Maquila refers to a system of production, or a factory, in which imported materials undergo a process of assembly or manufacturing, before being re-exported and sold abroad. In Central America maquilas are predominantly for the clothing industry, and are owned by companies from the US, Asia and Europe. They enjoy special tax and tariff regimes and provide cheap goods for markets in the north.

The maquila industry in Central America has been referred to as neoslavery,[1] and these ‘sweatshops’ are notorious for their poor working conditions. Organisations such as No Sweat, and War on Want have campaigned to bring awareness to this issue and forge a mental connection between the cheap garments available in high street stores and the abuse and violation of labour rights which goes on in the factories in which they were made.[2]

Maquila employees endure hazardous working conditions; lack of ventilation, excessive heat, dust, noise and lack of adequate safety equipment are frequent complaints. Bathroom breaks are monitored and timed. Shifts can range between ten and sixteen hours, and forced overtime, often unpaid, is also commonplace. 75% to 85% of maquila workers are women. They may be forced to take birth-control pills, take pregnancy tests, and pregnant women are routinely dismissed without notice or benefits. Workers may face verbal or sexual harassment. The staff turnover in maquilas is high; unemployment perpetuates the situation, as there are always more people desperate for work.[3]

Attempts to organise unions are often crushed, despite national and international labour rights legislation. Unionisation is difficult and minimal due a variety of factors including mass firing, intimidation, fear, death threats, unemployment and capital mobility.[4] When a worker is illegally fired for participating in union activities, they are commonly blacklisted, making it impossible to find similar job elsewhere.[5]

A report by the Maquila Solidarity Network suggests that that shrinking consumer markets due the global financial crisis will impede efforts to improve workplace conditions. They predict an increase in short-term and temporary contracting, less job security, factory closures, and greater anti-union pressure.[6]

[1] MacEoin. G., 13 August 1999 ‘Maquila neoslavery, under conditions from bad to inhuman – maquiladora industry in Central America’ National Catholic Reporter http://findarticles.com/p/articles/mi_m1141/is_36_35/ai_55553270/ (accessed 13 August 2009)
[2] See http://www.nosweat.org.uk; http://www.waronwant.org/
[3] See Armbruster-Sandoval, R. (2005) Globalization and cross-border labor solidarity in the Americas: The anti-sweatshop movement and the struggle for social justice, Routledge, New York; also Washington Office on Latin America (2009) ‘DR-CAFTA and worker’s rights: Moving from paper to practice’ (May) http://www.wola.org/images/stories/Rights%20and%20Development/wola_dr_cafta_rpt%20final.pdf (accessed 17 August 2009)
[4] Op.cit. (Armbruster-Sandoval)
[5] Op.cit. (Washington Office on Latin America)
[6] Maquila Solidarity Network (2009) ‘How will the global financial crisis affect the garment industry and garment workers?’ (February) http://en.maquilasolidarity.org/sites/maquilasolidarity.org/files/2009-02-25%20MSN-FinancialCrisis-Feb09-ENG.pdf (accessed 14 August 2009)

I am grateful for the following piece to Chuck Kaufmann who writes the NicaNotes blog for the Alliance for Global Justice (AFGJ).

 NicaNotes is a blog for Nicaraguan activists and those interested in Nicaragua, published by the Nicaragua Network, a project of the AFGJ. It provides news and analysis from the context of Nicaragua Network’s long history of struggle in solidarity with the Sandinista Revolution.

The Sandinista government’s unique Tripartite Alliance model achieves an agreement on the 2017 minimum wage that gives it a boost totalling 8.25%.

The Tripartite Alliance model functions as a direct negotiation between capital and labour in meetings moderated by the government. Since Daniel Ortega returned to the presidency in 2007 and implemented this system, Nicaragua has enjoyed an extended period of labour stability.

