Caracol Industrial Park: A stupid, ill-conceived and pernicious plan

By Augusta Dwyer (Toronto-based writer), published on Global Kiosk, July 9, 2012

A recent article in the New York Times about a new industrial zone in northern Haiti has inspired me to write something myself about the country’s notorious apparel industry.

Last May, I spoke to the director of an International Labour Organization program called Better Work, mostly to get some background on this controversial source of employment. Better Work doesn’t advocate for better wages and working conditions, as I had thought. Rather, it carries out twice yearly surveys of conditions in the factories in three existing industrial parks, two in the

capital and one in Ouanaminthe, as stipulated by the U.S. act that allows Haitian-assembled textile products into the U.S. free of the usual tariff. The current act, called HOPE II — for Hemispheric Opportunity through Partnership Encouragement — is an indication of a long-standing thesis that the overall cure to Haiti’s problems is to get peasant farmers and their families to abandon their tiny plots of land and pick up a salaried job instead.

Cheap labour plus the ability to export products tariff-free into the world’s largest market equals a competitive edge over other nations with low-cost labour. It means Haitian companies can offer an attractive package to foreign companies like Levis, Hanes or Montreal-based Gildan Activewear, to name only a few, assembling their clothing for them and shipping it to the U.S.

But right now, those companies and their Haitian contractors have a problem: a global economic recession that means that not enough consumers are buying their products. This hasn’t stopped the kind of people I consider pathological altruists from insisting that Haiti needs more textile assembly plants, whether they actually foster working-class prosperity or not. Nor has the fact that the 26 existing apparel factories in Haiti — down from about 80 in the late 80s/early 90s — are apparently having problems receiving enough orders.

And so, as part of U.S. post earthquake reconstruction efforts, a new factory complex is being set up in the north, near a town called Caracol. The plan garnered some harsh scrutiny in the New York Times, and is well worth a read. The article describes how, defying logic, a square mile of fertile farmland in a coastal area previously scheduled for environmental protection because of its vulnerable mangrove forests and reefs was chosen, its 366 peasant farmers paid to leave their lots and to dream big. Fulltime jobs and 365-square-foot houses were on their way!

A Korean firm called Sae-A Trading, which makes over $1 billion a year supplying clothing to retailers like Wal-mart and Gap Inc., is moving in. It will apparently kick in $39 million (compared to an estimated $224 million in US taxpayer subsidies) and has pledged to hire 20,000 workers. It will get housing for its workers, a port, and a special heavy-oil-burning power plant to generate a steady supply of electricity, all for free. For the U.S. power brokers who imposed the deal on Haiti, moreover, the fact that Sae-A has a bit of a nasty history with their former workers in Guatemala was immaterial.

And so is the reality of the entire history of cheap-labour enclaves in other parts of Haiti, the glaring picture of poverty their presence has done absolutely nothing to mitigate.

That’s why my interview with Better Work was so interesting.

Until 2009, a day in a textile plant earned a Haitian worker the equivalent of $1.75 or 70 gourdes.  Then-president Rene Preval wanted to raise that to 200 gourdes, but sector bosses cried foul, saying that because they used a quota (piece work) system — whereby workers had to finish so many pieces a day — this meant that bosses would in fact have to pay more and they had already agreed to contracts with their foreign buyers calculating the lower rate. The Haitian government said, ‘OK, the minimum wage will be $3 per day, or 125 gourdes, and if a worker fulfils his or her quota, they’ll get the $5.’ (In 2010, the minimum went up to $5 — and to $6 if quotas are filled.)

But according to Better Work, only 22 per cent of workers manage to actually do so in an 8-hour day. That means they are working 9 or 10 hours to get their six bucks.

“It’s not so much that targets are set too high,” said my Better Work contact, “they are probably a little bit too high, but it’s more that the workers arrive at work after not sleeping well. They live in houses that are very hot, they have no electricity or fans; there is a lot of noise, a lot of discomfort. They must be (at the plant) at 6:30 and some walk, some take two or even three tap-taps; some do not eat breakfast, some have one meal per day, so they are not properly fed. They do not drink much water and often this water is not clean. The factories are very hot and the machines are old. Only a few factory managers invest in new equipment, so most of the machines are bad quality.”

He offered other details that fill in the despairing picture of the life of the average industrial park worker. Only a few of the plants — most of which employ 1000 each — has a cafeteria. Instead, workers get an hour to sit in the searing sun by the side of the street to eat their lunch. There are a few areas with benches and trees but many workers don’t want to use them because they don’t want their co-workers want to see that they have brought nothing but some boiled spaghetti to eat.

And he told me about one plant that tried to comply with the Haitian labour law that allows nursing mothers an hour off to breastfeed their babies, but stopped when eight babies were left behind because their anonymous mothers couldn’t afford to keep them.

Yet, for people like Bill and Hillary Clinton, not to mention hundreds of foreign government bureaucrats, this is the right road to take towards development. Investments in industry — as opposed to, say, land reform and agricultural assistance — are to be not only encouraged but celebrated.

Caracol will simply join the ranks of exploitative workplaces where wages are a mere step up from starvation. It will pollute the bay on which it is built and ruin the tiny remnants of a local fishing industry. It will destroy the environment, as much as the souls of its workers, and contaminate the air with its noxious fuel-burning power plant.

And the only way it will ever provide jobs to 20,000 workers is by gutting the business of existing factories in a place where post-earthquake construction really is needed.

So it is a stupid, ill-conceived and pernicious plan. But sometimes it seems there is no use arguing common sense to a foreign person who thinks he — or she — knows what’s best for Haiti. And as so often when I looked at foreign projects landed like aliens from outer space into a nation few understand or want to, I can’t help but wonder who exactly is supposed to benefit? Because when it comes to Caracol, the clear winner is Sae-A Trading. And the losers, yet again, are the people of Haiti.