16930: Lemieux: Reuters: World Bank arm OKs first loan to Haiti since 1998 (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: JD Lemieux <lxhaiti@yahoo.com>

World Bank arm OKs first loan to Haiti since 1998
Reuters, 10.10.03, 5:34 PM ET

By Anna Willard

WASHINGTON, Oct 10 (Reuters) - The World Bank's private
sector financing arm has approved its first loan for Haiti
since 1998, for a company making Levi jeans in a
controversial free trade zone.

Nongovernmental groups tried to stop the $20 million
International Finance Corporation loan to a Dominican
Republic based textile manufacturer called Grupo M, because
they fear the workers at the factory will not have proper
labor rights.

The loan was approved by the IFC's board on Thursday
without objections from any of the shareholders.

"Everybody voted for it," Mark Constantine, the IFC's
principal strategist, in global manufacturing and services
department told Reuters.

"There is a complete lack of private investment going on
there and pretty miserable conditions for the local
community, it's a very poor area, in the poorest country in
the Western Hemisphere, the people working there are
thrilled to have jobs."

Nongovernmental groups say Haiti has a poor record of
enforcement of labor rights and said there is a risk the
workers' rights will be violated.

In a letter to the British representative at the World
Bank, the Bretton Woods Project, a network set up by
British non governmental groups, urged the IFC not to
approve the loan unless it concluded a contractual
commitment on labor rights.

The IFC has commitments against child and forced labor, but
the World Bank board has not yet taken a decision on
freedom of association and nondiscrimination the other two
core standards outlined by the International Labor
Organization, Constantine said.

But he said because the textiles plants in the free trade
area plan to supply goods to companies such as Levi
Strauss, Liz Claiborne and Tommy Hilfiger, Grupo M is
likely to stick the rules even though they are not set out
in the IFC deal.

"Our client observes these codes of conduct and is subject
to regular audits by these major brands," Constantine said.

"The Levis and Liz Claibornes of the world cannot afford
the reputational risk that comes with lousy practices.

The World Bank itself is unable to lend to Haiti because
the Caribbean nation is in arrears on earlier loans.

Constantine said the IFC had decided to go ahead with the
project even though its parent institution cannot operate
there, because the loan is going to a private company and
not the government.

Copyright 2003, Reuters News Service

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