History of Micronesia

Neo-Colonialism & Contract Labor Under The US Flag

By Phil Kaplan, Free Press Contributor. Institute for Global Communications, LaborNews. August 6, 1997.

* A housemaid is raped by her employer, a police officer. She returns home to the Philippines with child. Fearful of family disgrace, she gives birth in the jungle, and the child is given to her married sister. The child is ill and needs an operation. The mother returns to the CNMI where she was raped so she can earn enough money to pay for the operation. Her new employer, a fire fighter, rapes her. She conceives. Depressed and suicidal she is hospitalized for fear she is going to harm her baby, who is seriously underweight. Recovered, she agrees to marry a man she does not love, fearful of returning to home unwed and with a second child.

* A 19-year-old Chinese garment factory worker cannot meet the daily quota of garments, nor tolerate the harassment of her supervisors. She is returned to her barracks and told to buy her own ticket back to China. She doesn't have the money. She is denied access to the company dining room and told if she wants to eat she should feed herself. Given no option, she flees her employer.

* A group of 14 Filipino construction workers who haven't been paid for four months approach the Catholic Church for food. Their employer has little work for them. When they work he doesn't pay them. They have stayed with their employer because they don't want to accept the alternative - returning to the Philippines in debt, and without money.

* A housemaid, exhausted and unpaid, forced to work seven days a week, leaves her employer. She was required by her employer's teen age children to wake up in the middle of the night to iron their clothes so they can go out and party.

All of the above events happened not in an obscure third world country, but in the Commonwealth of the Northern Mariana Islands (CNMI). Which is a commonwealth of the United States. Such abuses are in part the result of lax labor and immigration laws governing the Islands since they become a Commonwealth in 1976. One consequence of these laws has been the development of a massive export platform where Chinese and Filipinos work in sweatshops to produce garments often labeled "Made in the U.S.A." Another is the creation of a system of domination putting foreign workers at risk from the indigenous population, who lord it over them with little restraint.

Opposing any change is a pantheon of free market legislators, foundations, media, and the venerable Seattle law firm, Preston Gates, which has been paid $1.1 million to lobby the Common Wealth's cause. This situation has not gone unnoticed, and human rights advocates are making gains in both the U.S. Congress and in international human rights forums. This effort gained higher profile in a letter dated May 31, 1997, in which President Clinton wrote to the Governor of the CNMI, Froilan Tenorio, "...out of concern about certain labor practices in the islands that are inconsistent with our country's values.... there have been persistent incidents of improper treatment of alien workers and inadequate enforcement of their rights.... and manufacturers, using foreign workers, unfairly compete with other production under the U.S. flag.... I have therefore concluded that federal immigration, naturalization, and minimum wage laws should now be applied to the Commonwealth...." The ultimate power to extend these laws belongs with the U.S. Congress, which is setting up a pitched battle between human rights advocates, and conservatives who see such authoritarian labor practices as the fruitful workings of the "free market."

The Making of An Export Platform

The CNMI consists of a number of the northernmost islands in the Micronesian chain. There are only three islands that have an appreciable population, Saipan, Rota and Tinian. In 1975 the population of the CNMI was just under 14,000, of which 12,320 (88 percent) were the indigenous Chamorro and Carolinian peoples. Today the population is estimated to be 59,000, of which 36 percent are indigenous and 42 percent alien contract workers, with the remainder other U.S. citizens or temporary residents.

In 1975 the peoples of the Northern Mariana islands voted to determine their political status, and by a large margin approved a Covenant with the United States to establish the Commonwealth of the Northern Mariana Islands. With Congresses' approval in 1976 the CNMI came under U.S. sovereignty.

At the time the "Covenant" was signed the Northern Mariana Islands were almost completely undeveloped. In 1980 total wages and salary income produced in the CNMI was $41.7 million, but by 1990 was $265.9 million and growing. The issuance of business licenses between 1979 and 1991 increased from 475 to 4,313. The number of requests for nonresident work permits in 1979 was 2,214, but by the end of this year, 33,000 work permits will have been issued. Total reported business gross revenue has increased from $224 million in 1985 to nearly $1.5 billion in 1995. These and other indicators are numerical measures of the convulsive change that has transformed the CNMI in rapid order.

