BetterWork: 23rd Compliance Synthesis Report Under the Hope Legislation - Haiti

2 3 r d C o m p l i a n c e S y n t h e s i s R e p o r t U n d e r t h e H o p e L e g i s l a t i o n Haiti OCTOBER 2020 – DECEMBER 2021 1 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 C o p y r i g h t © I n t e r n a t i o n a l L a b o u r O r g a n i z a t i o n ( I L O ) a n d I n t e r n a t i o n a l F i n a n c e C o r p o r a - t i o n ( I F C ) ( 2 0 2 1 ) F i r s t p u b l i s h e d ( 2 0 2 1 ) ILO publications benefit from copyright under Protocol 2 of the Universal Copyright Convention. However, short excerpts from them may be reproduced without authorization because the source is indicated. For reproduction or translation rights, the 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 email pubdroit@ilo.org. The IFC and ILO welcome such applications. Libraries, institutions, and other users registered with reproduction rights organizations may make copies by the licenses 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: apparel industry 23rd biannual synthesis report under the HOPE II legislation / International Labour Office; International Finance Corporation. - Geneva: ILO, 2021 1 v. ISSN 2227-958X (web pdf) 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. 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. Catalogs 2 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 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 A c k n o w l e d g m e n t s / D i s c l a i m e r Better Work Haiti receives financial support from the United States Department of Labor (USDOL). This publication's contents are the sole responsibility of Better Work Haiti and do not necessarily reflect the views or policies of the USDOL. The funding that is provided by the United States Department of Labor falls under cooperative agreement number IL-21187-10-75-K. 89 percent of the program's total costs in 2020 were funded by Federal funds, for a total of USD 11,295,840. This material does not necessarily reflect the United States Department of Labor's views or policies, nor does mention of trade names, commercial products, or organizations imply endorsement by the United States Government. 3 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 T a b l e o f C o n t e n t s Acknowledgments/Disclaimer........................................................................................... 2 List of Acronyms .................................................................................................................. 4 Section I: Introduction and Context ................................................................................... 7 1.1 Background............................................................................................................................................... 7 1.2 Haiti Apparel Industry at a glance in numbers......................................................................... 10 1.3 Impact of COVID-19 on workers in the Apparel Sector......................................................... 12 Section III: Highlights of the reporting period April– November 2021 .......................... 17 Country Context ................................................................................................................................................ 17 Section IV: Compliance situation in the Haitian garment industry.............................. 24 Section V: Core labor standards non-compliance findings of the reporting period (April 2021 – November 2021)................................................................................ 30 Section VI: Better Work key activities and response to COVID-19 ................................. 33 Factories in Detail ............................................................................................................... 45 List of Factories .................................................................................................................................................. 45 Findings from the Factories ......................................................................................................................... 47 Annex 1: The TAICNAR Project and Reporting Requirements under the HOPE II Legislation ............................................................................................................................ 49 Annex 2. Better Work’s Service Delivery Model ................................................................ 53 Annex 3. The Better Work Compliance Assessment Methodology ................................ 56 Better Work Compliance Assessment Framework............................................................................. 56 Calculating Non-Compliance & Public Reporting ............................................................................. 64 Limitations in the Assessment Process .................................................................................................. 64 Annex 4. Factories Findings ............................................................................................... 