BetterWork: 16ème Rapport de Synthèse Biannuel en Vertu de la Législation HOPE II Haïti

16th Biannual Synthesis Report Under the HOPE II Legislation Haiti 30 APRIL 2018 Copyright © International Labour Organization (ILO) and Inter - national Finance Corporation (IFC) April 2018 Publications of the ILO enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to the ILO, acting on behalf of both organizations: ILO Publications (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland, or by email: pubdroit@ilo.org. The IFC and ILO welcome such applications. Libraries, institutions and other users registered with reproduc - tion rights organizations may make copies in accordance with the licences issued to them for this purpose. Visit www.ifrro.org to find the reproduction rights organization in your country. ILO CATALOGUING IN PUBLICATION DATA Better Work Haiti 16th Synthesis Report under HOPE II Legislation International Labour Office synthesis report / labour law / hope legislation / haiti / garment April 2018 The designations employed in this, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the IFC or ILO concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the IFC or ILO of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the IFC or ILO, and any failure to mention a particular firm, commercial prod - uct or process is not a sign of disapproval. ILO publications can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publica - tions, International Labour Office, CH-1211 Geneva 22, Switzer - land. Catalogues or lists of new publications are available free of charge from the above address, or by email: pubvente@ilo.org Visit our website: www.ilo.org/publns Cover photo: ©ILO/IFC Printed by ILO Copyright © International Labour Organization (ILO) and International Finance Corporation (IFC) (2018) First published (2018) Publications of the ILO enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to the ILO, acting on behalf of both organizations: ILO Publications (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland, or by email: pubdroit@ilo.org. The IFC and ILO welcome such applications. Libraries, institutions and other users registered with reproduction rights organizations may make copies in accordance with the licenses issued to them for this purpose. Visit www.ifrro.org to find the reproduction rights organization in your country. ILO Cataloging in Publication Data Better Work Haiti: apparel industry 16th biannual synthesis report under the HOPE II legislation / International Labour Office; International Finance Corporation. - Geneva: ILO, 2018 1 v. ISSN 2227-958X (web pd7f) International Labour Office; International Finance Corporation Clothing industry / textile industry / working conditions / workers’ rights / labor legislation / ILO Convention / international labor standards / comment / application / Haiti 08.09.3 The designations employed in this, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the IFC or ILO concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the IFC or ILO of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the IFC or ILO, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, and Switzerland. Catalogues or lists of new publications are available free of charge from the above address, or by email: pubvente@ilo.org Visit our website: www.betterwork.org 1 BETTER WORK HAITI - 16 TH SYNTHESIS REPORT B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 2 Acknowledgements Better Work Haiti is supported by the US Department of Labor. Core donors to Better Work are: Netherlands Ministry of Foreign Affairs, Swiss State Secretariat for Economic Affairs (SECO), Danish International Development Agency (DANIDA), Australian Department of Foreign Affairs and Trade, German Federal Ministry for Economic Cooperation and Development, and the US Department of Labor. Funding is also provided by Canada Department Foreign Affairs, The European Commission, DFID, German Federal Ministry for Economic Cooperation and Development, GIZ; Royal Government of Cambodia, Garment Manufacturers Association in Cambodia and private sector donors, including The Walt Disney Corporation, Inc., Levi Strauss Foundation, Gap Inc. This publication does not necessarily reflect the views or policies of the organizations or agencies listed above, nor does mention of trade names, commercial products, or organizations imply endorsement by them. B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 3 Table of Contents List of Tables and Charts ...................................................................................................................4 List of Acronyms .................................................................................................................................. 5 Section I: Introduction and Context ................................................................................................. 6 1.1. Country Context and Industry Updates ............................................................................................. 7 1.2. TAICNAR Program Activities in the Reporting Period ...................................................................... 9 Section II: Highlights from the Reporting Period ........................................................................ 10 2.1. Compliance Situation in Haiti’s Exporting Garment Sector .......................................................... 12 2.2. Compliance Performance with regards to International Core Labor Standards ..................... 14 Child Labor ........................................................................................................................................................ 14 Discrimination .................................................................................................................................................. 