CNMI

Virus inflicts further pain on IPI

Imperial Pacific International says it’s committed to completing its project on Saipan, even though it continues to struggle on multiple fronts, including tax bills, worker shortages and now the fallout from the Covid-19 virus.

"Today the new coronavirus outbreak is impacting the world, the CNMI tourism industry, and our community at a speed which has already outpaced the SARS epidemic of 2003. Impact on travel demands throughout all of Asia began weeks ago and although our company is faced with the difficult decision to mitigate these challenges, IPI still holds true to the CNMI and its people,” the company said in a statement.

“Our company has struggled, our employees have struggled, and our ability to create a steady stream of income has suffered. Throughout all of these unexpected adversities, IPI did its best to honor the commitments that it made to the CNMI back in 2015,” it added.

The IPI statement also emphasized its contributions to CNMI, though offering some numerical figures that critics were hesitant to believe.

“Since the award of the casino license, IPI created thousands of jobs and generated countless business opportunities for hundreds of local businesses. To date, IPI has invested around $1 billion in the CNMI and paid over $300 million in taxes and fees to the government.”

It claimed it had “lost over $500 million accumulatively.”

The Hong Kong-listed operator was scheduled to have finished the project 36 months from the awarding of the license, but was granted an extension in 2018 until no later than February 2021.

Part of the delay has been caused by a shortage of labour, with the government clamping down on a key form of visa under which its workers entered the Commonwealth.

As of early this year, the company again warned that it did not have sufficient labour.

IPI vice president for construction Eric Poon says the company is still waiting on the approval of “hundreds” of H-2B visa applications made in 2019, which is key to completing construction of its hotel tower on time.

Poon said that the resorts’ hotel beachfront villas and construction of the North Wing are now completed, with only furniture installation and building inspection in progress.

However, Poon told casino commissioners that the delay in the H-2B visas could cause a “potential delay of the ongoing hotel tower construction phase and other venues,” and added that the current workforce of 572 construction workers would not be able to meet targeted deadlines.

Poon said they need about 1,000 construction workers to meet the completion deadline of February 28, 2021. “This is our only concern, and I hope this can be addressed soon,” he added.

While worker shortages may be the only concern on the development side of the project, there are significant question marks over revenue. Tourism slumped in fiscal year 2018 to about 607,000 and in fiscal year 2019 to less than 425,000 due to the impact of Typhoon Yutu.

That figure will take a further hit from the coronavirus, with the governor of the islands banning all arrivals from Mainland China for a period of 30 days from Jan. 29.

Over recent years the tourism mix to the CNMI has shifted, with a decline in visitors from Japan and Korea and growth in tourists from China.

Throughout all of these unexpected adversities, IPI did its best to honor the commitments that it made to the CNMI back in 2015.

In its 2019 interim report, an independent auditor noted that during the 6-month period ending June 30, 2019, the casino operator incurred a net loss of almost HK$1.9 billion ($240 million), which may cast significant doubt on the company’s ability to continue in business.

The operator did manage to negotiate an accord with the government on taxes, agreeing to pay about US$18 million in outstanding taxes, US$10 million of which has just been paid and the balance of about US$8 million by the end of March.

The CNMI Department of Finance had previously stated that the owed amount was about US$30 million, but IPI appears to have been successful in having this amount reduced through its claims that it had overpaid its taxes in previous years.

But as trouble for IPI subsided in one quarter, it rose in another, as the firm’s new lawyer David Banes warned that a US$5.6 million lawsuit filed by Pacific Rim Development, a construction-related firm, against IPI could “lead to the shutdown of the casino, with hundreds of workers losing their jobs, and sending a far-reaching ripple effect through the entire CNMI’s economy, which relies almost exclusively on tourism.”

IPI settles case with former VIP host

A CNMI district court has dismissed a lawsuit filed by a former Imperial Pacific International VIP hostess against her company after the two parties reached a settlement, local media reports.

Shirlene Loh was a former VIP services host from October 2015 to August 2016. Loh said she worked 14 hour days, without a break, but IPI failed to give her the minimum wage rate and OT as required by the labor standards act. She also alleged that her share of tips was taken by the VIP services supervisor.

However, last month, both IPI and Loh filed a notice of settlement and will be filing a dismissal as soon as the documents are completed.

Guam cockfighting ban in force

Guam’s cockfighting ban came into effect in December, bringing down the curtain on a gruesome but decades-old Guamanian custom.

According to a recently-released Animal Wellness Foundation and Animal Wellness Action survey, public opinion is ready for the move. It found that only 7 percent of Guamanians have been to a cockfight in the last year, and only 21 percent believe that they should continue.

This stands against 60 percent of those surveyed who support the federal ban on cockfighting. When the ban takes effect, those who sponsor or exhibit birds in a cockfight face a fine and a maximum prison term of five years. Attending a cockfight will be punishable by a fine and up to one year in prison.

Among other things, some commentators believe that cockfight betting has been a venue for money laundering in Guam.