BetterWork: 25èm Rapò Sentèz sou Konfòmite Dapre Lejislasyon HOPE Ayiti NOV 2021 - DEC 2022

25th Compliance Synthesis Report Under the Hope Legislation Haiti NOV 2021 - DEC 2022 1 B E T T E R W O R K H A I T I – 2 4 T H 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 2 Copyright © I n terna t io nal L a bour Organi zati on ( I LO) a nd In tern ati o nal Fina nce Corpora- tion (IFC) (20 23) First publishe d (2023) ILO publications benefit from copyright under Protocol 2 of the Universal Copyright Convention. However, their short excerpts 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 25th biannual synthesis report under the HOPE II legislation / International Labour Office; International Finance Corporation. - Geneva: ILO, 2023 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 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 2 B E T T E R W O R K H A I T I – 2 4 T H 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 2 Acknowledgments/Disclaimer 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 2022 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 4 T H 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 2 Table of Contents Acknowledgments/Disclaimer .......................................................................................... 2 List of Acronyms ............................................................................................................. 4 Section I: Introduction and Contex t ................................................................................ 7 1.1 Background .............................................................................................................................................. 7 1.2 Haiti Apparel Industry at a glance in numbers ............. Erro r! Book mark not defined. ..................................................................................................................... Erro r! Book mark not defined. Section III: Highlights of the reporting period December 2021-June 2 0 22 ............... 13 Country Context ............................................................................................................................................. 13 Section IV: Compliance situation in the Haitian garment industry ............................ 18 Secti o n V: Core labor standards non-c ompli a nce findin gs of the reportin g period (Ap r il 2021 – November 2021) .......................................................................... 25 Section VI: Better Work key activiti es during the reporting period ........................... 29 Factories in Detail ......................................................................................................... 3 5 List of Factories ............................................................................................................................................. 35 Findings from the Factories .......................................................................................................................37 Annex 1: The TAICNAR Project and Repo rting R e quir ement s under th e HOPE II Legislation ................................................................................................................ .. 39 Annex 2. Better Work’s Se rvice Delivery Model .......................................................... 42 Annex 3. The Better Work Complia nce Assessment Methodology ............................. 45 Better Work Compliance Assessment Framework ...................................................................... 45 Calculating Non-Compliance & Public Reporting ........................................................................ 53 Limitations in the Assessment Process ........................................................................................... 53 Annex 4. Fa ctories Find ings .......................................................................................... 57 4 B E T T E R W O R K H A I T I – 2 4 T H 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 2 List of Acronyms 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 PIM Parc Industriel Métropolitain (also referred to as SONAPI) 5 B E T T E R W O R K H A I T I – 2 4 T H 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 2 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 4 T H 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 2 7 B E T T E R W O R K H A I T I – 2 4 T H 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 2 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, 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, Madagascar, Nicaragua, Pakistan, Sri Lanka and Viet Nam. Better Work is mainly operating in the apparel and footwear industry in the countries it is present. 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-fifth report under the HOPE legislation. Detailed enterprise-level data of compliance performance as required by the HOPE II legislation is included in the Factory Tables section below. The two components of the HOPE II TAICNAR program aim to strengthen the labor compliance of Haiti's industry. 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 services is extensive, encompassing technical assistance from the ILO in reviewing national laws and regulations to 8 B E T T E R W O R K H A I T I – 2 4 T H 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 2 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 implemented 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 program’s activities. 