14 Forced Labor .................................................................................................................................................... 14 Freedom Of Association And Collective Bargaining ......................................................................... 14 2.3. Compliance Performance with regards to National Labor Standards ........................................17 Compensation .................................................................................................................................................. 17 Social Security And Other Benefits .......................................................................................................... 18 Paid Leave ........................................................................................................................................................ 19 Overtime Wages ............................................................................................................................................. 19 Contracts And Human Resources ........................................................................................................... 20 Occupational Safety And Health...............................................................................................................21 Working Time ...................................................................................................................................................23 2.4. Advisory and Training Services in the Reporting Period .............................................................. 24 Better Work Advisory Services .................................................................................................................. 24 Better Work Trainings................................................................................................................................... 26 Section III: Conclusion and Next Steps .......................................................................................... 27 Annex 1. The TAICNAR Project and Reporting Requirements under the HOPE II Legislation ......................................................................................................................................... 30 Annex 2. Better Work’s Service Delivery Model .......................................................................... 32 Annex 3. The Better Work Compliance Assessment Methodology ..........................................35 Better Work Compliance Assessment Framework ................................................................................ 35 Calculating Non-Compliance & Public Reporting .................................................................................. 42 Limitations in the Assessment Process .................................................................................................... 42 Annex 4: Factories in Detail ........................................................................................................... 45 List of Factories ............................................................................................................................................... 45 Findings from the Factories ......................................................................................................................... 46 B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 4 List of Tables and Charts Chart 1: Non-compliance rates for 23 factories assessed between March 2017 and February 2018 over two Better Work cycles .............................................................................. 13 Table 1: Factory’s PICC Status ............................................................................................................... 24 Table 2: Better Work compliance assessment framework ............................................................. 35 Table 3: List of factories in the Haitian apparel sector which have been assessed between October 2016 and September 2017……………………………… ................................................................... 46 B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 5 List of Acronyms ADIH Association des Industries d’Haïti (Haitian Industry Association) BMST Bureau de la Médiatrice Spéciale du Travail CAOSS Conseil d’Administration des Organes de Sécurité Sociale (Board of Social Security Bodies) CP Compliance point CSS Conseil Supérieur des Salaires (Wages High Council) CTMO-HOPE Commission Tripartite de Mise en œuvre de la loi HOPE EA Enterprise Advisor HELP Haiti Economic Lift Program HOPE Haitian Hemispheric Opportunity Through Partnership Encouragement Act ITUC International Trade Union Confederation MSDS Material Safety Data Sheet MAST Ministère des Affaires Sociales et du Travail (Ministry of Labor and Social Affairs) OFATMA Office d’Assurance de Travail, de Maladie et de Maternité (Office for Work, Health and Maternity Insurance) ONA Office Nationale d’Assurance Vieillesse (National Office for Old- Age Insurance) OSH Occupational safety and health PAC Project Advisory Committee PIC Parc Industriel de Caracol PICC Performance Improvement Consultative Committee PIM Parc Industriel Métropolitain (also referred to as SONAPI) PPE Personal Protective Equipment SC/AFL-CIO Solidarity Center/American Federation of Labor - Congress of Industrial Organizations TDS Social Dialogue Table (Table de Dialogue Social) TAICNAR Technical Assistance Improvement and Compliance Needs Assessment and Remediation USDOL United States Department of Labor B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 6 Section I: Introduction and Context Better Work – a collaboration between the United Nations’ International Labour Organization (ILO) and the International Finance Corporation (IFC), a member of the World Bank Group – is a comprehensive program bringing together all