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The US and Mexican governments have agreed on a package of remediation in relation to the first complaint filed against a garment factory under the US-Mexico-Canada Agreement’s (USMCA) Rapid Response Labor Mechanism. The remediation includes the introduction of policies and guidance setting out the facility’s commitment to freedom of association and collective bargaining, a complaints mechanism, training, and ongoing monitoring by trade unions.

Context of the complaint

  • The complaint is related to freedom of association and collective bargaining violations at the INISA 2000 Aguascalientes garment factory in Mexico. It was brought to the US government by trade unions Frente Auténtico del Trabajo and the Sindicato de Industrias del Interior under the US-Mexico-Canada Agreement’s (USMCA) Rapid Response Labor Mechanism. The trade unions are not affiliated with IndustriALL.
  • According to the complaint, the garment factory
    • Intervened in internal union activities
    • Discouraged workers from attending union assemblies
    • Coerced workers to accept the terms of a collective bargaining agreement proposed by the company.
  • The INISA 2000 Aguascalientes sewing factory is part of a larger denim production chain. Around 95% of its production is exported to the US and the facility employs approximately 700 workers. It is a wholly owned family business based out of Kentucky, US. The factory is not listed on Open Supply Hub.
  • The complaint is the first relating to the garment sector. All other cases filed through the Rapid Response Labor Mechanism have concerned the industrial manufacturing, automotive and mining sectors.
  • Mexico’s textile and apparel industry is now one of the country’s strongest industries and is a leading supplier of denim goods for the US market. The USMCA, Covid-19 and global supply chain challenges have resulted in increased garment and textile production in the country as companies adopt “nearshoring” strategies and seek to shift their sourcing from China.

Investigation and remediation

  • Following the filing of the complaint, the US government conducted an investigation and found sufficient credible evidence of coercion and interference by the company. We believe that the investigation was conducted by the US government’s Interagency Labor Committee for Monitoring and Enforcement Procedural Guidelines. This is based on our knowledge of previous cases investigated.
  • On 8 August, the US and Mexican governments agreed on a package of remediation, which includes the following actions to be completed by 10 November 2023.
    • Relocation of the union’s office and individuals employed to perform union work to a different work area separate from Human Resources
    • Introduction of neutrality statements and company guidelines. These set out the facility’s commitment to freedom of association and collective bargaining. The neutrality statements and company guidelines should be publicly accessible on the facility’s website and posted in prominent locations throughout the facility
    • Adoption of a zero-tolerance policy for violations of the neutrality statements or guidelines. Employees who violate the policy should face consequences such as dismissal from the company
    • Adoption of a facility-level grievance mechanism enabling anonymous and confidential complaints by workers and a non-retaliation policy for those filing a complaint
    • Periodic inspections by trade unions with reference to the remediation package and compliance with Mexican laws related to freedom of association and collective bargaining.

About the USMCA

  • The USMCA is a trade agreement between the United States, Mexico and Canada and includes enforceable labour obligations. The USMCA Rapid Response Labor Mechanism allows the US or Mexico to take enforcement action if they believe that workers are being denied the right of free association and collective bargaining in factories in Mexico.
  • Complaints filed under the Rapid Response Labor Mechanism have a track record of being successfully resolved. Previous cases were allresolved within months of being filed and, where applicable, contained financial compensation covering back pay and severance pay.
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