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- 1 - q Better Work Haiti: Garment Industry 10 th Biannual Synthesis Report Under the HOPE II Legislation Produced on 16 April 2015 Better Work Haiti is supported by the US Department of Labor. - 2 - Copyright © International Labour Organization (ILO) and International Finance Corporation (IFC) (2015) First published (2015) 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 10 th biannual synthesis report under the HOPE II legislation / International Labour Office; International Finance Corporation. - Geneva: ILO, 2015 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, and Switzerland. Catalogues or lists of new publications are available free of charge from the above address, or by email: pubvente@ilo.org Visit our website: www.ilo.org/publns - 3 - Acknowledgements Better Work Haiti is supported by the US Department of Labor. Core donors to Better Work are: Netherlands Ministry of Foreign Affairs Swiss State Secretariat for Economic Affairs Ministry of Foreign Affairs of Denmark The US Department of Labor Funding is also provided by DFID, Government of France, Government of Canada, Irish Aid, GMAC, Royal Government of Cambodia and private sector donors, including The Walt Disney Company, Levi Strauss Foundation, Gap Inc. and FUNG (1937) Management Ltd. 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 ................................................................................................................................ 6 Section I: Introduction and Methodology ......................................................................................... 7 1.1 Structure of the report ..............................................................................................................7 1.2. Context ....................................................................................................................................8 1.3. The Better Work compliance assessment methodology .......................................................... 12 Section II: Findings .......................................................................................................................... 17 2.1. Compliance Assessment Findings (10 th round of assessments) ................................................ 17 2.2. Detailed Findings .................................................................................................................... 19 1. Core labour standards ....................................................................................................... 19 2. Working conditions ........................................................................................................... 19 2.3. Compliance effort................................................................................................................... 28 Section III: Better Work Haiti Advisory Services and Training ......................................................... 31 3.1 Better Work Haiti Advisory Services ................................................................................... 31 3.2 Better Work Haiti Training Services .................................................................................... 31 3.3 Related activities ............................................................................................................... 32 Section IV: Conclusions and Next Steps ........................................................................................... 33 4.1 Conclusion ......................................................................................................................... 33 4.2 Next Steps ......................................................................................................................... 34 Section V: Factories in Detail ........................................................................................................... 35 5.1 List of factories ........................................................................................................................ 35 5.2. Findings from the factories ..................................................................................................... 36 Factory Tables ................................................................................................................................. 38 Annex 1. HOPE II Legislation Reporting Requirements...................................................................141 - 5 - List of Tables and Charts In Focus 1: Social Security and Other Benefits ................................................................................... 20 In Focus 2: Termination..................................................................................................................... 21 In Focus 3: Chemicals and Hazardous Substances .............................................................................. 22 In Focus 4: Emergency Preparedness ................................................................................................ 22 In Focus 5: Health Services and First Aid............................................................................................ 23 In Focus 6: Welfare Facilities ............................................................................................................. 24 In Focus 7: Worker Protection ........................................................................................................... 25 In Focus 8: Working Environment ..................................................................................................... 25 In Focus 9: Overtime ......................................................................................................................... 26 In Focus 10: Regular Hours ................................................................................................................ 26 Chart 1: Non-compliance rate * ......................................................................................................... 18 Chart 2: Compliance Effort ................................................................................................................ 