PURPOSE OF THE REPORT

Submission No. 9702 was filed pursuant to the North American Agreement on Labor Cooperation (NAALC) on October 30, 1997, by the Support Committee for Maquiladora Workers (SCM), the International Labor Rights Fund (ILRF), the National Association of Democratic Lawyers (ANAD) of Mexico, and the Union of Metal, Steel, Iron, and Allied Workers (STIMAHCS) of Mexico.

On February 9, 1998, an addendum on health and safety issues to the submission was filed by the Maquiladora Health and Safety Support Network (MHSSN), Worksafe! Southern California (WSC) the United Steelworkers of America (USWA), the United Auto Workers (UAW), and the Canadian Auto workers (CAW). A public hearing was held in San Diego, California, on February 18, 1998.

The report on freedom of association issues was issued on April 28, 1998. In the report the NAO recommended that the Secretary of Labor engage in ministerial level consultations with her Mexican counterpart on the issues raised. Due to the complexity of the health and safety issues which were raised for the first time under the NAALC, and the relatively late filing of the health and safety addendum, the NAO determined to issue the instant report separately and at a later date.

The NAO recommends that ministerial level consultations between the Secretary of Labor and the Secretary of Labor and Social Welfare of Mexico include the safety and health issues raised as well as the issues of freedom of association reviewed earlier.

SUMMARY OF SUBMISSION AND ALLEGATIONS

Submission No. 9702(II) raises safety and health issues at the Han Young export processing plant in Tijuana, Baja California, Mexico. Han Young assembles truck trailer chassis for Hyundai Precision America, a subsidiary of the Hyundai Corporation of Korea.

In April 1997, workers began to organize an independent union to address issues of safety and health and the lack of a company doctor at the plant, as well as economic issues. After the organizing effort began, the workers were informed that they were already represented by a union which would handle their complaints.

Among the health and safety concerns cited by the workers was the frequent occurrence of injuries such as burns and broken bones. They also expressed concern about respiratory illnesses, hearing loss, and loss of vision.

The submitters asserted that these problems were caused by the lack of compliance with government regulations and the failure to follow safety practices such as installing local exhaust ventilation, conducting periodic hazard identification and control, exposure monitoring, medical surveillance, health and safety training and other hazard control measures.

The submitters also asserted that the company failed to provide adequate personal protective equipment such as safety shoes, safety glasses, chemical-resistant gloves, respirators and face shields.

The submitters argue that Mexico is in violation of NAALC Article 3(1) in failing to enforce its labor laws on safety and health in the workplace through appropriate actions.

ANALYSIS AND DISCUSSION

Article 3 of the NAALC commits the Parties to enforce their labor laws. In an effort to improve health and safety in the workplace, Mexico implemented a new Federal Regulation on Safety, Health, and the Workplace in April 1997.

The complaints of the workers appear to be substantiated by workplace inspections of the plant. The NAO review indicates that the factory was subjected to eleven health and safety inspections by government inspectors since it began operations in 1993. At least four inspections have taken place since June 1997.

Han Young has been assessed about $9400 in financial penalties for health and safety violations identified in the inspections and failure to undertake corrective action. Nevertheless, serious deficiencies continue at the workplace. The NAO has been unable to ascertain if fines were collected, and if additional fines were assessed and increased as appropriate for violations identified in subsequent inspections. The deterrent effect of inspections and financial penalties is lost if they are not enforced.

The NAO review also raises questions as regards the efficacy of the inspection process, particularly regarding follow-up inspections intended to verify employer compliance with abatement orders.

FINDINGS AND RECOMMENDATION

The NAO finds that by enacting a new Federal Regulation on Safety, Health, and the Workplace in April 1997, Mexico has undertaken a serious effort to improve the enforcement of safety and health laws and regulations in the workplace.

The Han Young facility was subjected to thorough and repeated inspections by Federal and state authorities. Nevertheless, a number of questions have been raised with regard to the efficacy of inspections. Further, despite these efforts, serious hazards continued unabated at the plant.

The fines that were assessed against Han Young were substantial provided they were enforced. The NAO, however, has been unable to ascertain if the fines were collected, if the sanctions were increased in accordance with Mexican law, and what, if any, further action is contemplated by the Mexican authorities to seek compliance in this case.

A major instrument to ensure compliance with workplace health and safety regulations is the deterrent effect afforded by the conduct of comprehensive periodic inspections combined with the certainty of the assessment of significant financial penalties against violators. This deterrent effect is lost if penalties are not enforced.

The NAO therefore recommends that ministerial level consultations between the Secretary of Labor and the Secretary of Labor and Social Welfare of Mexico include discussion on (1) the final disposition and/or current status of the health and safety cases involving Han Young de Mexico, S.A. de C.V.; (2) the status of efforts by the Government of Mexico to enforce compliance with that country's health and safety laws and regulations through the implementation of the Federal Regulation on Safety, Health and the Workplace; and (3) the process by which workplace inspections are conducted and the process by which financial penalties are imposed, escalated, and collected.