All bets are off Foreign workers facing familiar labor problems in the CNMI

May 3, 2017

 

Saipan — Abandoned, abused and exploited. This is how hundreds of Chinese nationals working for contractors tapped by Imperial Pacific International to finish its multimillion dollar casino-hotel project felt as most of them were reportedly not paid their wages and overtime dues, are living in deplorable staff housing, and sometimes without food and clean drinking water.

 

    Three groups from three different construction firms have staged separate protest rallies that led to investigations by local and federal law enforcement agencies on the labor practices of three construction firms MCC International, Gold Mantis and Sino Great Wall Engineering. Beilida Overseas (CNMI) Ltd. is a subcontractor of MCC.

 

    Sino Great Wall consequently settled all of its obligations to its workers a few days after the protest staged in late December. The company paid 185 workers a total of $1,338,032.03 in back wages and other for the period covering July to November 2016. Sino Great Wall officials said the late transmittal of their funds to the bank here on Saipan caused the delay in releasing the checks to their workers.

 

    The laborers were hired from different provinces in China —Changchun, Hebei, Heilongjiang, Henan, Shandong and Shenyang —with so called “brokers” from recruitment agencies promising them of construction work with wages twice the amount they have been getting in major cities in their homeland.

    Some say these alleged labor shenanigans are reminiscent of the 1990s landscape when the CNMI was confronted with allegations of labor abuses at the height of the then thriving  garment industry. This eventually led to the federal takeover and the subsequent death of the garment industry.

 

    A construction worker in China, according to the China Labor Bulletin’s 2015 data, pays an average salary of 3,508 yuan per month or $509. The current minimum wage in the CNMI is $6.55 and if you work eight hours a day for 20 days it gives you a monthly salary of $1,048 or 7,215 yuan, excluding overtime which is computed at 1.5 times or $9.825 per hour.

 

    That’s why the thought of a paycheck worth two times higher than what they have been paid in China pushed hundreds of Chinese construction workers to take the risk of going to the CNMI. The only catch: they would pose as tourists when they enter Saipan.

 

    The third group of protesters from Gold Mantis said that they paid the “broker” $1,500 or 10,325 yuan each as recruitment fee and they were charged another $1,000 when they arrived on Saipan. Their supervisors also charged them $50 to $100 for their uniforms.

 

    All of the agreements were done verbally; no formal contracts were signed. They were told not to ask any questions, not to talk anyone aside from their contacts, and just follow the instructions from the person in charge at the construction site.

 

    The Gold Mantis workers were even asked by their supervisor, in a meeting on Monday night, to sign a document that they had already received their salaries. However, the space where it would have shown how much money they would be receiving was left blank.

 

     They said they were asked to sign another letter relieving their employer of their responsibility to take care of them. They refused to sign. They, however, signed a payroll sheet and were told that they would be getting their wages and other allowances on Wednesday, April 20. Their supervisor never showed up and they have yet to locate him, but he might had already left Saipan.

 

    Gold Mantis workers demanded that they get paid the $6.55 hourly wage they were promised, be reimbursed for the expenses they paid the “broker” and other fees collected from them including the expenses for their uniforms, get paid the for days they were told to stop working, and be provided return tickets home.

          In a statement, Imperial Pacific said it did not condone the hiring and or employment of individuals by illegal means. “Imperial Pacific International is emphatic in its request to all of its contractors and subcontractors to follow all local and federal labor and immigration laws and regulations in the conduct of its business, including and in particular, the hiring of construction workers,” the company said in a statement.

 

    Imperial Pacific also reminded its contractors and their subcontractors “to faithfully follow and fulfill its contractual commitments and obligations to its workers and Imperial Pacific International, and resolve all labor issues appropriately.” 

 

         The recent events slowed down the construction activity at Imperial Pacific Resort and prompted federal and local enforcement officials to conduct inspections and investigations into the reports of alleged illegal use of laborers by the contractors. It was later confirmed that most of the 1,032 people who entered Saipan as tourists have violated their visa parole by overstaying and working illegally. Chinese tourists, along with Russian visitors, enjoy the visa parole program where they stay for 45 days in the CNMI.

 

    The $500-million casino project, which is almost 100 percent complete and waiting for occupancy clearance certificates from the Department of Public Works, has yet to take off but things are getting a bit messy for IPI, which continues to be hounded by negative publicity and various allegations such as safety rules violations and money laundering.

 

     Before the workers’ protests, the raid of MCC’s office and arrests of several officials of the other contractors, a Chinese worker — who is among those who allegedly came to Saipan as a tourist—died on March 23. A week before that, a trash fire hit the IPI construction site and in December IPI got sued by local contractor RNV Construction for allegedly refusing to pay $1,672,078 when they built the temporary live casino training facility at the T Galleria Saipan.

 

     Imperial Pacific has also received several downgrades on its credit ratings from Fitch Group and Moody’s Investor Services, two of the Big Three credit rating agencies. The downgrades were based on growing concerns that the lone casino licensee on Saipan lacks the needed funds to complete the initial gaming facility located in the heart of Garapan—Saipan’s main tourist district.

 

    Several online financial news sites—most especially Bloomberg—had been amplifying Imperial Pacific missteps with its project in the CNMI, where local casino officials suspect a possible agenda and part of demolition job against them since a lot are threatened once the hotel resort is fully operational.

 

     Social media has been abuzz with those who oppose the casino project having a field day in highlighting the events that had transpired the last three weeks. Rep. Edwin K. Propst even called on CNMI Gov. Ralph Torres, the Commonwealth Casino Commission, and other officials and agencies involved in approving the casino to take action and demand IPI to fix the mess.

 

    CCC officials also asked Imperial Pacific to get their act together and tell their contractors to settle everything with their workers so that work at the casino-hotel would continue for it to open either in the third quarter or later this year.

 

    Torres, Delegate Gregorio Kilili C. Sablan (D-MP), and other CNMI officials are worried that the ongoing mess with the Chinese workers that entered Saipan as tourists could jeopardize their efforts of asking the Trump administration to keep the China visa parole program, increase the CNMI-Only Transitional Nonimmigrant Worker visa or CW1, and extend the program again to either five or 10 years.

 

    Anti-casino advocates are all fired up, blaming officials who supported the entry of the gaming industry on Saipan, even alleging that some of the CNMI’s leaders were in the pockets of casino investor.

 

    Despite the controversy, tourist arrivals and activity remain high and in the last calendar year, 2016, the CNMI’ breached the 500,000 visitor mark—first time on over a decade.

 

     Put all the controversial issues and bad publicity aside, the casino—most especially the temporary facility at T Galleria—has generated a lot of job opportunities to the local workforce and has also pumped in millions of dollars to the CNMI’s coffers through the license fees and business gross revenue taxes. Money that gave the government the chance to deliver basic services to its people like salary increases for civil servants, bonus and other benefits of retirees, payment of their overdue utility bills, and land settlement and other judgment cases.

 

     The business sector has also gained with all hotels almost full in occupancy while restaurants, shops, buffet tables, and others that either offer goods or basic services are bustling with activity. The wheels of commerce in the CNMI are again turning after years of rust and sluggish performance.

    Conflicting opinions have been circulating in the CNMI. Ideas and points of view are being tossed around where the consensus by both groups—whether pro or anti—is to find a solution to the current mess so the past problems with the garment workers and what happened with the Tinian Dynasty & Casino would never come back to haunt the Commonwealth.

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