II

105TH CONGRESS

1ST SESSION S. 1100

To amend the Covenant to Establish a Commonwealth of the Northern

Mariana Islands in Political Union with the United States of America,

the legislation approving such covenant, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 31, 1997

Mr. AKAKA (for himself, Ms. COLLINS, Mr. HUTCHINSON, Ms. LANDRIEU, Mr.

BUMPERS, Mr. FORD, Mr. BINGAMAN, and Mr. HOLLINGS) introduced

the following bill; which was read twice and referred to the Committee

on Energy and Natural Resources

A BILL

To amend the Covenant to Establish a Commonwealth of

the Northern Mariana Islands in Political Union with

the United States of America, the legislation approving

such covenant, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Commonwealth of the

5 Northern Mariana Islands Reform Act’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that:
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1 (1) The Covenant to Establish a Common2 wealth of the Northern Mariana Islands in Political

3 Union with the United States of America was ap4 proved by Congress pursuant to Public Law 94–241,

5 90 Stat. 263.

6 (2) At the time that the Covenant was being

7 negotiated, representatives of the government of the

8 Northern Mariana Islands expressed concern that

9 United States immigration laws would allow unre10 stricted immigration into their small island commu11 nity.

12 (3) In response to these concerns, section

13 503(a) of the Covenant provided that the Immigra14 tion and Naturalization Act did not immediately

15 apply to the Commonwealth of the Northern Mari16 ana Islands.

17 (4) Congress expressly reserved the right to ex18 tend the Immigration and Naturalization Act to the

19 Commonwealth of the Northern Mariana Islands at

20 a future date.

21 (5) Following the enactment of the Covenant,

22 the Commonwealth of the Northern Mariana Islands

23 instituted a largely unrestricted immigration policy,

24 causing the Commonwealth’s population to increase

25 from 16,780 in 1980 to a population of over 58,800
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1 in 1995, with foreign workers outnumbering United

2 States citizens.

3 (6) As a result of these immigration policies, 91

4 percent of the private sector work force in the Com5 monwealth is comprised of foreign workers.

6 (7) The Commonwealth of the Northern Mari7 ana Islands has used its immigration policy to re8 cruit a large, low-cost foreign work force of des9 perately poor individuals with no meaningful oppor10 tunity to demand safe living and working conditions

11 of fair wages and benefits.

12 (8) Notwithstanding an unemployment rate of

13 14 percent among United States citizens, the Com14 monwealth has recruited increasing numbers of for15 eign workers.

16 (9) Even though the Commonwealth alleges

17 that unfilled job openings justify recruitment of an

18 increasing number of foreign workers, the Common19 wealth’s own statistics indicate an unemployment

20 rate of 4.5 percent among foreign workers.

21 (10) The United States Immigration and Natu22 ralization Service reported that the Commonwealth

23 of the Northern Mariana Islands has no reliable

24 records of aliens who have entered the Common-
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1 wealth, how long they remain, and when, if ever,

2 they depart.

3 (11) At the time that the Covenant was being

4 negotiated, representatives of the government of the

5 Northern Mariana Islands expressed concern that

6 the minimum wage provisions of the Fair Labor

7 Standards Act would disrupt the Commonwealth’s

8 struggling local economy.

9 (12) In response to these concerns, section

10 503(c) of the Covenant provided that the minimum

11 wage provisions of the Fair Labor Standards Act did

12 not immediately apply to the Commonwealth.

13 (13) Congress expressly reserved the right to

14 extend the minimum wage provisions of the Fair

15 Labor Standards Act to the Commonwealth of the

16 Northern Mariana Islands at a future date.

17 (14) The economy of the Commonwealth of the

18 Northern Mariana Islands has grown significantly

19 and, in 1996, annual gross business revenues rose to

20 $1,500,000,000, a sixfold increase during the past

21 decade.

22 (15) The current minimum wage in the Com23 monwealth of the Northern Mariana Islands is only

24 $3.05 per hour for garment and construction indus-
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1 try workers and $3.05 per hour for those working in

2 other industries.

