Better Work Haiti: 6th Biannual Synthesis Report

- 1 - Better Work Haiti: Garment Industry 6 th Biannual Synthesis Report Under the HOPE II Legislation Produced on 16 April 2013 Better Work Haiti is supported by the US Department of Labor Funding for additional activities is provided by the Labour Program of Human Resources and Skills Development Canada - 2 - Copyright © International Labour Organization (ILO) and International Finance Corporation (IFC) (2013) First published (2013) Publications of the ILO enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to the ILO, acting on behalf of both organizations: ILO Publications (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland, or by email: pubdroit@ilo.org. The IFC and ILO welcome such applications. Libraries, institutions and other users registered with reproduction rights organizations may make copies in accordance with the licences issued to them for this purpose. Visit www.ifrro.org to find the reproduction rights organization in your country. ILO Cataloguing in Publication Data Better Work Haiti: garment industry 6th biannual synthesis report under the HOPE II legislation / International Labour Office; International Finance Corporation. - Geneva: ILO, 2013 1 v. ISSN 2227-958X (web pdf) International Labour Office; International Finance Corporation clothing industry / textile industry / working conditions / workers’ rights / labour legislation / ILO Convention / international labour standards / comment / application / Haiti 08.09.3 The designations employed in this, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the IFC or ILO concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the IFC or ILO of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the IFC or ILO, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ILO publications can be obtained through major booksellers or ILO local offices in many countries, or direct from ILO Publications, International Labour Office, CH-1211 Geneva 22, Switzerland. Catalogues or lists of new publications are available free of charge from the above address, or by email: pubvente@ilo.org Visit our website: www.ilo.org/publns - 3 - Acknowledgements Better Work Haiti is supported by the US Department of Labor. Funding for additional activities is provided by the Labour Program of Human Resources and Skills Development Canada. The Better Work global programme is supported by the following (in alphabetical order): the Australian Government, the Levi Strauss Foundation, the Netherlands Ministry of Foreign Affairs, and the Swiss State Secretariat for Economic Affairs (SECO). This publication does not necessarily reflect the views or policies of the organizations or agencies listed above, nor does mention of trade names, commercial products, or organizations imply endorsement by them. - 4 - Table of Contents List of Acronyms ........................................................................................................................... 7 Section I: Introduction and Methodology ...................................................................................... 8 1.1 Structure of the report .................................................................................................................. 8 1.2. Context ......................................................................................................................................... 8 1.3. The Better Work compliance assessment methodology ........................................................... 11 Section II: Findings ..................................................................................................................... 14 2.1. Compliance Assessment Findings (6th round of assessments) .................................................. 14 2.2. Detailed Findings ........................................................................................................................ 16 1. Core labour standards ........................................................................................................... 16 2. Working conditions ............................................................................................................... 17 2.3. Compliance effort ....................................................................................................................... 23 Section III: Better Work Haiti Advisory Services and Training ....................................................... 26 3.1 Better Work Haiti Advisory Services ...................................................................................... 26 3.2 Better Work Haiti Training Services ...................................................................................... 27 3.3 Related activities ................................................................................................................... 27 Section IV: Conclusions and Next Steps ....................................................................................... 28 4.1 Conclusion ............................................................................................................................. 28 4.2 Next Steps .................................................................................................................................... 28 Section V: Factories in Detail ...................................................................................................... 30 5.1 List of factories ............................................................................................................................ 30 5.2. Findings from the factories ........................................................................................................ 31 CODEVI ...................................................................................................................................... 32 DKDR Haiti S.A. .......................................................................................................................... 36 Fairway Apparel S.A. .................................................................................................................. 40 Fox River Caribe Inc. ................................................................................................................... 43 - 5 - Genesis S.A. ............................................................................................................................... 46 Global Manufacturers & Contractors S.A ..................................................................................... 50 Horizon Manufacturing S.A. ........................................................................................................ 54 Indigo Mountain Haiti S.A. .......................................................................................................... 56 Interamerican Wovens S.A. ........................................................................................................ 59 Island Apparel S.A. ..................................................................................................................... 63 Johan Company .......................................................................................................................... 