BetterWork: 18th Biannual Synthesis Report Under the HOPE II Legislation

18th Biannual Synthesis Report Under the HOPE II Legislation Haiti REPORTING PERIOD October 2018 – April 2019 PRODUCED APRIL 2019 25 FACTORY ASSESSMENTS Copyright © International Labour Organization (ILO) and Inter - national Finance Corporation (IFC) April 2019 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. 18 th Synthesis Report under HOPE II Legislation International Labour Office synthesis report / labour law / hope legislation / haiti / garment labor / garment / industry / compliance April 2019 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 Copyright © International Labour Organization (ILO) and International Finance Corporation (IFC) (2019) First published (2019) 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 18th biannual synthesis report under the HOPE II legislation / International Labour Office; International Finance Corporation. - Geneva: ILO, 2019 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 2 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T 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. 3 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T Table of Contents List of Tables and Charts .......................................................................................... 4 List of Acronyms ......................................................................................................... 5 1.1. Background ................................................................................................................. 6 1.2. Country Context and Industry Updates ............................................................... 7 Section II: Highlights from the Reporting Period ................................................. 11 2.1. Compliance Situation In Haiti’s Exporting Garment Sector ........................... 17 2.2. Compliance Performance With Regards To International Core Labor Standards ................................................................................................................... 21 Child Labor................................................................................................................................ 21 Discrimination .......................................................................................................................... 21 Forced Labor ........................................................................................................................... 22 Freedom of Association and Collective Bargaining ................................................. 22 2.3. Compliance Performance with regards to National Labor Standards ....... 23 Compensation ........................................................................................................................ 23 Paid leave................................................................................................................................. 23 Contracts and Human Resources .................................................................................. 24 Termination ............................................................................................................................ 24 Occupational Safety and Health..................................................................................... 25 Chemicals and hazardous substances ......................................................................... 25 Emergency Preparedness ..................................................................................................26 Working Time .......................................................................................................................... 27 REGULAR HOURS ................................................................................................................ 27 2.4. Advisory and Training Services in the Reporting Period ............................... 28 Better Work Advisory Services ..........................................................................................28 Better Work Trainings ......................................................................................................... 30 Section III: Conclusion and Next Steps ................................................................. 32 Annex 1. The TAICNAR Project and Reporting Requirements under the HOPE II Legislation ................................................................................................................. 34 Annex 2. Better Work’s Service Delivery Model .................................................. 37 Annex 3. The Better Work Compliance Assessment Methodology ................ 40 Better Work Compliance Assessment Framework ........................................................... 40 Calculating Non-Compliance & Public Reporting ............................................................. 46 Limitations in the Assessment Process ................................................................................ 47 Annex 4: Factories in Detail ...................................................................................50 List of Factories .......................................................................................................................... 50 Findings from the Factories ...................................................................................................... 51 4 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T List of Tables and Charts Table 1: Factory’s Bi-partite committee Status ....................................................................25 Table 2: Better Work compliance assessment framework .................................................. 37 Table 3: List of factories in the Haitian apparel sector which have been assessed between April 2019 and March 2019 ............................................................................................ 