To promote economic growth the CNMI was promised hundreds of millions of dollars in support from the U.S. treasury to develop the infrastructure on the Islands, and residents were granted a 90 percent rebate on their federal income tax. Most federal laws and programs were applied with limited but important exceptions. For example, the section of the Fair Labor Standards act which sets the level of the minimum wage was exempted, but the rest of the act, including the section dealing with overtime, applied.

In the early eighties the economic possibilities of the CNMI were discovered and exploited. Japanese hotel developers found that Saipan's inexpensive beachfront land made it a perfect place for investment. The regulatory climate was less than vigorous and most importantly, a large, skilled, inexpensive Filipino work force was nearby to build and staff the hotels.

To promote industry, a practical free trade zone was established, and a garment industry quickly developed in response. Garments assembled in the CNMI are shipped into the United States duty free often with "Made in USA" labels affixed.

Further enhancing its development was the Commonwealth's control over immigration, which has allowed the importation of a work force from the People's Republic of China (PRC). "Sweated" Chinese labor in turn provided the conditions that helped send the local economy into overdrive.

The development of garment and hotel industries happened virtually overnight. By the mid-eighties the indigenous peoples found themselves in the midst of an incredibly hot, cash driven economy. While the indigenous people do not own the garment companies or the hotels, they do own the land, and control the institutions of governance necessary for doing business. For some the opportunity meant millions of dollars in profits from the leasing of land to developer interests. For others, wealth was accumulated through the importation and exploitation of alien labor.

Development brought restaurants, night clubs, retail, construction, and other businesses. Indigenous businesspeople staffed their businesses with managers and workers, primarily from the Philippines, who were highly motivated and who also came incredibly cheap. The minimum wage was set in the early 1980s at $2.15 an hour, with houseworkers, fisherman, farmers and construction workers exempted. This meant that workers could be had for $150 a month plus room and board. Indigenous people, if employed in the private sector, were likely employed in high paying patronage jobs in the hotel and garment industries.

By the mid 1990s almost 70 percent of the indigenous work force was employed by government, while few indigenous persons were employed in blue collar private sector jobs. Those that were received much more than the minimum wage.

There is therefore no constituency in the CNMI with a vote for raising the minimum wage, since far more of indigenous peopleare bosses rather than employees. The minimum wage of $2.15 an hour wasn't raised until December of 1994, when it became $2.45 an hour after pressure from Congress and the Department of Interior, the federal agency with jurisdiction over the CNMI. At that time construction workers were made non-exempt. Currently the minimum wage stands at $2.90 an hour.

Neo-Colonialism, Native Style

It is no surprise that the CNMI's insular island culture should react as it has to the convulsive societal change wrought by economic prosperity. Village and family disciplines no longer check behaviors of male family elites. The systems of justice in the CNMI have been rigged, immunizing elites against the consequence of abuse they inflict upon alien contract workers.

The Chamorro and Carolinian people are keenly sensitive to the wrongs inflicted upon them during the colonial epoch. By accepting the Covenant they chose to surrender their sovereignty in exchange for promises of riches. The U.S. government, sensitive to charges of Colonialism, looked the other way as the Commonwealth evolved. The federal government has been reluctant to assert federal jurisdiction at the expense of indigenous rights.

The CNMI is almost entirely the product of the design of the indigenous leadership, who are rightfully proud of what they have accomplished. Their protests against interference by the federal government that would threaten their interests are couched in the rhetoric of the colonial oppressed. Their actions arise from mentality that has embraced the values, attitudes and regrettably the practices of the worst of their former colonial masters. Such attitudes are expressed daily against the workers most intimately connected to the lives of the Chamorro and Carolinian peoples.

The Plight of Filipino Labor

The CNMI has been primarily reliant on Filipino labor. There are almost as many Filipinos residing in the Commonwealth as there are indigenous people. These contract workers are particularly at risk of abuse in large measure because they are the most visible and most intimately involved in the daily lives of the locals.