30 Table 1: Better Work compliance assessment framework ................................................................. 13 Table 2 : Piece rate workers’ weighted average earnings across all factories assessed by Better Work ......................................................................................................................................................... 20 Table 3: Number of workers in factories registered to Better Work Haiti........................................... 35 Table 4: List of factories in the Haitian garment sector registered with Better Work as of February 2015 ................................................................................................................................................. 35 - 6 - List of Acronyms ADIH Association des Industries d’Haïti (Haitian Industry Association) CAOSS Conseil d’Administration des Organismes de Sécurité Sociale (Board of Social Security Bodies) CATH Centrale Autonome des Travailleurs Haïtiens (Haitian Workers Central) CFOH Confédération des Forces Ouvrières Haïtiennes (Haitian Workforce Confederation) CNOHA Centrale Nationale des Ouvriers Haïtiens (Haitian Workers National Central) CODEVI Compagnie de Développement Industriel (Industrial Development Company) CP Compliance point CSH Coordination Syndicale Haïtienne CSS Conseil Supérieur des Salaires (Wages High Council) CTH Confédération des Travailleurs Haïtiens (Haitian Workers Confederation) 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 (Mouvement of Independent Organisations integrated to Committed Unions) 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 PIC Parc Industriel de Caracol PICC Performance Improvement Consultative Committee PIM Parc Industriel Métropolitain (also referred to as SONAPI) PPE Personal Protective Equipment SC/AFL-CIO Solidarity Center/American Federation of Labour - Congress of Industrials Organisations TAICNAR Technical Assistance Improvement and Compliance Needs Assessment and Remediation USDOL United States Department of Labor - 7 - Section I: Introduction and Methodology Better Work Haiti, a partnership between the International Labour Organization (ILO) and the International Finance Corporation (IFC), was launched in June 2009. The program aims to improve the working conditions and competitiveness of the apparel industry by increasing respect of the Haitian labour code and of the ILO Declaration on Fundamental Principles and Rights at Work and strengthening economic performance at the enterprise level. Better Work Haiti targets the apparel industry in Haiti, especially in the capital Port-au-Prince and in the north-east region of the country. In 2014, total export revenues from the textile and garment industry accounted for approximately 90% of national export earnings and 10% of national GDP. The apparel industry is also among the largest employers within Haiti, creating jobs for over 30,000 people. Most workers (66%) are women who support a number of family members. The program assists participating factories by conducting independent compliance assessments and providing advisory services and trainings. This report presents the results of assessments conducted in 26 factories and advisory and training services provided to 28 factories in the period between September 2014 and February 2015. As part of its mandate to share information with all stakeholders in the program and encourage continuous improvement, Better Work Haiti produces twice yearly synthesis reports containing information on the performance of all participating factories in the period. 1.1 Structure of the report This is the tenth report to be produced by Better Work Haiti in the framework of the HOPE II legislation. This synthesis report provides an overview of the working conditions of 26 factories which were assessed during the period September 2014 – February 2015. Twenty-four of these factories were included in the ninth synthesis report published in October 2014. One factory, Fox River Caribe Inc, had been assessed in previous cycles, was out of operations for two Better Work cycles (mid 2013 to mid 2014) and had now resumed operations and was therefore assessed again in this cycle. One factory, Val d’Or Haiti Apparel, has registered in late 2014 and was assessed for the first time in this cycle. Two more newly registered factories, Seed Apparel S.A. and The Little Haitian Factory S.A. have not yet been assessed by Better Work, and Gladiator Textiles LLC has temporarily suspended operations since late 2014 and hence no assessment could be conducted. The first section of this report gives an overview of the HOPE II legislation and the origin of the Better Work program in Haiti. This section also includes an explanation of the Better Work methodology, including the reports produced in the framework of the Better Work program and the HOPE II legislation. The second section of the report outlines the compliance assessment findings from the tenth round of factory assessments, conducted between September 2014 and February 2015. This section also includes an analysis of compliance effort since the previous synthesis report. The third section of the report describes Better Work Haiti advisory and training services in the period from September- February 2015. The fourth section of the report outlines the priorities of the Better Work Haiti program in the upcoming months. Finally, the last section describes the efforts made by the factories to correct the compliance needs identified in the Better Work Haiti compliance assessments. Information provided for each of the participating factories includes: compliance needs for each compliance cluster and each compliance point; details of non-compliance; improvement priorities; efforts made by the - 8 - factory to remedy the compliance needs as verified in the latest Better Work Haiti 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. The newly registered factory Val d’Or Apparel Haiti S.A. is included in the overall analysis of the sector over the past months. However, it has only been assessed once and hence, data from this factory has not been included in Sections 2.3 (Compliance Effort) and 5.2 (Findings from the factories/ Factories in detail) as a minimum of two assessments is required for inclusion in these sections. 