66 Lucotex Manufacturing Co. ......................................................................................................... 71 Magic Sewing Manufacturing S.A. ............................................................................................... 74 Modas Gloria Apparel S.A. .......................................................................................................... 78 Multiwear S.A. ........................................................................................................................... 81 One World Apparel S.A. .............................................................................................................. 85 Pacific Sports S.A. ....................................................................................................................... 88 Palm Apparel S.A. ....................................................................................................................... 91 Premium Apparel S.A. ................................................................................................................ 94 Sewing International S.A. ........................................................................................................... 97 The Willbes Haitian II S.A. ......................................................................................................... 101 The Willbes Haitian III S.A. ........................................................................................................ 104 Annex 1. HOPE II Legislation Reporting Requirements ............................................................... 107 Annex 2. Process for handling complaints to the Labour Ombudsperson .................................... 108 - 6 - List of Tables Table 1: Better Work compliance assessment framework ................................................................... 12 Table 2: Number of workers in factories registered to Better Work Haiti ............................................ 30 Table 3: List of factories in the Haitian garment sector ........................................................................ 30 In Focus 1: Social Security and Other Benefits ...................................................................................... 18 In Focus 2: Termination ......................................................................................................................... 19 In Focus 6: Chemicals and Hazardous Substances ................................................................................ 20 In Focus 5: Emergency Preparedness .................................................................................................... 21 In Focus 4: Health Services and First Aid ............................................................................................... 21 In Focus 3: Welfare Facilities ................................................................................................................. 22 In Focus 7: Worker Protection............................................................................................................... 22 - 7 - List of Acronyms ADIH Association des Industries d’Haïti CATH Centrale Autonome des Travailleurs Haïtiens CFOH Confédération des Forces Ouvrières Haïtiennes CNOHA Centrale Nationale des Ouvriers Haïtiens CODEVI Compagnie de Développement Industriel CP Compliance point CSH Coordination Syndicale Haïtienne CTH Confédération des Travailleurs Haïtiens CTMO-HOPE Commission Tripartite de Mise en œuvre de la loi HOPE (Tripartite HOPE Commission) EA Enterprise Advisor HELP Haiti Economic Lift Program HOPE Haitian Hemispheric Opportunity Through Partnership Encouragement ITUC International Trade Union Confederation MSDS Material Safety Data Sheet MOISE Mouvement des Organisations Indépendantes Intégrées aux Syndicats Engagés MAST Ministère des Affaires Sociales et du Travail (Ministry of Labour and Social Affairs) OFATMA Office d’Assurance de Travail, de Maladie et de Maternité (Office for Work, Health and Maternity Insurance) ONA Office Nationale d’Assurance Vieillesse (National Office for Old-Age Insurance) OSH Occupational safety and health PAC Project Advisory Committee PICC Performance Improvement Consultative Committee PPE Personal protective equipment SC/AFL-CIO Solidarity Center/American Federation of Labour - Congress of Industrials Organisations TAICNAR Technical Assistance Improvement and Compliance Needs Assessment and Remediation USDOL United States Department of Labor - 8 - Section I: Introduction and Methodology 1.1 Structure of the report This is the sixth report to be produced by Better Work Haiti in the framework of the HOPE II legislation. The objective of the report is to describe the labour compliance performance of factories participating in the Better Work Haiti programme, including changes in compliance with international labour standards and with national labour law since the publication of the “1 st Biannual Report under the HOPE II Legislation” published on 19 October 2010. The first section of this report gives an overview of the HOPE II legislation and the origin of the Better Work programme in Haiti. This section also includes an explanation of the Better Work methodology, including the reports produced in the framework of the Better Work programme and the HOPE II legislation. The second section of the report outlines the compliance assessment findings from the sixth round of factory assessments conducted between October 2012 and February 2013. The third section of the report describes Better Work Haiti advisory and training services in the period from August 2012 to February 2013. The fourth section of the report outlines the priorities of the Better Work Haiti programme in the upcoming months. Finally, the last section of the report describes the efforts made by the factories to correct the compliance needs identified in the Better Work Haiti compliance assessments. As required by the HOPE II legislation, information provided for each of the participating factories includes: compliance deficiencies for each compliance cluster and each compliance point; details of non-compliance; improvement priorities; efforts made by the factory to remedy the compliance needs as verified in the sixth assessment visit; and with respect to non-compliance areas that have not been remediated, the amount of time that has elapsed since the non-compliance was first reported publicly. 