public auditor charged that the Marianas Visitors Bureau had misspent up to $12 million in illegal contracts, and that the governor (Lang) had spent unappropriated millions on solesource contracts. The governor was also accused of lending substantial sums to the Tinian Casino Gaming Commission to meet their salaries, and to pay a consultant a total of $730,000 for four years plus benefits. The consultant, a convicted felon, has yet to deliver any product. To compound the problem, the Asian financial crisis hit the country harder than any other jurisdiction in

2 212 the contemporary pacific spring 2000 the Pacific. Tourism dropped dramatically from over 700,000 visitors in 1997 to around 450,000 in Nearly all of the Korean-owned hotels have either closed or been converted to apartment facilities, while resorts closed whole wings, reduced personnel, or cut hours to cope with the drop in traffic. Revenue from the 10 percent hotel room tax plunged, leaving the Marianas Visitors Authority (formerly Bureau) with reduced resources for publicity to attract more tourists. A reduction in tourist arrivals also meant a cut in commercial flights from tourist sources. The domino effect has produced a drop in revenues for the Commonwealth Ports Authority and reduced its ability to upgrade port and airport facilities. The luxury shopping mall in Marpi owned by Japan Airlines now has only a few shops still in operation. Duty Free Shopping has reduced working hours to 36 a week, and all tourism-related industries still functioning are asking for government relief in the form of deferred or reduced taxes, exemptions from various administrative requirements, and even some form of subsidy. Perhaps the most visible barometer of the economic situation, the Tinian Dynasty Hotel and Casino is barely clinging to life after completing its first year of operation in March It claims to be losing a million dollars a month for lack of clientele, and a visit to the main gaming hall is an experience in pity for the remaining staff, who must stand in full uniform at empty tables for hours on end. Of the three five-star restaurants opened a year ago, only one is still operating; the original work force of 1,200 has been reduced to around 800, and more are likely to be let go in the near future. The casino has been plagued by lawsuits filed by contractors, suppliers, and employees, and the government has been demanding past-due taxes. The Commonwealth Utilities Corporation briefly shut off the water supply for nonpayment of bills. Particularly intriguing is the question of what happened to the more than $700,000 developer s fee allegedly paid by the casino to the government to offset infrastructure costs. The bank that funded the purchase of the two high-speed ferryboats plying the waters between Saipan and Tinian threatened to repossess for lack of payments, and the Commonwealth Ports Authority refuses to decrease the per passenger boarding fee for the run to Tinian. Air access to the island is limited to small aircraft from Saipan and Guam. The Federal Aviation Authority has approved plans to extend the current World War II runway to allow larger aircraft to come in, but work will not be completed for several years. It remains to be seen if the present casino can survive the drought. To complicate matters further, the Mayor of Rota, Benjamin Mangloña, came out publicly proposing a local initiative to approve a casino on Rota. Claiming it will resolve the economic crisis on Rota by requiring that 75 percent of the employees be US citizens; that no more than 100 rooms be allowed in the hotel, with overflow clientele going to existing establishments; and that a more efficient regulating body than Tinian s be estab-

3 political reviews micronesia 213 lished, Mangloña justified his reversal of position on casinos by saying, I don t want my people to go to bed starving. Tinian, of course, took this announcement with a certain amount of umbrage. A petition to put the question to the voters on Rota was filed on 2 July 1999 with over 600 signatures, twice as many as necessary, and half of the registered voters on Rota. The Tinian Dynasty enjoyed its best business of the year when dozens of federal agents from the Immigration and Naturalization Service and Public Health were on Tinian to process Chinese boat people, who began to arrive in March The hotel was full of paying federal employees, and the casino received a contract to provide daily meals to the 500 Chinese being held. The Chinese were from Fujien Province in Southeast China, and had paid up to $10,000 to travel to Guam, where they planned to request political asylum. Nearly five hundred made it to Guam before federal authorities, aware that the commonwealth has no asylum provisions, determined that the military reservation on Tinian would be a better place to house any new refugees. Four or five more Chinese boats were intercepted on the high seas and diverted to Tinian. Each of the leaking fishing vessels carried from 75 to 120 Chinese passengers, frequently without adequate food, water, or sanitation. A tent city was erected at the old b29 runway in northern Tinian, and federal officials came from Hawai i and the mainland to process and repatriate the internees. The last of the 500 on Tinian were repatriated in late June 1999, while the officers and crews of the boats were arrested and charged in federal court with a variety of violations of federal laws. With the decline of the tourism sector, previously the largest revenue source for the Northern Marianas at over $150 million annually, revenues from the garment industry assumed new importance. Although the industry generates, on the average, $100 million dollars annually in direct and indirect taxes, it has long been a source of controversy. Most of the factories are owned by Chinese or Korean companies, although some are owned by US companies, and all are almost fully staffed by Asian workers. A 20 percent local hire quota has resulted in about 2,000 of the 15,000 workers being from the freely associated states, and a few are actually from the commonwealth. The distinction between local hire and contract worker is significant in that the employer is legally required to provide contract workers with medical care, room and board, barracks-tofactory transportation, and other costs, with some deductions permissible for room and board. Local hire employees do not receive these benefits, and attempts to rectify the situation have been unsuccessful so far. Allegations of sexual and physical abuse, payroll fraud, discrimination, and fraudulent recruiting scams reached an all-time high during the year. The federal government considers the garment workers indentured servants because they must work off recruiting fees (paid in the country of origin) before they can make any money for themselves, and they are