1.2. Context The HOPE II legislation and the TAICNAR project In 2006, the United States Congress enacted the Haiti Hemispheric Opportunity for Partnership Encouragement Act of 2006 (HOPE), expanding preferences for Haitian apparel established under the Caribbean Basin Economic Recovery Act, thus enabling the Haitian garment industry to benefit from new duty-free preferences. In 2008, these preferences were further expanded through legislation known as HOPE II, which also established new standards and programs strengthening and monitoring working conditions in the garment sector. On 24 May 2010, the Haiti Economic Lift Program of 2010 (HELP Act) was signed into law to expand existing preferences even more to contribute to Haiti’s economic growth and development in both the textile and apparel sectors. Among its provisions, the HELP Act extended almost all of the trade preferences established under HOPE and HOPE II until 2020, and significantly expanded the tariff preference level limits for knit and woven apparel. In order to benefit from HOPE/HOPE II/HELP, Haiti was required to establish an independent Labour Ombudsman 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 ILO, to develop a program 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) program. Finally, Haiti needed to develop a mechanism for ensuring that all producers benefiting from the HOPE II trade preferences participated in the TAICNAR program. There are two components to the TAICNAR program. 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 program 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 Ombudsman’s register. To encourage compliance with core labour standards and national labour 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 labour standards and national labour law that is related and consistent with those standards. Better Work Haiti, which is a partnership of the ILO and the IFC, is implementing the TAICNAR program. The program is coordinating its work with the Labour Ombudsman and the HOPE - 9 - 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. Recent Developments This section of the report presents the changes and developments that have occurred during the last six months which have an impact on the Better Work Haiti program and broadly on the apparel sector in Haiti.  In 2014, the total export volume of the garment industry to the United States was US$ 854 million. Haitian apparel exports increased by approximately 6% over 2013. Haiti exported 53,369,000 square meter equivalents (SMEs) of knit apparel, exceeding the previous quota of 52,000,000 SMEs for the first time. This resulted in the quota being increased to 200 million knit apparel SMEs for the 2015 calendar year. Haiti grew its value-added exports by 43% over 2013.  The senatorial and regional elections, which were planned to be held in October 2014, were deferred. This resulted in a series of demonstrations and roadblocks. On 14 December 2014, the Prime Minister, Laurent Lamothe, resigned from his post. President Michel Martelly appointed an interim Prime Minister to replace Laurent Lamothe. “The United Nations and its international partners have welcomed the formation of a new Government in Haiti one week after the country's Parliament became ‘dysfunctional’ due to its failure to hold elections within its constitutional framework.” 1 The new Haitian Prime Minister Paul handed over to the Provisional Electoral Council (CEP) a decree governing the organization of presidential, legislative and local elections which are all planned to be held in 2015.  On 18 January 2015, the new minister of the Ministry of Labour and Social Affairs (MAST) Victor Benoit took over from Charles Jean-Jacques.  In February 2015, after several months of consultations with the tripartite constituents, the ILO signed a Decent Work Country Programme (DWCP) for Haiti led by the ILO Sub-regional office in Costa Rica. The objective of the DWCP is to better articulate ILO interventions in Haiti and to provide better technical assistance to constituents.  Over the course of 2014, Better Work Haiti elaborated its 2015-2017 strategy for the second phase of the program (first phase: 2009 – 2014) after consultations with the program’s constituents. The new strategy, which is aligned with the strategy of the Better Work Global program, focuses on three axes: (i) strengthening of core service delivery in order to become a driver of change towards higher compliance with national labour law and international labour standards; (ii) increasingly using knowledge, experience, relationships and data to extend impact beyond the direct interventions at the factory level so that the industry becomes more stable in the long-term and contributes to a greater extent to the Haitian economy and society; (iii) strengthening the long-term viability of the programme through increased cost recovery, empowered national staff and strengthened partner institutions such as the Ministry of Labour, the employers’ and workers’ organizations.  In December 2014, the annual Better Work Haiti buyers’ and multistakeholder forum was held in Port-au-Prince and in the North East of Haiti. The forum allowed stakeholders of the industry to exchange on issues of common relevance. Several buyer representatives from international brands were present at the forum. During the multistakeholder forum, including representatives from the Government of Haiti, US Government, international brands, employers, unions, and other 1 http://www.un.org/apps/news/story.asp?NewsID=49899#.VRxd_PyG-8A - 10 - social partners, discussions on the challenges of the industry in Haiti focused on productivity and the growth of the garment sector in Haiti. The second part of the forum consisted of a trip to the industrial parks in the North of Haiti (CODEVI and Caracol) to which Better Work Haiti buyers were invited. These two Northern locations represent about 30% of Haiti’s garment industry with a total workforce of over 10,000 people. The joint visit allowed buyer representatives to evaluate the potential of Haiti’s north as a sourcing destination and to gain a deeper understanding of the implications and the relevance of Haiti’s North for the industry of the country.  