1.2. Context The HOPE II legislation and the TAICNAR project In 2006, the United States Congress enacted the Haitian Hempispheric Opportunity through Partnership Encouragement Act (HOPE) Act to provide duty-fee entry to the United States for garments manufactured in Haiti. Two years later, in 2008, the US Congress passed the HOPE II legislation , which expanded duty-free access and established a new programme for strengthening and monitoring working conditions in the textile and garment sector through the ILO (the Technical Assistance Improvement and Compliance Needs Assessment and Remediation program – TAICNAR). On 24 May 2010, the Haiti Economic Lift Program of 2010 (HELP Act) was signed into law, expanding the Caribbean Basin Economic Recovery Act and the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008 (Haiti HOPE II) to contribute to Haiti’s economic growth and development. Among its provisions, the HELP Act extended the HOPE trade preference program until 2020, and expanded the tariff preference level limits for knit and woven apparel. The HOPE II legislation allows for duty-free entry into the United States for a limited number of garments imported from Haiti, provided that 50% of the value of the goods and/or the costs of processing the garments originates in Haiti, the United States, or another country that has a free- - 9 - trade agreement with the United States. This percentage increases to 55% of the value of the goods and/or the costs of processing the garments originates in Haiti in the fourth year and 60% in the fifth year of HOPE II implementation. In order to benefit from HOPE II/HELP, Haiti was required to establish an independent Labour Ombudsperson appointed by the President of the Republic in consultation with the private sector and the trade unions. Haiti was also required to work with the International Labour Office (ILO), to develop a programme to assess and promote compliance with core labour standards and national labour law in the factories that are eligible for tariff advantages under HOPE II. This was referred to in the legislation as the Technical Assistance Improvement and Compliance Needs Assessment and Remediation (TAICNAR) programme. Finally, Haiti needed to develop a mechanism for ensuring that all producers benefiting from the HOPE II trade preferences participated in the TAICNAR programme. There are two components to the TAICNAR programme. The first of these consists of technical assistance to strengthen the legal and administrative structures for improving compliance in the industry. The scope of these services is extensive, encompassing technical assistance from the ILO in reviewing national laws and regulations to bring them into conformity with international standards, raising awareness of workers’ rights, and training labour inspectors, judicial officers and other government personnel. The second element of the TAICNAR programme focuses on assessing compliance with core labour standards and national labour law, supporting remediation efforts, and publicly reporting on the progress of each factory on the Labour Ombudsperson’s register. The Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II) re- quires the President of the United States to identify “whether a producer […]has failed to comply with core labor standards and with the labor laws of Haiti that directly relate to and are consistent with core labor standards 1 .” The statute requires the President to consider the reports from the TAICNAR program in making these identifications. The President “shall seek to assist” any non- compliant producers “in coming into compliance with core labor standards” and with directly related Haitian labor laws that are consistent with those standards. “If such efforts fail, the President shall withdraw, suspend, or limit the application of preferential treatment [...] to articles of such produc- er. 2 ” Better Work Haiti, which is a partnership of the ILO and the International Finance Corporation, is implementing the TAICNAR programme in collaboration with the HOPE Commission, a presidential tripartite commission comprising three members of the Haitian government, three members of the Haitian private sector and three members of national workers’ organizations. It is supervised by a President and guided by an Executive Director and a consultant. Since August 2011, the HOPE Commission has served as Better Work Haiti’s Project Advisory Committee. Recent Developments In January 2013, a new Minister, Mr Charles Jean-Jacques, was appointed at the Ministry of Labour and Social Affairs (MAST). Mr Jean-Jacques has been the Director General of the Haitian Office for Work, Health and Maternity Insurance (OFATMA) for the past five years and has been very supportive of the Better Work Haiti programme, particularly with sending medical staff to factories 1 HOPE II Legislation 19 U.S.C. § 2703a(e)(4)(B)(i) 2 HOPE II Legislation 19 U.S.C. § 2703a(e)(4)(B)(ii). - 10 - to perform medical exams as prescribed in the labour law and participating actively in the OSH event annually. Fulfilling the statute’s requirement, the President of the Republic of Haiti appointed Mrs. Josseline Colimon Féthière as the Labour Ombudsperson on 3 April 2012. Mrs. Féthière has attended media- tion training in the U.S. and has mediated many cases in the sector since her appointment. Better Work Haiti has held meetings with Mrs. Féthière and the national stakeholders in an attempt to im- prove coordination among the various entities involved in implementing the HOPE II legislation. In particular, a note regarding the process for handling complaints in relation to the office of the Special Labour Ombudsperson and the Regional Office of MAST was developed. The note is available in Cre- ole, French and English. Solidarity Centre/AFL-CIO printed the note as a poster, which was distributed in all the factories. The process is described in Annex 2. Freedom of association in the Haitian garment industry Since the previous report of October 2012, seven new unions have been created and have received attestation from the Ministry of Labor and Social Affairs. At the beginning of 2013, 50% of Haitian apparel factories had a union presence. This new situation in the garment industry in Haiti, particularly in the factories of the capital, impacts considerably the context in which Better Work Haiti evaluates and promotes social dialogue. Given the history of distrust between workers and employers with regard to the labour movement, there continues to be problems regarding the treatment and termination of union members, and particularly, union leadership. Better Work Haiti is monitoring these situations closely and reporting on them in the on-going assessment cycles. Furthermore, since the beginning of 2012 trade unions are sharing information and issues regularly with Better Work Haiti, and this information is being taken into consideration during factory assessments. The unions are also regularly contacting the Labour Ombudsperson to request her intervention in labour issues. Since fall 2012, the Haitian labour movement has benefitted from the support of two international trade union organizations, namely Solidarity Centre/AFL-CIO and the International Trade Union Confederation (ITUC). ITUC is mainly working with their Haitian affiliates, Confédération des Travailleurs Haïtiens (CTH) and Confédération des Travailleurs Haïtiens (CSH) (both members of the CTMO-HOPE) and Confédération des travailleurs des secteurs public et privé (CTSP), a public service union. Solidarity Centre/AFL-CIO is primarily assisting the unions in the apparel sector. Social Dialogue The social dialogue roundtable created by representatives of the employers, unions, government, ILO and Better Work Haiti in July 2012 creates a space for exchange, consultation and negotiation to harmonize relations between employers and workers' organizations. To date, the members have been focusing on establishing a memorandum of understanding