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 4 T H 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 2 1.2 HAITI APPAREL INDUSTRY AT A GLANCE IN NUMBERS 36 FACTORIES IN THE PROGRAM 58,571 WORKERS EMPLOYED (63% WOMEN) 8 INDUSTRIAL ZONES HOSTING 90% OF TEXTILE ~ $1.1Bi ( 1 0 B E T T E R W O R K H A I T I – 2 4 T H 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 2 Better Work Haiti continues to work with industry stakeholders, namely the workers’ and employers’ organizations and the government representatives, to not only safeguard jobs in the textile and apparel sector but also to multiply them through increased productivity and demands from international buyers. Better Work Haiti continues to engage with international buyers to address the issues that concern them and the Haitian textile sector. The discussions around the renewal of the HOPE Law have given all actors an added incentive to work together to address the many non-compliance issues that may affect the sector’s growth and productivity. The non-compliances related to social security have been a key point in the discussions for the renewal of the HOPE law. According to the data published in October 2022, by the US Department of Commerce Office of Textiles and Apparel (OTEXA), the Haitian textile industry exported USD 1.1Billion worth of products to the United States for the period ending August 2022. This represents an increase of 14.54 percent for the same period ending on August 2021. This reporting period shows 58,571 jobs in the sector, compared to 53,410 during the last reporting period. Building on the strong partnerships Better Work has developed with the government, global brands, employers, and unions, over the years, the program plays 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)  36 brand and retail partners 1 3 B E T T E R W O R K H A I T I – 2 4 T H 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 - J U N E 2 0 2 2 Section III: Highlights of the reporting period July 2022-December 2022 COUNTRY CONTEXT Political uncertainty remains a constant factor in Haiti, despite several rounds of discussions between government representatives and civil society opposition members. Although there have been several accords between members of civil society, there has not been any decision on a transitional government to replace the current prime minister. The socio-economic conditions in Haiti have worsen both with the t he rise of the dollar, general inflation, food shortages, the cholera epidemic, and the proliferation of armed gangs. On the economic front, the value of the Haitian Gourdes compared to the US dollar continues to decrease. In July 2022, the Central Bank of Haiti’s (Banque de la Republique d’Haiti) reference rate for exchange, was 114.54 Gourdes for one US dollar. However, the actual exchange rate at the local banks is usually higher, around 121 gourdes for 1 US dollar. In addition, there is still a scarcity of US dollars in the official market. For the past few months, inflation has been evolving at a frantic pace, reaching 26.7% in April 2022, 27.8% in May 2022, 29% in June 2022 and 30.5% in July 2022, according to the latest bulletin from the Haitian Institute of statistics and computer science (IHSI). This affects employers who need to make payments in US dollars for ordered goods. Workers often complain that their purchasing power has decreased significantly. They feel that the increase in their daily wages is not enough to help them meet their basic needs. In such a context, past gains in poverty reduction have been undone. The presence of cholera is another threat that affects negatively living conditions in Haiti. Cholera cases continue to spread to new areas of the capital and in the country. As of 8 November 2022, the Direction d'Épidémiologie, des Laboratoires et de la Recherche (DELR) 1 4 B E T T E R W O R K H A I T I – 2 5 T H 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 2 reported 7,569 suspected cases and 712 confirmed cases of cholera across the country. Of these, 655 (92%) have been reported in the Ouest Department 1 . The security situation has deteriorated significantly since the end of April 2022, seriously affecting the operational environment for humanitarian actors and hindering their ability to carry out life-saving assistance. Gangs are claiming more territory without indications that they can be contained or frustrated. This situation has seriously affected the functioning of economic life, health services, telecommunications, public transport, banking services, humanitarian, and emergency relief operations and, to a greater extent, the garment sector. It’s been an ordeal for workers to commute to the factories because of the fuel shortage affecting public transportation when roadblocks are not the issue. Access to raw materials has been an ordeal for factories to operate. GARMEN T INDUSTRY CHA L L E NGES Although the Haitian garment sector has shown a great degree of resilience throughout the years and in fact, the total value of good exported has revealed an increase of 14.5 % for the period ending August 2022, as compared to the same period ending August 2021, the Haitian garment sector is facing some difficult challenges. The socio-political instability which is characterised by recurrent and often violent street demonstrations, constant interruption in fuel supplies has had a negative impact on