45 5 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T List of Acronyms ADIH Association des Industries d’Haïti (Haitian Industry Association) BPC Bipartite Committee 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 L i ft 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 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 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 6 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T Section I: Introduction and Context 1.1. BACKGROUND 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 second 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. 1 In Haiti for example, a plastics factory is participating voluntarily in the program by paying a market price for the Better Work services. 7 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T 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, 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. 1.2. COUNTRY CONTEXT AND INDUSTRY UPDATES 8 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T Over the last year Haiti experienced a high number of political and socio-economic demonstrations due to concerns and frustration over ongoing difficult living conditions, and demands for increased transparency and accountability. The depreciation of the national currency (Gourde) against US dollar is raising prices of essential commodities, and in turn maintains the population in anxiety and daily frustration. The volatility of the political environment was illustrated by violent and widespread civil unrest occurred from 6-8 July, 2018, as a result of the Government announcement that it would discontinue retail fuel subsidies. During the first quarter of 2019, the opposition called for national protests after a court report alleged that officials and former Government ministers had reportedly misappropriated millions of dollars in loans made to Haiti by Venezuela after 2008. For 10 consecutive days, protestors took to the streets in the metropolitan area of Port au-Prince (West Department), as well as of other cities and villages around the country to demand the departure of President Moise, better living conditions, and an end to corruption. Small groups of violent individuals erected roadblocks throughout the country. Economic activity remained partially paralyzed as banks, schools and most businesses were closed. Public transportation traffic and roadside market activity continued to be significantly low. The international community is calling on the country’s leaders, civil society actors, and private sector society actors, and primarily the country's leaders, to engage in a constructive and inclusive dialogue in order to identify and implement realistic and lasting solutions to the political and economic crisis currently occurring in Haiti. In this regard, the Core Group (composed of the Special Representative of the United Nations Secretary-General, the Ambassadors of Brazil, Canada, France, Germany, Spain, the European Union, the United States of America, and the Special Representative of the Organization of American States) is encouraging the government to accelerate its structural reforms aimed at promoting better management of the State's resources, improve living conditions, fight inequalities, and foster a conducive investment climate to stimulate the development of productive sectors – essential to catalysing the country’s growth.2 Most BWH factories are in the Metropolitan Port-au-Prince area and the North East Department. The BWH factories in Port-au-Prince and at the Caracol Industrial Park 2 Public statement from Core Group 9 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T have seen very high levels of absenteeism and have struggled with production during the period. The lack of fuel and public transport had been the biggest challenge for BWH factories to continue to operate efficiently. However, the CODEVI industrial park located in Ouanaminthe (North East of Haiti) worked at 100% capacity during the unrest. The role of social dialogue as an effective tool for achieving socio- economic development, industrial democracy and social justice has been seriously embraced by the government, workers’ and employers’ organizations in Haiti during the period. Following several tripartite consultative workshops and meetings, the social partners agreed to bring the country’s legislation in conformity with international labour standards. Again through this tripartite approach the social partners have met with their respective group individually with a judicial consultant. The tripartite members agreed to harmonize labour laws and to further engage on a more comprehensive reform process targeting the weakness in the current Haitian Labour law. Total export revenues from the textile and garment industry in Haiti continue to account for approximately 90% of national export earnings and 10% of national GDP. Despite the turmoil in 2018, the apparel sector has seen $926 million worth of garment sent to the US, up 7.7% from $861 million in 2017. S&H Global S.A, a Haitian subsidiary of Sae-A Trading Co. Ltd., one of the largest Korean garment companies in the world, which has invested $78 million to develop its operations in the Caracol Industrial Park (PIC), has created more than 13,000 jobs. Instability and unrest in country, have forced the investors to use another back up plan for their expansion rather than in Haiti as initially planned. 1 0 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T HAITI INDUSTRY AT A GLANCE IN NUMBERS Better Work Haiti strives to create a garment industry that provides decent work to a projected 65,000 workers, lifting their families and communities out of poverty, empowering women, boosting national income and improving social stability. Building on the strong partnerships Better Work has developed with the government, global brands, employers and unions, over the next five years, the programme will play a central role in realizing the full potential of the HOPE II Act – a preferential trade program with the US. Convening diverse stakeholders to tackle shared challenges and supporting institutions’ efforts to monitor and safeguard factory compliance with international labour standards will be top priorities. Key partners  Ministry of Social Affairs and Labour (MAST)  Office of the Labour Ombudsman (BMST)  National Insurance and Pensions Office (ONA)  Office for Employment Injury, Illness and Maternity (OFTMA)  Ministry of Commerce and Industry (MCI)  