SGMA Code of Conduct

This Code of Conduct shall become effective upon its adoption by the Saipan Garment Manufacturers' Association in accordance with their Articles and Bylaws, but in no event later than December 1, 1998. Each member of the Association shall recognize the competence and authority of the Association, and the various committees formed under the authority of the Association and the rules, guidelines and procedures promulgated by the Association and its committees in order to implement and enforce the Code. In particular, each member shall observe the following:

COMMITMENT TO CODE OF CONDUCT

Members shall carry out their activities in conformity with the policies, objectives, rules, guidelines and procedures promulgated by the Association and its committees, and work seriously towards making a positive contribution to the achievement of the goals of the Code of Conduct, and the recognition of the fundamental rights set forth in the Code.

Members shall agree to undertake all steps necessary, individually and through the assistance and cooperation of the Association and its committees, to achieve the full compliance with of the Code of Conduct using all appropriate means to realize its goals, including participation in Association sponsored training, monitoring, reporting and compliance programs, the faithful institution of internal policies and procedures, and the exercise of economic and other influence over the activities of all non-member business enterprises with ties to the Saipan garment industry, for the purpose of promoting the Code of Conduct, protecting the integrity of the industry, and guaranteeing the fundamental rights of all employees.

Members shall not use the Association, any of its committees or any rule, guideline or procedure promulgated to implement and enforce this Code of Conduct as an instrument to oppress any member or non-member or as a vehicle to impose any unlawful restraint on trade.

STANDARDS FOR THE TREATMENT OF WORKERS AND WORKING CONDITIONS:

1. Prohibition Against Forced Labor. Members shall not use any forced labor, whether in the form of prison labor, indentured labor, bonded labor or otherwise.

2. Prohibition Against Child Labor. Members shall not employ any person that is at an age younger than 18.

3. Prohibition Against Harassment or Abuse. Members shall treat each of their employees with respect and dignity. No employee shall be subject to any physical, sexual, psychological or verbal harassment or abuse.

4. Prohibition Against Unlawful Recruitment Contracts. No Member shall knowingly recruit employees from any manpower service or other contractor, if such contractor conditions the placement of its recruits upon their payment of a fee, whether such fee is characterized as a placement fee, a processing fee, a deposit or otherwise, which violates any CNMI or Federal laws.

5. Nondiscrimination. Members shall not discriminate in employment including hiring, salary, benefits, advancement, discipline, termination or retirement against any employee on the basis of gender, race, religion, age, disability, sexual orientation, nationality, political opinion, or social or ethnic origin, except as strictly necessary to comply with the CNMI Nonresident Workers Act.

6. Health and Safety. Members shall provide a safe and healthy working environment to prevent accidents and injury to health arising out of, linked with, or occurring in the course of work or as a result of the operation of Member facilities.

7. Freedom of Association and Collective Bargaining. Members shall recognize and respect the rights of their employees to associate freely and to bargain collectively .

8. Wages and Benefits. Members shall pay their employees at least the minimum wage required by CNMI law and shall provide all legally mandated benefits. No deductions other than CNMI earnings taxes (and social security where applicable) shall be made from any employee's wages unless specifically authorized by the CNMI Department of Labor.

9. Overtime Pay. Members shall pay their employees for overtime hours at the premium rate established by CNMI law.

10. Hours of Work. Members shall not permit workers to work more than 60 hours per week unless he or she voluntarily chooses to do so in writing. Members shall grant workers at least one day off in a seven day workweek, unless the worker states in writing that he or she voluntarily chooses to work a seventh day."

STANDARDS FOR LIVING CONDITIONS:

1. Company Housing. Members that provide their employees with company housing shall provide adequate, safe and healthy living conditions.

2. Freedom of Movement. Members shall allow the residents of company housing the freedom to come and go as they please.

3. Housing at Will. Members shall respect their employees' right to decline company housing and to live elsewhere at will and without penalty.

FUNDAMENTAL RIGHTS OF EMPLOYEES:

1. Freedom of Expression. Members shall recognize and respect the rights of their employees to hold opinions without interference and the right to freedom of expression.

2. Freedom of Religion. Members shall recognize and respect their employees' freedom of thought, conscience and religion, including the freedom, without coercion, to manifest their religion and beliefs in teaching, practice, worship and observance.

3. Right of Privacy. Members shall recognize and respect the rights of their employees to be free from arbitrary or unlawful interference with their privacy, family, home, personal effects and correspondence.

4. Rights of the Family. Members shall recognize and respect the rights of their employees to found and nurture a family in accordance with their beliefs. Special protection shall be accorded women during pregnancy to engage in work which is not harmful to them without fear of discrimination or dismissal based on maternity or marital status.

STANDARDS FOR TRANSSHIPMENT AND COUNTRY OF ORIGIN:

1. Entry Requirements. Members shall observe and strictly adhere to all CNMI requirements for the entry and documentation of all materials imported into the CNMI for manufacturing.

2. Manufacturing Contracts. Members shall not engage any contractor for the purpose of adding value to their goods, irrespective of the nature and scope of the contractor's work, unless the contractor is a licensed CNMI business in good standing.

3. Transshipment. Members shall not promote, engage or participate in any form of illegal transshipment. Members shall adhere to the strict requirements for dutyfree and quota-free treatment of textile products exported from the CNMI under general headnote 3(a) of the Harmonized Tariff Schedule of the United States.

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