Labour stability in and of itself is not necessarily a positive thing if that stability is due to an uneven playing field such as exists currently in the US where corporations hold most of the cards, or if it is due to ‘company’ unions, such as are dominant in Mexico, which do not defend the interests of the workers. But labour stability in Nicaragua says more about the nature of the State than it does about the relative power dynamics between capital and labour. In the two times I can think of in the past ten years that labour and capital have not been able to come to a consensus about the percentage increase in the minimum wage, the government has sided with labour and imposed an increase equal to or close to the rate supported by the unions.

In February, Paulo Speller, secretary general of the Organisation of Ibero-American States (OEI), said during a visit to Nicaragua, “Nicaragua is a country that has inspired us because it has a different situation compared to the rest of the region. The economy is growing, the people live in peace, and the government is implementing carefully developed policies. The Nicaragua Tripartite Alliance model between government, employers, and labour is a unique and successful model in the region.”

Luis Barbosa, secretary general of the Sandinista Workers Central – José Benito Escobar, said, “We have achieved something great” and Labour Minister Alba Luz Torres called it “a major victory for Nicaragua’s workers.” Employers, represented by the Superior Council for Private Enterprise (COSEP) are also happy with the deal and have repeatedly credited the model for calming foreign investor fears and promoting investment and job growth.

Nicaragua has several minimum wages for various sectors of the economy. The one covered by this agreement is the one covering Nicaragua’s lowest paid workers in agriculture and garment factories. The agreement covers workers in the rapidly growing tobacco industry, as well as coffee workers, Nicaragua’s largest single employment sector. For the first time unskilled workers will earn US$195.60 per month. That doesn’t sound like much, admittedly. Honduras and Costa Rica have minimum wages of US$353 and US$516 respectively, but a one-to-one dollar comparison leaves out the fact that Nicaraguan workers have free health care, free education, subsidized food and housing for low wage workers, all of which increases the buying power of the Nicaraguan córdoba.

Nicaragua is nowhere near full employment; barely a third of workers are considered formally employed and paying into social security. But that is a significant increase over historical norms and few would argue that workers are not better off than they were under the neoliberal governments of 1990-2006.

The fundamentals of the world economy have not changed. Neoliberal capitalism is still making the rules. But in Nicaragua the nature of the State and what economic actors are defended by the State has changed, and that has made all the difference.

 NicaNotes website: http://afgj.org/nicanotes

AFGJ website: http://afgj.org/

In The Violence of Development website we try to avoid party politics within the seven Central American countries, focussing instead on the issues of development that transcend party boundaries. But in the case of Honduras a progressive government has recently taken over from a government of gangsters and narco-traffickers whose policies promoted only the interests of an elite, an oligarchy, a mafia, policies widely and enthusiastically supported by the US and Canadian governments despite the fact that the former government gained control only through defrauding the democratic votes and wishes of the Honduran people.[1]

In order to foster the notion of development for all, many of the first acts of the new government of President Xiomara Castro have involved the repeal of laws set by the gangsters who ran the former government. Two of the laws repealed are summarised below.

By Martin Mowforth

May 2022

First, the Honduran hourly employment law entitled employers to hourly contracts, the payment for which could be a matter of agreement between the employer and the individual employee, thereby violating articles 46 – 48 of the Honduran Labour Code. The Honduran Association of Labour Lawyers (AALH) described this law as “worsening working conditions for Hondurans.” A report from the Rights Centre for Women and a Beverage Industry Workers Union revealed that 75 per cent of Honduran women with part-time work have not had access to maternity licenses or have been denied the right to breastfeeding. The AALH stated that, “this situation has benefitted employers who have amassed wealth as a product of exploitation,” and noted that poverty levels had increased by 20 per cent since the enactment of the hourly employment law.