67 4 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 L i s t o f A c r o n y m s ADIH Association des Industries d’Haïti (Haitian Industry Association) BMST Bureau de la Médiatrice Spéciale du Travail (Office of the Special Ombudsperson of Labor) 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) CTH Confédération des Travailleurs Haïtiens (Confederation of Haitian Workers) CTSP Confédération des Travailleurs des secteurs Publics et Prives (Confederation of Workers from the Public and Private Sectors) CTMO - HOPE Commission Tripartite de Mise en œuvre de la loi HOPE (Tripartite Commission for the Implementation of the HOPE Law) EA Enterprise Advisor GOSTTRA Groupement Syndical des Travailleurs-eusses du Textile pour Réexportation d'assemblage (Union Group of Textile Workers for Re-export of the Assembly) HELP Haiti Economic Lift Program HOPE Haitian Hemispheric Opportunity through Partnership Encouragement Act IOE International Organization of Employers ITUC International Trade Union Confederation MSDS Material Safety Data Sheet MAST Ministère des Affaires Sociales et du Travail (Ministry of Social Affairs and Labor) OFATMA Office d’Assurance Accidents du Travail,Maladie etMaternité (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 PAP Port-au-Prince, Haiti PIC Parc Industriel de Caracol (Industrial Park of Caracol) PICC Performance Improvement Consultative Committee 5 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 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 SDT Table de Dialogue Social (Social Dialogue Table) ) 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 - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 7 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 S e c t i o n I : I n t r o d u c t i o n a n d C o n t e x t 1 . 1 B A C K G R O U N D 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, 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, Ethiopia, Egypt, Haiti, Indonesia, Jordan, Nicaragua, and Vietnam. Better Work is mainly operating in the apparel and footwear industry in the countries it operates. 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. In addition, according to the HOPE legislation, biannual reports must be published to indicate enterprise-level compliance performance. Further details on the components of the HOPE II law and specific requirements regarding biannual reports being published by the entity operating the TAICNAR program are quoted in annex 1 (HOPE II Legislation Reporting Requirements). This is the twenty-third report under the HOPE legislation to be published in April 2021 and delayed publication to July 2021; due to unforeseen circumstances; it is being published late this year. . Detailed enterprise-level data of compliance performance as required by the HOPE II legislation is included in the factory tables in the section called “factory tables.” The two components of HOPE II 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 each factory's progress 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 8 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 services is extensive, encompassing technical assistance from the ILO in reviewing national laws and regulations to bring them into conformity with international standards, raise awareness of workers’ rights, and train 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 the government of the United States' determinations, 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's 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, particularly 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 also took on several elements of the second component of the TAICNAR program while carrying out activities covering TAICNAR component one. The Better Work program coordinates its work with the Labor Ombudsman and a tripartite Project Advisory Committee (PAC). This Committee meets with Better Work regularly to discuss the activities of the Better Work program. The PAC members represent the private sector, government and worker representatives, and the Labor Ombudsperson in line with the Committee's HOPE law's requirements. Therefore, Better Work follows this two-pronged approach at the country level to improve Haiti's garment industry's working conditions and competitiveness. On the one hand, direct factory-level interventions allow deep insight into each company’s compliance performance and assist in a tailored way. On the other hand, the program works with the tripartite constituents to address endemic challenges more substantially by bringing stakeholders together, sharing industry data, and offering technical assistance to address compliance challenges and capacity-building needs. 9 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 The outbreak of COVID-19 and security concerns had tremendous impacts on the Haitian garment sector and workers in the sector in 2020 and 2021. These will be elaborated in Section 1.3 Impact of COVID-19 and the Section III Country Context. 1 0 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 1 . 2 H a i t i A p p a r e l I n d u s t r y a t a g l a n c e i n n u m b e r s FACTORIES THE PROGRAMME 39 53,410 WORKERS (63% WOMEN) 7 FREE ZONES HOSTING 90% OF TEXTILE 988 Million APPAREL EXPORTS IN USD MILLIONS (83% OF NATIONAL EXPORTS) BRANDS AND RETAILERS 26 BETTER WORK HAITI STAFF 14 YEARS IN HAITI - SINCE 2009 +10 INDUSTRY COMPLIANCE REPORTS 22 1 1 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 By 2022, 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. As of September 2021, the number of workers in the garment factories registered with Better Work stood at 53,410. According to the data published by the US Department of Commerce Office of Textiles and Apparel (OTEXA), the Haitian textile industry exported approximately USD 988 million worth of products to the United States from October 2020 to September 2021, representing an increase of 29 percent comparing the same period of the previous year after the significant drop in 2020 due to the pandemic. Building on the strong partnerships Better Work has developed with the government, global brands, employers, and unions, over the next five years, the program 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 labor standards will be top priorities. Key partners