levels of the garment industry to improve working conditions and respect of labor rights for workers, and boost the competitiveness of apparel businesses. The program was launched in Haiti in June 2009 as part of the global Better Work program with country operations in Bangladesh, Cambodia, Haiti, Indonesia, Jordan, Nicaragua, and Vietnam. To date, Better Work is focusing its efforts on the apparel and footwear industry in the countries it operates in. However, companies from other industries may benefit from Better Work services in some particular country contexts 1 . In Haiti, the program is mandatory for all apparel producers exporting their products to the US market under the HOPE II legislation. The HOPE II law requires that Haiti in cooperation with the ILO establishes a Technical Assistance Improvement and Compliance Needs Assessment and Remediation Program (TAICNAR) which (i) assesses Haitian apparel factories exporting under the HOPE II law on compliance with international core labor standards and national Haitian labor law, (ii) assists these factories on their remediation efforts and (iii) provides capacity building to the Government of Haiti on these aspects. According to the HOPE legislation, biannual reports have to be published to state enterprise level compliance performance. Further details on the components of the HOPE II law as well specific requirements with regards to biannual reports being published by the entity operating the TAICNAR program are quoted in annex 1 (HOPE II Legislation Reporting Requirements). This is the first of these two annual reports under the HOPE legislation to be published in 2018. Detailed enterprise level data of compliance performance as required by the HOPE II legislation is included in the factory tables in annex 4. The two components of HOPE II’s TAICNAR program aim at strengthening labor compliance of the industry in Haiti. The first of these elements focuses on assessing compliance with core labor standards and national labor law, supporting remediation efforts, and publicly reporting on the progress of each factory on the Labor Ombudsman’s register. The second element of the TAICNAR program consists of technical assistance to strengthen the legal and administrative structures for improving compliance in the industry. The scope of these services is extensive, encompassing technical assistance from the ILO in reviewing national laws and regulations to bring them into conformity with international standards, 1 In Haiti for example, a plastics factory is participating voluntarily in the program by paying a market price for the Better Work services. B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 7 raising awareness of workers’ rights, and training labor inspectors, judicial officers and other government personnel. To encourage compliance with core labor standards and national labor law, the legislation indicates that preferential treatment may be withdrawn, suspended, or limited by the President of the United States from producers who – even after assistance has been provided - fail to come into compliance with the core labor standards and national labor law that is related and consistent with those standards. Removal of benefits is based on determinations made by the government of the United States, based primarily on non-compliance identifications made by the U.S. Department of Labor (USDOL). While Better Work Haiti reports are consulted as USDOL carries out its mandate to implement HOPE II, Better Work Haiti non-compliance findings cannot, on their own, serve to impact preferential treatment under the HOPE Act. Better Work Haiti has been implementing the first component of the TAICNAR program from 2009 until 2017 while other ILO projects, in particular the ILO-MAST capacity building project worked on the second component. As of 2018 with the start of the third phase of the Better Work Haiti project (2018 - 2022), Better Work will also take on several elements of the second component of the TAICNAR program while continuing carrying out activities covering TAICNAR component one. The Better Work program is coordinating its work with the Labor Ombudsman and a tripartite Project Advisory Committee (PAC). This committee meets with Better Work on a regular basis to discuss the activities of the Better Work program. The members of the PAC represent the private sector, government and worker representatives and the Committee is chaired by the Labor Ombudsperson in line with the requirements of the HOPE law. 1.1. COUNTRY CONTEXT AND INDUSTRY UPDATES Total export revenues from the textile and garment industry in Haiti accounted for approximately 90% of national export earnings and 10% of national GDP. Since the expansion of tariff benefits under the HOPE/HELP preference programs, apparel exports from Haiti to the US have more than doubled, growing from US$ 412.4 million in 2008 to a high of US$ 895.3 million in 2015. In 2016 and 2017, Haitian apparel exports to the US showed a slight decrease to US$848.7 million and 865 million respectively. The apparel industry is also among the largest employers within Haiti, creating jobs for approximately 48,000 people according to data from January 2018 from the employers association ADIH. The workforce in this industry therefore saw a growth of roughly 20 percent since January 2017 when this figure still stagnated at 40,000 (since mid-2015). Most workers (about 65-70%) are women who support several family members. It has to be noted, that ADIH includes management staff in these calculations. Based on Better Work’s data collection over more than six years in B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 8 Haiti’s apparel industry, one can say that management staff accounts to approximately 10-15% in the factories. Therefore, the number of production workers lies at around 41,000-43,000. ADIH