Second, on the 2^nd May [2022], the new government repealed a law that authorised self-governing economic zones known as ZEDEs. ZEDEs operate as privately-owned and autonomous cities which serve as special investment districts. Banks and corporations active in ZEDEs appoint their own administrative officials, mostly from the United States, and it is they, rather than the Honduran government, who determine the regulations for taxation, courts, policing, education and healthcare for residents. In 2013 the Honduran Constitution was amended to legitimise ZEDEs despite the fact that they clearly undermine national sovereignty and treat Hondurans as disposable. President Xiomara Castro described the repeal as recovering Honduran sovereignty.

One such ZEDE is called Prospera and is located on a 58 acre site on the island of Roatán. Its US backers have said that they intend to proceed with the ‘development’.

[1] Former Honduran President Juan Orlando Hernández (JOH) has now been extradited to the United States accused of drug trafficking and firearms use.

A lawsuit over toll booths in Honduras shows how corporate trade policies make life unlivable in poor countries — and send people fleeing north.

By: Jen Moore & Karen Spring

October 3, 2024

https://otherwords.org/highway-robbery-how-bad-trade-policies-make-life-unaffordable/
Jen Moore is an associate fellow of the Institute for Policy Studies. Karen Spring is the Tegucigalpa-based coordinator for the Honduras Solidarity Network. They are co-authors of the new report ‘The Corporate Assault on Honduras’. This op-ed was distributed by otherwords.org . Other Words is a free editorial service published by the Institute for Policy Studies. We are grateful to Jen, Karen and OtherWords for their permission to include their summary article in this website.

************

Many of us know the pain of paying steep tolls, especially when a turnpike is taken over by a private company.

Now imagine you live in one of our hemisphere’s most impoverished countries. Do that and you’ll get a glimpse into how unfair trade deals help make life unlivable in many countries — and force countless people to seek a living in countries like the United States.

When a private company suddenly put up toll booths in the middle of a taxpayer-funded highway, local residents in El Progreso, Honduras were furious.

They knew the new fees would also hike the price of food, bus fares, and their daily commutes — and that making it in their country, where roughly half of the population lives below the poverty line, was going to become unbearable.

So local businesses and residents joined forces to stop the company from charging fees. For 421 days, starting in 2016, the Angry Citizens Movement stood night and day — even on weekends and holidays — at the ‘Camp for Dignity’ along the highway. With handwritten signs and chants, they urged their neighbours not to pay. Even after facing tear gas, police repression, and threats, the movement persisted and expanded.

Eventually, they won — but not without consequences.

At the end of 2017, with the 24-hour camp still in place, the U.S.-backed President Juan Orlando Hernández managed to get reelected, even though presidential reelection is illegal in Honduras and there was widespread evidence of fraud. Mass protests lasted for weeks and the toll booths were burned. The company’s contract was finally cancelled in 2018 amid accusations of corruption.

Now, the private toll booth operator — backed by big U.S. banks, including JP Morgan Chase Bank and two Goldman Sachs funds — is suing Honduras through a process called international arbitration. They’re claiming $180 million, more than four times what the company reportedly invested.

It doesn’t matter that the project lacked public support, that the government institution that negotiated the contract was shut down under a cloud of corruption, or that now former President Hernández, who struck the highway deal, was convicted in the U.S. for drug trafficking earlier this year. What matters is the profit.

Lawsuits like these are only possible because of exclusive privileges for foreign investors found in many international trade agreements, investment laws, and contracts like this one. Under this ‘Investor State Dispute Settlement’ system, foreign investors can sue governments for losses and future claimed profits over decisions they believe affect them.

Currently, Honduras faces at least $14 billion in claims from foreign and domestic corporations. That’s equivalent to roughly 40 percent of the country’s GDP in 2023 and nearly four times its public investment budget for 2024.

In our new study into this avalanche of claims, we found that the majority of investors are revolting against Honduran efforts to reverse or renegotiate corrupt deals struck under Hernández, which were often damaging to the public interest and local communities.

And if these investors succeed, the economic burden on the country will only deepen the displacement crisis driving Hondurans to migrate north.