Ministry of Social Affairs and Labor (MAST)
Office of the Labor Ombudsman (BMST)
National Insurance and Pensions Office (ONA)
Office for Employment Injury, Illness and Maternity (OFTMA)
Ministry of Commerce and Industry (MCI)
Ministry of Economic and Finance (MEF)
Office of the State Secretary for the Integration of People with Disabilities (BSEIPH)
Association of Haitian Industries (ADIH)
Private Sector Economic Forum (PSEF) All Trade unions active in the garment sector (11)
26 brand and retail partners 1 2 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 1 . 3 I M P A C T O F C O V I D - 1 9 O N W O R K E R S I N T H E A P P A R E L S E C T O R Beyond firm-level impact, the worker survey conducted by Better Work Haiti shed light on the impact on workers and their families. Between June and July 2021, Better Work Haiti conducted another round of the workers’ survies to follow up on the survey in November 2020 to understand the impact of the COVID-19 pandemic on the workers, approximately six months after the arrival of the first case in Haiti. The June 2021 survey was conducted with approximately 1,500 workers who had participated in the previous survey to find out the changes that had occurred in their lives (if any), since November 2020. Among the respondents, 62% were female, and 23% of them were married. The survey covered the same themes that were covered in the last survey, and used the same questionnaire and methodology. The questions covered a wide range of topics, including their financial situation, their concerns, and their outlook on the future as well as their mental and physical health. Worker characteristics A total of 1,511 workers completed Better Work’s survey in both November 2020 and June 2021. The following provides a snapshot on the background of these workers: 62 % 33 23 % are female average age are married 2/3 81 % have completed secondary level of education are the main breadwinner in their family 1 3 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 1.3.1 Working hours and take-home pay have stabilized in 2021 following COVID-19 production disruptions in 2020, but financial insecurity among workers remains a major concern.
In November 2020, two-thirds of workers said they had experienced some sort of work disruption, such as a temporary suspension, in the past 30 days. The percentage of workers reporting similar disruptions decreased substantially by the second round survey, suggesting a stabilization of production and employment in 2021. One in five workers reported working hours had increased in the past 30 days.
The average monthly pay reported by workers was 7,400 gourdes ($76). Among workers who have maintained their employment, the level of reported take-home pay remained stable over the previous six months.
Yet stability in levels of nominal wages can mask financial hardship. Half of workers reported “financial stress” as a concern in the 2021 survey round. Even as this reflects a high proportion of the workforce, it has lessened from the 60 percent of respondents who reported “financial stress” as a concern in 2020.
The figure below helps illustrate how financial stress can manifest in workers’ lives. Fifty nine percent of workers spent down savings to cover living expenses in 2021. While this is down from the 81 percent of workers who reported the same in 2020, it coincides with a higher percentage of workers who are borrowing money (47 versus 36 percent), which could suggest personal savings are depleting. As in 2020, macroeconomic dynamics prompting rising food prices are also likely contributing to workers’ financial stress. 81% 36% 33% 10% 59% 47% 19% 8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Spent savings Borrowed money Help from family members Sold assets How did you cover living expenses in the last two months? Nov-20 Jun-21 1 4 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 1.3.2 Individuals who left their jobs since last year experienced worse outcomes.
Even though garment workers are facing financial challenges, those who left their garment sector jobs tended to face even starker problems. Ten percent of the sample, or 161 of workers surveyed, had left their job in the six months following November 2020. Seventy six percent of the workers who left their job since November 2021 were not working for pay in the week preceding the survey. Half of those not working are actively searching for a new job. When asked about making ends meet during their period of not working, respondents by and large report to be sustaining themselves with savings or support from relatives, with no respondents mentioning government social protection benefits. A majority of the workers who left their job in the past six months report lower income from all sources relative to when they held their garment job. Given the lower levels of productive employment reported among those who left their garment sector jobs, it is not surprising their incomes have deteriorated.