continues to update these figures based on statistics provided by its member companies several times a year. Currently, the biggest companies in the sector remain S&H Global (11,283 employees) and CODEVI (9,750 employees), both located in Haiti’s North. The number of exporting factories remains between 20 and 30 enterprises. A few new investors have recently or are currently planning to start operations in the industry in Haiti. There continues to be a general trend in shift of production from the capital in Port-au-Prince to the North of the country. The combined workforce of the factories in the North represents now almost 45% of the total employment in the sector. In September 2017, a new law related to the organizing and regulating work over a 24-hour period divided into three segments of eight hours was published in the Moniteur abrogating and revising a number of articles of the current law in place. The employers view this law as an important step to increase employment in the sector. Since the proposal for this new law was submitted to the Haitian parliament, the unions (SOTA-BO, CTSP and CNOHA) have denounced the fact that the consultation process was not tripartite. In correspondences sent to the Ministry of Labor before the strikes that took place in May and June 2017 the unions requested the Haitian government to hold on the publication of this specific law in order to focus on the labor law reform that started in 2012. One of the unions (CTSP) submitted a copy of this new law to the ILO Committee of Experts on the Application of Conventions and Recommendations (CEACR) for review. As this new Act has an effect on the application of all the Conventions ratified by Haiti on working time, namely Conventions Nos 1 and 30 (hours of work) and 14 and 106 (weekly rest), the Committee of Experts agreed with this request and sent its comments in February 2018. In the comments, the Committee of Experts noted that this new law eliminated the articles that limited regular daily working hours, the details related to possible exceptions to normal hours of work, and the articles that established a minimum weekly rest period of 24 consecutive hours to be granted preferably on Sunday and simultaneously to the whole staff of an establishment. Better Work Haiti will assess compliance with the new law in line with the ILO conventions on working time ratified by Haiti. Although the new law abrogated provisions of the Labour Code that limited daily working hours and required a weekly rest day, Better Work will assess compliance based on the relevant standards set forth in the ILO conventions. ILO Convention 14 on Weekly Rest in Industry requires a weekly day of rest, and ILO Convention 1 on Hours of Work in Industry limits daily working hours to 8 hours per day and 48 hours per week (with an allowance for up to 9 hours in a day if other day(s) in the week are shorter than 8 hours). Provisions in the new law that are consistent with the standards in the conventions ratified by Haiti will be assessed in line with the law. B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 9 1.2. TAICNAR PROGRAM ACTIVITIES IN THE REPORTING PERIOD TAICNAR Program Component 1: Compliance Assessments and Remediation Support The HOPE law states that the first component of the TAICNAR program is “to assess compliance by producers listed in the registry described in paragraph (2)(B)(i) with the conditions set forth in subparagraph (B) and to assist such producers in meeting such conditions.” Better Work Haiti is implementing this component of the TAICNAR program. Aggregated findings for the entire industry regarding compliance with national and international labor law are outlined in section II of the report. The details of Better Work’s assessment methodology are explained in annex 3 of this reports. Annex 4 provides the details of compliance for every factory that has been assessed. It has to be noted that Better Work offers several services that go beyond the requirements of the HOPE legislation, in particular the collaboration with international brands through sharing of factory assessment reports, joint support for factories regarding the improvement plan used during advisory services (corrective action plan), specific trainings and specific projects and or events such as the annual buyers and multi-stakeholders forum. With the introduction of fees to be paid by factories for participation in the Better Work Haiti program since 2016, it has been decided that non-paying factories will receive all Better Work core services (advisory, training, and one annual assessment) in line with requirements of the HOPE legislation. Factories that do pay their subscription fee will have access to the full offer of Better Work services beyond core services only. TAICNAR Program Component 2: Technical assistance to strengthen the legal and administrative structures for improving compliance in the industry The HOPE law states that the second component of the TAICNAR program is “to provide assistance to improve the capacity of the Government of Haiti – (I) to inspect facilities of producers listed in the registry described in paragraph (2)(B)(i); and (II) to enforce labor laws and resolve labor disputes, including through measures described in subparagraph E.” The ILO has been conducting different activities under this component, mainly in the context of the USDOL-funded ILO/MAST Capacity Building project which aimed at strengthening the capacities of the Ministry in order to improve apparel factories’ compliance with international and national labor laws. The project ran from 2014 to 2017 and was closely linked to the Better Work program. Several key activities which implemented by the project team and its constituents are listed below: B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 1 0  A taskforce of labor