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Imperial Pacific struggles to turn the corner

The plight of its foreign workers has put pressure on Imperial Pacific International as never before, with even the US Department of Labor recently demanding action from the court, including the possible arrest of Chairwoman Cui Li Jie.

In the latest turn, US District Court for the NMI Chief Judge Ramona Manglona has ordered IPI to satisfy the remainder of the consent judgment with the Department of Labor by March 1, threatening that otherwise she will appoint a receiver to gather and liquidate IPI’s assets.

Specifically, she ordered IPI and Chairwoman IPI chair Cui to pay the current employees’ remaining back wages, with the balance of the consent judgment coming to US$1,183,000. She furthermore has ordered the firm to create an escrow account to cover future employee salaries in the amount of US$800,000.

Beyond that, the judge rejected IPI’s request to lift her stop work order on construction activities, though non-construction employees such as administrative personnel, security, and staffers preparing meals may return to work.

It is now beyond question that IPI will fail to meet its February 28 deadline to complete construction of its casino resort, which will be yet another breach of the firm’s casino license. Once again, there seems to be an expectation that the local government will continue to do what it has repeatedly done, which is to fail to hold IPI accountable and to amend the agreement, or else ignore the fact that the firm is breaching the agreement and carry on with business as usual.

But if the CNMI regulatory authorities have proven to be a toothless tiger, that’s not necessarily the case for the federal courts, and thus IPI is indeed in deep trouble.

Former CNMI Senator Ray N. Yumul, the new chief executive officer for IPI, is taking the line that the main problem supposedly lay in the fact that the local government put unreasonable demands on IPI, so its failure was foreordained.

“It should have just been a simple bid—highest bidder takes the license, builds the building,” Yumul told the House Gaming Committee, arguing that making the firm contribute to the Community Benefit Fund was “ridiculous.” He added that the local government needed to look to its own exorbitant demands on IPI and then, “you’re going to see how IPI went from a promising industry to a struggling one today.”

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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