The most common reason cited for leaving a job was because of being fired or laid off, due to the fact that factories lost contracts during this period. However one- third of those who left their job stated that they decided to quit, which could point to job dissatisfaction. Among those who choose to quit, workers cited health-related concerns, poor working conditions, and low salaries as the most common reasons for leaving. 52% 33% 7% 4% 4% 0% 10% 20% 30% 40% 50% 60% I was fired or laid off I decided to quit The firm is closed I was suspended Other Reasons for leaving job in past 6 months (n=161) 1 5 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 1.3.3 Food security remains a prominent concern among garment workers and their dependents. While the most immediate pressures from COVID-19 restrictions – such as mobility restrictions, closures of markets, and food shortages – have abated in 2021, the majority of workers are still facing food insecurity. Echoing 2020, 80 percent of workers surveyed in 2021 say they and family members have had to reduce the number of meals or the portion of each meal at some point in the immediate past. This has largely persisted since the first survey round in 2020. Compared to 2020, a lower percentage – yet still 60 percent – of workers cite prohibitively high food prices as a problem to meet their nutrition needs. This remains the number one reason cited by workers to explain their reduction in food intake, followed by reduction in household income. Asked about other concerns, nearly 80 percent of workers cite personal safety concerns during their commute to work. Instability in the country was a common concern mentioned in the course of the survey interviews. 1.3.4 Workers’ self-reported health and well-being have deteriorated since 2020.
Better Work Haiti incorporated standardized questions measuring mental well- being, which covered areas such as optimism about the future, ability to cope with 80% 75% 60% 50% 0% 20% 40% 60% 80% 100% Price of food was too high Our household income has dropped Unable to buy the amount of food we usually buy because... Nov-20 Jun-21 1 6 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 problems, and feelings of connectedness with others 1 . After establishing appropriate cut-off scores to analyse the responses of workers, a deteriorating trend emerges, with the percentage of workers classified as at risk for possible or probable depression or anxiety rising from 12 to 35 percent.
A large drop-off in the self-reported physical health of workers also appears to have occurred from 2020 to 2021. Whereas in the first survey round 79 per cent of workers cited their physical health as “good” or “very good,” the corresponding proportion for 2021 drops to just 38 per cent of workers. These results on workers’ mental and physical health would seem to be consistent with the financial and food security- related stresses workers have reported. This survey exercise in 2021 following the experiences of 1,500 current and former garment workers in Haiti shows that despite gains made in workplace stability following production disruptions in 2020 related to COVID-19, many current and former workers face significant hardships related to household finances and basic needs. Moreover, the unique nature of the data set Better Work Haiti has created in elevating these insights from workers can also enable further research to understand better the drivers of outcomes for workers in the sector. The program is working on several dissemination materials such as a video infographic, a press release in local newpapers and online, including on social media, with the aim to provide insights into the working conditions and business conditions in the sector and to call the attention of the stakeholders to challenges and issues identified by the survey. 1 A set of seven questions was used with permission from the Short Warwick Edinburgh Mental Wellbeing Scale (SWEMWBS) © NHS Health Scotland, University of Warwick and University of Edinburgh, 2008, all rights reserved. 87% 65% 10% 35% 2% 0% 0% 20% 40% 60% 80% 100% Nov-20 Jun-21 No indication of depression or anxiety Possible depression or anxiety Probable depression or anxiety 1 7 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 S e c t i o n I I I : H i g h l i g h t s o f t h e r e p o r t i n g p e r i o d A p r i l – N o v e m b e r 2 0 2 1 C O U N T R Y C O N T E X T Long before the coronavirus, Haiti faced enormous economic hardship. The GDP growth was -1.7% in 2019, -3.3% in 2020 and -1.8% in 2021. The recent assassination of President Moise and the ensuing political unrest, gang activities and associated instability in the country have exacerbated the already fragile Haitian economy. The assassination of President Jovenel Moise on July 7 th sent shockwaves to the people of Haiti. The interim government, headed by President Ariel Henry, has been working on multiple fronts including the investigation of the assassination, the response and recovery