The blatant injustice of these corporate claims is increasingly recognized at the international level. The former UN Special Rapporteur for human rights and environment, David Boyd, has called them “a catastrophe for development.” Notably, the U.S. recently removed these corporate privileges in its trade relations with Canada.

Now it’s time for the U.S. to end these privileges in its other trade agreements including with Central America — and not sign any more that include them. That would be a good first step toward respecting the efforts of Hondurans and all people to live and prosper in their own countries.

Institute for Policy Studies and Transnational Institute, 3 October 2024, ‘The Corporate Assault on Honduras’, by Luciana Ghiotto, Jen Moore, Aldo Orellana López, Karen Spring, Manuel Pérez-Rocha

Miami-based investors are suing Honduras after their own false promises left families picking up the pieces.

By Marcia Perdomo | November 24, 2025

Online: https://fpif.org/u-s-backed-housing-scandals-threaten-to-rip-off-honduras-and-panama/

We are grateful to Jen Moore of Presente-Honduras for making this article available to us.

A pair of Miami-based investors whose social housing projects in Honduras and Panama received U.S. development financing are now using exclusive trade provisions to sue both countries. While little is yet known about their claim against Panama, the Hondurans who were supposed to benefit from more affordable housing are feeling duped and fighting to retake control of their community.

In 2010, U.S. company Inter-Mac marketed the Castaños de Choloma social housing project as a safe, low-cost housing in a non-flood zone with insurance against natural disasters. The housing project was jointly undertaken by Inter-Mac and construction company Hola Realty with a $70 million loan from the U.S. Overseas Private Investment Corporation (OPIC, the predecessor to the Development Finance Corporation or DFC).

But 10 years after the homes were built, midway through the COVID-19 pandemic and despite promises that the homes were built in a non-flooding zone, families were flooded out following back-to-back hurricanes Eta and Iota in 2020. Residents never received any compensation for the damages.

After the community began taking action to take management of Castaños into their own hands, to seek redress, and annul the company’s environmental permits for violating due process and human rights, two of the U.S. investors involved — Juan Carlos and Ernesto Argüello of Miami — launched a suit in May 2023 against Honduras at the World Bank-based International Centre for Settlement of Investment Disputes (ICSID). They’re demanding $100 million, plus $2 million in “moral damages,” as detailed in the report The Corporate Assault on Honduras. Few details have been made public about the grounds for the investors’ claim.

Their claim is possible thanks to special provisions in the Free Trade Agreement between the U.S. and Central America (CAFTA-DR) that gives transnational companies unilateral recourse to sue governments when they believe their investments have been harmed by public interest laws or regulations, court decisions in favour of community rights, or other measures.

But it was low-income families in Castaños de Choloma who paid a high price.

Reina Castellanos, who has lived in Los Castaños for 14 years, said that flooding from the 2020 Eta and Iota storms took them by surprise because when they bought their homes they were assured that the area was safe from flooding. Then, after the flood, the insurance policy they had paid for was never disbursed and Inter-Mac never explained what happened to the money.

Given the company’s abandonment, negligence, and deceit, Castellanos questions the arbitration claim against Honduras. “They couldn’t even manage to clean up the garbage that was leftover after the floods. How dare they sue the government now if it isn’t them who were harmed. They didn’t face the harm, rather it was us as a community,” she said.

With regard to the $2 million that the Argüellos are claiming in “moral damages” from Honduras, Castellanos said that she does not understand what damage they could be referring to. “We were the ones who were harmed and swindled… They never gave us even minimal consideration or ever showed up in the community.”

Pedro Mejía, a lawyer who has worked for the local firm Studies for Dignity (Bufete Estudios para la Dignidad) that represents the people affected by Inter-Mac and Hola Realty, believes the company’s claim before ICSID is arbitrary.

The claimants argue that the state did not guarantee their investment in Honduras. According to Mejía, however, the company “engaged in multiple illegalities, such as building houses without the corresponding environmental permits and basing their investment on a fraudulent promise that the houses would not flood, despite being located in a flood zone, according to official reports of which they were aware.”

