I am pleased to join Senator Murkowski in introducing the Commonwealth of the Northern Mariana Islands Covenant Implementation Act, legislation to curb trade, immigration, wage, and apparel labeling abuses in the CNMI.
On July 31, 1997, I introduced S. 1100, the CNMI Reform Act. S. 1100 extends the Immigration and Nationality Act to the Commonwealth, limits use of the "Made in USA" label, and applies the U.S. minimum wage to the CNMI. The measure we are introducing today is similar to S. 1100, but also imposes duties on CNMI garments unless garment companies employ a sufficient number of U.S. employees and establishes a comprehensive regime for CNMI immigration and naturalization.
This is a bipartisan bill, drafted by the Clinton Administration at the request of the Republican Chairman of the Senate Energy Committee. It contains more comprehensive reforms than the measure I introduced earlier this year. Under the Murkowski-Akaka bill, the CNMI garment industry will face severe restrictions because of continued abuses.
After a thorough analysis, the Commerce Department recently concluded that the Commonwealth is an "outpost for Chinese apparel production." The Commerce Department found that apparel manufacturers from the People's Republic of China have transplanted their operations to the CNMI, employing bonded and indentured Chinese laborers to sew Chinese fabric into garments labeled "Made in USA." By using the Commonwealth as an apparel manufacturing base, Chinese manufacturers avoid tariffs and escape U.S. quotas on finished goods.
Despite promises of the American dream if they work in the CNMI, laborers must sign contracts with the People's Republic of China that waive rights guaranteed to U.S. workers, forbid participation in religious and political activities while in the U.S., prohibit workers from marrying, and subject employees to penalties in the PRC. Working conditions in the CNMI garment industry hardly justify granting "Made in USA" status and preferential duties to CNMI garments.
A recent investigative report by King World Productions/Inside Edition is evidence of the abuses which garment workers suffer. Inside Edition used hidden cameras to expose the overcrowded and squalid buildings workers are forced to live in. Employees described being confined to barracks ringed by barbed wire and being treated more like prisoners than employees.
IMMIGRATION CONCERNS
I am sure many Senators will find it hard to believe that the Immigration and Nationality Act does not apply to all territories in the U.S. As surprising as it may be, the CNMI is exempt from U.S. immigration law and maintains its own policy on immigration.
After 20 years, CNMI immigration policy is a proven failure. In 1980, the Commonwealth's population was 16,780. Of these, 12% were alien residents. Today, CNMI's has a population of 59,000, more than half of whom are aliens.
Rather than preventing an influx of immigrants, the CNMI has established an aggressive policy of recruiting low-wage, foreign guest workers to operate an ever-expanding garment and tourism industry. According to the CNMI representative in Washington, local immigration policy has "no limit. It is wide open, unrestricted."
The U.S. Immigration and Naturalization Service reports that CNMI authorities have no reliable records of aliens who have entered the CNMI, how long they remain, and when, if ever, they depart. Ninety-one percent of the private sector work force are alien guest workers, and these workers have overwhelmed the CNMI to the point where the unemployment rate among U.S. citizens living in the Commonwealth is 14 percent. There is no justification for an immigration policy that admits foreign workers in such overwhelming numbers that it leads to double-digit unemployment.
Given these circumstances, the application of U.S. immigration law to the CNMI is long overdue.
"MADE IN USA" ABUSE
The evidence that garments sewn in the CNMI directly and unfairly compete with U.S. apparel manufacturers is very strong. According to the Commerce Department, 85 percent of CNMI apparel is classified as "import sensitive." This classification means that CNMI garments compete with segments of the U.S. apparel industry that are experiencing significant decline due to heavy import penetration.
Apparel manufacturers in the CNMI enjoy benefits that far exceed those enjoyed by foreign or domestic manufacturers. CNMI garment factories are not subject to the U.S. minimum wage and pay no duty on fabrics they import. Furthermore, quotas do not apply to either fabric imported into the Commonwealth, or to finished garments cut and sewn in the CNMI using foreign labor. Yet these products are labeled "Made in the USA" and compete unfairly with apparel employment elsewhere in the U.S.
LABOR ABUSE
The 1976 covenant exempts the CNMI from the federal minimum wage. This exemption was granted with the understanding that as its economy grew and prospered, the CNMI would raise its minimum wage to the federal level. Foreign workers typically enter the CNMI under one-year work permits and are paid a minimum wage of $3.05.
According to the July 1997 report by the Department of the Interior, the lower minimum wage, combined with unlimited access to foreign labor, creates an incentive for employers to hire foreign labor for all jobs, including skilled and entry level jobs at or near the minimum wage. Employment statistics clearly supports the Interior Department's analysis.
The minimum wage is sometimes a lighting-rod issue for republicans. However, in a labor market where there is an unlimited supply of guest workers, the low CNMI minimum wage means that low-wage alien laborers are displacing U.S. workers. Any policy that favors foreign workers over the interests of employed and unemployed U.S. citizens is indefensible.
HUMAN RIGHTS AND SEXUAL ABUSE
The Commonwealth's immigration policy results in serious problems in other areas. The Justice Department has documented numerous cases of women and girls being recruited from the Philippines, China, and other Asian countries expressly for criminal sexual activity. These abuses are a direct consequence the Commonwealth's unrestricted immigration policy.
Typically, these women are told they will work in the CNMI as "waitresses," but are forced into nude dancing and prostitution upon their arrival. The Justice Department described this situation as the "systematic trafficking of women and minors for prostitution," which may also involve illegal smuggling, organized crime, immigration document fraud, and pornography. Cases of sexual servitude have also been identified.
The U.S. Justice Department also found cases of female guest workers and aliens living in the CNMI being forced into prostitution through intimidation or threats of physical harm. In some instances, women who resist are kidnaped, raped, and tortured.
I thank Senator Murkowski, the Chairman of the Senate Energy and Natural Resources Committee, for his efforts to reform these abuses in the CNMI. I look forward to working with him on moving this bill through our committee so that it can be considered on the Senate floor.