Office of the State Secretary for the Integration of People with Disabilities (BSEIPH)  Association of Haitian Industries (ADIH)  Economic Forum  All Trade unions active in the garment sector  18 brand and retail partners 53,000 WORKERS (65% WOMEN) FACTORIES IN THE PROGRAMME 33 FREE ZONES HOSTING 90% OF TEXTILE 7 ~1 billion APPAREL EXPORTS IN USD BILLIONS (90% OF NATIONAL EXPORTS) BRANDS AND RETAILERS 18 BETTER WORK HAITI STAFF 16 YEARS OPERATING IN HAITI SINCE 2009 10 years INDUSTRY COMPLIANCE REPORTS 18 1 1 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T FIGURE 1. EMPLOYMENT GROWTH IN 5 YEARS Section II: Highlights from the Reporting Period  Better Work Haiti launched the Better Work Academy for national partners with the implementation of the Building Bridges project, funded by the Walt Disney Company, which aims to build the capacities of the national partners to empower participating organizations to reflect on and shape the future of the garment industry, as well as for other export sectors. On 9 November and 14-15 November, 2018 Better Work Haiti (BWH) and its national partners convened in Caracol and Port-Au-Prince to participate in Module 1 of the Building Bridges curriculum. 94 participants from employers, unions and government organizations attended the 3 workshops. 46,000 45,000 47,386 52,000 53,000 8,923 11,351 11,351 9,120 10,900 13,026 13,491 13,491 7,500 7,800 9,200 9,233 10,179 JOBS PIM PIC CODEVI 1 2 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T  Based on a discussion on industry compliance trends and challenges, participants jointly diagnosed governance challenges and developed a plan for further learning to translate their vision into action through the Building Bridges curriculum. Management and Union representatives from names of factories participating in the BWH program shared practical lessons learned with participants on their successes and challenges in promoting management-worker dialogue, skill development for workers and realizing improvements in working conditions. The following areas were identified as priorities for cooperation and action:  Labor law reform finalized and adapted to socio-economic realities;  Tripartite agreement to ensure that wage increases are predictable, safeguarding availability of social security and benefits to all workers through the modernization of social security agencies, and general implementation of electronic payments for improved transparency.  Effective platforms for sectoral dialogue and problem solving at the sectoral and national level  This program also aims to make Better Work expertise, data and skills acquired through work at the factory level available to participating organizations and to create an environment for participating organizations to convene in a joint learning process that contributes towards enhanced understanding and trust, allowing actors to share and learn from one another’s approaches.  A second event of the Building Bridges project is being planned for Q2 2019 1 3 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T TRADE UNION CAPACITY BUILDING  From Better Work’s perspective, significant progress was realized during the September mission of ITUC, IndustriALL and ACTRAV on improving their understanding of the BWH program and Haitian trade unions of their goals, activities, and opportunities available in the Better Work partnership.  Better Work core services staff also developed a much better understanding of the priorities and relationships among trade unions active in the garment and textile sector.  As of February 2019, the trade unions in Haiti have elected their new representatives to the PAC, (Project Advisory Committee) an important step that will facilitate forward movement on other important discussions. Further discussions will be required within the PAC on the reformulation of the structure and scope of bipartite social dialogue structures at enterprise and sectoral level, given the concerns expressed by the trade unions in relation to the PICCs and the Social Dialogue Round-Table. Staff of Labor Inspectorate Factory Management Trade Union Representative Business Associate Representative Representative of International Brand Other 0 1 2 3 4 5 6 7 8 9 10 FIGURE 3. BUILDING BRIDGES EVENT ATTENDANCE 1 4 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T  BWH is also working in the medium term with the trade unions in the garment sector to develop strong internal membership development programmes, which can ensure that basic operational needs of the trade unions are covered through membership dues.  Despite the intra-union conflicts during the period, BWH in collaboration with other ILO experts, provided technical support towards development of the labour law reform process by providing information on the guidelines and identifying the gaps between the conventions Haiti has ratified and the current labor code. A legal adviser was provided to the tripartite constituents.  As a part of its gender strategy implementation plan, Better Work Haiti collaborated with different stakeholders to organize activities in this area. In addition to training on sexual harassment awareness and prevention, Better work organized a workshop on the challenges faced by women in the workplace. Senior members of the factories, factory level union members, and the Ministry of Labour and social security institutions were present. This workshop provided the participants with the necessary knowledge and confidence regarding the specific stresses and challenges faced by women in the workplace. The Haitian garment sector working landscape is specifically challenged in that a very large number of the women are single parents. A total of 118 representatives of employers, factory level unions, union leaders and government organizations attended the workshops. The second workshop was facilitated by a consultant hired by Better Work Global who did similar work in all Better Work programs. This workshop gives new insight to both men and women as to the challenges that each face as individuals and in teams. This workshop invited the national partners to think and dialogue on what gender is and on their own attitudes toward it.  