inspectors received substantial training covering all areas related to their duties; their job descriptions were revised and joint factory visits conducted with BWH team members;  A specialization training was organized with the International Training Centre (ITC) of the ILO for the Haitian Labor Judges and Lawyers who are trainers at the School of Magistrate in Haiti (EMA);  A MAST call center was initiated;  An Information, Education and Communication Campaign (IEC Campaign) was prepared;  Technical and financial assistance was provided to start the work on archiving key documents at MAST;  Technical and financial assistance was provided on updating the MAST website;  Logistics support was provided to the Labor Inspection Service by putting a vehicle at their disposition. With the new phase of the Better Work Haiti program from 2018 – 2022, capacity building of all tripartite constituents – including Government partners – has become a key area of focus for the program. Hence, activities conducted and initiated under the ILO/MAST program will be continued and completed by BWH. Section II: Highlights from the Reporting Period Over the past months, Better Work continued delivering core services – assessment, advisory and training services – to all participating factories. In addition, Better Work continued its partnerships with various other actors to move specific projects forward in the garment industry in Haiti. Highlights from the reporting period include: B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 1 1  In In late 2017, the program finalized its new 5-year strategy for the Better Work Haiti program (2018 – 2022) with a stronger focus on capacity building of national constituents. Capacity building of worker representatives and union organizations, employers and the Government will be key for purposes of institutional sustainability of BWH efforts.  A tripartite meeting of Haitian stakeholders was held in March 2018 in San Jose/ Costa Rica. The meeting which was initiated and organized by the ILO concluded in an agreement signed by all parties which reiterated their commitment to the Decent Work Country Program signed in 2015, the need for social dialogue including the institutionalization of such dialogue, the commitment to work on improving the work environment in the country including respect of international labor laws ratified by Haiti, improving social security coverage and service etc.  In mid-2017, Better Work Haiti initiated a collaboration with the social security institutions ONA and OFATMA. Based on BWH’s compliance information, most factories of the garment sector are not fully compliant with regards to all legal requirements concerning social security. While some factories still have not signed up to the newly available maternity and health insurance, most non-compliances on social security refer to incorrect and/ or late payments of social security contributions. In return, the private sector and also workers’ representatives are not satisfied with the level of services available for beneficiaries by ONA and OFATMA. BWH therefore started a dialogue with the parties concerned in order to increase social security coverage and level and quality of services of ONA and OFATMA for workers in the garment sector. An action plan with concrete milestones in the collaboration is being developed as part of BWH’s new 5-year strategy.  Given the strikes in 2017 and the recurrence of industrial disputes at individual factory and sectoral level, Better Work continues to work closely with the Office of the Labor Ombudsman and worker and employer representatives on improved mechanisms for social dialogue. At the factory level, this happens through the bipartite committees (PICCs) while at the sectoral level, BW is seeking to assist in the revitalization of the social dialogue table for the garment sector. In addition, strengthening other platforms for social dialogue is also part of BWH’s efforts, such as the support of the Social Dialogue Table for social protection (cross-sectoral). B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 1 2 2.1. Compliance Situation in Haiti’s Exporting Garment Sector Better Work assesses participating factories once per year and works with each factory before and after this assessment to remediate non-compliance issues. While the assessment is a one-time activity once per year, advisory and training services delivered by the Better Work team focus on continuous learning and improvement. For more information on the Better Work service delivery model as well as the Better Work assessment methodology, please consult annex 2 and annex 3 respectively. The section presents the results of assessments, advisory and training services provided to all 27 participating factories in the period between March 2017 and February 2018. Assessment information is included for factories that have been assessed at least twice by Better Work. Chart 1 presents non-compliance findings for the 23 assessed factories in Haiti who had a minimum of two Better Work compliance assessments, showing non- compliance rates in brackets. A factory is found non-compliant in a compliance point if it is found out of compliance on any one aspect of it. Please note that as these reports are issued biannually, yet assessments are being done on an annual basis, issues are reported in two consecutive reports. In the individual factory tables in Annex 4 of this report, progress on the remediation of non-compliance issues can be followed in further detail. It has to be noted that many issues found during Better Work assessments are persisting non-compliance issues. The overall compliance rates for the sector are stagnating with minor variations over the cycles. Better Work is observing this issue, not only in Haiti but also in its other country programs. The focus on management systems