Threats and Neglect

Faced with the indifference and abandonment of the company after the flooding, the Castaños Board of Trustees has sought to take control of their community and to organise their own local government to manage water and solid waste collection services, as well as to build mutual support among neighbours.

“We see a lot of indifference, even from the current authorities,” said Carlos Velásquez, president of the Castaños Board of Trustees. “Castaños has survived very much thanks to the contribution of residents themselves. What we have done” has been “without the support of any state [or municipal] government.”

Initially, Velásquez says that he and other colleagues faced threats to their lives for their efforts. He blames municipal authorities, including former Choloma mayor Leopoldo Crivelli, as well as Inter-Mac. Crivelli was mayor of Choloma for 16 years and allegedly granted operating permits to the company despite its environmental license having expired.

Crivelli’s administration was controversial and has faced several judicial processes without conviction. One involves the overvaluation for more than 7.5 million lempiras (roughly $300,000) of a piece of land that was to serve as a municipal landfill. He was also named during the New York trial against drug trafficker Geovanny Fuentes for his close relationship to the accused (since sentenced to life in prison) and for having helped facilitate the release from jail and return of confiscated money to someone working for the Los Cachiros cartel.

Among the threats made against members of the Castaños Board of Trustees, a woman who was participating in community assemblies was approached by a man on a motorcycle who knew that her daughter’s father had already died and who threatened that, if she continued to attend the meetings, the girl would lose her mother as well. On another occasion, a board member had to take refuge in a police post when two motorcycles chased him. For his part, Velásquez learned that, at one point, he was on the hit list of one of the main gangs in the area.

But the community fought back.

Between November 2021 and February 2022, the Board of Trustees, with the help of Mejía’s firm, filed several complaints over efforts on the part of the company to try to illegally evict families and for restricting access to potable water in the community as retribution against them. On August 30, 2022, the San Pedro Sula Prosecutor’s Office reported that an investigation had been opened into the companies Intermac S.A. de C.V. and Hola Realty S.A. de R.L. “for a possible crime of ongoing fraud due to alleged poor construction of homes.” The outcome of this investigation is not known.

For the last few years, community representatives and their lawyers say that the company has mostly abandoned Castaños and that their main challenge is now to gain formal recognition from the municipality of Choloma.

The Case Against Panama

Despite transparency provisions in CAFTA-DR, only one procedural decision has been published so far in the case Juan Carlos Argüello and Ernesto Argüello v. Republic of Honduras (ICSID Case No. ARB/23/17).

The efforts to request a copy of the investors’ notice of arbitration from the Solicitor General’s office have been denied based on confusing confidentiality arguments. Lawyer Pedro Mejía also states that the Solicitor General has not approached the victims in the Castaños housing project “in order to understand the rights violations they have faced from Inter-Mac and to build common cause.”

During the September 2024 launch of The Corporate Assault on Honduras, Aldo Orellana, a member of TerraJusta, underscored the importance during international arbitration processes that the state share information with affected communities, in order to build a common front as the case proceeds. “It appears that the authorities are not sharing information on the cases, they are not listening to the communities’ concerns and given this, well, it is unclear what level of transparency the government is seeking or not,” said Orellana.

While the case against Honduras lurches forward, on August 11, 2025, CIADI registered  a second arbitration case from the Argüello brothers, this time against Panama under the terms of the U.S.-Panama Trade Promotion Agreement.

Little documentation is available about this claim. It is known, however, that the Argüello brothers were involved in another social housing project in Panama that received a $7.5 million loan from OPIC (now DFC) in 2015.

Based on press reports, this project was shut down following allegations of possible fraud by people who say they were tricked into investing in houses that the company sold multiple times. When interviewed by Panama’s Telemetro news program about the allegations, Ernesto Argüello said he had been deceived, claiming that people had presented false documents and blaming an employee for what had happened.