3 (16) The United States Department of Labor

4 has uncovered a systematic pattern of labor abuses

5 in the Commonwealth of the Northern Mariana Is6 lands, including—

7 (A) involuntary servitude and peonage,

8 (B) illegal withholding of wages earned,

9 (C) nonpayment of overtime wages,

10 (D) illegal deductions from paychecks,

11 (E) kickbacks of wages paid to employees,

12 (F) employee lockdowns in worksites and

13 living barracks, and

14 (G) unsafe and unhealthy working and liv15 ing environments.

16 (17) Despite an expectation that they will enjoy

17 the American dream in the Commonwealth of the

18 Northern Mariana Islands, foreign workers have

19 been required to sign contracts with government rep20 resentatives in the People’s Republic of China

21 which—

22 (A) waive rights guaranteed to United

23 States workers,

24 (B) forbid participation in religious and

25 political activities while in the United States,
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1 (C) prohibit workers from dating or

2 marrying in the United States,

3 (D) subject employees to civil and labor

4 penalties if returned to China, and

5 (E) permit Chinese Government recruiters

6 to charge a fee of 25 percent of an employee’s

7 net pay for a period of two years.

8 (18) The United States Department of Justice

9 has determined that the immigration and labor situ10 ation in the Commonwealth of the Northern Mari11 ana Islands has created a major organized crime

12 problem in the Commonwealth which involves—

13 (A) immigration document fraud,

14 (B) public corruption,

15 (C) racketeering,

16 (D) drug trafficking,

17 (E) prostitution,

18 (F) pornography,

19 (G) extortion,

20 (H) gambling,

21 (I) smuggling, and

22 (J) other forms of violent crime.

23 (19) The United States Department of Justice

24 is investigating numerous cases in the Common25 wealth of the Northern Mariana Islands of women
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1 being recruited from the Philippines, China, and

2 other Asian countries expressly for criminal sexual

3 activity, and has also described this situation as the

4 ‘‘systematic trafficking of women and minors for

5 prostitution’’.

6 (20) The Commonwealth of the Northern Mari7 ana Islands is exempt from Federal immigration

8 law, the Federal minimum wage law, and Federal

9 tariffs and taxes, yet its products are sold as ‘‘Made

10 in USA’’ although 95 percent of the workers in the

11 garment manufacturing industry are not United

12 States citizens.

13 (21) Garments made in the Commonwealth of

14 the Northern Mariana Islands carrying the ‘‘Made in

15 USA’’ label compete directly with garments made on

16 the United States mainland by workers and busi17 nesses that are subject to Federal immigration law,

18 the Federal minimum wage law, and Federal taxes.

19 (22) In 1996, garment manufacturers in the

20 Commonwealth shipped garments to the Continental

21 United States with a wholesale value of $555 mil22 lion, a 30-percent increase over the previous year.

23 (23) Congress appropriated $10 million to fund

24 a three-year initiative by the United States Depart25 ments of Justice, Labor, and Interior to assist the
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1 Commonwealth in its efforts to improve its labor and

2 immigration policies.

3 (24) Despite this appropriation there has been

4 little or no improvement in the immigration and

5 labor policies of the Commonwealth of the Northern

6 Mariana Islands.

7 (25) The government of the Commonwealth of

8 the Northern Mariana Islands has been ineffective in

9 stemming the flow of immigration onto United

10 States soil, raising the wage and living standards for

11 workers, and aggressively prosecuting labor and

12 human rights abuses.

13 (26) Despite efforts by the Reagan, Bush, and

14 Clinton administrations to persuade the government

15 of the Commonwealth of the Northern Mariana Is16 lands to correct problems in the Commonwealth, the

17 situation has only deteriorated.

18 (27) The continuing concern about labor

19 abuses, the Commonwealth’s immigration policy, and

20 the employment of foreign workers in a manner that

21 unfairly competes with other United States manu22 facturing prompted President Clinton on May 30,

23 1997, to notify the Governor of the Commonwealth

24 of the Northern Mariana Islands that Federal immi-
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1 gration and minimum wage laws should be applied

2 to the Commonwealth.

