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Union-busting in Nicaragua's free trade zone

Labor Alerts: a service of Campaign for Labor Rights, 3 February 2000

The Nicaraguan Labor Ministry, the new management of Nicaragua's free trade zone and some factory managers appear to be engaged in an effort to rid the free trade zone of unions. With independent (non-company) unions recognized in five or more factories, Nicaragua is a leader in Central America for union organizing in its maquiladora (assembly for export) sector. Destruction of the maquiladora unions in Nicaragua would represent a setback for the entire region.

In an alert posted on January 12, Campaign for Labor Rights reported large-scale firings aimed at breaking the union at Jem III, a factory which produces clothing for Wal-Mart. Jem III is part of JEM Sportswear, based in San Fernando, California.

Since the week of January 17, we have received reports of mass firings at the U.S.-owned Mil Colores jeans factory - also with the evident aim of busting the union. Mil Colores produces Arizona Jeans (a JC Penney brand), as well as the No Fear and High Sierra brands.

There is evidence that these events are not coincidental but are part of a larger anti-union attack. In a number of recent statements and decisions, the new Minister of Labor has taken the side of factory managers and has given scant attention to evidence supporting claims by the unions. Also, the new management of the free trade zone is sending out strong signals that unions are not welcome.


Management of free trade zones, government officials and factory managers usually demonstrate an anti-union bias. In the case of Nicaragua, local conditions also may be playing a role. During the Sandinista revolutionary government, which began in 1979, Nicaragua's fledgling maquiladora sector was converted to domestic production. After the Sandinistas' electoral defeat in 1990, foreign investment was slow to trickle back into the country, which still has only one free trade zone. Unlike other countries in the region - Guatemala, El Salvador, Honduras - there were no government-backed death squads to murder most of Nicaragua's union leadership. In many ways, unions and other popular organizations thrived under the Sandinista government. Since 1996, organizing by the Sandinista union (CST), coupled with vigorous solidarity campaigns by organizations in the U.S. and elsewhere, has resulted in a series of union victories, with more than half of the workers in the zone represented by unions.

Nicaraguan officials and free trade zone management now are blaming unions for the slow growth of Nicaragua's maquiladora sector - even though foreign investment in the zone was slow for a full 6 or more years between the end of the Sandinista administration and the appearance of a strong union presence in the zone. Whether the present anti-union drive truly represents a belief that foreign investment will increase without unions or whether Nicaraguan officialdom simply hopes to make unions the scapegoat for lackluster maquiladora growth is anybody's guess. What matters is that the union movement in Nicaragua's free trade zone is under serious attack.


Although factory managers at Jem III and Mil Colores have been directly behind these firings, this attack on unions does not seem to have arisen only at the factory level. Factory managers and owners are willing participants and even instigators because they now know that the zone management and the Labor Ministry will stand behind them. And although U.S. clothing companies often cut and run in response to union victories, there is no evidence that they are culprits in this case. The new management of the free trade zone and a new administration in the Labor Ministry appear to be playing a key role - if not the coordinating role - in the escalation of anti-union activity. This is a structural problem, then, and requires a structural strategy.

IMPORTANT!!! We are asking international supports NOT to leaflet at retail outlets of Jem III and Mil Colores customers, NOT to send letters to Wal-Mart and JC Penney and NOT to call those companies' headquarters. We may ask you to take such actions in the future. For now, however, it would be counter-productive to do so. We are avoiding taking any actions now which might cause Jem III and Mil Colores to lose business with Wal-Mart, JC Penney and other U.S. clothing companies, thereby causing even further job loss for our Nicaraguan sisters and brothers.

What we DO want to do is to give the unions' adversaries (the Nicaraguan government, free trade zone management, factory managers) good reason to believe that a failure on their part to abide by Nicaragua's constitutional guarantees of the right to organize will create labor unrest and international pressure likely to result in foreign disinvestment in the free trade zone. Given that Nicaragua's free trade zone operates under the scrutiny of an international anti-sweat movement, we can make a credible case that labor harmony will be good for investment and that injustice to workers will be counter-productive. Our immediate goal is to convince the power brokers in this struggle that there will be serious consequences from continuing on the present course of union-busting.