Outside of the hotel industry, about two-thirds of the Filipino work force, including the undocumented, live and work under duress. The Filipina is under special threat. Almost every family in the Commonwealth employs a Filipina housemaid. They are employed on a contract basis that requires them to work twelve hour days, six days a week. Up at 5:00 or 5:30 AM to wash their employer's car, most are not finished working until after 8:00 PM. Many are denied a day off. But it is not the long hours that burden the workers. It is not even that they don't know if they will be paid the contracted $200 a month wage. It is the atmosphere of threat and terror, that is found in many of the homes in the CNMI. The threat and practice of sexual abuse is not universal, but it is common.

A combination of factors place Filipina contract workers at risk of sexual abuse. In debt to a labor recruiter in the Philippines, they feel an overwhelming sense of responsibility to the families they are usually supporting at home. Desperately needing to stay employed, many victims remain silent in the face of abuse. Without a support network, they have nowhere to run. To run to the government is problematic. One of the victims I worked with claimed that she was raped by an official in a government agency charged with the enforcement of laws designed to protect alien labor. I spoke to a Filipina married to a Chamorro who claimed that the same official had abused his previous maids, with one returning to the Philippines with child.

The indigenous employer is cursed with, in varying degrees, a slaveowner mentality. It can be said that this was the behavior modeled to them during the colonial and neo-colonial periods. This offers a partial explanation, but no excuse. The Filipino contract workers are especially at risk on the island of Rota. Rota's population of 2,500 is almost equally comprised of Chamorros and Filipinos. The plight of contract workers on Rota has been the subject of articles appearing in the Pacific Daily News, The Washington Post, The Philippine Inquirer, and even the Reader's Digest. What has drawn the press is the extreme nature of the abuse, and the heroic efforts of human rights workers Wendy and Boboy Doromal who risked their lives to help workers subject to horrific abuse.

This international press coverage led the Philippine Government in March of 1995 to impose and later expand a moratorium on the deployment of houseworkers, farmers, waitresses and bar and nightclub employees, and later all female non-professional employees from coming to the CNMI. After promises of reform the Philippine government later lifted the moratorium.

The Chinese Connection

By the end of the year it is expected that almost 10,000 contract workers from the People's Republic of China will be employed in Saipan, primarily in the garment industry.

These workers will be recruited by their provincial labor ministries from government-owned garment factories. They will sign a contract which will prohibit a number of behaviors, including taking part in political or religious activities, or any "strike." Depending on which province is doing the recruiting the workers will be subject to "civil or labor" or "civil or criminal penalties" for violation of provisions of their contract. The workers will also be required to purchase a performance bond, which ranges in price from $1,000 to $4,000. Workers know that if they violate the terms of their contract, they void the bond and could also lose their job and benefits with their home factory. Many will also be required to pay, in advance, income tax on anticipated earnings. To do so many will take out a bank loan to cover the tax. If they fail to pay off a bank loan they could face criminal prosecution upon their return to China.

The Chinese government will have no trouble recruiting workers to come to the Commonwealth. Workers will be placed on leave of absence by their employers, and families will be allowed to maintain their residences in government-owned factory housing. Seniority and pension benefits will be maintained. The worker will have the opportunity to earn American dollars and they believe, "see America."

Having every intention of fulfilling the terms of their contract they will purchase the performance bond and pay in advance their income tax with borrowed money, with little fear of consequence.

With exception, nothing in their work experience will have prepared them for the conditions of employment they will face in the CNMI. They will be expected to work 12 to 14 hours days for extended periods of time. They will be expected to produce a daily quota of garments that will numb the mind and torture the body. Many will be poorly fed and housed and have minimal access to health care. And, as the historical record shows, they will be subject to employer schemes to circumvent federal wage and hour laws to insure that labor costs remain abysmally low. If they protest their working and living conditions they risk retaliation. They will know that they are monitored by Communist party agents and province labor ministry officials. They will be told of workers imprisoned in China for protesting their circumstance in the CNMI. Most will regret coming to the CNMI but will resign themselves to their fate. Having a healthy instinct for survival, and an appreciation for the ruthlessness of their government's agents, very few will come forward with complaint.