that defines the terms and conditions of the roundtable. Once the MoU is completed, the social partners will appoint their representatives to a Secretariat, which will take the ownership of the roundtable. Minimum wage On 1 October 2012, the minimum wage in the apparel sector increased for the second time in accordance with the graduated increases called for under the 2009 minimum wage law. The minimum wage of reference increased from 150 to 200 gourdes, and the benchmark for setting piece rate wages increased from 200 to 300 gourdes. Three years after this law was voted for, it is still subject to different interpretations. The Haitian government is collaborating with the CTMO-HOPE and all interested parties to put in place a national reference system to calculate the production - 11 - quota. This system will be based on productivity and efficiency criteria in line with international norms. Labour law reform The Haitian labour law adopted by the legislature in 1984 is not always consistent with fundamental labour standards, including those ratified by Haiti, which have the status of law under the Haitian Constitution. This has created a conflicting set of rules, leading to confusion among government offi- cials, workers, and producers and impairing the labour inspectorate’s ability to ensure compliance. In 2010, the Government of Haiti requested the assistance of the ILO to assist the tripartite constituents in the revision of the law. With the support from Canada, a consultative process to produce a first draft of a new labour code was initiated. With the support of an international labour law expert, the constituents’ groups prepared a draft reform proposal. In March 2013, a tripartite meeting was orga- nized to discuss a synthesis document of these proposals. It aimed at sharing the proposals formulat- ed by each group with all actors involved in the reform of the labour law and laying the foundations of a constructive social dialogue. Once the synthesis document is endorsed by the social partners, a second tripartite meeting will be held to discuss the final draft of the law to be submitted to Parlia- ment. 1.3. The Better Work compliance assessment methodology Better Work compliance assessment framework The Better Work programme assesses factory compliance with core international labour standards and national labour law. Following assessments, a detailed report is shared with the factory presenting findings on eight clusters, or categories, of labour standards, half of which are based on international standards and half on national legislation. Core labour standards: The ILO Declaration on Fundamental Principles and Rights at Work, adopted in 1998, calls upon Member States to respect and promote these principles and rights in four areas, whether or not they have ratified the relevant conventions. These categories, or clusters, are: freedom of association and collective bargaining, the elimination of forced or compulsory labour, the abolition of child labour and the elimination of discrimination in employment and occupation. The conventions on which the 1998 Declaration is based are Nos. 29, 87, 98, 105, 100, 111, 138, 182, and they form the reference base in assessing factory compliance with fundamental rights for all the Better Work programmes in various countries. For some issues, such as minimum legal working age, provisions in national law specify requirements for the application of international conventions. If national law is not consistent with international standards pertaining to core labour standards, the international standards are applied. Haiti has ratified all eight core Conventions listed above. According to the Haitian Constitution, ratified conventions become self-executing and therefore part of Haitian law. National labour law: The remaining four clusters refer to standards set in national legislation, and therefore vary from one country to another. These categories cover compensation, contracts and human resources, health and safety at work and working time. Each of the eight categories is divided into key thematic components called “compliance points” (CPs). These thematic subsections remain the same for assessments in all country programmes. However, each compliance point comprises specific questions, which may vary from one country to another. The detailed list of compliance points for each of the clusters is shown in Table 1. - 12 - The compliance assessment tool includes internal guidance notes that indicate the applicable legal standard by which to evaluate compliance. Where legal standards do not provide sufficient clarity to assess compliance, internal guidance has been developed to ensure consistency in reaching compliance decisions. Table 1: Better Work compliance assessment framework Compliance clusters Compliance Points Core Labour Standards 1 Child labour 1. Child Labourers 2. Unconditional Worst Forms 3. Hazardous Work 4. Documentation and Protection of Young Workers 2 Discrimination 3 5. Race and Origin 6. Religion and Political Opinion 7. Gender 3 Forced Labour 9. Coercion 10. Bonded Labour 11. Forced Labour and Overtime 12. Prison Labour 4 Freedom of Association and Collective Bargaining 13. Union Operations 14. Interference and Discrimination 15. Collective Bargaining 16. Strikes Working Conditions 5 Compensation 17. Minimum Wages 18. Overtime Wages 19. Premium Pay 20. Method of Payment 21. Wage Information, Use and Deduction 22. Paid Leave 23. Social Security and Other Benefits 6 Contracts and Human Resources 24. Employment Contracts 25. Termination 26. Discipline and Disputes 27. Contracting Procedures 7 Occupational Safety and Health 28. OSH Management Systems 29. Chemicals and Hazardous Substances 30. Worker Protection 31. Working Environment 32. Health Services and First Aid 33. Welfare Facilities 34. Worker Accommodation 35. Emergency Preparedness 8 Working Time 36. Regular Hours 37. Overtime 38. Leave Calculating non-compliance In public synthesis reports, Better Work reports on aggregate non-compliance in the participating industry as shown in Chart 1. Non-compliance is reported for each subcategory (compliance point, or “CP”) of the eight main labour standards clusters. A factory is found non-compliant in a subcategory if they are found to be out of compliance on any one aspect of it. With respect to the figures 3 In Better Work country-specific questionnaires, a compliance point “Other Grounds” may be included under the Discrimination cluster. This category is intended to assess specific discrimination issues that are covered in national labour law, and are considered to be aligned with the objectives of the relevant ILO conventions (100 and 111), but which are not explicitly named in the conventions, e.g., age, HIV/AIDS status, disability, etc. The questionnaire for Haiti does not include the “Other Grounds” compliance point because the Haitian labour law does not identify grounds for discrimination beyond those cited in Conventions 100 and 111. - 13 - presented in synthesis reports, for example, a non-compliance rate of 100% means that all participating factories were found to have at least one violation in that area. The non-compliance rate is not sufficient to fully