from the magnitude 7.2 earthquake which hit the country on 14 August 2021, as well as the improvement of the security situation against gang crimes. The timing of national and local elections is yet to be determined. The armed gangs seem to operate at will, disrupting activities in some parts of the capital, including public and commercial transport, which has affected the delivery of fuel and caused fuel shortages throughout the country. This disruption has in turn affected business operations in general and particularly in the textile sector that depends heavily on the use of diesel to power the factories. The situation was so dire during the months of July and August that some factories could not receive raw materials or export finished goods and some even closed their doors temporarily. As mentioned in the previous sections, in the worker’s survey commissioned by BWH, nearly 80 percent of surveyed workers cited personal safety concerns during their commute to work. While the country continues to deal with last year’s impact of the COVID-19 pandemic on the economy, there was a reported increase in new COVID infections. According to the latest information posted by the World Health Organization (WHO), as of the end of November, there were 25,351 cases of COVID-19 infections in the country and 746 deaths. Furthermore, the vaccination rate remains low at approximately 0.56% of the population has been fully vaccinated. ( https://covid19.who.int/table ) 1 8 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 On the economic front, the value of the Haitian Gourdes compared to the US dollar continued to decrease. At the end March 2021, the average exchange rate was about 80 Haitian Gourdes for one US dollar. In September 2021, the Central Bank of Haiti (Banque de la Republique d’Haiti) reported the average exchange rate at 97.40 Gourdes for one US dollar. It should be noted that the actual exchange rate at the local banks are usually higher. In addition, there is a scarcity of US dollars in the official market. S p o t l i g h t o n S o c i a l P r o t e c t i o n There are two main actors operating under the leadership of the Ministry of Social Affairs and Labor (MAST) that provide social security protection services to workers in the textile sector, namely The Office for Work, Health and Maternity Insurance (OFATMA) and National Office for Old-Age Insurance (ONA). OFATMA is a government-run insurance provider that provides health services to workers when they are sick as well as provides annual medical check ups to participating workers. Both workers and employers contribute 3 percent of the workers average salary to the agency, on a monthly basis, to cover worker’s healthcare needs. The employer contributes an additional 3 percent of the workers average salary for coverage of work-related accidents. It also provides long-term disability payments to workers who are injured or unable to work for an extended period of time. The other government-run agency is the ONA, which covers the retirement fund for all workers in the country. Similarly to the contribution for OFATMA, both employers and workers contribute an equal six percent to the fund. In general, workers are eligible to collect their pension dues after contributing during 240 months and after completing their 55th birthday. The agency also provides different types of loans to contributing workers, based on a percentage of the amount they have already contributed to the fund. Workers often complain that it is very difficult for them to receive any loans from the available programs. Both agencies have received criticism from employers and workers in the textile sector for lacking adequate services. There have been insufficient access to services due to different reasons. In some cases, factories do not register themselves for social security schemes.Many factories do not collect workers’ contributions or pay their contributions correctly, or in some cases, they collect workers’ contributions but do not transfer them to ONA or/and OFATMA resulting non-registration of workers to the list of beneficiaries. There are also cases where OFATMA’s list of beneficiaries are not updated on time or correctly. In those cases, workers cannot access the services they should be entitled to. It should be also 1 9 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 noted that the follow-up by the government agencies to ensure factories’ registration and to collect unpaid contributions has not been sufficient. According to a recent analysis by Better Work based on the data collected during regular factory assessments, there are 15 factories that are not registered for maternity and health insurance. Among this group, there are 2 factories that have not registered with OFATMA for work-related accident insurance either. There are also additional revenues that are lost because of faulty calculation of the average daily salary which does not include the payment for the lunch break, as required by the 2017 law related to the workday. In fact, during this reporting period, 24 factories were found to be non-compliant with their contributions to the social security system. However, there are a total of 32 factories in the program that do not include the lunch break payment in the calculation of the daily average salary and thus do not include this payment in the amount submitted to the social security services. (Please see tables below) Compliance Question The number of fac- tories found non- compliant (N=27) NC Rate by Ques- tion Does the employer collect and forward workers' contribu- tions to ONA? 24 89% Does the employer collect and forward workers’ contribu- tions to OFATMA? 