Labor Rights, Free Trade Zones & The Chentex Struggle in Nicaragua

Michael Ratner 

(see: www.humanrightsnow.com)


mid-September I traveled to Nicaragua as part of a delegation organized by the

National Labor Committee (NLC), an organization that fights sweatshops and

supports labor rights around the world. Charles Kernaghan and Barbara Briggs of

the NLC were returning with a mission: a few months earlier, visiting fired

workers at the Chentex and Mil Colores factories in the Las Mercedes Free Trade

Zone, the NLC group had caused quite a stir and been told they were being

deported from Nicaragua. Now we were going back to investigate the ongoing labor

struggles in the free trade zone.


San Salvador, we boarded a commuter flight for the 45 minute trip to Managua. A

few minutes prior to takeoff, the pilot entered the cabin, asked Charlie for his

passport, and informed him that immigration in Managua had prohibited him from

entering the country. Charlie refused to leave the plane. Five burly men then

boarded; finally, after thirty minutes or so, they escorted Charlie off. By

chance, a man from the human rights ombudsman’s office in Managua was on the

plane with us. He explained to the passengers that Charlie was thrown off not

because he was a criminal, but because of his support for labor rights. He said

that the Ministry of the Interior had banned Charlie because the government

believed human rights were a communist plot. Everyone on the place clapped for



arriving in Managua our delegation was met by a huge throng of supporters,

including union members, human rights advocates and Sandinista members of the

National Assembly. TV, radio and newspaper reporters were there as well, to

report on the banning of Charlie, who’d been labeled a "terrorist" and

a "subversive" by the government. We gave an hour?long press

conference, and for the next three days the press was everywhere. Much of the

coverage was sympathetic to the workers: it appeared that banning Charlie had

badly backfired against the government.


Las Mercedes Free Trade Zone is located near the airport, a few miles from

downtown Managua. There are about twenty maquilas , or factories, in this zone,

making apparel for U.S. stores such as Kohl’s, J.C. Penney’s, Kmart and WalMart.

The entire area is surrounded by a high barbed wire fence; between six and seven

each morning, 20,000 workers stream through a guarded, narrow gate. The workers

are mostly young women; maquila jobs are all they can get in a country where

unemployment is as high as 50%.


Chentex factory is probably typical of maquilas in the zone, except it is

bigger; 1,850 workers make 20,000 to 25,000 pairs of blue jeans a day for stores

in the United States. Chentex, like many other Nicaraguan maquilas, is owned by

Taiwanese citizens. Over the last decade, Taiwan has amassed tremendous

influence and clout with the Nicaraguan government: not only do Taiwanese

factories provide jobs in Nicaragua, but Taiwan has built the foreign ministry

and refurbished the presidential palace and the National Assembly building.

Taiwanese businessmen assert that if labor rights are enforced in Nicaragua,

they will refuse to build a new, $100 million free trade zone in Leon, and will

move their existing maquilas to another country,


stood outside the gate to Las Mercedes for an hour or so; one woman who

acknowledged our presence was fired later that day, on the assumption that she

must be a union member. We were not allowed go into the factories; neither was

the head of the human rights committee of the National Assembly. There is simply

no independent monitoring of conditions inside. We do know, however, that the

current struggle in the free trade zone began when the Chentex union, a

Sandinista union, asked for a increase in the piece rate. The minimum wage paid

by the factory is 800 cordobas a month, a little over 60 dollars. Even with

forced overtime and a work day of 12 hours, workers can’t earn the estimated

2500 cordobas it costs to live on for a month.


Chentex company responded to the union’s request by saying that there would not

be a wage increase, and refusing to allow mediation. The workers called a

one?hour work stoppage on April 27, and Chetex responded harshly, firing nine

union leaders, bringing in armed National Police and thugs to terrorize workers,

putting up barbed wire and surveillance cameras around the plant, and filing

lawsuits against union members. Chentex then formed a company union, and told

the workers that as far as Chentex was concerned, "the union is dead."


was at this point that the NLC got involved, sending delegations to Nicaragua

and launching a campaign to make Kohl’s and other U.S. department stores insist

that the factories they buy jeans from respect labor rights. The United States

government also became involved, sending representatives to Nicaragua and

telling the government that there must be a place in the free trade zone for

unions. Of course, the United States was not doing this out of love for the

Sandinista unions, or for labor rights in general. But the U.S. government

understood that, as of October 1, Nicaragua and other Caribbean Basin countries

were to fall under a new trade law granting them equal benefits with those

provided to Mexico under NAFTA (the North American Free Trade Agreement.) The

new law is an attempt to equalize the playing field between countries such as

Nicaragua and Honduras that are not part of NAFTA, and Mexico, which has, since

the passage of NAFTA, substantially increased textile production at the expense

of the Caribbean countries. However, the new law requires that benefits can only

be received if a country is protecting certain fundamental labor rights,

including the right to association, the right to unionize, and the right to

organize and bargain collectively. The actions of Chentex, and

the Nicaraguan government’s failure to enforce union rights in the free trade

zone, could have jeopardized Nicaragua’s designation under the trade laws. So

U.S. officials were dispatched to straighten things out. There efforts, to the

extent they were sincere, did not succeed. Our own meetings with various

Nicaraguan officials, including the Minister of Labor, were a failure: the

Nicaraguans insisted there was nothing they could do to support union rights.

Negotiations had been scheduled for both Chentex and Mil Colores, though, and we

hoped for some improvement.


the Mil Colores plant, where the owner is an American, and more subject to U.S.

pressure than Taiwanese businessmen are, the negotiations did go better.

However, the negotiations with Chentex were a charade. The company refused to

consider reinstating the fired unionists, which is equivalent to non?recognition

of the union.


this utterly dismal record of recognizing labor rights, President Clinton went

ahead and designated Nicaragua as a country that could receive trade benefits

under the new laws. This demonstrates the almost complete worthlessness of

legislation that supposedly mandates adherence to labor rights as a condition of

beneficial trade laws. To date, only twice under similar statutes have countries

lost trade benefits: once in the case of the unrecognized government of Mynamar

, and once during the period of the Sandanista government in Nicaragua.


remains for public pressure to change the situation for workers in the Las

Mercedes free trade zone. The battle for recognition of the Chentex union is

critical for the future of the Nicaraguan labor movement, and is seen by people

in Nicaragua and in the region as a turning point in their struggle to defend

worker and human rights and democracy in Nicaragua and Caribbean countries.


saw for myself the commitment of the workers when I went to visit a fired union

leader at his home. He lived with five people in a tiny one-room lean-to built

out of scrap wood and plastic sheeting, with no bathroom or running water. Until

he got his job back, he explained, he was getting food from relatives. But he

was planting a garden, and had hope for the future: “We will fight until we

win; we want the jobs, but we also want to be treated with dignity,” he said.


workers of Chentex and other maquilas believe the struggle for union rights in

Nicaragua’s free trade zone can be won. In the early weeks of October,

demonstrations in support of them will be taking place at Kohl’s department

stores throughout the United States. To learn more, contact the National Labor

Committee: www.nlcnet.org



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