describe the specific issues that Enterprise Advisors have observed during the assessments. Tables presenting non-compliance findings at a more detailed level are also presented in Section II (see “In Focus” tables). These tables allow the reader to fully appreciate specific challenges in compliance identified in factory assessments. In Focus tables report the number of factories found to be non-compliant with respect to each highlighted question. Better Work and public reporting The Better Work programme supports fair and transparent public reporting. In all Better Work country programmes, synthesis reports on the industry are prepared on the basis of the individual factory assessment reports and published twice a year. Evidence shows that public reporting of this kind helps encourage continuous improvement and reduces the probability of reversing compliance gains. Gathering and reporting these data over time enables factories to demonstrate their efforts to improve working conditions. In July 2010, Better Work Haiti published an initial compliance synthesis report, which featured aggregated compliance information based on factory assessments conducted by the programme between October and December 2009. In October 2010, Better Work published its first Biannual Report under the HOPE II legislation, the first report produced under the requirements of the legislation (see Annex 1). Subsequently, Better Work Haiti has produced the second (April 2011), third (October 2011), fourth (April 2012) and fifth (October 2012) Biannual Reports, as required by the HOPE II legislation. The current report includes aggregated industry compliance data, as well as detailed factory-level analysis of compliance needs, priorities for remediation identified by the factory and efforts actually made to remedy compliance needs. 4 Limitations in the assessment process The factory-level assessments carried out by Better Work Haiti follow a thorough checklist of 248 questions covering the abovementioned labour standards. Information is gathered through a variety of sources and techniques, including document review, observations on the shop floor, and interviews with managers, workers and union representatives. Worker interviews conducted during the assessment process are held onsite, either in a private room within the factory building or outside the building (yard, eating area). Interviews are conducted in Creole, the primary language of the workers. Given the cultural and political history in Haiti, which has seen considerable instability, many workers feel uneasy about sharing information on their workplaces with people who are not well known to them. This has affected somewhat the methodology of conducting onsite interviews with workers in Haiti. Nevertheless, after six assessments conducted over several years, Better Work Haiti EAs have become more experienced at collecting information and interviewing workers, and they have succeeded in creating an environment where workers are more comfortable discussing working conditions. 4 Reports produced under the HOPE II legislation differ in two ways from Better Work public reporting elsewhere: they include (1) factory names and compliance information from the first assessment (other Better Work country programmes name factories after one year of engagement and two assessments); and (2) more details on compliance needs and factory remediation efforts. - 14 - The detailed factory assessment reports are based on all the information collected during the assessment visit. Each factory is given seven working days before the report becomes official to provide feedback that may in some cases impact the final report language. Since the compliance assessment tool was adapted to the Haitian context, periodic revisions have been undertaken to ensure accuracy and clarity of both questions and guidance notes. Following the changes made in the compliance assessment tool in 2012, a new version was presented to MAST for review. MAST comments and feedback will soon be presented to the Better Work Haiti Project Advisory Committee (i.e., the CTMO-HOPE) for discussion and validation. Among the issues covered in Better Work’s compliance assessment tool, sexual harassment is one of the most sensitive and most difficult to detect during factory assessments. It is often unreported due to fear of retaliation, power imbalance between victim and perpetrator, and lack of resources. UN agencies and Haitian women’s NGOs have addressed sexual violence, particularly in the camps created for internally displaced people following the 2010 earthquake, but, to date, limited attention has been given to sexual harassment, even though anecdotal reports and workers survey results indicate that it is a concern. As a result, the assessment of sexual harassment in the workplace by Better Work Haiti is likely to underreport the extent of its occurrence. Finally, assessing compliance with freedom of association in Haiti presents some challenges, especially given the context of the emerging unions in the factories. On the one hand, as unions were not present in the factories for the past decades, workers (particularly younger ones) are unaware of the unions and their role in the workplace. On the other hand, some workers reported that in the past years, co-workers who wanted to join or had joined a union were dismissed. To date, despite the growing number of unions in the sector, trade union density remains rather low and not always official, as unions, with the exception of SOKOWA, do not normally request dues from members. Section II: Findings 2.1. Compliance Assessment Findings (6th round of assessments) Non-compliance rates Chart 1 presents non-compliance findings for the 24 assessed factories in Haiti, showing non- compliance rates as well as the number of factories in non-compliance in brackets. Key findings are provided in the detailed findings below. - 15 - Chart 1: Non-compliance rates 3 3 A factory is found non-compliant in a compliance point if it is found out of compliance on any one aspect of it. * There are two minimum wage requirements in exporting apparel factories: the minimum wage of reference and the production wage. One factory is non-compliant with payment of the minimum wage of reference of 200 Gourdes per day. All 24 factories are non-compliant with the requirement to set the piece rate incentive wage at a level such that workers can earn at least 300 Gourdes per day for ordinary hours of work. In the reporting period, an average of 16% of experienced piece-rate workers (not including newly recruited workers, those on new machines, and less qualified workers) reach 300 Gourdes per day for ordinary hours of work. 16 2.2. Detailed Findings 1. Core labour standards A. CHILD LABOUR In one factory, the employer did not have a system in place to verify the age of workers prior to hiring, i.e. the factory does not require a birth certificate or the national identification card to verify the age of the workers. B. DISCRIMINATION There were two findings under Discrimination relating to Gender. In one factory, sexual harassment was found. After the previous two assessments by Better Work Haiti, which also found non- compliance for sexual