factory productions. Armed gangs are claiming more territories without indications that they can be contained or frustrated. They blocked access to oil terminals in Port-au-Prince and significantly hampered fuel distributions across the country from mid-September 2022. This situation has seriously affected the functioning of economic life, health services, telecommunications, public transport, banking services, humanitarian and emergency relief operations, and, to a greater extent, the garment sector. The CODEVI industrial park had to interrupt operations for a full week in mid-September, because of socio-political unrest. The employees were not paid as a result and were exposed 1 Source PAHO Haiti 1 5 B E T T E R W O R K H A I T I – 2 5 T H 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 2 to more vulnerability. In addition, one of its facilities was vandalized by people demonstrating against harsh economic conditions. The CARACOL industrial park slowed down activities and had to perform a full stop for approximately two months because of fuel shortages. It’s been an ordeal for workers to commute to the factories because of the fuel shortage affecting public transportation when roadblocks are not the issue. Access to raw materials has been an ordeal for factories to operate. For the months of September, October and part of November, none of the factories could operate at full capacity. This is the result of the impact of both the global economy and the unprecedented unrest that Haiti is experiencing. There were three factories in Better Work Haiti’s portfolio that closed their doors permanently mainly for business reasons. The first factory actually closed in December of 2021 but had promised that it would reopen in January of 2022. However, after postponing the reopening dates several times, we found out that the factory had closed permanently, and the management team had left the country. It was an unfortunate situation because Better Work Haiti as well as the government found out that the company was permanently closed after workers, led by trade union representatives launched a protest at the industrial park where the factory was operating. Upon Better Work’s review of past assessment documents, it was revealed that the factory closed its door without paying past due contributions to the Haitian social security apparatus, namely The Office for Retirement and Pension Funds (ONA) and OFATMA, the Office for Accident Maternity and Health Insurance. The factory also failed to pay workers their severance pay as well as back pay for sick leave, maternity leave and annual leave. Better Work Haiti worked with the Ministry of Labor (MAST), The Office of the Ombudsperson for the Textile Sector (BMST), the representatives of workers’ association, the representatives of the employers’ association (ADIH) and the buyer that was working with the factory during its time of operation, to find a solution to the problem. After several rounds of discussions all parties were able to finalize the calculation of the debt and agreed on a payment method for the workers through theADIH. With thanks, the Better Work partner brand involved agreed to pay all workers and the funds were already transferred to ADIH and payments are being made to the workers. The second company was temporarily closed since April 2022, when they informed the Ministry of Labor (MAST) that they would be closed temporarily form April 8 th to May 7 th . They subsequently requested an extension for the temporary closure until June 8 th . On June 15 th , 2022, inspectors from the Ministry of labor visited the SONAPI industrial park, where they were informed by the factory’s representatives that the factory was closed permanently. According 1 6 B E T T E R W O R K H A I T I – 2 5 T H 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 2 to a report submitted by the inspectors from the Ministry of Labor, the factory’s debt to workers in terms of unpaid salary and severance pay and sick leave payment was over 39 million Gourdes. Additionally, based on the latest analysis conducted by Better Work, the factory owed ONA, the Office for retirement Insurance and Pensions, approximately 24.450 million gourdes in contributions dating back to 2019. The case is still pending. The Ministry of Labor is waiting for an order from the tribunal to authorize them to sell the seized assets of the company so they can liquidate the debts. The third factory closed in July of 2022. Fortunately, they reached an agreement with the worker’s representatives prior to closing the factory and all the workers were paid their severance pay in a timely manner. This was also confirmed by representative of workers’ associations. After-Care Program for the Haitian Textile Sector (PASHH) Better Work Haiti has been working closely with the International Finance Corporation (IFC), as a member of the Technical Secretariat of the Create Investment Opportunity (CIO) project. As part of their objectives, the CIO project has been looking at ways not only to increase investment in the Haitian garment sector but also to maintain the gains that have been acquired during the past several years. The CIO project has been looking at the after-care services offered in the garment sector in order to find out the factors that affect it and to devise ways to improve on the services offered. To this end, IFC organized a workshop from November 21 to November 23 rd ’ in which Better Work Haiti, the Haitian Ministry of Finance, ADIH, the Center for Investment Facilitation (CFI), the Ministry of Commerce and Industries (MCI) and others participated with the objectives implement a formal after-care program for the Haitian Garment Sector, (PROGRAMME AFTERCARE POUR LE SECTEUR DE L'HABILLEMENT EN HAÏTI. PASHH as the acronym reads in French.) During the three-day workshop, participants obtained a better understanding of the required after-care services, their components and their importance for the investors and their importance for promotion and growth of the sector. The following components were specifically addressed:  The Global Investor Services Framework  Investor support and its importance.  