Three new factories registered to the Better Work Haiti program in late 2014/ early 2015 and one has already been assessed by Better Work in the most recent assessment cycle. In the context of mandatory participation, factories register and engage in the program as soon as production begins. All factories joining the Better Work Haiti program obtain access to a service package of assessment, advisory and training services. ILO-MAST Capacity Building Program In 2014, the ILO launched a USDOL-funded project supporting the labour inspectorate of the Ministry of Labour and Social Affairs (MAST). A task force within the Ministry has been set up, and several initial trainings for the Ministries’ mediators, conciliators and labour inspectors have been provided since June 2014 in collaboration with the Labour Ombudsperson and Better Work Haiti, such as training of 18 Labour Inspectors task force members on practice of labour inspection and labour administration tools. It is planned that these trained labour inspectors will shadow Better Work Enterprises Advisers in conducting labour inspection visits in the apparel sector in 2015 as well as other activities by Better Work EAs, such as advisory or training services. This collaboration is aiming at giving an opportunity to MAST inspectors to capitalize on Better Work’s enterprise level knowledge and methodology in their core service delivery. The MAST inspectorate task force members will further contribute to dis- seminate and transfer the acquired knowledge and competencies to their other colleagues. Beyond the strengthening of the technical capacities of the labour administration, the project also focuses on aspects of human resources in the Ministry’s inspectorate and to assist on issues such as labour inspectors’ recruitment criteria, career planning, initial and continuing training programs etc. A thorough human resources review including the elaboration of a comprehensive job profile for labour inspectors has already been completed in 2014. Beside these activities related to the labour inspection services, the project is also aiming at support- ing MAST’s conciliation services and the Office of the Labour Ombudsperson for the garment sector. Several trainings on conciliation and mediation methodology and ways to implement different tech- nical and practical tools were conducted since the inception of the program in spring 2014. The pro- ject also works on promoting mechanisms of collaboration between the ministry’s conciliation ser- vices and the Office of the Labour Ombudsperson in the garment industry. To this end, a joint proto- col is about to be concluded and signed by MAST authorities and the Labour Ombudsperson. Industrial Relations in the Haitian garment industry At the time of writing, 30 officially recognised factory level unions are present in the apparel factories. These union cells are affiliated to 8 centrals/confederations and are present in 19 out of - 11 - the 28 currently operating factories part of the Better Work Haiti program. Thus, approximately 68% of those participant apparel factories in the country now have a union presence. 2 In 2014 the Haitian labour movement benefited from the support of Solidarity Center/AFL-CIO and the International Trade Union Confederation/ Trade Union Confederation of Americas (ITUC-TUCA). The Solidarity Center, AFL-CIO Haiti office conducted educational workshops for unions in the garment sector in Port-au-Prince, Ouanaminthe and Caracol, accompanied unions in meetings with employers, participated in the Social Dialogue Table, and participated in multiple activities organized by the ILO and Better Work Haiti. In 2015, because of significantly reduced funding, the Solidarity Center will no longer have a full-time Director in Haiti but will continue to maintain a local office in Port-au-Prince. ITUC-TUCA supported Haitian trade union organisations through a variety of capacity building measures in 2014. Their work has a broader focus than the garment industry only. Areas in which ITUC-TUCA provided support to Haitian labour unions in 2014 included social security/ social protection in support to the workers’ representatives of CAOSS (Board of Social Security Bodies), gender equality, the labour law reform and national organising campaigns in different sectors and regions in the country. Following the release of the first report of the CSS in November 2013, workers walked off the job in Port-au-Prince in early December 2013, calling for a higher increase in the minimum wage. The protests disrupted production and resulted in some violence. A number of workers from different factories were dismissed in connection with these events. Complaints from three factories for property damage by employers’ side and by workers for wrongful dismissals were filed with the MAST and remain unresolved as of the writing of this report. In the case of one factory, MAST stated that it was not the competent authority to adjudicate the case and the matter was transferred to the High Labour Court for resolution. That case is still pending. The Social Dialogue Roundtable was formally created by representatives of the employers and the unions, and the government as an observer and with support of Better Work Haiti in July 2012 as a space for exchange, consultation and negotiation to harmonize relations between employers and workers' organizations. Since early 2015, it is registered as an association and therefore a legal entity. Its executive secretariat consists of four members, two employer representatives and two union representatives. The social dialogue roundtable is serving as a forum for exchange and negotiation between employers and workers in order to strengthen the competitiveness of the Haitian garment sector in creating employment and