3 SEC. 3. APPLICATION OF IMMIGRATION LAW.

4 (a) Article V, section 506 of the Covenant to Estab5 lish a Commonwealth of the Northern Mariana Islands in

6 Political Union with the United States of America (ap7 proved by Public Law 94–241, 90 Stat. 263) is amended

8 by adding at the end thereof the following:

9 ‘‘(e)(1) For purposes of entry into the Northern Mar10 iana Islands by any individual (but not for purposes of

11 entry by an individual into the United States from the

12 Northern Mariana Islands), the Immigration and Nation13 ality Act shall apply as if the Northern Mariana Islands

14 were a State (as defined in section 101(a)(36) of the Im15 migration and Nationality Act).

16 ‘‘(2) Notwithstanding paragraph (1), with respect to

17 an individual seeking entry into the Northern Mariana Is18 lands for purposes of employment in the textile, hotel,

19 tourist, or construction industry (including employment as

20 a contractor), the Federal statutes and regulations govern21 ing admission to Guam of individuals described in section

22 101(a)(15)(H)(ii)(b) of the Immigration and Nationality

23 Act shall apply. For purposes of this paragraph—

24 ‘‘(A) references in such statutes and regulations

25 to United States resident workers shall be deemed to
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1 be references to United States citizens, national or

2 resident workers; and

3 ‘‘(B) references in such statutes and regulations

4 to Guam shall be deemed to be references to the

5 Northern Mariana Islands.

6 ‘‘(3) When deploying personnel to enforce the provi7 sions of this section, the Attorney General shall coordinate

8 with, and act in conjunction with, State and local law en9 forcement agencies to ensure that such deployment does

10 not degrade or compromise the law enforcement capabili11 ties and functions currently performed by immigration of12 ficers.

13 ‘‘(4) The Attorney General shall prescribe and imple14 ment a transition period for the amendments made to sec15 tion 506(a) of the Covenant. The transition period shall

16 not exceed 4 years from the effective date of this sub17 section. Not later than 2 years after the date of enactment

18 of the Commonwealth of the Northern Mariana Islands

19 Reform Act, the Attorney General shall submit a report

20 on the status of implementing this section.’’.

21 (b) EFFECTIVE DATE.—The amendments made by

22 subsection (a) shall take effect 180 days after the date

23 of enactment of this Act except that the amendment des24 ignated as ‘‘(e)(2)’’ shall take effect on the date of enact25 ment of this Act.
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1 SEC. 4. LABELING REQUIREMENTS FOR TEXTILE FIBER

2 PRODUCTS.

3 (a) Public Law 94–241 is amended by adding at the

4 end the following:

5 ‘‘§ 6. Labeling of textile fiber products

6 ‘‘(a) No textile fiber product that is made or assem7 bled in the Commonwealth of the Northern Mariana Is8 lands shall have a stamp, tag, label, or other means of

9 identification or substitute therefor on or affixed to the

10 product stating ‘Made in USA’ or otherwise stating or im11 plying that the product was made or assembled in the

12 United States unless the product is made or assembled

13 using direct labor that meets the required percentage of

14 qualified manhours.

15 ‘‘(b) A textile fiber product that does not meet the

16 requirements of subsection (a) shall be deemed to be mis17 branded for purposes of the Textile Fiber Products Identi18 fication Act (Public Law 85–897, 72 Stat. 1717).

19 ‘‘(c) In this section:

20 ‘‘(1) DIRECT LABOR.—The term ‘direct labor’

21 includes any work provided to prepare, assemble,

22 process, package, or transport a textile fiber prod23 uct, but does not include supervisory, management,

24 security, or administrative work.