4 214 the contemporary pacific spring 2000 not allowed to change their employment at will. Sometimes recruiting fees amount to more than $10,000, a sum hard to save when earning under $3.05 per hour (after deductions). 1 Working conditions have been targeted as substandard and inhumane, and there have been organized efforts to close down the industry on Saipan. 2 These include monthly protests on the US mainland against retailers who have brand-name products made in Saipan (The Gap, Tommy Hilfiger, etc), a billion-dollar class action suit against the retailers, and movements in Congress to nullify the competitive advantage the factories gain by locating on Saipan. In the early months of 1999 the world press was inundated with horrendous stories about human rights conditions in the Northern Marianas, filed by people who had never visited the commonwealth. In addition to US networks and wire services, stories were carried by Xinhua, afp, bbc, Radio Australia, Singapore and Hong Kong newspapers, and many more. Most had facts creatively embellished (one claimed 50,000 workers in the industry instead of 15,000; armed soldiers at the workers barracks when there are no armed soldiers in the commonwealth, etc). The most significant attack on the industry came when abc s 20/20 did a second segment on prostitution and the garment industry. While the prostitution segment was fairly innocuous, the section on the garment industry used file footage of many years ago without identifying it as such, made no mention of the improvements made in the industry s personnel management and ethics policies, and ignored obvious indications of worker satisfaction. The fact that 20/20 teamed up with a human rights advocacy group, Global Survival Network, indicated a preexisting agenda. As a result of this widespread negative publicity, six new bills were introduced in Congress to federalize authority over immigration and the minimum wage, and in some cases to eliminate the exemption for products manufactured in the commonwealth. A seventh bill, a repeat of last year s, was introduced by Senator Frank Murkowski (R Alaska) and Senator Daniel Akaka (D Hawai i); it would phase in federalization over a period of eleven years, giving the attorney general authority to verify conformance with an agreed timetable for the phase-in. Minimum wage is not mentioned in this version. An eighth measure is currently being drafted by the US administration and is being reviewed by the cnmi government. It would also provide a ten-year timetable, but the details are not public. A crucial hearing by the Senate Committee on Energy and Natural Resources will be held in late July The committee chairman, Senator Murkowski, succeeded in getting a similar bill out of committee last year, but it died on the floor. With so many pieces of legislation pending, and with bipartisan support growing in both houses, it is possible that something could become finalized by the end of Some of the factories on Saipan are bound to close if any of the federalization legislation shows signs of becoming a reality or the class action lawsuit proceeds. In response to criticisms from Washington about the unknown