contributing to the Haitian economy through the promotion of decent work. Since its establishment in mid 2014, the executive secretariat of the roundtable has called for three meetings on the minimum wage and production quotas, one meeting with the public health and accidents insurance OFATMA and a separate one with the public old age insurance institution ONA. The Labour Ombudsperson is actively involved in these exchanges of the social dialogue roundtable. As of January 2015, Better Work Haiti has designated a full-time Industrial Relations Officer. This person will liaise with national partners to assist the sector in these efforts and to further strengthen social dialogue. The Better Work Haiti Industrial Relations Officer will work closely with the social dialogue table, the Labour Ombudsman and all the unions of the garment industry in Haiti. Recently, the sector has seen an increase in communication between unions and employers, more meetings are being held, in some factories protocols are being signed on production quotas between management and union cells. In general, more information exchange between all stakeholder is 2 Note that union presence in additional factories exists and has been previously reported but these additional factory-level unions have not yet attained official recognition and therefore are not included in the calculation. - 12 - being noticed which speaks for evolving industrial relations with a clear intent by all parties involved to improve cooperation. Better Work Haiti will support these efforts through participation in the sectoral activities, technical support where possible and direct assistance at the factory level through its advisory and training services delivered by the team of Enterprise Advisors. The Office of the Labour Ombudsperson was opened in Building 48 in the Metropolitan Industrial Park (SONAPI). The office space is shared with CTMO-HOPE. The support team for the Labour Ombudsperson has elaborated working papers to clearly define the support the Ombudsperson’s office offers to the garment sector in Haiti. The Labour Ombudsperson cooperates with all stakeholders in the sector and is particularly involved in all efforts of coordination and mediation as well as training activities that are being held jointly with officials from the MAST. The Labour Ombudsperson is also providing support to the social dialogue roundtable and is actively involved in conflict situations that evolve at the factory level. In this context, she has been involved in different cases in six factories alone in the first three months of 2015. A number of cases have already been successfully remediated and all partners appreciate the Labour Ombudsperson as a significant support to more mature industrial relations in Haiti’s garment sector. Labour law reform Since 2011, the ILO has been providing technical assistance to reform the Haitian Labour Code. As a result, based on inputs from MAST and social partners, a first draft of the Labour Code was prepared. Following tripartite discussions, 11 out of 38 chapters from the draft Code were adopted in October 2013. In November 2014, a revised draft of the Labour Code was shared with the tripartite constitu- ents, which integrates the outcomes of the October 2013 discussions and other comments by the Office. The draft Labour Code is currently examined by workers and employers. The tripartite consul- tation process will resume after the examination of the draft by each of the parties. The ILO’s Decent Work Country Programme for Haiti, adopted in early 2015, establishes that the revision of the Labour Code should be finalised by the end of July 2015. The ILO is currently looking at ways and resources to support the social partners in their revision of the draft, in particular through external consultants. 1.3. The Better Work compliance assessment methodology Better Work compliance assessment framework The Better Work program 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 programs 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 - 13 - 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. Working Conditions: The four other clusters assess conditions at work, including compensation, contracts and human resources, occupational safety and health, and working time. The compliance points covered in these clusters are largely consistent across countries; however each compliance point contains specific questions that may vary from country to country due to differences in national legislation. National legislation is used as a reference point even if it is not in accordance with the international conventions that have been ratified by the country. In countries where national law either fails to address or lacks clarity around a relevant issue regarding conditions at work, Better Work establishes a benchmark based on international standards and good practices. 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 8. Coercion 9. Bonded Labour 10. Forced Labour and Overtime 11. Prison Labour 4 Freedom of Association and Collective Bargaining 12. Freedom to Associate 13. Union Operations 14. Interference and Discrimination 15. Collective Bargaining 16. Strikes Working Conditions 5 Compensation 17. Minimum Wages 4 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. Dialogue, Discipline and Disputes 27. Contracting Procedures 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. 