On July 6, 2012, the New York Times published an article entitled: “Earthquake Relief Where Haiti Wasn’t Broken”. The piece has numerous factual errors and does not address many of the most salient points about the development of the Northern Corridor.

Framing:

The title itself (“Earthquake Relief Where Haiti Wasn’t Broken”) provides a frame that disregards Haiti’s situation before the earthquake. First, Haiti was the poorest nation in the hemisphere before the January 2010 earthquake. Caracol, where the park is located, is part of one of the poorest regions in Haiti—a region in dire need of investment and “relief” before the earthquake. Hurricanes had ravaged the country and efforts were underway to attract private sector investment including in the apparel industry. Second, the earthquake affected the entire nation. In the aftermath of the earthquake more than 25,000 registered internally displaced people moved to the North. Third, the dense population and poor building standards associated with urban sprawl in Port-au-Prince gave rise to the earthquake’s overwhelming devastation. As such, decentralization—creating population centers with basic services like health systems, infrastructure, and markets outside of Port-au-Prince—is one of the Government of Haiti’s top priorities after the earthquake. This required the creation of opportunities for people to build their lives in areas away from an overcrowded Port-au-Prince. The North was chosen because little investment has flown to this region previously and because it offers attractive opportunities in agriculture, tourism and manufacturing.

The Government of Haiti:

The Government of Haiti has lead the development of the North, negotiated the terms of Sae-A’s tenancy, and owns and oversee the Park. This is not mentioned in the article. The Government of Haiti has worked directly with interested tenants to ensure that any investment would be in alignment with Haiti’s priorities and that the tenants understood the requirements of doing business in Haiti. On a day-to-day basis, the UTE, a part of the Ministry of Finance, implements the construction of the industrial park. Additionally the Caracol Park and associated investments, including the power plant, education investments, agricultural investment and the water treatment facility, were approved by the Interim Haiti Recovery Commission (a body comprised of senior members from the executive, legislative and judicial branch, union and civil society leaders and partners from the international community). Both the United States Government and the Inter-American Development have worked with the Government of Haiti – both on the federal and local level—every step of the way to ensure the necessary capacity building is taking place and that the investments lead to sustainable economic development.

Local Engagement:

One of the priorities from the beginning of the project was engaging the local population. A broad and comprehensive communications campaign, including billboards, radio spots, brochures and meetings in the community, provided information to the local resident and solicited their feedback. In total there have been more than 100 consultation meetings in the North directly engaging the community. Additionally, information kiosks in all the key regional towns are a part of this effort and provided a place for people to ask questions, respond to job opportunities and share thoughts.

Agriculture:

The article describes the land that the Park is on as having been good for agriculture and states that the farmers on it did not understand why they were displaced. In conversations with the more than 364 farmers, they consistently expressed concern about risks of farming on the land and the annual fluctuations in incomes. Average yields per hectare per year in the Caracol area are approximately $1,450. A household of smallholder farmers holds on average less than one hectare. This means most smallholder farmers make considerably less than the minimum wage and don’t have the means to escape poverty. The 50 hectares where the Sae-A factory is now being developed is expected to generate $45M in local workers’ wages, 600 times what the same land yielded for farmers. Most importantly, the Government of Haiti worked with the farmers to come up with compensation packages for relocation. They included at least two cash payments and adjustment assistance ensuring farmers are able to sustain their livelihoods long after cash compensation has run out. ) Each farmer was compensated for the value of the crops raised for a period of 2 years. The average compensation for a farmer utilizing this GoH property was 3,376.49 USD. All the farmers (but one, who is no longer capable of farming and asked for a house, instead) will receive farmland in exchange for leaving the site, including land rights, which 80% did not previously have. In addition, the USG invests in a skills training program that allows local residents without any formal employment background to qualify for new job opportunities.

Additionally, understanding the critical role of agriculture in Haiti and its growth potential, the United States and the IDB are investing a significant amount in agriculture, exceeding investments in the industrial park itself.

Labor rights:

Each of the investors and stakeholders take labor rights extremely seriously. Working with the United States and the International Labor Organization, Haiti has implemented rigorous labor requirements that must be met by anyone doing business in the country.

Before engaging Sae-A the Government of Haiti, the United States and the IDB each did extensive vetting of the company’s compliance record and financials. When allegations of wrong-doing at a factory in Guatemala arose, the Office of the United States Trade Representative was engaged as were private sector actors who sourced from Sae-A and had executed independent audits. Together these entities reviewed the situation. Sae-A provided a point by point clarification on the allegations made by AFL-CIO, many of which appear lacking in supportive evidence.  Where Sae-A’s Guatemalan management team was found in violation of company policy, corrective action was taken, including dismissal of Sae-A managers and improvement of grievance procedures. Sae-A also shared several independent audit reports conducted through both announced and unannounced factory visits by compliance auditors on behalf of major U.S. buyers that show that Sae-A took quick and decisive action to address any issues that arose in one of their Guatemalan factories.

