Tourism and construction are clear casualties
Saipan—Expect a mad scramble for CW1 slots for the last two fiscal years of the CNMI-Only Transitional Worker Program as the federal government prepares to end the five-year extension of the Commonwealth-only visa.
After a delay, the U.S. Citizenship and Immigration Services announced the reduction of the CW1 cap for FY 2018 by 3,000, bringing down the number from 12,998 for FY 2017 to 9,998 to the
current fiscal year. They also revealed the caps for FY 2019 and 2020 (until Dec. 31, 2019) to 4,999 and 2,499, respectively.
The CW1 program aims to zero out the number of personnel under the CW1 visa classification, while at the same time giving employers five years to transition their non-immigrant workers to other U.S.-eligible work visa categories.
The significant reduction of the CW1 cap for FY 2018 is expected to have a strong impact to the local economy most especially in the construction industry, given that hotels, and other tourism-related facilities and infrastructure are currently being built to meet the increasing visitor arrivals. The move could also slow down the local economy, which was stagnant for a number of years following the exit of the once thriving garment industry due to unfair labor practices and cheaper labor available elsewhere.
The CNMI economy declined -17.5 percent in 2009 after the last garment factory closed on Saipan. Business was both slow or at a standstill with low tourism arrivals, no new investors were coming in, and businesses were either forced to cut work hours or lay off their employees. The government also suffered huge cuts to its annual budget and implemented austerity measures just to continue giving basic services to the public.
These were the dark ages, according to Gloria Cavanagh, president of the Hotel Association of the Northern Mariana Islands, a sad and sorry sight for the CNMI after enjoying the billions of dollars it earned during the height of the garment industry. Cavanagh is also the board chair of the Marians Visitors Authority, the CNMI’s local tourism arm that heavily promotes the islands as a worthwhile vacation spot to foreign markets like China, Japan, Korea, Russia and Taiwan.
The 3,000 -cap reduction of FY 2018’s total slots came as a surprise to local government and business officials, with CNMI Gov. Ralph DLG Torres saying USCIS’ move is a “tremendous blow to our economy.”
CNMI officials have been lobbying the White House and the U.S. Congress to help them solve the current labor crisis for the “continuity of [the CNMI’s] economic growth.” They have since been either meeting or constantly communicating with federal officials and Congressional leaders to follow up on the status of their requests to solve the ongoing labor shortage, especially in the construction industry, that clearly affected work on several hotel projects most specifically the multimillion-dollar Imperial Pacific Resort hotel and casino in downtown Garapan.
Imperial Pacific International (CNMI) Ltd., the local arm of Hong Kong-based IPI Holdings, is currently the biggest investor in the CNMI as it also plans to take over Mariana Resort & Spa, the current hotel facility being run by Japanese company Kan Pacific CNMI. They plan to improve the Marpi hotel and at the same time build a waterpark as part of IPI’s multibillion-dollar Phase II project.
IPI and its contractors, however, were involved in a labor controversy after federal immigration and labor officials discovered that laborers working at the Imperial Pacific Resort construction site entered the CNMI as tourists, therefore, making them ineligible to be employed in the CNMI. Protests also became a permanent spectacle near the hotel-casino as workers voiced their frustration to the contractors who hired them for withholding their salaries or not paying them the amount agreed on.
Gold Mantis, Great Wall, Beilida, MCC International were some of the contractors tapped by IPI to work on their casino resort. The Chinese workers, through an interpreter, revealed that the people who hired them said that they would enter the CNMI as tourists and that proper work documents allowing them to be employed would be processed once they arrived on Saipan.
Those promises were never fulfilled, while they were forced to work longer hours without overtime pay and their salaries were not paid for weeks or even months. The Chinese tourist-workers issue could hurt the local government’s efforts of lobbying Washington D.C. officials to extend the CW1 program another 10 years while giving improved status to some of the eligible foreign workers.
CNMI Gov. Ralph Torres, after learning of USCIS’ intention to reduce the CW1 slots by 3,000, immediately flew to Washington D.C. in mid-November to continue to lobby Federal officials of helping them solve the CNMI’s current labor and immigration problems. “[The Department of Homeland Security] told me it is their legal responsibility to make larger cuts to the CW number under the current law in order for the CNMI to reach zero by 2019,” says Torres.
Torres notes that under the Consolidated Natural Resources Act of 2008 or Public Law 110-229, the measure that created the CW1 program, the effect of the reduction could have been more severe. “It was incredibly difficult to argue against the facts of the current law.”
If current policies stand, local businesses and employers would be left with no other choice but to either follow the law by transitioning their employees to other U.S.-eligible work visas or make the difficult decision of either once again cutting their operational hours or letting go of their ineligible personnel.
The CNMI Labor department has also claimed that more locals or U.S. citizens are now being hired by companies operating in the CNMI. Though the exact numbers have yet to be released, it was learned that most of those who were hired were sons and daughters of foreign workers that are now at a legal age to be employed and seek job opportunities in the commonwealth.
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In previous interviews, Torres said U.S. President Donald J. Trump would help the CNMI with its labor issues and has already instructed White House Chief of Staff John Kelly to coordinate the efforts to find a solution.
Matt Deleon Guerrero, Torres’ chief of staff, is also in constant and direct communication with Kelly as part of CNMI efforts to beat the Dec. 31, 2019 deadline for the CW1 program.
The CW1 program, introduced under the Consolidated Natural Resources Act of 2008 on May 8, 2008, extends most of the U.S. federal government’s immigration laws to the CNMI for the first time. The program gave a five-year window to allow CNMI businesses, companies or employers to hire temporary foreign workers—who are ineligible to work after not qualifying in other U.S. visa categories—under the CW-1 visa to be able to work in the Commonwealth.
The CW1 program, which was supposed to end in 2014 but was extended until 2019, applies if the non-immigrant employee does not qualify in any of the other regular US-worker visa categories under the Immigration and Nationality Act. CNMI employers were allowed to apply for temporary permission to use foreign laborers.
Some businesses, especially the huge companies, have already started the processing of the papers for some of its personnel and staff to be classified under the H-1B and H-2B workers visa category where the CNMI and Guam are exempted from the federally-mandated cap. Applications for foreign nationals that would fall under the H1-B and H-2B visa classifications, must each include a Labor Condition Application and Temporary Labor Certification that would show the work and other services rendered would be limited to either the CNMI or Guam.
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