SAN VICENTE Saipan — A businessman who has long been wanting to run his own garment factory on Saipan despite the odds welcomed a new law that legalizes the transfer of business licenses within the garment industry but said the measure is “a bit too late.”
Public Law 14-82 was signed by Gov. Juan N. Babauta on Aug. 2. In his transmittal letter to the presiding officers of the legislature the governor said the statute will allow existing garment manufacturers seeking to expand operations to take over smaller companies that have ceased operations. The law will likewise allow for new investors to take over these business licenses. “This measure promotes economic stability in the garment industry ” Babauta said.
He also noted that P.L. 14-82 will allow for the “efficient allocation of garment workers in the commonwealth who are or may become displaced by external economic factors. “This measure accomplishes this while still maintaining strict compliance with the existing 15 727 ceiling on the number of garment workers within the commonwealth ” Babauta said.
Paul Zak who has a pending application with the CNMI government to transfer a license and reopen a garment factory — Concordate Knitwear Ltd. — said the new law allows investors including those already on island to take over fixed assets of garment factories that had closed down. Five garment factories on Saipan have ceased operations following changes international trading brought about by the lifting of worldwide import quota restrictions on Jan. 1 this year.
“The new law is an attempt to solve the problem. But the government waited too long. They opened the door after the horses had gone out ” Zak told the Journal. The measure was introduced in the CNMI House of Representatives on April 21 2005. It passed both houses of the Legislature and was sent to the governor on July 5 2005.
The law also has a provision instructing the Department of Finance in consultation with the attorney general’s office to establish implementing criteria and conditions. Zak who submitted his application last year said this could further delay implementation of the law. Zak said there were “four to six potential new investors on standby” to see what these criteria and conditions would be. He did not elaborate.
Other garment factory management officials agree that the new law was late. Tony Taisacan an office manager at Michigan Inc. said they have been asking for such a measure for more than two years. “When we were asking for it nobody acted. Now that the industry is already headed to the cemetery they try to do something ” Taisacan said.
Jin Apparel said the law is too late.
The Saipan Garment Manufacturers Association did not make a statement on the matter and calls to SGMA President James Lin were not returned.
Richard A. Pierce special assistant to the governor for trade relations and economic affairs said the new law “allows something that’s never been permitted before in the CNMI.
“It affords opportunity to anyone equally to attain a license that may have been rendered unneeded or no longer useful by the original owner ” he told the Journal. “This Administration is doing what it can do for the community to benefit from it’s garment industry. Both here locally and in Washington D.C.”
Zak acquired Concordate Knitwear from the Korean owner but found that the license was not transferrable. The factory was dissolved by the government after it failed to submit a timely financial report in 2001. Concordate Knitwear’s operations stopped and the factory’s workers were transferred to Rifu Apparel in San Vicente where Zak currently works as a consultant. MBJ