24 89% Does the employer pay 3% of workers' basic salary to OFATMA for maternity and health insurance? 24 89% Does the employer pay the required employer contribution to ONA? 24 89% Does the employer pay 3% of workers' salary to OFATMA for work-related accident insurance? 18 67% Does the employer pay workers their annual salary supple- ment or bonus? 16 59% 2 0 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 The issue of non-compliance on social security benefits, which is recurrent in the Haitian textile sector has attracted the attention of the United States Congress in recent months. In a letter sent to various brand manufacturers in November of 2021, the US House Ways and Means Committee expressed its concerns that many of the factories operating in the sector are not complying with their obligations to contribute to the social security system. The representatives of the House Ways and Means Committee are asking the manufacturers to take leadership to ensure that their suppliers comply with the requirement of the laws by paying by contributing to the social security system as they should. The association of Haitian Industries (ADIH) sent a letter to its members, exhorting them to comply with the laws and to quickly take action to solve any pending issues they may have with ONA and OFATMA. 15 2 32 32 0 5 10 15 20 25 30 35 Number of factories that are not registered for OFATMA Maternity and health insurance Number of factories that are not registered for OFATMA work related accident insurance Number of factories that are not including lunch break in calculating OFATMA contributions Number of factories that are not including lunch break in calculating ONA contributions Among 38 factories registered to Better Work Social security registeration and calculation 2 1 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 In February 2020, the government and social partners adopted a National Social Protection and Promotion Policy (PNPPS) 2 . This policy results from a participatory and inclusive process initiated in Spring 2016 at the official launch of the Sectorial Table on Social Protection (TSPS) based on the “social re-foundation” pillar of the Strategic Plan for the development of Haiti. The PNPPS defines the main functions of social protection and social promotion. The PNPPS aims by 2040 to reduce poverty, inequalities, and economic, social, and institutional injustices to build just social citizenship where the holders of rights to social protection and promotion see their rights realized and their ability to live the desired life improved. The guiding principles define the principles to be taken into account in the PNPPS and the conditions necessary to achieve its objectives. These principles are universality, equity, equality between the individuals, solidarity in the financing, adequacy of benefits, subsidiarity and participation, coherence of policies, adaptation, an obligation of means, and results. In May/June 2021, a joint Virtual Mission of the UN System in Haiti to support the implementation of the “Politique nationale de protection et promotion sociales (PNPPS)” took place in Port-au-Prince, Haiti. The objective of one UN “virtual” mission to Haiti was to coordinate among agencies and support the implementation of the policy by the Haitian actors. The key UN agencies involved are WFP, ECLAC, PAHO/WHO, UNDP, UNICEF and the ILO. The main governmental counterparts are the MAST, Ministry of Planning and External Cooperation (MPCE) and the Ministry of Economy and Finance (MEF). The UN Resident Coordinator designated the country team economist to be the leader of a UN team of representatives of the agencies. Following several rounds of discussions between Better Work Haiti and the directors of ONA and OFATMA, it was agreed that an Inter-sectoral commission, composed of representatives from ONA, OFATMA, MAST, The Association of Haitian Industries and representatives of workers will be revitalized, to address the non-compliance issues in the sector. The commission, which was launched in 2018 and renewed in 2019, will work on a plan to harmonize the activities of ONA and OFATMA, make a revised proposal to the new Minister of MAST, and outline a series of actions that must take place to improve the 2 https://www.social- protection.org/gimi/gess/RessourcePDF.action;jsessionid=bDiAHTV0ceriETjFXlw7uxKdmpvOXPLDIjqm5d 