during advisory and training continues to help in tackling this problem. However, additional measures may be necessary to address persistent non- compliance issues. Better Work’s differentiation approach that will be implemented in 2018 may provide some incentives for factories to further improve their compliance. Moreover, Better Work’s collaboration with national labor ministries is also crucial to address this general challenge. B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 1 3 Chart 1: Non-compliance rates for 23 factories assessed between March 2017 and February 2018 over two Better Work cycles 0% 13% 9% 22% 70% 9% 91% 13% 13% 17% 26% 9% 87% 100% 96% 48% 83% 87% 83% 4% 52% 39% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Child Labourers Hazardous Work and other Worst Forms Race and Origin Bonded Labour Forced Labour and Overtime Collective Bargaining Interference and Discrimination Union Operations Minimum Wages/Piece Rate Wages Paid Leave Social Security and Other Benefits Contracting Procedures Employment Contracts Chemicals and Hazardous Substances Health Services and First Aid Welfare Facilities Worker Protection Leave Regular Hours Child Labour Discrim ination Forced Labour Freedom of Association and Collective Bargaining Compensation Contracts and Human Resources Occupational Safety and Health Workin g Time Non-compliance rates by Compliance Point (March 2017 - February 2018) Non-compliance rate (n= 23) B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 1 4 2.2. Compliance Performance with regards to International Core Labor Standards During the last round of assessments between April 2017 and March 2018 in 23 factories, the following results with regards to core labor standards have been observed. CHILD LABOR Child Labor is virtually non-existent in the apparel sector in Haiti. There were no non-compliance findings under the Child Labor cluster in the period under review. DISCRIMINATION During the reporting period, no cases of non-compliance related to discrimination were identified. In the past, non-compliance points under this cluster were mainly cases of sexual harassment. Although no non-compliance cases were confirmed during the reporting period, BWH has collected evidence indicating that sexual harassment is a widespread practice in the industry in Haiti and elsewhere (see Limitations in the assessment process in annex 3). Awareness raising and prevention of sexual harassment has hence become part of BWH’s advisory and training portfolio and is one main areas of focus in the new BWH strategy 2018 - 2022. Collaboration with other organizations are also planned in order to address this issue. FORCED LABOR There are no findings under the Forced Labor Cluster in this reporting period. FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING There are three cases of non-compliance under the Cluster for Freedom of Association and Collective Bargaining, all under the compliance point of Interference and Discrimination. Two cases were already reported in the October 2017 report. For remediation efforts on all of these cases, please consult individual factory tables in Annex 4 of this report. B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 1 5 In the most recent case of a factory cited in non-compliance under this compliance point, the case was made under the above mentioned compliance point under the question on termination or non-renewal of worker's employment contract due to union membership or activities. Eight union leaders were terminated for having at least 4 days of unauthorized absence during May 2017. On May 17 the union submitted a copy of the letter announcing the sectorial strike set to take place on May 19, 2017. The notice provided to the employer was a copy of the sectorial strike notice provided by PLASIT-BO, CNOHA and GOSTRA-CTSP to ADIH and MAST, and indicated that the work stoppages would continue until workers' demands were met. Better Work considers that the strike was not subject to a limit in duration under Article 206 of the Labor Code since the notice was provided to employers and the ministry prior to the strike. Following the terminations, the Ombudsperson conducted two mediation sessions with the employer and the union federation upon the request of SOTA/BO, in which the employer was asked to reinstate the terminated union officers. The employer informed the Ombudsperson and the union that they would not reinstate the terminated union officers. Management subsequently has provided the 8 terminated union officers with their severance payment including payment for notice, however, seven out of eight of the union officers have not agreed to sign waivers giving up the possibility of bringing claims against the employer for wrongful termination in the future. Also, it was not possible to reliably verify the claim by management that all these workers had at least 4 days of unauthorized absence during May 2017. Information provided to Better Work Haiti during the factory visit and subsequently by email shows inconsistencies between the payroll records, punch card attendance records and manual attendance records kept by supervisors. In any case, the evidence demonstrates that the union officers were absent in order to participate in sectorial strikes, which does not justify their terminations for unauthorized absences. In the case of this factory, Better Work recommends to reinstate the 8 terminated union officers with compensation for back pay. As previously mentioned, the two other cases of non-compliance under this cluster fall under the same compliance point of interference and discrimination and the same sub-question on termination or non-renewal of worker's employment contract due to union membership or activities. In both cases, Better Work recommends to reinstate the terminated workers with compensation for back pay. Better Work also made the following industry wide recommendations after a series of strikes in 2017:  The employers and Trade Union Representatives that are present on the Social Dialogue Table (ideally in consultation with employers and unions that are not titular members of the Social Dialogue Table) should consider B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 1 6 a review and amendment - as necessary - of the Terms of Reference of the Social Dialogue Table, to ensure that it is functionally representative of employer and worker interests in the export garment and textile industries and that it meets on a regular basis with clear outcomes.  