4 Since the 8 th Better Work Haiti synthesis report, Better Work Haiti only reports non-compliance with the minimum wage of reference of 225 Gourdes (as of 1 st May 2014). The reporting on the production wage of 300 Gourdes will be done with specific details on each factory’s percentages of workers’ average earnings in the factory tables in section V of the report. - 14 - 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 labour standards clusters. A factory is reported as non-compliant in a subcategory if it is found to be out of compliance on any issue addressed within the subcategory. With respect to the figures 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 does not sufficiently describe the specific issues that Enterprise Advisors (EAs) observe during assessments. In order to address this, tables presenting non-compliance findings in more detail 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 program supports fair and transparent public reporting. In all Better Work country programs, 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 program 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 produced the second (April 2011), third (October 2011), fourth (April 2012), fifth (October 2012), sixth (April 2013), seventh (October 2013), eighth (April 2014), ninth (October 2014) and tenth 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 made to address compliance needs. Limitations in the assessment process The factory-level assessments carried out by Better Work Haiti follow a thorough checklist of more than 250 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. The information collected is compiled - 15 - and analyzed to produce a detailed assessment report. Before the reports become official, factories are given seven calendar days to provide feedback. 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), and take place either in small groups or individually. Interviews are conducted in Creole, the primary language of the workers. Workers may be suspicious and feel uneasy about sharing information on their workplaces with people who are not well known to them and coaching of workers by factory management is considered a common problem in the industry in general. Nevertheless, after ten assessments conducted over several years, Better Work Haiti EAs have become more experienced at collecting information and interviewing workers, which together with other activities led by Better Work Haiti have contributed in creating an environment where workers are more comfortable discussing working conditions. Interviews with workers cover many aspects of life at work and last approximately 20 minutes. An average of 40 workers representing different sections of the factories, as well as union representatives, is interviewed. Among the issues covered in Better Work Haiti’s compliance assessment tool, sexual harassment, similarly to other countries, is one of the most sensitive and most difficult to detect during factory assessments. The assessment of sexual harassment in the workplace by Better Work Haiti is likely to underreport the extent of its occurrence. However, sexual harassment remains an issue of concern in the industry in general. Better Work is basing its assessment findings on triangulation of facts which requires sufficient evidence in order to find a factory in non-compliance on a particular compliance point and some issues are not always easy to detect. Although concerns regarding sexual harassment persist, in 2014, Better Work Haiti has seen positive developments on the topic with factories acknowledging the issue as a potential problem and demonstrating an increased openness to address it. Several factories are therefore working on prevention of sexual harassment in the workplace. In particular, Better Work’s supervisory skills training has contributed to raise awareness of this issue among supervisors in more than half of the factories in Haiti. Assessing compliance with freedom of association at the enterprise level also presents challenges, in part because some labour unions are organised at the sectoral level rather than at the factory level where small union cells predominate. Simple auditing of factory compliance has been widely acknowledged to be limited in rectifying com- pliance issues. Factories wishing to cheat the auditing system are able to do so without focusing on the long-term business benefits of improving their working conditions. In Haiti, factories have been assessed twice yearly, double the number of assessments that factories in other Better Work country programs receive. As a result, the Better Work Haiti program did not have sufficient time and re- sources to provide sufficiently effective advisory services between assessments. This led to areas of non-compliance being remediated in an unsustainable manner. Factories with well-established man- agement systems can ensure that compliance improvements are sustainable in the long run. There- fore, Better Work recognizes the necessity to shift its focus and to provide more in depth advisory services to assist factories to address root causes of non-compliance issues and find long-term solu- tions. As described in the following section, a revised service delivery model with a stronger focus on advisory services will be implemented in all Better Work country programs as of 2015 including Haiti. Moreover, in Haiti, the establishment of Performance Improvement Consultative Committees (PICCs), which has only recently started to pick up, will gradually move advisory services to the next level as these bipartite committees will further promote the good practice of social dialogue at the factory level. - 16 - Better Work’s Service Delivery Model Since Better Work’s establishment, compliance with labour laws and international standards has improved across all country programs. In its initial phases (phase I: 2007 - 2009 / phase 2: 2009 - 2012), the Better Work program has collected lessons learned from its various country operations. In order to carry the program into its third phase, Better Work underwent an independent evaluation, which made a series of key recommendations. One of the main suggestions was that Better Work should advance and restructure its services to increase the onus of responsibility for change onto the factory personnel that Better Work staff engages with. Subsequently and in line with this recommendation, the Better Work’s service package of assess- ment, advisory and training services has been revised in close consultation with all of the program’s constituents. Each Better Work country program has developed its own roll-out plan to incorporate the various components of this new approach which focuses on management systems and aims at increasing factory ownership through improved relations between management and