Until the U.S. Congress lost patience with the CNMI in 1994 and appropriated moneys for labor and immigration enforcement, there had been a minimal wage/hour or Occupational Safety and Health Administration regulation on the islands. But when applied, it was used to good effect. The largest settlement of a wage claim in the history of the Department of Labor was forced on a CNMI employer who managed to deny his workers $9 million in overtime pay when the minimum wage in the CNMI was $2.15 an hour.

In April of 1993 I met with 26 Chinese workers in a setting that allowed them to expresses themselves freely. They complained bitterly that they had been betrayed by their province labor ministry. The felt acutely the threat they were under from their government for protesting. They believed that the CNMI government was corrupt and complicit in their subjugation. They complained of 12 to 14 hour work days. They complained of having access to only one five minute cold water shower a day.

The Diocese has attempted to document the plight of Chinese garment factory workers in the CNMI. Since the workers live and work under totalitarian distress, the job has been difficult. The CNMI has thrived in part because its victims have been too frightened to come forward and publicly state their experience. It was therefore highly unusual when in April of 1994 the CNMI's Attorney General's office referred to the Diocese three citizens of the PRC caught up in a labor dispute with Marianas Garment Manufactures Inc. (MGM). According to the assistant Attorney General of the Commonwealth, this company was owned by the Chinese Textile Ministry through a dummy corporation in Hong Kong. It was hoped we would be able to assist the workers in obtaining refugee status through the United Nations High Commission for Refugees (UNHCR).

In late 1993 the CNMI had filed a lawsuit against MGM alleging wage and hour violations. In December of 1993 the company closed it doors, sending most of its 300 workers back to China.

Shortly after the case was filed, evidence was discovered supporting worker's allegations that the MGM was operating with two sets of books facilitating the payment of a sub-minimum wage. The CNMI filed the case initially to clear legal impediments to allow for the sale of MGM and to show Congress they were regulating the garment industry. Because then-Governor Guerrero's daughter was the personnel manager for the firm, and the Attorney General for the Commonwealth was one of his son-in-laws, the lawsuit caused a certain amount of distress especially with the owners of MGM, who were facing a $2.9 million claim.

We spent six months working with the MGM workers to document their claim for refugee status. Two of our MGM clients, Ms. Cao and Ms. Chen, chose to stay in the CNMI. Ms. Cao filed a labor complaint. Ms Chen decided to stay with her Aunt, who operated a small retail store, and to go to school. Another client, Mr. Sui, was a supervisor in a printing company and a friend of Ms. Cao.

We learned not only from Ms. Chen and Ms. Cao but also from another former employee of MGM of the horrific living and working conditions MGM workers were forced to endure. Ms. Chen stated she and her coworkers were treated "like animals with no respect." Work days were 12 to 14 hours long. At meals of mostly vegetables and rice, 8 workers would share two six inch plates of food. Ms. Chen claimed that one of her coworkers became anemic and had to be returned to China where she died. During the dry season on Saipan there wasn't enough water provided for drinking or cleaning. Workers would leave their barracks after work looking for water.

The Attorney General's office and the workers themselves feared that they would be imprisoned for their involvement in the lawsuit the CNMI government had filed against MGM. Ms. Cao had filed a complaint and had offered to be a witness. Mr. Sui found himself under threat of 20 years imprisonment because he refused to pressure Ms. Cao and Ms. Chen into returning to China. Ms. Chen had no intentions of getting into a dispute with MGM. She naively thought she could stay in the CNMI and go to school.

When it was discovered that Ms. Chen had not returned to China with her coworkers she was tracked down and asked to meet with the General Manager for MGM, Mr. Wu Yong. According to Chen, he told her she was needed as a witness for MGM in the lawsuit. Ms. Chen stated that when she did not readily agree, Wu threatened her and her family. For a combination of factors including her fear that testifying for MGM would require her to perjure herself before the Superior Court of the Commonwealth, she refused to cooperate with the company.