During the period, BWH worked with the Haitian government (Ministry of Labor, ONA, and OFTMA) to improve their organizational structure and have made available to the labor inspectors tools and equipment to prevent disputes and mechanisms for remediation in the garment sector.  BWH supported the Labor Administration to develop and implement a national labor inspection plan. Labor inspections in the west departments have increased by 35%. BWH collaborated with the Ministry of Labor (MAST) to develop and implement a national training plan including the social 1 5 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T security institutions (ONA, OFATMA’s). During the period, a joint inspection (MAST, ONA and OFTMA) to a garment factory was carried out for the first time ever to respond to the need for synergy between the government institutions to reduce cases of non-compliance in the factories, particularly in the garment sector. 6% 44% 6% 34% 6% 3% FIGURE 1. INDUSTRY INVESTMENT OWNERSHIP USA (2) KOREAN (14) DOMINICAN REPUBLIC (2) HAITIAN (11) TAIWAN (2) SRILANKA (1) 1 6 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T  HOPE II country eligibility requires a range of commitments from the Government of Haiti including improving compliance with national labor law, which is directly related to an effective labor inspection system. This commitment provides an opportunity for BWH to encourage the MAST senior officials to ensure adequate resources are allocated to strengthening labor inspection including the capacity of the labor inspectors and conciliators.  BWH is supporting MAST, ONA (Office Nationale d’Assurance Vieillesse) and OFTMA (Office d’Assurance de Travail, de Maladie et de Maternité) to revise internal procedures and put mechanisms in place to improve their capacity to collect and analyse data, including sex- disaggregated data and statistics, and to produce evidence-based reports on interventions on workplace compliance.  Currently, the MAST trainers are replicating the trainings received from the ILO’s Labour Administration Department and BWH to train other inspectors in the region. Seven training sessions (e.g. Inspection Methodology, labour law and Industrial Relation, Occupational Safety and Health and the Core Labor Standards.) have been provided in six departments of the country (West, North, North-east, South, South-East, and Central Plateau 15 8 3 5 2 4 0 2 4 6 8 10 12 14 16 T-shirts Knits Shirts Pants Sports apparel Others FIGURE 1. MANUFACTURING PRODUCTS BY FACTORIES 1 7 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T department). A total of 173 inspectors of ONA, OFATMA and MAST regional offices have been participating in these training sessions. 2.1. Compliance Situation In Haiti’s Exporting Garment Sector All factories registered with the Better Work program in Haiti are assessed once per year. This assessment is conducted after an initial advisory period of about 100 days and follow up advisory visits and trainings are offered after the assessment to facilitate 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. This section presents the results of assessments, advisory and training services provided to the 25 participating factories assessed at least twice in the period between April 2018 and March 2019 The charts present non-compliance findings for the 25 assessed factories in Haiti 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 these reports are issued biannually, yet assessments are being done on an annual basis, so 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. Persistent noncompliance issues in areas related to compensation (social security) and OSH (Chemicals management and emergency preparedness) continue to be a concern for the sector. In addition to the focus on management systems during advisory and training, Better Work is working closely with the Ministry of Labor and Social Affairs, ONA and OFATMA to address these issues in a sustainable way. In fact, ensuring that all parties involved in labor inspection are aligned on the way to assess and address these issues is key to solve them. A first OSH training was organized by Better work and MAST for OFATMA inspectors in October 2017. Also, a joint workshop was organized in May 2018 with inspectors from MAST, ONA and OFATMA to review the legal framework on social security and agree on the approach for assessing compliance in this area. Better Work is also supporting the Ministry of labour in the implementation of a national training plan for MAST, ONA and OFATMA inspectorate to reinforce their capacity in compliance assessment. All these efforts should contribute to reduce the rates of persistent noncompliance 1 8 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T during 2019, as several actors will be actively involved in the monitoring of these issues. 1 9 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T 4% 0% 4% 0% 0% 8% 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Child Labourers Documentation and Protection of Young Workers Hazardous Work and other Worst Forms Gender Race and Origin Religion and Political Opinion Bonded Labour Coercion Forced Labour and Overtime Prison Labour Collective Bargaining Freedom to Associate Interference and Discrimination Strikes Union Operations Child Labour Discrimination Forced Labour Freedom of Association and Collective Bargaining Non-compliance rates by Compliance Point - March 2018 - March 2019 Non-compliance rate (n= 25) 2 0 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T 4% 24% 48% 20% 96% 96% 64% 80% 0% 100% 92% 24% 8% 36% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Method of Payment Minimum Wages/Piece Rate Wages Overtime Wages Paid Leave Premium Pay Social Security and Other Benefits Wage Information, Use and Deduction Contracting Procedures Dialogue, Discipline and Disputes Employment Contracts Termination Chemicals and Hazardous Substances Emergency Preparedness Health Services and First Aid OSH Management Systems Welfare Facilities Worker Accommodation Worker Protection Working Environment Leave Overtime Regular Hours Compensation Contracts and Human Resources Occupational Safety and Health Working Time Non-compliance rates by Compliance