Review and revise as necessary provisions in the Labor Law Guide relating to strikes, so that they fully and accurately reflect Haitian Law and international labor standards.  In the ongoing Labor Law reform process, the Government of Haiti and the social partners should work to ensure that there is adequate protection for factory level trade union officers in carrying out their representative functions, with adequate protection against acts of anti-union discrimination, including during recruitment, hiring, employment and termination.  In collaboration with the ILO, the Government of Haiti, in partnership with the social partners in Haiti, may consider a review and amendment of the Terms of Reference of the Superior Council of Wages (Conseil Superior des Salaires, or CSS), including the selection process and mandate of representatives. The trade unions in the sector, with the support of ILO ACTRAV and the Global Unions, may consider establishment of a labor caucus for the preparation of, and follow-up to decisions of the CSS.  Haitian Employers’ and Workers’ Organizations may wish to consider a review of the lessons learned from collective bargaining at the enterprise level in Haiti, and if appropriate, request support from the ILO on technical assistance on examining models of collective bargaining that may be most relevant to the garment and textile industry in Haiti, including with respect to representative voices of workers and employers in the process.  Factories and trade unions that have negotiated and implemented FOA policies and protocols may consider engaging with workers and other relevant stakeholders, (with ILO support) to determine lessons learned and areas of improvement for better industrial relations.  The ILO and MAST should focus on consolidation of the existing collaboration between the Better Work Haiti Program and the Labor Inspectorate Garment Sector Task Force, and develop recommendations for sharing lessons learned and strategies for ensuring maximum effectiveness, efficiency and independence of the inspectorate with other MAST departments. B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 1 7  ADIH and Trade Union Federations should provide support to factories and enterprise level union representatives on developing the capacity of employers and unions to resolve rights and interest disputes in line with Haitian law and international labor standards, with the support of the Haitian Labor Ombudsperson and the ILO. These recommendations were presented to Better Work Haiti’s stakeholders and are integrated in the new workplan of the program for the next five years. 2.3. Compliance Performance with regards to National Labor Standards Better Work assesses compliances with eight clusters, four related to international core labor standards (see previous section) and four with regards to national labor legislation. Each cluster consists of several compliance points and each compliance point is made up of several questions (see Table 3 in the annex for further detail on the structure of the Better Work compliance assessment tool). In this section, selected compliance points will be analysed in further detail. Chart No. 1, which gives an overview of the compliance performance of the full set of factories in the sample, shows that nine compliance points have reached non-compliance rate above the 50% threshold. While several of these non-compliance points have been analysed in detail in past reports, some points with non-compliance rates below 50% will be included in further detail in this edition of the report. COMPENSATION In the Compensation cluster, the highest non-compliance rates persist in the compliance point of Social Security and Other Benefits (91%), as well as the compliance point on Paid Leave (70%). 22% of factories were found in non- compliance with regards to overtime wages. The issues for these points are detailed in the tables below. One important change under the legal requirements under the compensation cluster is that the two-tier minimum wage (minimum wage of reference and production wage) was eliminated during the last minimum wage increase in August 2017. Better Work therefore no longer reports the percentage of workers on an incentive scheme earning the production wage as indicated in past reports per individual factory. All assessed factories are in compliance with regards to the payment of the legally required minimum wage. B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 1 8 SOCIAL SECURITY AND OTHER BENEFITS Compliance Question # of factories found NC NC Rate by Question Does the employer collect and forward workers contributions to OFATMA? 20 87% Does the employer collect and forward workers' contributions to ONA? 18 78% Does the employer pay 3% of workers' basic salary to OFATMA for maternity and health insurance? 20 87% Does the employer pay 3% of workers' basic salary to OFATMA for work-related accident insurance? 8 35% Does the employer pay the required employer contribution to ONA? 19 83% Does the employer pay workers their annual salary supplement or bonus? 