ASSOCIATED PRESS
Richard A. Pierce, executive director of the Saipan Garment Workers Association, says the garment industry in Saipan faces a slump brought on by war, terrorism and SARS.
Saipan garment
industry hurtingBoth owners and critics of
the country's economic engine
want to see it chug ahead
SAIPAN, Northern Mariana Islands >> The garment industry in Saipan helped transform this American island in the Pacific into a center for manufacturing and tourism. Now the industry is contending with a series of setbacks that have cost it hundreds of millions of dollars in orders.
Annual exports from about 30 Saipan garment factories topped $1 billion in name-brand, made-in-the-USA apparel in the late 1990s, but have been declining steadily the last three years. The industry now predicts sales could dip even lower than the lowest previous projection for this year of $660 million.
A $20 million settlement reached in April between garment workers and U.S. apparel manufacturers and retailers over allegations of sweatshop conditions removed some uncertainty. But business is still down due to a confluence of factors including the lawsuit, the war with Iraq, SARS and the sluggish U.S. economy.
"We are anticipating that this will be the first year where we may see the last half is worse than the first half in terms of sales," said Richard Pierce, Saipan Garment Manufacturers Association executive director.
Labels including Tommy Hilfiger, Calvin Klein, Polo, Ralph Lauren and Liz Claiborne and retailers such as The Gap, Abercrombie & Fitch, Sears Roebuck and Co., Nordstrom and Target are among the U.S. companies that buy clothing made in Saipan, capital of the U.S. Commonwealth of the Northern Mariana Islands.
With orders already down from last year, the island's garment industry reported an 18 percent drop in sales in April. The settlement with workers was not enough to offset orders canceled because of the war in Iraq and the U.S. economy.
"The war hit us fast and hard," said Lynn Knight, a vice president of manufacturer Tan Holdings. She said cancellations of orders by the world's top clothing brands stranded 15 containers of high-class handiwork on the docks right after the war started in April.
At the same time, she said, the industry is struggling with the commonwealth's tight restrictions on transit of workers from countries hit by severe acute respiratory syndrome. Like islands across the Pacific, Saipan wants to remain SARS-free.
The government on June 12 lifted the ban for some countries but kept it for Taiwan and China.
But with the settlement reached in April between workers and 54 clothing outlets and factories, the industry and its harshest critics now agree Saipan can shed its sweatshop image and set an example for the world as a decent place to work.
Lawyers for 30,000 former and present Saipan workers say better conditions finally will be guaranteed July 28, when an intense monitoring system starts up under three retired judges from Washington state, California and the island's own Superior Court.
The workers, most of whom come from China, the Philippines and other Asian nations, still will be paid the legal minimum $3.05 an hour for Saipan, which is far more than they would earn at home. But factories now have to comply with terms of the settlement, including limiting hours, paying overtime and allowing complete freedom for the workers.
Garment industry officials say that even before the settlement they had adopted a code of conduct that will improve workers' treatment. The industry acknowledged no wrongdoing in the settlement.
The industry organization expelled one factory last month and Saipan Gov. Juan Babauta said five may be shut down for violations of federal labor and safety standards.
Pierce estimated that workers will average $193 from the settlement, while workers' lawyers and public relations firms get millions.
Michael Rubin, a California attorney for workers in the suit, acknowledged that some former employees will get as little as $100 from the $6 million in direct payments from the settlement. But he said those working now could get more than $1,000, with the first payments next month. The rest of the $20 million settlement goes for monitoring and legal expenses. Rubin said plaintiffs' lawyers worked thousands of hours without charge.
"Not only does this fully protect fundamental human rights of the workers, but it does so in a commercially practical way that all segments of the industry can be proud of," Rubin said.
The garment industry has helped reshape Saipan, which just 15 years ago was a little Pacific isle of sugar fields, war memorials and modest beach resorts 3,800 miles southwest of Hawaii. The island and the rest of the Northern Marianas came under U.S. control during World War II and became a U.S. commonwealth under a covenant with the United States in 1978.
Now it is a 13-mile-long island of contrasts: Boulevards lined with Brazilian fire trees, high-rise resort hotels and classy shops catering to Japanese tourists -- and nondescript garment factories behind chain-link fences and hundreds of neon-lit poker parlors where islanders and some foreign workers pour their wages into video gambling machines.
The island's 30 American, Korean and Chinese garment factories provide more than a third of government revenue.