5 political reviews micronesia 215 number of illegal overstayers in the commonwealth, the legislature passed pl 11 33, known as the Amnesty Law. It provided that any illegal aliens who turn themselves in within a six-month period would be given a permit good for 90 days to find a legal job. Those that did not find work would be sent home at government expense. Of the roughly 2,000 mostly Filipino and Chinese workers who came out, fewer than 500 found jobs in the depressed economy. The legislature also passed, and the governor signed, the three-year-limit law. Under this new law, contract workers would have to leave the commonwealth for at least 90 days before being rehired. The aim of the bill was to encourage employers to hire local employees, but was opposed by local employers on the grounds that it would raise the cost of doing business. A second measure under consideration would simply put a five-year limit on contract workers, with no chance of renewal. This would prevent eventual naturalization should federalization occur. In addition, the legislature put an absolute cap on garment workers (except for new factories), and a cap on all others at the present levels. Only investors with over a million dollars in expansion projects ($200,000 in Tinian and Rota) would be allowed to bring in new workers. The dramatic drop in government revenues meant reduced appropriations for government operations. Especially hard hit was the public school system, and it was touch and go whether the schools would be open after May When off-island contract teachers found their renewal contracts had a new clause, allowing the administration to terminate them with 90 days notice if funds were unavailable, many simply packed up and left. Around 150 education personnel left, and the public school system scrambled to hire more local retirees and others who may be eligible. The Commonwealth Health Center, the Northern Marianas main hospital, suffered a major loss of medical personnel as well, with qualified nurses leaving for more lucrative positions on the US mainland or in Hawai i. No longer eligible for free housing, doctors were also leaving in record numbers. Unemployment among the indigenous US citizen population has reached an all-time high of over 16.1 percent, and there has been a concurrent 13 percent increase in food stamp recipients. 3 These are mainly new recipients under eighteen years old, often with non US citizen parents. Negotiations between the federal and commonwealth governments under the terms of the covenant that established the commonwealth in 1978 took place during the year. In January 1999, federal 902 representative Mr Edward Cohen met with the cnmi 902 team on Saipan for the first time. (Earlier attempts at holding talks in Washington had been canceled without explanation by the Northern Marianas).The talks were billed as informal, and no conclusions were reached, although it was clear that neither side was going to give in. Cohen pressed the Clinton administration s intention to phase in federal controls over immigration and minimum wages, while Lieutenant Governor Jess Sablan vowed to protect the existing terms of the covenant. Both

6 216 the contemporary pacific spring 2000 sides said the talks were cordial. The administration s proposed legislation refers to implementing the covenant, since Article 503 gives Congress the authority to take back powers allocated to the commonwealth. However, some in the commonwealth called it a takeover and unilateral amendment of the covenant. The proposed legislation has been given to the governor for comment, but no public statement has been made on the content. In the area of financial aid under section 702 of the covenant, similar attempts were made to change the way money was allocated to the Northern Marianas. Earlier appropriations under 702 made by the Congress had been rejected by the previous governor, who said the money was no longer needed and could be traded for continued control of the minimum wage and immigration. As a result, nearly $100 million had accumulated, while needed capital improvement projects went unbuilt. After the Interior Department began sharing the money with other jurisdictions, such as Guam, the commonwealth administration prepared a list of projects, including a new prison, the Marpi landfill, the high school gym, and projects on Tinian and Rota. However, Congress refused to allow Interior to redistribute the money and in June issued a statement that funds would simply be deferred until 2001, when the commonwealth would be prepared to spend it. On a brighter note, the new cnmi Museum of History and Culture opened during the year to great fanfare, with a display of images prepared by the government of Spain on the Spanish influence in the Pacific. This was the hundredth anniversary of Spain s departure from the region. The museum was built at the renovated former Japanese hospital in the Garapan area of Saipan. It was funded by money resulting from the sale of artifacts recovered from the wrecked Spanish galleon, Nuestra Señora de la Concepción, that went on the reef south of Saipan in It also contains extensive artifacts from that event. A professional staff has been hired, and the facility has been well received by the public. samuel f mcphetres Notes 1 Many of the Chinese garment workers are extremely frugal and maintain their own savings accounts, from which some have been known to withdraw as much as $20,000 saved during their three years on Saipan. This sum represents regular wages for 40 hours per week plus sometimes as many as 20 hours of overtime weekly. 2 Salon Magazine, an Internet publication, described the conditions for garment workers on Saipan as having 31,000 workers forced to sleep in filthy quarters head to foot and guarded by armed soldiers behind barbed wire ( Jeff Stein. <salon.com> Feb 1999). 3 The 16.1 percent figure refers to cnmi-born US citizens, and includes children born to mothers who are not US citizens, the largest single group delivering at the Saipan hospital. Unemployed guest workers are generally repatriated, and US citizens in hard hit areas such as education and public health return to the mainland. The commonwealth has no unemployment insurance.