1 4% There is a slight decrease in the level of non-compliance on Social Security and Other Benefits. OFATMA started to meet enterprises individually to discuss the best way to transition to the newly available maternity and health insurance services. So far, a total of 12 factories have registered and started paying their contribution to this insurance scheme. However, only nine of these employers calculate their contributions as 3% of the workers' basic salary. As explained in the previous report, this is due to the fact that in September 2016, the employer’s association negotiated an agreement with OFATMA to reduce the contribution rate for the garment industry. However, after the letter of acceptance of this agreement published by OFATMA, no follow-up was made to make this agreement compliant with the legal requirements. Better Work Haiti also continues to find that payments for work-related accident insurance are late or inaccurate for a number of factories (8). Seventeen factories have also been found non-compliant for payments of workers’ and employers’ contributions to ONA (pension funds). This level of non-compliance identified relates to late or inaccurate payments of these contributions. No additional non-compliance in the payments of the annual salary supplement or bonus have been identified since the latest report as most of the factories adjusted their payroll to include the payment of maternity and sick leave in the annual bonus after Better Work Haiti announced that the assessment approach will be adjusted to reflect the requirements of article 148 of the Labor Code after clarification from MAST. B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 1 9 PAID LEAVE Compliance Question # of factories found NC NC Rate by Question Does the employer pay workers correctly during breastfeeding breaks? 0 0% Does the employer pay workers correctly during sick leave? 7 30% Does the employer pay workers correctly for annual leave? 1 4% Does the employer pay workers correctly for legally mandated holidays? 13 57% Does the employer pay workers correctly for maternity leave? 5 22% Does the employer pay workers correctly for weekly rest days? 12 52% There is some progress in the compliance rate on the compliance point on Paid Leave, which dropped from 90% to 70%. At the question level, one can see that payments for workers on legally mandated holidays, during sick leave, weekly rest days and maternity leave were calculated on the minimum wage and not on the average wage as required by the law. 13 factories were found in non-compliance for incorrect payment of the legally mandated holidays. However, it is important to mention that this number will probably decrease in the future with the new law on working hours as the legal requirement to pay non-working legally mandated holidays was eliminated. No factory was found in non-compliance for breastfeeding breaks and one factory’s payment for annual leave was found to be incorrect. OVERTIME WAGES Compliance Question # of factories found NC NC Rate by Question Does the employer pay workers 100% above the normal wage for all overtime hours worked at night? 2 9% Does the employer pay workers 100% above the normal wage for overtime hours worked on legally mandated holidays? 0 0% Does the employer pay workers 100% above the normal wage for overtime hours worked on weekly rest days? 0 0% Does the employer pay workers 50% above the normal wage for all ordinary overtime hours worked? 4 17% B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 2 0 The level of non-compliance in the area of overtime wages is related to the fact that some factories paid less than 100% above the normal wage for the overtime hours worked during daily or night hours. However, it is important to mention that the level of non-compliance for the inaccurate payment of overtime hours worked at night is expected to decrease due to the approval of the new law on working hours. In fact, under this new legislation, overtime hours worked at night will be paid 50% above the normal wage. CONTRACTS AND HUMAN RESOURCES In the cluster on Contracts and Human Resources, 17% of factories were cited in non-compliance under the compliance point Dialogue, Discipline and Disputes - all for the same compliance question. 26% of factories were found in non-compliance for Employment Contracts. Further details are outlined in the tables below. DIALOGUE, DISCIPLINE AND DISPUTES Compliance Question # of factories found NC NC Rate by Question Did the employer resolve grievances and disputes in compliance with legal requirements? 0 0% Do the disciplinary measures comply with legal requirements? 0 0% Have any workers been bullied, harassed, or subjected to humiliating treatment? 4 17% The non-compliance in the area of Dialogue, Discipline and Dispute is related to 4 cases of factories were workers reported verbal abuse from their supervisors or managers. In all cases, the issue was reported by at least 50% of interviewed workers, and management was not able to demonstrate evidence of effective implementation of the policies related to verbal abuse. In all cases, BWH Enterprise Advisors also witnessed cases of verbal abuse during the factory tour. EMPLOYMENT CONTRACTS Compliance Question # of factories found NC NC Rate by Question Do all persons who perform work for the factory, both on the premises and offsite, have a contract? 0 0% Do the contracts comply with the labor code, collective agreement and internal work rules? 3 13% Do the internal work rules comply with legal requirements? 2 9% B E T T E R W O R K H A I T I – 1 6 T H S Y N T H E S I S R E P O R T 2 1 Do the written employment contracts specify the terms and conditions of employment? 2 9% Do workers understand the terms and conditions of employment? 0 0% Two factories were found in non-compliance because their internal work rules were not approved by MAST as required by law. This also caused non-compliance for the workers’ contracts in these 2 factorie