Point - March 2018 - March 2019 Non-compliance rate (n= 25) 2 1 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T 2.2. Compliance Performance With Regards To International Core Labor Standards Better Work’s compliance assessment framework is based on eight clusters, four related to international core labor standards (see previous section) and four relating 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). During the last round of assessments between April 2018 and March 2019 in 25 factories assessed at least twice by Better Work Haiti, the following results with regards to core labour standards have been observed. It is important to note that the child labour and discrimination issues described are not new issues as they were reported in the previous reporting period. Therefore description of the improvement priorities identified is provided. CHILD LABOR During the period under review, there was one finding related to child labor. Although no child was found working in this factory, the non-compliance issue is due to the fact the factory was not able to demonstrate that it had a proper system in place to systematically verify workers ’age during the hiring process. Keeping a reliable system in place to verify the age of workers prior to hiring is a key element to prevent child labor in garment factories. The factory was advised to improve the recruitment procedure to ensure that reliable documents and a valid ID is included in their files. DISCRIMINATION One case of gender discrimination was found during the reporting period. The factory found in non-compliance has a policy on sexual harassment, has organized sexual harassment prevention training at all levels of management and workers, and has followed through with termination when such incidents occurred. Also, all supervisors and managers are trained on sexual harassment and required to commit to respect the factory's policy on this matter. However, this policy has been undermined through management discretion at the module level to rehire a known offender. In addition, it was found that male management staff was conducting random bathroom checks, which created a humiliating work environment for workers. At the time of the assessment visit, there was no evidence that specific measures had been put in place to ensure 2 2 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T that known harassers are not rehired or that HR staff do not abuse their power, or that bathroom checks if necessary are only conducted by a person of the same sex in a respectful manner. The factory took immediate action following the assessment visit to terminate the harassers. BWH is providing additional advisory and training services to help the factory improve its current procedures. Also, a new training on sexual harassment is being implemented at several factories since August 2018 in order to prevent sexual harassment and raise workers awareness. Subsequent verifications done by Better Work enterprise advisor since the latest synthesis report revealed that the workers were aware of the anti-harassment policy and that the factory improved the procedures related to the training of middle and senior management on sexual harassment. Also, the compliance department was centralized and is now working under the direct supervision of the company president, which confers more independence to the factory compliance officer in their regular duties. The factory was advised to ensure that all module are respecting the zero tolerance policy; ensure that all employees working in the HR department and the supervisory lines of each module receive the HR training; review the zero tolerance policy and consult workers representatives on issues related to Sexual Harassment. The implementation of the improvement priorities identified was confirmed during advisory visit by the enterprise advisor assigned to this factory. FORCED LABOR There are no findings under the Forced Labor Cluster in this reporting period. FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING There are two cases of non-compliance under the cluster for Freedom of Association and Collective Bargaining, all under the compliance point of Interference and Discrimination. Two factories were cited in non-compliance under this compliance point for termination or non-renewal of worker's employment contract due to union membership or activities. Better Work found noncompliance based on the fact that in the first factory, management did not provided sufficient evidence that 2 union members and one union leader were terminated for violating the rights of non-striking workers. 2 3 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T Better Work recommends the reinstatement of this union leader, with compensation for back pay. In the second factory, 11 trade unionists were fired after a strike for refusing to sign a letter saying that the strike they organized to request a raise for the minimum wage was illegal as requested by the employer. However, 9 of the 11 trade unionist who remain out of work have not agreed to end their contracts. Better Work recommends reinstatement of these 9 workers. During off hours, including during breaks, union representatives employed at the factory should not be required to ask permission to engage in union activities, assuming there is no interference with normal operations. 2.3. Compliance Performance with regards to National Labor Standards 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 the same compliance points tend to remain at high non-compliance rates of over 50% from one cycle to the next. Most of these areas of persistent non-compliance (PNC) have been analysed in detail in past reports. Therefore, some compliance points with lower non- compliance rates 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 (88%), as well as the compliance point on Paid Leave (48%). 24% of factories were found in non- compliance with regards to overtime wages. These numbers show a slight increase in the noncompliance rate in comparison to the previous cycle. Better Work Haiti is exploring ways to improve its collaboration with MAST, ONA and OFATMA in order to ensure that these issues are addressed in a more sustainable way. PAID LEAVE Compliance Question # of factories found NC NC Rate by Question Does the employer pay workers correctly for annual leave? 