A Change of Guard

សូមស្តាប់វិទ្យុសង្គ្រោះជាតិ Please read more Khmer news and listen to CNRP Radio at National Rescue Party. សូមស្តាប់វីទ្យុខ្មែរប៉ុស្តិ៍/Khmer Post Radio.
Follow Khmerization on Facebook/តាមដានខ្មែរូបនីយកម្មតាម Facebook: https://www.facebook.com/khmerization.khmerican

Monday 27 May 2013

Cambodia: A rising star with a falling reputation?

By | 24 May 2013
Original article at just-style.
Mass faintings have been common in Cambodia, including those at Universal Apparel Cambodia (pictured) where 200 workers fainted in April 2011
Mass faintings have been common in Cambodia, including those at Universal Apparel Cambodia (pictured) where 200 workers fainted in April 2011
Cambodia's reputation as a standard-bearer for apparel workers' rights is wearing thin - and yet the country is a rising star when it comes to attracting foreign investment and increasing exports.
There are many reasons to deter brands and retailers from sourcing clothing in Cambodia.
The Kingdom has no local textile supply chain. Corporate social responsibility is more a question of paperwork than of really caring for workers' well-being and for the environment. And general education and productivity of workers is low, with primary school drop-out rates of 45.5%.
Reports of illegal strikes and mass faintings of exhausted girls abound - more than 2,100 faintings in 29 factories in 2012, and over 500 in five factories in the first quarter of 2013. And in the last week alone there have been two partial collapses at factories that have resulted in at least two deaths. 
Company turnover is high, with 62.5% of the 273 firms operating in 2009 having entered the industry after 2003, as is labour turnover (on average 20-25% per year).
The public infrastructure is deficient and the cost of electricity very high. Unofficial expenses to corrupt officials can cost large garment factories up to $20 dollars per month per worker.
According to Aon Hewitt's People Risk Index 2013, Phnom Penh, where most factories are located, ranks 127 out of 138 cities surveyed worldwide, which means that Cambodia's capital scores very badly when it comes to finding and retaining qualified people.
And yet...Cambodia is a rising star when it comes to garment exports.
In 2012, the country's garment exports to the EU reached US$1.217bn (+32.4%), putting it in 9th position among the EU's principal garment suppliers. With US$2.534bn in garment exports to the US in 2012, Cambodia is the US's number 7 supplier.

Investors are rushing in. According to the Council for the Development of Cambodia (CDC), 82 garment factories with a capital investment of US$499m were approved in 2012, as were two sock factories supported with US$25m, four textile manufacturers with US$9m and two glove factories with US$10m invested.
In comparison, in 2011, investments in 45 garment factories were worth US$205m.
It is not just investors from China, Taiwan, Hong Kong, Korea, Malaysia and Singapore who are moving in. The French Chamber of Commerce in Cambodia saw demand for its services triple in 2012 compared to 2011. Requests come mostly from French companies that are working in garments.
In February 2013, UK Trade and Investment opened an office at the British Embassy in Phnom Penh to assist UK companies doing business in Cambodia.
And the Federation of Indian Chambers of Commerce and Industry is convinced there are still opportunities like providing textile materials to Cambodia. By avoiding middle-men in regional hubs like Singapore, Indian textile suppliers could offer Cambodian garment manufacturers 8-15% lower prices, it says.
Ken Loo, secretary general of the Garment Manufacturers' Association of Cambodia (GMAC), recommends a "wait-and-see" attitude following a rise in the minimum wage from 1 May, from US$61 to US$80 per month.
He believes that higher minimum wages in other countries, combined with Cambodia's better market access, will encourage manufacturers to move to to the Kingdom. "If we didn't have so many strikes, the number would even be much higher," he says.
He admits that in future Burma/Myanmar will be a strong competitor. "But Myanmar needs time to build up infrastructure. It's about four years away from offering Cambodia real competition," he believes.
Better Factories Cambodia
The International Labor Organization's Better Factories Cambodia (BFC) factory monitory programme was created in 2001, with a mandate to improve labour law compliance and standards in Cambodia's garment factories, as well as to promote the sector internationally among buyers.
But a report published in February this year - 'Monitoring in the Dark', by the Stanford International Human Rights and Conflict Resolution Clinic in partnership with the Worker Rights Consortium - suggests that in many areas BFC has failed to address continuing serious labour rights problems in the Cambodian garment industry.
In particular, the report says that, during the 11 years of BFC's operations in Cambodia, there have been declines in wage levels and basic job security, including widespread use of temporary contracts for workers, union intimidation and excessive overtime.
However, BFC's periodic monitoring reports paint a picture that keeps stakeholders happy, including BFC staff, the American Government (which until 2005 linked annual quota expansion of Cambodia's garment exports to the US to improvement in the labour rights environment), the CSR-sensitive brands and retailers sourcing from Cambodia, the Cambodian government, the local garment manufacturers and their association GMAC, and even some NGOs.
This contrasts with the poorly made, but far more realistic, reports by Cambodian unions, which highlight the underpaid and overstretched Cambodian workers.
Brands invited to contribute financially
Also of interest is the changing view on supply chain responsibilities.
In March 2013, while GMAC was negotiating hard with labour unions about a new minimum wage, secretary general Ken Loo said: "One thing GMAC is flexible on is the financial contribution of brands when it comes to paying wages. We have no problem paying the workers anything - so long as the extra money is coming from the buyers."
Also the effect of recent skills development schemes on the productivity of the Cambodian garment industry should be assessed.
Mona Tep, director of leading player SHRM&P, which evolved out of the Garment Industry Productivity Centre funded by USAID, points out that two-thirds of Cambodian garment firms have replaced foreign, often non-Khmer speaking Chinese workers such as supervisors, with much cheaper Cambodian personnel.

1 comment:

Anonymous said...

By listening a TV discussion last night in one of the country in Europe, we feel that the salary of the factory workers in Bangladesh are far behind our worker in Cambodia.

It sound we are better than some other countries. Of course the level of the knowledge of our factory worker are still need a lot of learning and have more experiences.

-What we in the mean time needed are the upgrading the working process, the working quality, the environment, the social and protecting system in most of the factory in Cambodia.
-Taking care and learn to know the family background of our Khmer factory worker. Teach them to use the right way and make good decision, before go to the street.

Their life is our and also the life of our country.