SAIPAN GARMENT MANUFACTURERS ASSOCIATION (SGMA)

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News Release January 31, 2000

SAIPAN GARMENT MANUFACTURERS ASSOCIATION (SGMA) RELEASES FACTORY MONITORING FINDINGS

SAIPAN, Northern Mariana Islands) (January 31, 2000)---The Saipan Garment Manufacturers Association ( SGMA ), in a meeting with the Commonwealth of the Northern Mariana Islands’ Governor Pedro P. Tenorio, today announced the findings of monitoring visits of the association’s member companies performed by PricewaterhouseCoopers (PWC ). During December, the independent external monitoring firm performed visits at 30 Saipan apparel manufacturers to assess compliance with the SGMA Code of Conduct.

The SGMA Board of Directors expressed satisfaction in PWC’s findings for the accuracy they conveyed in depicting the conditions in the Saipan factories.

"Hiring PricewaterhouseCoopers was a good investment to ensure that we meet the standards in the SGMA Code of Conduct consistent with the expectations of the world’s leading apparel brands, for whom they produce," said SGMA Executive Director Richard A. Pierce.

Adopted in late 1998, the SGMA Code of Conduct was based upon a model from the Presidential Task Force’s Apparel Industry Partnership (AIP). "Extensive training seminars were conducted for SGMA member companies in 1999 during January, February and August." The U.S. Department of Labor’s Wage & Hour more Compliance and OSHA divisions conducted training with a non-profit firm, Business for Social Responsibility (BSR), where health and safety, wage payment and compliance principle sessions were given as a mandatory requisites for all SGMA members.

During PWC’s Code of Conduct monitoring visits, each factory was inspected and surveyed, including inquiries of management, confidential employee interviews and detailed testing of records to assess compliance with 10 separate Code standards. The standards covered such subjects as forced labor, child labor, harassment or abuse, nondiscrimination, health and safety, freedom of association and collective bargaining, wages and benefits, overtime pay/hours of work, worker dormitories/freedom of movement and compliance principles.

PricewaterhouseCoopers’ findings did not identify any instance of non-compliance for 6 of the 10 code provisions subject to the monitoring. "However, the reports did indicate some occupational health and safety deficiencies and all companies had overtime in excess of the SGMA Code of Conduct standard, which is 60 hours per week." Not all of the Code of Conduct internal mechanisms had been properly implemented to date; some of the sampled employees did not know of or understand the provisions of the SGMA Code of Conduct.

The results of the monitoring highlights some isolated issues at individual factories and a few more systemic issues at the facilities," said PWC Partner, Randal Rankin. "The SGMA and its members have made significant efforts, including training and education as well as monitoring, to ensure conditions are improved to meet expectations."

PWC forwarded the results of the monitoring to the SGMA Compliance Committee for review and member company sessions, where schedules and recommendations for corrective action plans will be developed and implemented prior to follow-up audits by PWC.

"All SGMA member companies have displayed a willingness to implement the corrective actions necessary to correct the non-compliance issues identified by PWC," said SGMA Executive Director Pierce.

Pierce explained that other detected Code non-compliance was not necessarily problematic, but more in the definition of work in progress. "The excess overtime is all voluntary; no one is ever forced to work when they don’t want to." The total number of employees in our factories is capped according to CNMI law (15,373). "The ceiling is a self-imposed measure, which is sensitive to any impact on the U.S. domestic market." At the same time, our buyers like the quality of our products and want more than Saipan’s factories can produce in a 60-hour workweek. "Our Code will have to be amended, and we will request consideration from our buyers."

Pierce assured the Governor that the SGMA Code compliance identified by PWC as needing improvement is being addressed. "As the factory workforce becomes fully educated, and the internal monitoring teams in each factory are all operational, the overall workplace condition will meet a higher level of compliance."

At SGMA’s request, a weeklong Occupational Health and Safety Conference will take place in March. U.S. Department of Labor-OSHA Region IX administrative offices have committed to participate in the training. "At that time, OSHA will officially kick-off the SGMA/OSHA Excellence 2000 Partnership with volunteered SGMA members." OSHA has been asked to speak on the new federal Ergonomics Act, and certified instructors will discuss the Blood Borne Pathogen Act. "Instructors will also qualify conference participants with OSHA-501 Voluntary Compliance certification."

More information about the Saipan Garment Manufacturers Association can be found at SGMA’s website a http://www.sgma-saipan.org/ 

Contact: Richard Pierce TEL: (670) 235-7699 E-mail: sgmacsc@gtepacifica.net 

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