workers. The new service delivery model will put stronger emphasis on a systems-based approach that builds factory ownership over time, without losing the essential element of assessments, which is the pro- gram’s objective measure of outcomes in improving working conditions. The revised service delivery model is meant to improve and allow Better Work services to work together more effectively. In Haiti, this can only be achieved through a shift of focus from a heavy assessment-centred approach to more in depth advisory and training services. Therefore, starting with the completion of this 10 th round of assessments by Better Work Haiti and the publication of this tenth compliance synthesis report, the program will move to one assessment per factory per year and stronger focus on advisory services and management systems. Implications for Public Reporting under HOPE II 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 garment factories exporting under the HOPE II law on compliance with international core labour standards and national Haitian labour law, (ii) assists these factories on their remediation efforts and (iii) provides capacity building to the Government of Haiti on these aspects. The require- ments of the HOPE II law with regards to biannual reports being published by the entity operating the TAICNAR program are quoted in annex 1 (HOPE II Legislation Reporting Requirements). The change in Better Work’s service delivery model described above will not derogate these re- quirements of the HOPE II legislation. Public biannual synthesis reports will continue to be published on the 16 th of April and the 16 th of October of each year. The findings from each factory’s annual as- sessment will be reported in one of these two synthesis reports including the date of each factory’s assessment. The report following 6 months later will contain information from advisory services, especially with regards to remediation efforts by the factory concerning the non-compliance issues identified in the past assessment. Therefore, information provided will actually exceed the HOPE II requirements of reporting on the preceding 6 months period as progress will be stated over an entire 12 months period. This longer cycle will give factories more opportunities to work with their assigned Better Work Enterprise Advisor to find long-term solutions for weak management systems, which are at the root cause of recurrent non-compliance issues. - 17 - Section II: Findings 2.1. Compliance Assessment Findings (10 th round of assessments) Non-compliance rates Chart 1 presents non-compliance findings for the 26 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 Section 2.2 below. In Focus Tables provide additional information for Compliance Points, at the question level, where a significant number of factories was out of compliance. - 18 - * A factory is found non-compliant in a compliance point if it is found out of compliance on any one aspect of it. Chart 1: Non-compliance rate * 19 2.2. Detailed Findings 1. Core labour standards During the last round of assessments, which took place between September 2014 and February 2015 in 26 factories, the following results have been observed. A. CHILD LABOUR Child Labour is virtually non-existent in the apparel sector in Haiti. There is, however, one finding of non-compliance in the Child Labour cluster in this assessment cycle. In the case of one factory, two workers’ files were found with no government issued ID (copy of national CIN card or birth certificate) which is usually used in the recruitment process. In addition, apprentice workers and those working as maids offsite did not have registered files with proper documentation to show their age. Factory management acknowledged this finding and stated that they would take action to comply with the law. B. DISCRIMINATION In this assessment cycle, no factory was found to be in non-compliance in the Discrimination Cluster. C. FORCED LABOUR There are no findings under the Forced Labour Cluster in this reporting period. D. FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING There are two instances of non-compliance in this reporting period under the Cluster for Freedom of Association and Collective Bargaining. Both Collective Bargaining and Freedom to Associate have non-compliance rates of 4% each. In one factory, as illustrated in previous public reports, the non- compliance finding is due to a failure to implement certain provisions of the CBA in force. In another factory, four workers who were union members were dismissed last year over a period of a couple weeks in August. Their files stated “lack of work” as the reason for their termination. Following the first of these terminations, the union requested a meeting with factory management. Two additional unionists were fired that day. The workers’ files contained no disciplinary warnings. Several meetings between factory management, representatives from the concerned union and the Labour Ombudsperson took place. Although factory management had agreed to consider reinstating some of the dismissed workers, none of the four had been reinstated at the time of the assessment in November. These terminations have impaired the right of workers to form a union of their choosing in the factory. 2. Working conditions E. COMPENSATION In the compensation cluster, the highest numbers of non-compliances persist in the Social Security and Other Benefits Compliance Point which has a 58% non-compliance rate. The issues are detailed in the table below. 20 In Focus 1: Social Security and Other Benefits Question # 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? 3 Does the employer forward workers contributions to OFATMA? 0 Does the employer forward workers contributions to ONA? 9 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? 3 Does the employer pay the required employer contribution to ONA? 11 Does the employer pay workers their annual salary supplement or bonus? 