Exiting ICSID: An Important Step, But Not Enough

In response to an avalanche of cases against Honduras since 2023, the Central American country withdrew from the World Bank tribunal, ICSID, in 2024. But experts say the move is not enough and that the system that enables Investor State Dispute Settlement, or ISDS as it is known, should be questioned as a whole.

Speaking in Honduras in August, economist and University of Columbia professor Jeffrey Sachs made damning remarks against ISDS and the institutions that enable such claims. Rather than promoting sustainable development as is their mandate, he condemns multilateral agencies like the World Bank and others for facilitating ISDS claims that he calls an abuse and a means to extort countries like Honduras.

Of a total of 21 known claims arbitration that have been brought against Honduras, 14 remain pending for $9.9 billion, or roughly 27 percent of the country’s GDP in 2024.

Luciana Ghiotto from the Transnational Institute, co-author of the report The Corporate Assault on Honduras, says that it is not enough to withdraw from ICSID given that it is only one of a number of global arbitration centres to which investors can bring claims. The protections afforded to investors in free trade agreements, bilateral investment treaties, as well as Honduras’ 2011 Investment Protection and Promotion Law and various contracts enable investors to sue Honduras in any arbitration forum in the world, not just ICSID.

Demonstrating this, in May 2025, two companies brought new claims against Honduras, one under the United Nations Commission on International Trade Law (UNCITRAL) arbitration rules and a second under the ICSID Additional Facility arbitration rules.

To avoid further arbitration, Ghiotto proposes refraining from signing more free trade or investment treaties, including by conducting a comprehensive audit of treaties — as Ecuador has done previously. She further emphasized the urgency of renegotiating or terminating the contracts that contain ISDS and are unfavourable to Hondurans, as well as making reforms to the Law for the Protection and Promotion of Investments of 2011 that provides access to ISDS for all investors in Honduras regardless of their country of origin.

This article was adapted from an earlier version published in Spanish by the Honduran outlet Criterio.

Online: https://fpif.org/u-s-backed-housing-scandals-threaten-to-rip-off-honduras-and-panama/

In 2000, Daniel W. Drezner of the University of Chicago published an article entitled ‘Bottom Feeders’[1] in which he accused the critics of EPZs of a “lack of supporting evidence” for their arguments, of peddling myths and of simply being wrong. The grounds for his arguments are summarised below.

There is a lack of supporting evidence that the reduction of controls on trade and capital flows has forced a generalised downgrading of labour or environmental conditions;

“Multinationals often pay higher-than-average wages in developing countries in order to recruit better workers” (p.65);

“Several nations, including the Dominican Republic and the Philippines, actually … established labour standards in their EPZs when none previously existed” (p.66);

“Even developing countries … have liberalised their foreign investment laws while simultaneously tightening environmental regulations” (p.66);

“And even in the absence of uniform national enforcement, many multinational corporations have embraced self-monitoring programmes for the environment – an effective complement to government regulations” (p.66)

“Nongovernmental organisations, corporations, politicians and academics use the race to the bottom as an excuse to peddle their policy wares” (p.68).

[1] Daniel W. Drezner (2000) ‘Bottom Feeders’, at http://drezner.foreignpolicy.com/

A report by the International Confederation of Free Trade Unions (ICFTU)[1] states that the supposed benefits of EPZs are limited for a number of reasons:

• work tasks involve simple processing operations, requiring limited and non-transferable skills;
• most jobs are poorly paid and of low quality;
• only a small percentage of foreign currency earnings remain in the country;
• investments are insecure and can easily re-locate to another country offering a more attractive
• investment climate, and;
• materials are often imported rather than sourced from the local market.