The role of other partners and stakeholders who can help or participate in the program  Support tools: company visits, website, CRM, IIS, after-care questionnaire.  Global examples of investor support programs. 1 7 B E T T E R W O R K H A I T I – 2 5 T H 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 2  What to consider in selecting target investors to participate in the after-care program.  An overview of the systemic investor response mechanism.  An overview of buyer trends in the US and their implications for exportation in the Haitians Garment sector. Definit i on o f an Afterca r e program for the garment sector in Haiti (P A S HH) The workshop resulted in the development of a first version of a targeted Aftercare program for the Haitian Textile sector (PASHH). The PASHH is defined as a high-level inter-institutional program that seeks to ensure participation and collaboration of all the entities involved in the investor's journey. The PASHH proposes an inter-institutional approach in order to provide a more effective service to the investors, with the following objectives in mind:  Be a preferred partner of the investor to facilitate the establishment, optimize operation and promote expansion and diversification.  Facilitate the retention of established companies that face high risk grievances  Identify and support of expansion opportunities  Take a proactive investor relations approach  Present a coalition of stakeholders at the service of the investor (united front for the relationship with the investor)  Strengthen alliances and links with government stakeholders responsible for solutions to investor requests  Work proactively to improve the business climate in the garment sector  Promote positive links with local Small and Medium Enterprises (SMEs) 1 8 B E T T E R W O R K H A I T I – 2 5 T H 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 2 Section IV: Compliance situation in the Haitian garment industry THE OVERALL TREND OF NON-CO MPLIANCES IN THE HAITIAN GARMEN T INDUSTRY This section presents an overview of the non-compliance findings in 31 participating factories, which were assessed at least twice by December 2022. The overall non-compliance rate is calculated based on the total number of factories that have at least one compliance question which caused them to be non-compliant for the cluster. Thus, while the total number of factories that are non-compliant in the cluster may be high, it does not mean that each of these factories are non-compliant for all the questions in a particular cluster. Better Work Haiti conducted 17 hybrid, 15 in-person and 3 fully virtual assessments, during this period, with the support of inspectors from the Ministry of Labor. During the hybrid assessments , labor inspectors visited factories on site and Better Work staff supported them remotely. The factories’ improvement plans were verified either in person during factory visits or virtually through requests for documentation during advisory services and conversations with bipartite committee members, including workers and management. The charts below presents non- compliance findings for the 31 assessed factories during the reporting period, showing non- compliance rates in brackets. Please note that these reports are issued biannually, yet assessments are done annually, so issues are reported in two consecutive reports. The highest non-compliance rates in the industry is in the Occupational Safety and Health (OSH) cluster, meaning that almost every factory had at least one violation in the cluster. Since the total non-compliance rate in the cluster is based on an aggregate of questions, It is necessary to look at the individual questions that are driving the non-compliance rate higher.  Under this cluster, the compliance point with the highest rate on non-compliance is Chemicals and Hazardous Substances and more specifically, there are three questions that are causing the persistent high non-compliance rate. The first question is about the the proper labeling of chemical products. During this reporting period, 26 out of the 31 factories were non compliant for this question, which represent a rate of 84%. This usually means that during assessment, Better Work Haiti found chemical products that were either not labelled or the label may have been missing information such as a pictrogram. The second question with a high rate of non-compliance is related to the availability of chemical safety data 1 9 B E T T E R W O R K H A I T I – 2 5 T H 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 2 sheets for the products that are used in the workplace. The chemical safety data sheets give relevant information for the hanling of the product, including specific instructions in case of an accident. Hence, during assessments, Better Work Haiti found a rate of non-compliance of 77% or 24 out 31 factories. Last but not least, the other questions in the OSH cluster that is affecting the compliance rate negatively is related to the inventory of chemical and hazardous in the workplace. Factories sometimes fail to include all the chemical products they use in the inventory list. Usually products that they do not use regularly are not reported on the inventory sheet or management think that some products such machine oil for example are not necessarily chemical products and do not need to be reported as part of their regular inventory. Better Work Haiti found that 87% of factories assessed during this perido were non-compliant as it relates to their inventory.  