harassment, management implemented a policy on sexual harassment that is posted in the workplace. Also, both management and workers confirmed that several meetings were organized with all the supervisors and workers to inform them about the policy, the procedure to report sexual harassment incidents and the investigation process. Management also indicated not having received any complaint about this issue since workers were informed about the new policy in place. Although management has taken important steps to address this issue, sexual harassment continues to be an issue for a number of workers in the factory. In another factory, the employer required pregnancy tests as a condition of employment. Better Work Haiti Enterprise Advisors found copies of pregnancy tests in workers’ files. C. FORCED LABOUR There was one finding under the Forced Labour and Overtime CP related to one employer forcing workers to work more than 80 hours of overtime per trimester by threatening dismissal or other action that would reduce their future income. The factory's daily work schedule includes two hours of overtime. Workers reported that they are not allowed to leave the workplace if they do not reach their quota. They are also subject to sanctions if they refuse to work overtime, such as being suspended or even terminated. During the assessment, EAs also found a note posted by management on the floor saying that no one is allowed to leave the workplace before 5:10 p.m. D. FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING As in previous reports, there is one non-compliance finding under Collective Bargaining referring to the only factory in Haiti with a collective bargaining agreement (CBA). The non-compliance finding is due to a failure to implement certain provisions of the CBA in force, particularly referring to medical services and the provision of space for food vendors. There is a 4% non-compliance rate in Interference and Discrimination. This refers to one factory where the employer tried to interfere with and manipulate the union. Shortly after receiving a letter informing the management that a union was formed in the factory, management repeatedly called the union officials to several meetings to discuss the dissolution of the union and to ask them to sign related documents. The factory managers acknowledged that they were involved in the documentation process (union dissolution documents) and stated that they only wanted to help the workers who had requested their assistance. Six workers who did not wish to resign from the union 17 said that four other workers resigned after being pressured by management. They also mentioned that all the documentation was prepared by management, and that they were requested to sign a document that contained only their names, so it was not clear what they were signing. One non-compliance in Strikes relates to a strike that took place in May 2011, which was covered in previous Biannual Reports (October 2011, April and October 2012). Although the events underlying the non-compliance—the termination of some 140 workers for their participation in a strike declared illegal by MAST—did not recur, Better Work Haiti continued to find non-compliance because the employer had not taken action to address this non-compliance. According to the factory’s senior management, the factory is willing to re-instate some workers. In December 2012, under the guidance of the Labour Ombudsperson, discussions have been initiated between the factory owner and Mr Fanfan Evel, a Haitian lawyer and president of AUMOHD, a Haitian NGO offering legal assistance to workers. A formal document which will specify the terms and conditions for reinstatement of workers is currently being drafted by the Labour Ombudsperson. While this indicates progress on the issue, non-compliance has still been cited since the terminations have not yet been remedied. 2. Working conditions E. COMPENSATION There are two applicable minimum wage requirements in exporting apparel factories in Haiti: the min- imum wage of reference, currently set at 200 Gourdes per day, and the production wage, currently set at 300 Gourdes per day. The applicability of the minimum wage of reference is not clearly defined in the law, but according to guidance provided by the tripartite CTMO-HOPE, this wage is meant to en- sure a base wage for newly recruited workers, for those on new machines, and for less qualified work- ers. The production wage refers to a legal requirement to set piece rates in a manner such that a worker can earn 300 Gourdes during 8 regular hours of work per day. Better Work Haiti has assessed and reported on both the payment of the minimum wage (now set at 200 Gourdes per day) and on the requirements relating to the setting of the piece rates (which now must be set in a manner that allows experienced workers to earn 300 Gourdes within 8 regular hours) in the same manner from the start. Better Work Haiti’s assessment and reporting on minimum wage and the setting of piece rates is based on: - the Law on Minimum Wage (No. CL-09-2009-010), which requires that in the exporting factories em- ploying workers paid by the piece or by the task, the piece rate price must be set in a manner that permits a worker to earn 300 Gourdes during 8 regular hours of work. The law also provides that the minimum wage of reference is currently set at 200 Gourdes per day. - the letter dated 19 July 2010, in which the CTMO-HOPE clarified that in exporting garment factories, the piece rate must be set in a manner that allows workers to reach the higher amount (now, 300 Gourdes), while the minimum wage is there to ensure a base wage for newly recruited workers, for those on new machines, and for less qualified workers. - the letter dated 16 July 2010 from Prime Minister, which sets out the reference wage. Based on those references, when determining the percentage of piece rate workers who earn at least 300 Gourdes per day, Better Work Haiti first excludes piece rate workers who have been recruited within the past 3 months, or those who have been using their equipment for 3 months or less. Then, Better Work Haiti calculates the percentage among the remaining experienced workers who earn 300 18 Gourdes during 8 regular hours. While all of the more experienced piece rate workers should be earn- ing on average 300 Gourdes per day, Better Work Haiti finds compliance even if 90% of them earn this amount. The 100% non-compliance rate in Minimum Wages is due to all 24 factories being out of compliance with setting the piece rate at a level such that workers earn at least 300 gourdes per day for ordinary hours of work (other than workers who have been recruited within the past three months, or those who have been using their equipment for three months or less). This is an issue that was noted in pre- vious Biannual Reports. The average number of piece-rate workers currently earning 300 gourdes after eight hours of regular work time is 16%, down from 28% in the previous reporting period. One factory was non-compliant with the payment of the minimum wage of reference of 200 gourdes per day re- quired for full-time workers who are not working on the piece rate. In this factory, Enterprise Advisors