According to letters from Ms. Cao's husband and friend, Mr. Wu returned to China to get them to influence Ms. Chen and Cao to cooperate with MGM. Ms. Chen claimed in a prepared statement that Mr. Wu worked out of the Chinese embassy in Tokyo. Ms. Cao claimed that a coworker dropped her labor complaint and returned to China after Wu threatened her with 20-years imprisonment. Ms. Cao also claims that he got another of her coworkers to drop her complaint by telling her that he had the ability to "have those who go against us killed."

In September of 1994, Bishop Tomas Camacho wrote to the Governor of the Commonwealth asking for relief for the MGM workers, and assurance that Chinese workers in the future would not be threatened. In response, the Governor announced support for a moratorium on any Chinese workers coming to the CNMI for five years. After an intensive lobbying campaign which included a visit from a delegation of Chinese officials, the Governor withdrew his support for the legislation, which subsequently died.

Since my return to Washington State we have been attempting to fulfill the Church's commitment to the MGM workers. It wasn't until a few months ago that UNHCR's office in Geneva accepted jurisdiction over their case. In the meantime Ms. Chen married a U.S. citizen and is residing in Guam. Ms. Cao had herself smuggled into Guam in April. Mr. Sui is still in Saipan fearing deportation.

Third World Labor, First World Politics

These abuses will flourish as long as current immigration laws, weak labor laws, and lax enforcement allow workers to be exploited with impunity. Representative George Miller of California has introduced legislation to remove from the CNMI its control over immigration and to impose the federal minimum wage. The legislation is supported by a coalition of labor, human rights and religious organization and to the surprise of many, the Reader's Digest.

The June 1997 edition of the Reader's Digest contains an article entitled "Shame on American Soil" by Henry Hurt, which is a passionate expose addressing the exploitation of Filipino contract workers with the apparent complicity of the justice system in the CNMI. Coming from a conservative source, this article has greatly raised the profile of the human rights crisis in the CNMI.

The Democratic staff of the House Resources Committee, in a report released in April, charged that there exists in the CNMI "a systematic pattern of violation of labor rights and human rights ....in disregard to concerns voiced by human rights activists, labor unions, religious organizations, federal enforcement and oversight agencies, and the U.S. Congress." The letter from Clinton in May also strengthened the hand of those calling for further regulation.

Opposing any change is a pantheon of free market legislators, foundations, media, and the venerable Seattle law firm, Preston Gates, which has been paid $1.1 million to lobby the Commonwealth's cause, as reported in the Marianas Variety.

The crux of their argument is that the Commonwealth should be left alone to pursue "a free market agenda."

Ronald Bailey, writing for the May/June issue of The American Enterprise, reported that "... I found... the Marianas was a true free-market success story." Author Clint Bolick, in the April 18 issue of Human Events, wrote that the CNMI's "secret... is its largely unregulated markets... that in two decades have created out of almost nothing head spinning economic growth, productivity and prosperity." In the same article Bolick quoted another conservative pundit who wrote that the federal government "... can ill-afford to scorn, much less shut down, CNMI's experimental laboratory of liberty."

Over the last year the Commonwealth has junketed to the CNMI members of Congress, their staffs, and others including editorial writers for the Washington Times. These efforts helped draw House Republican leaders Dick Armey, Tom De Lay and Bill Archer to the Commonwealth's cause. They have succumbed to the surreal myth that the economic miracle has something to do with free market economic theory, as opposed to authoritarian labor practices. Rep. Miller's legislation therefore stands little chance of passage this year. However, a companion bill will likely be introduced in the Senate with bipartisan support. Its chances depend in some measure on the true story of the CNMI becoming known.

The Republican Party in the House is being split between free market conservatives and the Christian Right over "Most Favored Nation" trade status for China. If the story of the projection of Chinese state terror onto "American soil" becomes known, Miller's legislation might be more favorably received on both sides of the Congressional aisle.

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