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Toh Han Shih

The Pacific island of Saipan may not be everybody's idea of paradise, but its sweatshop reputation has done little to deter thousands of female Chinese garment workers from trying to earn some money in the sun.

Now it could all  end with the scrapping of four decades of textile quotas at the start of this year.

Chinese workers can be found  in garment factories in such far flung locations as  Lesotho, Mauritius, Jamaica, Belize and Jordan, but Saipan has become the most popular destination.

The island has a  population of almost  70,000, of which  15,000 are garment workers and  90 per cent   are Chinese women on two-year contracts.

Many of the island's 27 garment factories are owned by Hong Kong firms such as Luen Thai Holdings, the largest Hong Kong-listed garment firm with annual revenues of more than  US$500 million.

'Saipan has become a heaven for the Chinese workers,' said Kelvin Ho Chun-hung, director of CSCC, a United States firm that audits factories for social compliance. 'In one year, they make what they make in 10 years in China. Many workers try to stay in Saipan longer, legally or illegally. It is an easier job and much more money.'

Working a maximum 60-hour week, the women can earn about  US$10,500 a  year.  After deducting US$190 a month for food and lodging, and   US$1,900 for the recruiting agent, it  is still far better than they could earn in China, where the better-paid workers take home 12,000 yuan (US$1,450) a  year and 75-hour  weeks are common.

Saipan offers better working conditions, as it comes under US labour laws by being the capital of the US Commonwealth of the Northern Mariana Islands,  Mr Ho said.

Many mainland  factories crowd eight to 12 workers to a dormitory room, while each room in Saipan houses only four to six women.

However, this was not always this case. In fact, before  2002, working conditions in Saipan were so bad that they led to the island becoming the focus of an international sweatshop scandal.

Chinese workers were lured by tales of  high wages and  good working conditions, but they found things very different  on arrival.

'Some wanted to go home but could not as their passports were kept by the employers. It was like forced labour,'  Mr Ho said.

Minimum pay codes were ignored, working hours were nearly as long as in China, wages  were sometimes delayed and recruiting agents demanded much higher fees.

'Some years ago, a worker told me she earned just enough to cover expenses only after two years. Many workers begged for a third year or took a second job, which sometimes included prostitution.'

Even today, some Chinese female garment workers moonlight as prostitutes, as tourism is another major industry on the island, where entertainment centres have sprung up,  Mr Ho said.

Luen Thai's parent company, Tan Holdings Corp,   is the biggest tax payer and private employer on the island.

Other than  the garment factory, which was opened by the company's Malaysian founder Tan Siu Lin in 1983, it also owns two hotels,  and  travel, logistics, fishery and newspaper businesses.

In 1999, Luen Thai and  32 other factory operators, retailers  Wal-Mart and clothing brands such as Gap, were the subject  of a class-action lawsuit from labour and human rights groups on behalf of Saipan's 50,000 garment workers.

Luen Thai and most of the other defendants settled the case in 2002 by paying compensation to workers, improving work conditions and abiding by social compliance requirements including minimum pay and overtime.

However,  the new conditions  may be short-lived with the ending of global textile quotas  on January 1.

'The garment factories in Saipan and Mauritius will have a hard time surviving after quotas are gone. They don't have raw material or big pools of cheap labour. The only reason factories are there is quotas,' said Bill Fong Kwok-chung, executive director of Fong's Industries, a producer of textile machinery.

However, the US is considering one-year quotas on certain Chinese garments under an 'anti-surge mechanism'.

'This will keep some orders in Saipan that would have been lost,' said Richard Pierce, spokesman for the Saipan Garment Manufacturers Association.

But will Saipan's garment factories close after the anti-surge mechanism is scrapped  at the end of 2008?

Luen Thai chief executive Henry Tan, son of the founder,  was not sure if he would phase out his 3,000 Chinese garment workers.

'It depends on US trade policy. The US government is being lobbied to work on changes on products shipped from Saipan to the US. We are confident there will be some changes in US policy, that will allow factories in Saipan to survive,' said Mr Tan.

Nevertheless,  the statistics suggest the sun is setting on Saipan's garment industry. The territory's garment sales have declined steadily  from a peak of US$1.06 billion in 1999 to US$795 million in 2003, with a  rebound to US$821 million last year. The island's garment workforce  has fallen  from over 50,000 in 1999 to 17,000 in 2003 and  15,000 today.



Saipan sweatshops no barrier to work-hungry