25 ‘‘(2) FREELY ASSOCIATED STATES.—The term

26 ‘Freely Associated States’ means the Republic of
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1 Palau, the Republic of the Marshall Islands, and the

2 Federated States of Micronesia.

3 ‘‘(3) QUALIFIED MANHOURS.—The term ‘quali4 fied manhours’ means the manhours of direct labor

5 performed by persons who are citizens or nationals

6 of the United States or citizen of the Freely Associ7 ated States.

8 ‘‘(4) REQUIRED PERCENTAGE.—The term ‘re9 quired percentage’ means—

10 ‘‘(A) 20 percent, for the period beginning

11 January 1, 1998, through December 31, 1998;

12 ‘‘(B) 35 percent, for the period beginning

13 January 1, 1999, through December 31, 1999;

14 and

15 ‘‘(C) 50 percent, for the period beginning

16 January 1, 2000, and thereafter.

17 ‘‘(b) EFFECTIVE DATE.—The amendments made by

18 this section shall take effect on the date of enactment of

19 this Act.’’.

20 SEC. 5. MINIMUM WAGE REQUIREMENTS.

21 (a) Section 503 of Article V of the Covenant to Es22 tablish a Commonwealth of the Northern Mariana Islands

23 in Political Union with the United States of America (ap24 proved by Public Law 94–241) is amended by deleting

25 ‘‘States; and (c) the minimum wage provisions of Section
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1 6, Act of June 25, 1938, 52 State. 1062, as amended.’’

2 and inserting in lieu thereof ‘‘States.’’.

3 (b) Public Law 94–241, 90 Stat. 263, is amended

4 by adding at the end thereof the following:

5 ‘‘§ 7. Minimum wages in the Commonwealth of the

6 Northern Mariana Islands

7 ‘‘(a) The minimum wage provisions of the Fair Labor

8 Standards Act of 1938 (29 U.S.C. 206(a)(1)) shall apply

9 to the Commonwealth of the Northern Mariana Islands,

10 except that—

11 ‘‘(1) during the period beginning 30 days after

12 the date of enactment of this Act and ending on De13 cember 31, 1997, the minimum wage rate applicable

14 to the Commonwealth of the Northern Mariana Is15 land shall be $3.05 an hour for an employee;

16 ‘‘(2) beginning on January 1, 1998, and each

17 calendar year thereafter, the minimum wage rate ap18 plicable to the Commonwealth of the Northern Mari19 ana Islands for an employee for each such calendar

20 year shall be the minimum rate applicable to the

21 Commonwealth of the Northern Mariana Islands for

22 the preceding calendar year increased by 30 cents or

23 the amount necessary to increase the minimum wage

24 rate to the rate described in section 6(a)(1) of the
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1 Fair Labor Standards Act of 1938, whichever is

2 less; and

3 ‘‘(3) after the calendar year in which the mini4 mum wage rate applicable to the Commonwealth of

5 the Northern Mariana Islands has been increased

6 under subparagraph (A) to the minimum wage rate

7 described in section 6(a)(1) of the Fair Labor

8 Standards Act of 1938, the minimum wage rate ap9 plicable to the Commonwealth of the Northern Mari10 ana Islands for an employee for any succeeding cal11 endar year shall be the rate described in such sec12 tion.’’.

13 (b) EFFECTIVE DATE.—The amendments made by

14 this section shall take effect 30 days after the date of en15 actment of this Act.

16 SEC. 5. REPORT.

17 Not later than 1 year after the date of enactment

18 of this Act, the Secretary of the Interior, in consultation

19 with other Federal agencies, shall conduct a study of the

20 extent of human rights violations and labor rights viola21 tions in the Commonwealth of the Northern Mariana Is22 lands, including the use of forced or indentured labor, and

23 any efforts being taken by the Government of the United

24 States or the Commonwealth of the Northern Mariana Is25 lands to address or prohibit such violations. The Secretary
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1 of the Interior shall include the results of such study in

2 the annual report, entitled ‘‘Federal CNMI Initiative on

3 Labor, Immigration, and Law Enforcement,’’ transmitted

4 to Congress.

5 SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

6 There is authorized to be appropriated such sums as

7 may be necessary to carry out provisions of this Act.

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