4x21olWFD-Gbgw!1750948109?id=57284 2 2 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 performance of the social security actors. The commission will submit a proposal to monitor the number of workers in the sector on a monthly basis, taking into consideration the fluctuations that are constantly occurring. A special unit will be put in place to compile all the data on the workers’ socio-demographic profile, including their health condition. This information will be shared with the relevant authorities, including the Association of Employers (ADIH) and the Office of the Labor Ombudsperson (BMST). The inter-sectoral commission will work on the modalities to bill and collect the payment from the employers in a more efficient manner as well as the penalties for non-payment of the invoices in a timely manner. They will also make a proposal regarding the measures to be considered by factories in the event of the non-availability of ONA and OFATMA services. The commission will further propose a plan to establish a permanent registration process of all workers to the social security database and in the case of those workers who do not have a national ID card, they will work with the competent authorities, namely the National Office for Identification (ONI) to provide them with a national ID card. The commission will work with the employers and the union to ensure that they respect their obligations towards the social security actors. 2 3 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 2 4 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 S e c t i o n I V : C o m p l i a n c e s i t u a t i o n i n t h e H a i t i a n g a r m e n t i n d u s t r y T h e o v e r a l l t r e n d o f n o n - c o m p l i a n c e s i n t h e H a i t i a n g a r m e n t i n d u s t r y This section presents an overview of the non-compliance findings in 27 participating factories, which were assessed at least twice before November 2021. Better Work Haiti conducted hybrid assessments and hybrid advisories during this period with the support of inspectors from the Ministry of Labor. During the hybrid assessments and hybrid advisories, labor inspectors visited factories on site and Better Work staff support them remotely. The factories’ improvement plans were verified virtually through requests for documentation during advisory services and conversations with bipartite committee members, including workers and management. The charts present non-compliance findings for the 27 assessed factories during the reporting period, showing non-compliance rates in brackets. Please note that these reports are issued biannually, yet assessments are being done annually, so issues are reported in two consecutive reports. In this report's individual factory tables, progress on the remediation of non-compliance issues can be followed in further detail. The highest non-compliance rates in the industry were in occupational safety and health (OSH). Persistent non-compliance issues in compensation (social security, as described in the earlier section) and OSH (Chemicals management, Emergency preparedness, and Health service and first aid) continue to concern the sector. This is where Better Work’s role as convenor of industry stakeholders is essential. It allows the program to discuss challenges that affect many companies in the industry. 2 5 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 The overall trend of non- compliances in the Haitian garment industry 96 % Non-compliance on e m e r g e n c y p r e p a r e d n e s s r e m a i n s h i g h. Under this cluster, non-compliances on having adequate fire-fighting equipment (74%), keeping emergency exits accessible, unobstructed, and unlocked during working hours (78%) are also key challenges to be addressed. 96 % Non-compliance on c h e m i c a l a n d h a z a r d o u s s u b s t a n c e m a n a g e m e n t remains high at 96%. The non-compliance on storing the chemicals properly is relatively low at 22%, but 81% of factories were found non-compliant on properly labeling them. 96 % Non-compliance on social security and other benefits remains high at 96% as detailed in the previous section. 59 % Factories found non-compliant on at least one question under the Employment contracts cluster, but no factories found non-compliant on the question asking the workers to have contract During this reporting period, Better Work Haiti noted two new allegations on core labor standards violations during assessments. One FOA case falls in the interference and discrimination compliance point, for failure to pay the minimum daily salary to union members who were suspended. The second case relates to six union leaders who were dismissed on the basis for failure to wear a mask during work hours. The factory only provided documentation for only one out of those six workers. The details of those cases are described in Section V: Core labor standards non-compliance findings. The overall rate of non-compliance continues to be