The other persistent non-compliance point in the OSH cluster is in the area of emergency preparedness and the specific question related to the emergency exits and escape routes is the one with the highest non-compliance rate. Better Work Haiti found that 71% or 22 out of 31 factories were non-compliant on this point. During assessments, we found that the escape routes often need to be repainted or the emergency maps may not reflect the actual layout of the factory floor. The other high non-compliance questions in this compliance point relates to fire fighting equipment (65%) and the accessibility of emergency exits (71%). although the factories may have sufficient fire fighting equipment, Better Work Haiti often finds that factories may not keep the proper maintenance documents to certify that the equipment are regularly checked.  In the compensation cluster, the compliance question related to paid leave and social security contribution remains a major issue of of non-compliance for the operators in the sector. Most of these non-compliance point are related to the payment of the lunch break, which according to the law is an integral part of the work day. However, workers and employers’ both have concerns about the application of this law. The labor roundtable that was organized by Better Work Haiti in May 2022 brought this issue to the forefront of the discussions and there have been several follow up meetings between the government, the ADIH representatives and representatives of workers’ associations. However there has not been a final decision on how to resolve the issue.  In the compliance point related to paid leave, Better Work Haiti have found that 87% of factories pay the annual leave incorrectly, 81% of factories pay the maternity leave incorrectly. However 100% of factories were compliant when it come to extra daily breaks given to pregnant women or breastfeeding women. 2 0 B E T T E R W O R K H A I T I – 2 5 T H 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 2  In the compliance point related to social security benefits, the non-payment of the lunch break continues to affect the contributions submitted to OFATMA. The data collected revealed that 74% of factories (23 out of 31) do not submit the accurate amount to OFATMA for work related accident insurance. The salary declaration does not reflect the proper amount of salary paid to workers, because it does not include the lunch break payment. We also found that 81% of factories (25 out 31) did not pay workers the correct amount for the annual salary supplement of bonus.  Although there are a few question that are keeping the non-compliance high in the com- pensation cluster, Better Work Haiti have found that there were no violations related to method of payment, minimum wage payment and overtime payment, or unauthorized deductions from worker’s wages. 2 1 B E T T E R W O R K H A I T I – 2 5 T H 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 2 The highest rates of non-compliances in the Haitian garment industry 65 % FACTORIES DO NOT HAVE ADEQUATE FIRE- FIGHTING EQUIPMENT Non-compliance on emergency preparedness remains a priority for Better Work Haiti. However, under this cluster, non- compliances on having adequate fire-fighting equipment stands at 65% and 61% of factories were non-compliant when it comes to keeping emergency exits accessible, unobstructed, and unlocked during working hours,. Better Work Haiti will continue to view these issues as high priority issues to be addressed on a consistent basis. 52 % FACTORIES HAVE ISSUES WITH EMPLOYEMENT CONTRACTS The highest non-compliance point in the Employment contracts cluster is 52% and it is related to the questions about internal work rules. While most factories have a document outlining their internal work rules, this documents is sometimes not approved by the Ministry of Labor, as required by law. 81 % FACTORIES HAVE ISSUES WITH ANNUAL SALARY SUPPLEMENT OR BONUS Non-compliance on social security and other benefits remains high at 100%. However, as in the compensation cluster, the non-compliance point is generally related to the non- payment of the lunch break, which is not included in the calculation of the average daily salary. The data shows that the annual salary supplement or bonus is also affected by the non-payment of the lunch break. 84 % FACTORIES HAVE ISSUES WITH PROPERLY LABELLING THEIR CHEMICAL PRODUCTS Non-compliance on chemical and hazardous substance management remains high at 100%. The non-compliance on storing the chemicals properly stands at 19%, while 84% of factories were found non-compliant on properly labelling their chemical products. 