2 8% 2 4 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T Does the employer pay workers correctly for legally mandated holidays? 1 4% Does the employer pay workers correctly for maternity leave? 7 35% Does the employer pay workers correctly for weekly rest days? 1 5% Does the employer pay workers correctly during the daily break? 1 4% Are eligible workers paid correctly for sick leave? 1 4% Does the employer pay any workers incorrectly for any types of paid time off (breaks and leave)? 0 0% Does the employer pay workers correctly during 2 breaks of 30mn or 3 breaks of 15 minutes for breastfeeding? 1 4% The highest rate of noncompliance in this section is related to the payment of maternity leave. Seven factories were found in non-compliance for inaccurate payment of maternity leave. In fact, in some factories, the calculation of maternity leave payments for workers entitled to incentives is based on the minimum wage of reference instead of average earnings as required by the law under Article 148. However, the increase in the noncompliance rate for this section is due to the fact that the factories that are not registered to OFATMA for maternity and health insurance only pay 6 weeks maternity leave instead of 12 weeks. CONTRACTS AND HUMAN RESOURCES In the cluster on Contracts and Human Resources, an average of 28% of factories were cited in non-compliance under the compliance point termination for different questions. Further details are outlined in the tables below. TERMINATION Compliance Question # of factories found NC NC Rate by Question Does the employer compensate workers for unused paid annual leave when they resign or are terminated? 1 4% Does the employer comply with legal requirements before suspending workers or reducing the size of the workforce due to changes in operations, lack of materials, force majeure, or accident resulting in an immediate work stoppage? 0 0% 2 5 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T Does the employer pay workers their annual salary supplement or bonus upon termination? 2 8% Does the employer provide workers proper notice of termination when required, or pay workers during the notice period? 4 16% Does the employer terminate workers for reasons that are invalid under national law? 0 0% Has the employer complied with any orders to reinstate or compensate workers who were found to be unjustly terminated? 0 0% Four factories were found in non-compliance for not providing workers with proper notice of termination when required, or correctly paying workers during the notice period. These non-compliances are mainly related to inaccurate payment of the notice indemnity upon termination, because the calculation of the notice of termination payments for workers entitled to incentives is based on the minimum wage of reference instead of average earnings as required by the law under Article 148. The other non-compliance issues related to inaccuracy of the payments made for workers entitled to incentives, as the factories listed did not include all the wages in the calculation of the annual salary supplement or bonus and the annual leave. OCCUPATIONAL SAFETY AND HEALTH Although there is a slight decrease in the overall non-compliance rate for this cluster, the non-compliance rates for Occupational Safety and Health remain high in the Haitian garment industry (average 72%). The highest levels on non- compliance in that cluster still relate to the emergency preparedness, health services & first aid, chemicals and hazardous substances and the worker protection and working environment compliance points. … CHEMICALS AND HAZARDOUS SUBSTANCES Compliance Question # of factories found NC NC Rate by Question Are chemicals and hazardous substances properly labelled? 18 72% Are chemicals and hazardous substances properly stored? 10 20% Does the employer have chemical safety data sheets for all the hazardous chemicals used in the workplace? 21 84% 2 6 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T Does the employer keep an inventory of chemicals and hazardous substances used in the workplace? 18 25% Does the employer provide adequate washing facilities and cleansing materials in the event of exposure to hazardous chemicals? 14 56% Has the employer effectively trained workers who work with chemicals and hazardous substances? 3 12% Has the employer taken action to assess, monitor, prevent and limit workers' exposure to chemicals and hazardous substances? 10 40% 88% of the factories assessed were found in non-compliance in the chemicals and hazardous substances compliance point. These high levels of non- compliance are due to the fact that the factories are still failing to implement sustainable systems to ensure that all chemicals and hazardous substances used in the workplace are properly managed. Better Work offered additional sessions of the seminar on chemicals management during the reporting period to address this issue. Also, it is important to note that the high level of non- compliance for chemical safety data sheets (MSDS) is often due to factories not having all the MSDS required in local language. Management is required to provide an original MSDS in French or request a proper translation. EMERGENCY PREPAREDNESS Compliance Question # of factories found NC NC Rate by Question Are emergency exits and escape routes clearly marked and posted in the workplace? 20 80% Are flammable materials safely stored? 4 16% Are possible sources of ignition appropriately safeguarded? 1 4% Are the emergency exits accessible, unobstructed and unlocked during working hours, including overtime? 13 52% Are there enough emergency exits? 1 4% Does the employer conduct periodic emergency drills? 7 28% Does the workplace have a fire detection and alarm system? 8 32% Does the workplace have adequate fire-fighting equipment? 17 68% Has the employer trained an appropriate number of workers to use the fire-fighting equipment? 7 35% 2 7 B E T T E R W O R K H A I T I – 1 8 T H S Y N T H E S I S R E P O R T Has the employer informed and prepare