The ICFTU report also suggests that: “Serious questions remain as to the real benefits of EPZs to development. By its very nature, EPZ investment is precarious, and likely to leave the country at a moment’s notice if a cheaper, more compliant workforce is on offer somewhere else.”[2]

Similarly, John Madeley suggests that the main beneficiaries of EPZs are the transnational companies, rather than the host countries: “They have a record of facilitating exploitation and make a very limited contribution to the overall development of the countries in which they are located.”[3]

A further criticism of EPZs as a development mechanism, and one widely publicised by the NGO sector, relates to the poor working conditions and labour rights violations which occur in the factories situated in the zones, such as the maquilas in Central America. The ICFTU report states that governments offer a weak framework of social and employment rights as part of the incentive package to attract investors, either explicitly through exempting them from labour laws, or passively, through the lack of regulation or enforcement of these laws.[4]

[1] International Confederation of Free Trade Unions (2003) ‘Export processing zones – symbols of exploitation and a development dead-end’ (September p.5) http://www.icftu.org/www/pdf/wtoepzreport2003-en.pdf (accessed 24 August 2009)
[2] Ibid.
[3] Madeley, J. (2008, second edition) Big business, poor people: How transnational corporations damage the world’s poor, Zed Books, London (p.153)
[4] Op.cit (ICFTU)

Andria Myriamthopoulos and Martin Mowforth, 2009

Pollution control remains a dream in developing countries. Companies that produce goods will avoid production in countries with strict environmental regulations and will try to produce their goods in countries with less strict environmental regulations. Tietenberg (2007)[1] and Tietenburg and Lewis (2009)[2] explain that this is because they will face the problem of market share loss.

This is a good reason for countries to accept and follow lower environmental standards; which is known as the Race of the Bottom. Developed countries ‘force’ developing countries to keep environmental standards low for their economic benefit. This is not only happening in developing nations but also in weak developed countries whose economy depends mainly on the market flows of stronger countries such as the UK.

[1] Tom Tietenberg, Tradable Permits in Principle and Practice. Moving to Markets: Lessons from Twenty Years of Experience. J. Freeman and C. Kolstad. New York, Oxford University Press, 2007: 63-94.
[2] Tom Tietenberg and Lynne Lewis (2009) Environmental Economics and Policy, New Jersey: Prentice Hall.

The Better Work Programme of the International Labour Organisation (ILO) and the World Bank’s International Finance Corporation (IFC) was launched in 2007 following the success of the ILO’s Better Factories Cambodia Project. In July 2011 Nicaragua became the first Latin American country to join the programme which is supported financially by the US Department of Labour and is implemented locally with the support of the Nicaraguan government.

In essence, the programme focuses on improving labour standards and on promoting the business case for better working conditions. It has three major components:

• Compliance with ILO Core Labour Standards and national labour laws. Auditors evaluate adherence to these standards.
• Worker-Management Cooperation. In the case of Nicaragua, tripartite talks take place every six months between the government (Ministry of Labour), the factory owners and unions to negotiate the minimum wage, meal subsidies, health care and working conditions.
• Social dialogue for all involved. This includes the international buyers as well as the government, employers, unions and workers and, amongst other things, leads to improvements in compliance with social standards which in turn lead to improved competitivity.

The weekly Nicaragua News sheet claimed that “before 2007 the word maquiladora was a synonym for labour abuse. It was difficult for workers to organise unions and those who tried were often fired. Today most factories are unionised and there are more government inspectors inspecting more frequently and issuing more fines.”[1] An earlier Nicaragua News sheet cited Luis Barboza, formerly of the Sandinista Workers Central (CST), who explained that “before [1990 – 2006], there was an alliance between the corporations and the government to destroy unions and investment came at the cost of a decline in labour conditions. Now the situation has changed.”[2]

Companies participating in the scheme include VF Corporation, Levis, Tommy Hilfiger, Wal-Mart, Gap, Gildan, Target Corporation, Sears, and J.C. Penney, amongst others.

[1] Nicaragua News (31 July 2012) ‘Labour conditions improve in Free Trade Zones’, Managua.
[2] Nicaragua News (2 August 2011) ‘Better Work Programme launched’, Managua.