The United States and the IDB have and continue to work closely with the Government of Haiti, the International Labor Organization’s Better Works program and the Solidarity Center, the AFL-CIO’s local Haitian organization. The U.S. Department of Labor has led several high level delegations this year to Haiti with USTR, the Department of Commerce and State, to review compliance of existing manufacturers

Apparel Industry:

Light manufacturing is a catalyst for greater economic development, which is critical for Northern Haiti where the majority of Haitians earn less than $2 a day. In the next five years, Sae-A is expected to pay approximately $45 million in wages to local workers. This money will create a demand that will put in movement economic initiatives in the region. Previously, economic production from the 50 hectare Sea-A site amounted to roughly $75,000 a year. Sae-A’s investment equals approximately 600 times more income for local Haitians from the same land. Unlike other apparel factories in Haiti, Sae-A is investing in a knitting and dying operation—Haiti’s first. This will allow the entire manufacturing process to take place in Haiti, as opposed to a cutting and sewing operation. This facility represents a substantial investment that also serves as evidence of Sae-A’s commitment to stay in Haiti.

The HOPE and HELP legislation that provides trade preferences to Haiti, have stringent compliance requirements to access U.S. trade preferences. Manufacturers must comply with these requirements to benefit from the trade preferences. In fact, HOPE II is the only U.S. trade regime containing factory-specific eligibility requirements.  Over the past several years, the USG has worked closely with the GOH to put in place labor compliance monitoring for all apparel companies operating in the country and supported adherence to labor standards as a condition of the foreign investment. Gail Strickler, the Assistant U.S. Trade Representative for Textiles provided the following statement to the reporter, but only a few words were reported:

“I've had 30 years of experience in this industry and have visited thousands of factories and believe that Sae-A is an exemplary corporate citizen that not only creates jobs, but invests in its workers and the surrounding communities.  The action we have taken across the USG from Congress to the Department of Labor to Department of State and USTR, has resulted in the most comprehensive framework to date that advances and protects workers' rights. We constructed this framework specifically to ensure that only those companies committed to best practices would invest in Haiti.”

HOPE II’s labor requirements have already produced concrete results.  For example, following the dismissal of six executive members of a newly created union, USG assistance in conjunction with the Government of Haiti, factory owners, and union representatives resulted in the reinstatement of all six workers – a significant milestone in Haiti. 

Environment:

The article neglects to discuss the safeguards that are being implemented to protect the environment, which is part of the reason the American Institute of Architects has been engaged. The Government of Haiti and other stakeholders are keenly aware of the potential impacts of urbanization and the compound effect due to lack of infrastructure. Steps will be taken in accordance with the recommendations in the plan. There is already environmental protection activity underway. This includes steps to develop a modern wastewater treatment plant, that meets the same requirements of those built in the United States, as well as a rigorous monitoring system that regularly tests the water quality in and around the industrial and the Caracol Bay. The IDB has committed to specific investments to clean and rehabilitate the mangroves that have suffered from environmental degradation for decades. The IDB is also investing in a landfill that will be the first of its kind in Haiti. The environmental protection efforts also include regular testing of groundwater, surface water and the air quality. In depth information on the environmental studies can be on this website. With regard to the power plant, complementary alternative energy sources are also pursued, like the first-ever industrial scale solar facility in Haiti and this was discussed with the reporter. All other possible energy sources for the power plant were evaluated. Wind and solar are attractive, but don’t offer continuous power. Diesel only produce 6% less emissions, but is more than 30% more expensive.

Lastly, assertion that the United States Department of the Treasury abstained from a vote because of environmental concerns is false. There is legislation, “Pelosi Amendment,” in the United States that required Treasury to abstain in the July 25, 2011 vote for the IDB financing because the environmental impact assessment (EIA) was incomplete and had not been publicly available for at least 120 days. At the time the Department of Treasury specifically stated: “The United States welcomes this project to create thousands of jobs in Haiti and create new opportunities for sustainable economic opportunities in one of Haiti's poorest regions.”

Migration:

The Government of Haiti has put in place steps to mitigate mass migration to the area around the Park that could lead to “slums” and an unsafe environment. These steps include prohibiting hiring at the gate, having the companies who work in the Park provide transportation from central meeting point in the surrounding towns and sharing information through a comprehensive communications effort and information kiosks.

The American Institute of Architects has been hired and is on the brink of rendering the regional and the specific urban plans that are to be validated by the communities of the area.

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