found discrepancies in the payroll records and were not able to confirm that the minimum wage of reference is paid correctly. Management acknowledged the issue and stated that they are working to improve it. In two factories, the employers fail to pay workers 50% above the normal wage for all ordinary overtime hours worked, resulting in an 8% non-compliance rate. In one factory, workers said they perform one hour of overtime per day to meet their target, but this hour of overtime is not remunerated as such. The payroll review did not show any overtime hours performed by workers. In the second factory, workers stated that they do not understand how the overtime calculation is made. The attendance records were not reliable, because both management and workers confirmed that workers do not punch their cards. Management stated that they punch the workers' attendance cards after the work shift has started, because when workers punch their own cards it takes too much time. Management keeps a manual record to confirm when workers start and finish work. Several inconsistencies in the payment of overtime hours were observed by EAs. The Paid Leave non-compliance rate (21%) refers to factories not paying workers for sick leave (one factory) and not paying the weekly rest day (five factories). The Haitian Labour Code states that any worker, who works 48 hours, or six consecutive days in a week, is entitled to a paid weekly rest day. Workers should therefore be paid for the full day on Sunday (with the payment calculated based on average earnings if they are piece-rate workers). The Social Security and Other Benefits CP has a 71% non-compliance rate. In Focus 1: Social Security and Other Benefits Question Number of factories out of compliance Does the employer collect the required contribution to OFATMA from all workers? 0 Does the employer collect the required social insurance contribution to ONA from all workers? 4 Does the employer forward workers’ contributions to OFATMA? 0 Does the employer forward workers’ contributions to ONA? 16 Does the employer pay 3% of workers' basic salary to OFATMA for maternity and health insurance? 0 Does the employer pay 3% of workers' basic salary to OFATMA for work-related accident insurance? 7 Does the employer pay the required employer contribution to ONA? 17 Does the employer pay workers their annual salary supplement or bonus? 0 19 The non-compliances in the payment of employer contributions and the forwarding of workers’ contributions to ONA (pension funds) relate to late payments. The employers are collecting the contribution of workers, but forwarded them to ONA together with their own contribution too late. According to Haitian legal requirements, the payment of the contribution to ONA should be made every month. In four factories, the employer does not collect the required contribution to ONA from workers. The law requires a payment of 6% of the worker’s basic salary, and in these factories the percentage contributed by workers is under 6%. Because there is no functioning health insurance system in Haiti and the maternity insurance is voluntary for workers, Better Work Haiti determines compliance on the requirements related to workers’ contributions based on whether the employer collects, forwards and pays contributions for workers who ask to enrol in the maternity insurance programme. Concerning the seven factories in non-compliance with OFATMA employer contributions, five factories are late in their payment while two factories do not contribute to the insurance provided by the government institution. Wage Information, Use and Deduction has a 21% non-compliance rate. In five factories, the payrolls reviewed by EAs showed a number of issues, such as deductions not reported in the payroll, discrepancies between the amounts showed in the payrolls and those made to workers, payroll records not signed by workers, and overtime hours not reported in the payroll or not properly paid. In one factory, workers were not properly informed about their wage payments and deductions. In two factories, the employers made unauthorized deductions from wages. In one factory, management is deducting 25 gourdes when workers arrive late at work. In the other factory, workers are informed about their contribution to ONA but they did not know how much was deducted. There is one finding under Method of Payment, due to one factory not paying wages on time. F. CONTRACTS AND HUMAN RESOURCES The highest non-compliance rate in this cluster is in Termination (29%). In Focus 2: Termination Question Number of factories out of compliance Do workers have an opportunity to defend themselves before they are terminated based on their conduct or performance? 3 Does the employer compensate workers for unused paid annual leave when they resign or are terminated? 0 Does the employer comply with legal requirements before reducing the size of the workforce due to changes in operations? 3 Does the employer notify the labour ministry when suspending operations due to lack of materials, force majeure, or accident resulting in an immediate work stoppage? 0 Does the employer only terminate workers for valid reasons? 3 Does the employer pay judicially ordered damages for wrongful termination? 1 Does the employer pay workers their annual salary supplement or bonus upon termination? 1 Does the employer provide workers proper notice of termination when required, or pay workers during the notice period? 1 Has the employer complied with any orders to reinstate or compensate workers who were found to be unjustly terminated? 0 In three factories, workers were dismissed without having the opportunity to defend themselves. Three factories also had findings that management reduced the size of the workforce but did not inform MAST. Also in three factories, the employer terminated workers without any warnings, and no 20 supporting documentation showing the reasons for the terminations was available in the workers’ files. Under Dialogue, Discipline and Disputes, it was found that in four factories, disciplinary measures did not comply with legal requirements. Furthermore, in three factories, workers were bullied, harassed or humiliated. In two of these factories, workers reported that supervisors used humiliating treatment, shouting at them and using bad language, and in the other, workers reported being subjected to abusive language and having dust blown into their faces. The Employment Contracts CP has a 17% non-compliance rate. In four factories, internal work rules were not compliant with legal requirements. Among these four factories, one factory could not provide the internal work rules approved by MAST to the EAs. In one factory management did show internal rules but these still needed to be approved by MAST, while in another one, the internal work rules stipulate 1.5 overtime hours per day for five days per week, which is the equivalent to 90 hours of overtime for a trimester. According to the Haitian Labour Code, the limit for overtime hours per trimester is 80 hours. Another factory had contracts that do not comply with the labour code, collective agreements or internal work rules. In particular, the employment contracts in that factory stipulate that workers are not provided payment for weekly rest days if their work done from Monday to Saturday totals less than 48 hours. The Haitian Labour Code stipulates that workers are entitled to a paid weekly rest day if they work 48 hours or 6 consecutive days in a week (whether more than 48 hours or not). G. OCCUPATIONAL SAFETY AND HEALTH As in previous public reports, this continues to be the cluster where most non-compliances have been found. The recent assessment cycle shows that, in particular, Chemicals and Hazardous Substances, Health Services and First Aid, Welfare Facilities and Worker Protection report high non-compliance rates. In Focus 3: Chemicals and Hazardous Substances Question Number of factories out of compliance Are chemicals and hazardous substances properly labelled? 