The first of two installments looking at the New York Times in depth investigation into the Caracol industrial park. Part two will be posted shortly.

Deborah Sontag, writing in today’s New York Times, takes a detailed look at the new Caracol industrial park being built in northeastern Haiti, finding that in their rush to show reconstruction progress the plan’s backers have overlooked labor and environmental concerns. Sontag writes:

Two and a half years after the earthquake, Haiti remains mired in a humanitarian crisis, with 390,000 people languishing in tents. Yet the showcase project of the reconstruction effort is this: an industrial park that will create jobs and housing in an area undamaged by the temblor, a venture that risks benefiting foreign companies more than Haiti itself.

The park, whose main tenant Sae-A expects to generate some 20,000 jobs over the next six years, has been made possible by generous subsidies from the U.S. and Haitian governments and the Inter-American Development Bank (IDB). Sae-A officials were invited to the U.S. embassy in Seoul to meet with Secretary of State Clinton in 2010. One concern the company had at the time was “uncertainty about whether Haiti’s minimum wage for textile workers, scheduled to increase to $5 from $3.75 a day this October, would continue to rise.” Wikileaks cables later revealed that the U.S. embassy in Haiti, along with some multinational companies had “aggressively moved to block a minimum wage increase for Haitian assembly zone workers,” according to The Nation.  While the minimum wage has increased, 18 out of 20 factories monitored by the Better Work Haiti program were found to be non-compliant on the minimum wage in their most recent assessment published in April.

Despite the “obstacles,” and convinced by legislation providing tariff-free access to the U.S. market, Sae-A officials were soon heading to sign an agreement -- but not in Haiti, in Washington:

By late summer, they were flying with their investment plan to Washington for a meeting with Mrs. Clinton and other international officials in a historic treaty-signing room on the State Department’s seventh floor.

While Sae-A originally estimated the project would create 3,000-4,000 jobs, American and international officials wanted more:

“We would say, ‘We could probably do a factory with about 3,000 to 4,000 people.’ They’re like, ‘Wow. What would you need to make it bigger?’ I [Lon Garwood, senior advisor to Sae-A] said, ‘If we could get a loan for the machines, we could probably double that.’ They said, ‘What about 10,000?’ We said, ‘If we didn’t have to worry about purchasing the land, if we didn’t have to build the factory shells, then we could double it again.’ That’s where the 20,000 jobs figure came from.”

In the end, the land was provided free of charge by the Haitian government (evicting some 350 farmers in the process), the IDB agreed to provide $100 million to finance the building, while the U.S. would contribute $124 million for a power plant, housing and a port. Sae-A, which reported $1.1 billion in export business last year, only needs to invest $39.2 million. The $124 million provided by the U.S. is over a quarter of the money the U.S. earmarked for reconstruction. 

Yet, despite billions in donor pledges, and billions more in private donations, reconstruction has lagged far behind expectations. Sontag writes:

“I think there was emotion within State that we haven’t done anything effective in Haiti,” said Cathy Feingold, international development director for the A.F.L.-C.I.O. “There was a guilty sense that we have to do something, anything. But doing it this way is not going to be helpful to Haitians. It’s got to be done so there are living wages and the environment is healthy.”

Environmental, Social Concerns Overlooked

As HRRW, and others have written about before, there are a number of environmental and labor concerns that have surrounded the Caracol park in controversy since its inception.  For starters, the designated site, in addition to being home to 350 farming families, sits in a bay known for its mangroves, coral reefs and a number of endangered species. As Sontag notes, prior to the earthquake “environmentalists had designated Caracol Bay to become the country’s first marine protected area.”

Never the less, as Haiti Grassroots Watch (HGW) previously reported, the consultants contracted to select possible sites recommended Caracol, at first.  After the fact, the same consultancy admitted that “the study process and the section of sites was not accompanied by extensive environmental, hydrologic or topographic research.” HGW reports that Koios went on to suggest either moving the location or cancelling the project outright.

It wasn’t just the consultants who were alarmed. Sontag writes:

The United States Treasury Department had concerns, too. Because an environmental impact study was not done properly or far enough in advance, the Treasury, which represents the United States on the development bank board, took the unusual step of abstaining from the vote that approved the $55 million grant to build the park.

One person who was not consulted about the location was the mayor of Caracol, Landry Colas:

“I would have chosen another site, given that this one was already occupied by people earning a living,” he said. “But I’m no expert.”

Colas added, “Foreigners know more about what’s going on in Caracol than I do.”

Another concern is if the Caracol area will be able to handle the influx of people expected. What many fear is that with thousands of people migrating to an area without adequate infrastructure, the conditions which led to the formation of Cite Soleil in the Duvalier era will be repeated. Jacqueline Charlies, writing for the Miami Herald, reported:

“When you look at the social problems that Cité Soleil poses today, you have to ask, did it have to be that way?” said Michèle Oriol, executive secretary of Haiti’s Inter-ministerial Commission on Territorial Planning, which has objected to the park’s location, and that of a U.S.-financed housing development just off the main commercial corridor.

As part of the Caracol project, the U.S. government has signed contracts to build some 750 houses in the Caracol area, costing some $20 million. In comparison, as Sontag points out, the U.S. embassy in Haiti is building 86-100 townhouses complete with recreation facilities for up to $100 million. Additionally, the houses, while larger than originally planned due to community input, have been criticized as well.  Sontag writes:

Described by American officials as a cost-efficient use of space, the Caracol housing project is criticized as “extremely dense and monotonous” and “violating numerous principles inherent to sound urban design” by Greg Higgins, an architect who wrote a scathing peer review.

Tags: accountability | economy | environment | garment factories | garment industry | iadb | jobs | minimum wage | new york times | reconstruction | unions