2 2 B E T T E R W O R K H A I T I – 2 4 T H 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 - J U N E 2 0 2 2 The assessments conducted during last six months did not reveal any finding on Core Labor Standards. However Better Work Haiti has received several complaints from workers who claim they were dismissed because of union activities. A group of female workers also claimed that they were forced to stay in their undershirt afer being dismissed. These workers were part of a group of workers that were recently unionized. However during the investigation, Better Work Haiti did not find any evidence to definitively support either claims. Since the investigation was conducted fully virtually, Better Work Haiti was not able to conclude the investigation and issue a final recommendation. However, Better Work Haiti plans to review the allegations during the upcoming assessments in 2023. 2 3 B E T T E R W O R K H A I T I – 2 5 T H 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 2 0% 6% 0% 6% 0% 0% 0% 6% 0% 0% 10% 3% 3% 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 - November 2021 - November 2022 (Core Labour Standards Clusters) Non-compliance rate (n= 31) 2 4 B E T T E R W O R K H A I T I – 2 5 T H 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 2 0% 10% 16% 87% 0% 100% 16% 13% 3% 71% 65% 100% 97% 100% 77% 90% 0% 97% 84% 45% 6% 94% 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 - November 2021 - November 2022 (National Law Clusters) Non-compliance rate (n= 31) 2 5 B E T T E R W O R K H A I T I – 2 5 T H 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 2 Section V: Core labour standards non- compliance findings of the reporting period (July 2022 – Dec 2022) CLAIM OF FREEDOM OF ASSOC I ATION CASE During this reporting period, Better Work Haiti investigated two alleged complaints of sexual harassment as well Freedom of Association at a factory in the Northeast and another possible case of Freedom of Association at a Factory in Port-au-Prince. Factory 1 Better Work Haiti received a complaint from a worker in Port-auPrince who claims that she was wrongfully dismissed after missing three consecutive days of work. She further claims that she was dismissed because she is a vocal member of a union group present at the factory and she has been defending some workers who were being treated unfairly. Better Work proceeded to investigate the case and interviewed the worker as well as the Human Resources manager at the factory. The worker explained that on the first day she was absent, she informed the human resources manager through another colleague at the factory, that she could not make it to work because of the insecurity situation in the area near her home and on the way to work. So her absence for that first day, November 14 th 2022, was justified. The worker claims that the HR manager was also informed about her absence for the second and third day, November 15 th and 16 th , by the same colleague. The HR mangager denies having been informed for those two days. On November 17 th 2022, when she arrived at the factory, she was called to the HR office where they handed her the termination letter. This version of the fact was also reported to Better Work by the HR manager. During an interview with Better Work advisors, the HR manager confirmed that he was notified the first day; however since the worker did not contact him to justify her abscences for the second and third day, the justification for the first is not valid and therefore he has the right to dismiss her based on Article 42C of the Haitian Labor code, which states that if a worker is absent for three consecutive days without proper justification, he or she can be fired without notice. Better Work Haiti found that the worker did justify her absence for the first day as confirmed by the HR manager and therefore she did not miss three consecutive days without proper 2 6 B E T T E R W O R K H A I T I – 2 5 T H 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 2 justification. Better Work has informed the factory that the worker should be reinstated with back pay and all other benefits due to her. Better Work does not have enough concrete evidence that the claim is a violation of Freedom of Association but rather a contract violation. Better Work has discussed the case with the terminated worker and she confirms that she will accept full payment of her severance pay because the current security situation makes it difficult for her to reach her job on time every day. As per our last contact with the factory’s management, they informed Better Work Haiti that they agree to pay the worker her full severance pay, including balance of annual leave and annual salary supplement. Better Work Haiti will continue to monitor the case to verify if the worker has received the compensation she is entitled to. Factory 2 Case of Sexual Harassment During an evaluation which took place in June 2022, a trade unionist informed Better Work assessors of 2 possible cases of sexual harassment that may have occurred at a factory in the Northeast. Better Work assessors asked to talk with the 2 victims, who agreed to tell them about their situation and consented to the reporting of the cases. Both alleged victims confirmed that the cases occurred in module 3 of the said factory. Following the conversations with the alleged victims, it was concluded that both victims were being harassed by the same individual who is a line leader. In