13 Are chemicals and hazardous substances properly stored? 4 Does the employer have chemical safety data sheets for the hazardous chemicals used in the workplace? 13 Does the employer keep an inventory of chemicals and hazardous substances used in the workplace? 4 Does the employer provide adequate washing facilities and cleansing materials in the event of exposure to hazardous chemicals? 11 Has the employer effectively trained workers who work with chemicals and hazardous substances? 5 Has the employer taken action to assess, monitor, prevent and limit workers' exposure to chemicals and hazardous substances? 1 The non-compliance findings for chemical safety data sheets in 13 factories relate sheets that are either not available or not in a language that users can read. [... middle sections omitted for long document ...] 104 The Willbes Haitian III S.A. Location Port-au-Prince No. of workers 524 Registration date 27 August 2010 Advisory Services and Training 21 September 2012 Management Intro Meeting. 03-04 October 2012 Social Dialogue Training provided by ILO. 19 October 2012 Advisory visit to measure the remediation efforts accomplished. 15 November 2012 Follow-up advisory visit on remediation efforts. 13 December 2012 Social Dialogue meeting 24 January 2013 Social Dialogue meeting Compliance cluster Compliance point Assessment Details of non-compliance Improvement Priorities Remediation Efforts # months 1* 2* 3* 4* 5* 1 Child Labour Child Labourers      Documentation and Protection of Young Workers      Hazardous Work      Unconditional Worst Forms      2 Discrimination Gender      Other Grounds      Race and Origin      Religion and Politi- cal Opinion      3 Forced Labour Bonded Labour      Coercion      Forced Labour and Overtime      Prison Labour      4 Freedom of Associ- ation and Collective Bargaining Collective Bargain- ing      Interference and Discrimination      Strikes      Union Operations      105 5 Compensation Method of Payment      Minimum Wages      Piece rate level. Set piece rate at a level such that workers earn at least 300 Gourdes per day for ordinary hours of work. 24 Overtime Wages      Paid Leave      Premium Pay      Social Security and Other Benefits      Wage Information, Use and Deduction      6 Contracts and Human Resources Contracting Proce- dures      Discipline and Dis- putes      Employment Con- tracts     Termination      7 Occupational Safe- ty and Health Chemicals and Hazardous Sub- stances   Chemical safety data sheets for all chemicals and hazardous substances in the workplace. Washing facilities or cleansing materials in the event of chemical exposure. Display chemical safety data sheets for all chemicals and hazardous substances in the workplace. The eye wash bottle in the spot cleaning area was re- placed by a functional one. The factory also purchased additional sterile solution bottles in case replacement is needed. 24 Emergency Prepar- edness    10 per cent of workers received training in the use of the fire fighting equipment. Appropriate records are kept on file. Health Services and First Aid   Onsite medical facilities and staff. Pre-assignment and/or annual medical checks for workers. Hire additional medical staff according to the Haitian labour code. Provide pre-assignment and/or annual medical checks for all workers. 10 per cent of workers received first aid training. Appro- priate records are kept on file. 24 OSH Management Systems      Welfare Facilities    Toilets. Increase the number of toilets and main- tain the actual ones. 24 Worker Accommo- dation      Working Environ- ment      The factory has acceptable temperature levels in sewing, quality and packing area. 106 Worker Protection   Accommodating standing workers. Installing guards on all dangerous moving parts of machines and equipment. Accommodate standing workers. Install guards on all dangerous moving parts of machines and equipment. The factory ordered about 80% of the missing eye guards for sewing machines and the mechanic supervisor start- ed with their installation. The factory installed chairs with backrest for all workers 24 8 Working Time Leave      A new poster was displayed in the factory in order to explain the company’s breastfeeding policy. The last assessment visit showed that the policy is now imple- mented. Overtime      A new poster was displayed in the factory in order to explain the company’s overtime policy. Time system machine is kept on all day long. Regular Hours      107 Annex 1. HOPE II Legislation Reporting Requirements SEC. 15403. LABOUR OMBUDSMAN AND TECHNICAL ASSISTANCE IMPROVEMENT AND COMPLIANCE NEEDS ASSESSMENT AND REMEDIATION PROGRAM. [...] (D) BIANNUAL REPORT. —The biannual reports referred to in subparagraph (C)(i) are a report, by the entity operating the TAICNAR Program, that is published (and available to the public in a readily accessible manner) on a biannual basis, beginning 6 months after Haiti implements the TAICNAR Program under this paragraph, covering the preceding 6-month period, and that includes the following: (i) The name of each producer listed in the registry described in paragraph (2)(B)(i) that has been identified as having met the conditions under subparagraph (B). (ii) The name of each producer listed in the registry described in paragraph (2)(B)(i) that has been identified as having deficiencies with respect to the conditions under subparagraph (B), and has failed to remedy such deficiencies. (iii) For each producer listed under clause (ii) — (I) a description of the deficiencies found to exist and the specific suggestions for remediating such deficiencies made by the entity operating the TAICNAR Program; (II) a description of the efforts by the producer to remediate the deficiencies, including a description of assistance provided by any entity to assist in such remediation; and (III) with respect to deficiencies that have not been remediated, the amount of time that has elapsed since the deficiencies were first identified in a report under this subparagraph. (iv) For each producer identified as having deficiencies with respect to the conditions described under subparagraph (B) in a prior report under this subparagraph, a description of the progress made in remediating such deficiencies since the submission of the prior report, and an assessment of whether any aspect of such deficiencies persists. [...] 108 Annex 2. Process for handling complaints to the Labour Ombudsperson