high in the Occupational Safety and Health cluster, particularly emergency preparedness and chemicals and hazardous substances. The data reveals that factories have made a greater effort to train workers in the use, maintenance and storage of chemical substances. For example, the non-compliance rate on the specific questions related to the monitoring and prevention of exposure to chemical and hazardous substances is at 19% and the non-compliance rate in term of training is at 22%. The non-compliance rate on storing the chemicals properly continues to be relatively low at 22%. The questions concerning inventory documentation, labeling of containers of hazardous substances and the availability of material safety data sheet still present a high rate of non-compliance, which affect the overall rate of non-compliance in the OSH cluster. The rate of non-compliance in the emergency preparedness also remains high at 96% for this reporting period. The data reveals that employers have properly informed and prepared workers for emergencies in the workplace, with a non-compliance rate of just 7%. Non- compliance regarding accessible, unobstructed, or unlocked emergency exits during working hours, including overtime stands at 78% during this reporting period. During the last reporting period, 12 out 13 factories or 92% were non-compliant on the availability of adequate fire-fighting equipment. For this period, the report on 27 factories assessed demonstrated a non-compliance rate of 74%. One of the main problems with the non-compliance issues in OSH is because most of the factories do not have a dedicated compliance officer. The compliance officers usually have several other responsibilities within the organisation and therefor fail to pay attention to all the details related to OSH. The issues are usually corrected after the assessment, however regular follow ups are not done to ensure that they issue do not reoccur. We regularly advise the factories to have a dedicated compliance officer to oversee all OSH related issues. We 2 7 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 have also proposed an individual plan to each factory, to improve OSH compliance. The objective was to develop and carry out specific activities which involves management and workers representatives from factories, to significantly reduce the most recurrent OSH non- compliances. In the compensation cluster, the highest rates of non-compliance persist in the compliance point of Social Security and Other Benefits (96%). The data present a slight increase in the rate of non-compliance due to the fact that we are reporting on more than double the number of factories that were assessed during the last reporting period. Twenty four factories assessed have have been cited for non-compliance on collecting and forwarding workers’ contributions to OFATMA and ONA and paying employers’ contributions. The non- compliance is consistently high in this area due to the fact that several factories have not subscribed to the maternity and health insurance which OFATMA is offering since December 2016, while others are making the payments late. Twenty factories are in non-compliance for collecting and forwarding workers’ contributions to OFATMA on time. In addition, 24 factories have also been non-compliant for workers’ and employers’ contributions to ONA (pension funds), respectively. Among these, the majority of non- compliances identified relate to late payments of these contributions. The Haitian Labour Code requires that payments (6 percent of the basic salary to be paid by employees and 6 percent of the employers' basic salary) are being made within the first 1 working days of each month for the previous month. The data reveals that 20 assessed factories do not count the break time in the normal working time, in accordance with article 3 of the law on the organization and regulation of working time over the duration of 24 hours divided into three shifts of eight hours. In accordance with the provision of the same article, the break time will be at least half an hour and must be fully remunerated, regardless of its duration. This will lead to non-compliance findings for all factories who do not pay for the break time and the resulting mandatory contributions. Better Work Haiti’s actions on those points are elaborated in Section VI: Better Work key activities and response to COVID-19. 2 8 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 4% 7% 0% 7% 0% 0% 0% 0% 0% 0% 0% 0% 4% 0% 0% 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 - Feb 2021 - Nov 2021 (Core Labour Standards Clusters) Non-compliance rate (n= 27) 2 9 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1 4% 15% 7% 85% 4% 96% 15% 19% 7% 59% 63% 96% 96% 100% 33% 93% 0% 93% 89% 19% 0% 70% 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 - Feb 2021 - Nov 2021 (National Law Clusters) Non-compliance rate (n= 27) 3 0 B E T T E R W O R K H A I T I - 2 3 R D C O M P L I A N C E S Y N T H E S I S R E P O R T - D E C E M B E R 2 0 2 1