the first case, the line leader told the victim that the vice-chief, who is superior to the line leader wanted her number and that she was interested in going out with her. The line leader promised that she would receive overtime opportunities if she accepted. She declined and told the line leader to give his wife number to the vice-chief. In May of 2022, she explained that she went to the HR office to complain but no actions were taken. The victim requested to be moved to different modules or different lines, but her requests were basically ignored. During the assessment, Better Work assessors noted the obvious distress of the female worker while telling the assessors the details of her situation, the assessors recommended that the factory finds a solution for an immediate relocation of the worker. The factory made the transfer the day after the assessment visit. In the second case, the line leader took a personal interest in the alleged victim and told her directly that he wanted to go out with her. Being a new worker, she was moved from one position to another, while the line leader pretended to help her with the different tasks. He 2 7 B E T T E R W O R K H A I T I – 2 5 T H 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 2 also promised that he would allow her to work overtime if she agreed to go out with him. When she requested to be moved to a different module, the vice-chief agreed but she was later returned to the line where the leader was harassing her. When Better Work assessors question the alleged aggressor, he claims that the female workers were lying and complaining because they could not perform their tasks. He added that, When the female workers are not doing their work properly and are sent to the HR office, they often tell a story of harassment to avoid receiving warning letter. The vice-chief and line chief seem to agree and back up the section leader and line leader as well. They said that they had to talk with the female workers after the line leader reported that they individually insulted him in front of the other workers. They added that the alleged victims informed them about the harassment only at this time and they were convinced that the alleged victims were lying to get themselves out of trouble because they never reported that to the HR department. The leader, section leader and the vice-chief claimed that they received a training on sexual harassment. However, they did not seem to fully understand the extent and the gravity of a sexual harassment case. Better Work finds non-compliance for the 2 cases mentioned. Although the factory has a policy against sexual harassment, there is no evidence that the factory has taken the necessary steps to address the cases of sexual harassment. No disciplinary action, no training, no actual investigation was undertaken, even though the factory was made aware of these cases. Case of Freedom of Association In December of 2021, factory 2 in the Northeast had decided to fire 8 workers who are members of different union groups. They informed the Ministry of Labor (MAST) that these workers would be fired based on article 37(a), Which means that according to the terms and conditions of the contract, the dismissed workers will receive their severance pay and a work certificate. On the same day, the Ministry sent its recommendations to the factory, saying that the company has the right to terminate a worker's contract. However, the termination must be in line with the international conventions, and the termination of a union member must be discussed with the Interference and Discrimination Freedom of Association and Collective Bargaining and should be based on article 37(c). After several rounds of negotiations at the end of December 2021, the union members agreed to accept their severance pay, according to them because their lawyers forced them to do so. On January 5th 2022, the remaining union leaders inform MAST and the factory’s 2 8 B E T T E R W O R K H A I T I – 2 5 T H 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 2 management that they plan to organize a strike which will last three days, starting January 17th. On January 14th the factory met with union leader to try to avoid the strike and on January 15th informed them that they had decided to reinstate the union members that were fired in December of 2021. However, on January 17th, a general strike was launched at the park, requesting an increase in the minimum wage. The factory’ management said some of the union members in the meeting on January 14, 2022, were participating in the strike and perpetrating violence against the factory and that the leaders who were in the meeting did nothing to prevent the violence. Based on that, the factory managers changed their minds and decided not to continue the reinstatement process until the labor court decides about this labor dispute. Management did not provide any proof that the union leaders at Everest participated in the violence. There do not appear to have been valid reasons for the terminations, unrelated to their status as trade union officials for 7 out of 8 of those terminated. The factory did not follow the recommendations of the Ministry of Labor in this matter when the Labour Directorate recommended that the factory negotiate with the trade unions the terms and reasons for the termination of the contracts. In addition, the factory did not act in good faith when it reversed its decision to re