6 The number of factories that are in non-compliance on ONA (pension funds) payments is highest in this compliance point with 40 percent of factories not forwarding employer and worker contributions to ONA according to the law. While factories do actually pay the contributions to ONA, the payments of the required ONA contributions are not made within the stipulated time frame. The Labour Law requires payments (6% of basic salaries from employees and 6% of basic salaries from employers) to be made before the 10 th of each month. Of the three factories that are in non-compliance on the payments for work-related accident insurance, two factories have never paid OFATMA contributions stating that they are unwilling to contribute to OFATMA as they are not satisfied with the service provided. The other non-compliance relates again to late payments of the required contributions. As announced in the 8 th biannual public synthesis report, the compliance point on the production wage (piece rate) has been removed from Better Work’s compliance assessment tool in the Compensation cluster. However, Better Work continues to collect data from each factory on the percentages of piece rate workers earning 225-249/250-299/300 and more Gourdes per day. Table 2 : Piece rate workers’ weighted average earnings across all factories assessed by Better Work 5 Average % of workers earning between 225 and 249 in 8 regular hours Average % of workers earning between 250 and 299 in 8 regular hours Average % of workers earning 300 Gourdes or more in 8 regular hours 27% 32% 41% 5 Better Work collects the percentages of piece rate workers per factory who earn 225-249 Gourdes, 250-299 Gourdes or 300 Gourdes or more during eight hours of work (excluding workers who have been recruited within the past 3 months, or those who have been using their equipment for 3 months or less). The calculations are based on average earnings, meaning that if a worker earns 300 Gourdes per 8 hour day on nine out of ten days and then earns 250 Gourdes on the tenth day, the average earnings over the ten days would be recorded under the 250-299 Gourdes category. Please note that the per- centages provided in this table are being calculated as weighted averages, taking into consideration the different factory sizes and their respective number of piece rate workers. [... middle sections omitted for long document ...] The Willbes Haitian III S.A. Location:Port-au-Prince Number of workers:643 Date of registration:27-Aug-10 Advisory and Training Services Date Activity 22-Sep-14 Advisory visit on the improvement progress of the factory. 14-Oct-14 Supervisory Skills Training 19-Jan-15 Management Intro meeting. Discussion on the improvement plan. Induction on PICC 1 2 3 4 5 6 7 8 9 Child Labourers Documentation and Protection of Young Workers Hazardous Work Unconditional Worst Forms Gender Race and Origin Religion and Political Opinion Bonded Labour Coercion Forced Labour and Overtime Prison Labour Collective Bargaining Interference and Discrimination Strikes Union Operations Method of Payment Minimum Wage Overtime Wages Paid Leave Premium Pay Social Security and Other Benefits Child Labour Discrimination Forced Labour Freddom of Association and Collective Bargaining Compensation Compliance cluster Compliance point Assessment Details of non-compliance Improvement Priorities Factory was found non-compliant. Factory was progressing Factory was compliant. Remediation Efforts Months 1 2 3 4 5 6 7 8 9 Compliance cluster Compliance point Assessment Details of non-compliance Improvement Priorities Remediation Efforts Months Wage Information, Use and Deduction Contracting Procedures Dialogue, Discipline and Disputes Employment Contracts Termination Disciplinary measures. Disciplinary measures must comply to internal work rules and legal requirements. Termination process has been reviewed to comply with factory's internal policies. All unused annual leave allowances have been paid to workers upon resignation or termination. 12 Chemicals and Hazardous Substances All chemicals and hazardous substances used in the workplace were found labeled. Emergency Preparedness Fire detection and alarm system. Safeguarding possible sources of ignition Install adequate fire detection and alarm system in building 35. Take measures to reduce fire hazards resulting from fabrics and paper stored near electrical installations. 18 Contracts and Human Resources 1 2 3 4 5 6 7 8 9 Compliance cluster Compliance point Assessment Details of non-compliance Improvement Priorities Remediation Efforts Months Health Services and First Aid Pre-assignment and/or annual medical checks for workers. Ensure that all workers receive a medical check at least once a year and within the first three months of employment. All workers who are exposed to work-related hazards have been offered free health checks. 48 OSH Management Systems Welfare Facilities Toilets. Washing facilities and/or soap. Provide the number of toilets required by the Haitian Labor code. Ensure soap and paper is available at the workplace at all time during working hours. The factory accommodated an eating area to accommodate the workers. 48 Worker Accommodation Working Environment The factory improved the lighting system to reach recommended levels. Occupational Safety and Health 1 2 3 4 5 6 7 8 9 Compliance cluster Compliance point Assessment Details of non-compliance Improvement Priorities Remediation Efforts Months Worker Protection Accommodating standing workers. Installing guards on all dangerous moving parts of machines and equipment. Standing workers must be provided with fatigue mats or have tables equipped with foot rest. The factory must install guards on all dangerous moving parts of machines and equipment. The factory provided all workers doing hazardous work in the factory with the appropriate protective equipment. The factory trained workers to use machines and equipment safely. 48 Leave Overtime The factory has requested the authorization to do overtime work and it has been granted. Regular Hours Percentage of piece rate workers earning 300 Gourdes or more for eight hours of work (workers’ average earnings): Oct-13 Apr-14 27% 30% Working Time Oct-14 28% Apr-15 43% 141 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. [...]