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UN Factory Monitoring Group in Cambodia Plans to Name Names

After the tragic Rana Plaza factory collapse last April, Bangladesh became an object of intense international scrutiny, a surfeit of attention not always welcome. Cambodia is potentially facing comparable scrutiny now that a monitoring group has announced plans to aggressively publicize the failure of garment factories in Cambodia to comply with labor and safety standards.

The new program, Better Factories for Cambodia  (BFC), sponsored by the United Nations, begins work on September 27. Currently, the organization conducts safety audits of garment factories in Cambodia and sells them to businesses who do or potentially would contract with them. It also makes public a report that summarizes the prevailing factory conditions in Cambodia but refrains from naming names.

Now, the BFC intends to take its inspections process a few steps further, publishing the names of factories that repeatedly fail a strict regimen of assessment that considers fifty-three different categories of appraisal. The BFC estimates that fifteen of the roughly 450 factories it currently oversees would qualify for that level of public disclosure.

The BFC’s new protocols have stoked considerable controversy in Cambodia. Sat Samoth, undersecretary of state at Cambodia’s Labor Ministry, complained the public disclosures would violate the existing relationship between the UN International Labor Organization and Cambodia, impinging upon the nation’s sovereignty. He also claimed the program would be counterproductive: “If we disclose the names of the factories, and then the buyers stop purchasing the products, what will happen to the workers? They will lose their jobs.”

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The secretary general of the Garment Manufacturers Association in Cambodia (GMAC) angrily denounced the plan as “vigilante justice.” He argued that any practicable solution to Cambodia’s labor conditions had to be “demand driven.” He said, “Consumers talk, talk, talk. But at the end of the day, they just buy the cheapest thing on the shelf.”

Recently, Cambodia’s garment factories have suffered under the weight of heavy criticism for inadequate structural stability and safety. A recent report issued by the International Labour Organization’s Better Factories Cambodia program (BFC) purports to show that general condition of these factories has markedly declined since 2011. This is especially striking since the same study detected improvement int he eight years prior to 2011.

Jill Tucker, Chief Technical Advisor of BFC, said “Some of the non-compliance may be attributed to the industry’s rapid growth since 2011. Still, all stakeholders need to take stronger steps to halt the downward trend. If not, Cambodia runs the risk of forfeiting the advantages that accrue to a reputation for decent working conditions.”

Tucker went on to stress the study’s empirical rigor: “While 25 percent of the factories featured in the report are new, having had only one assessment, more than half have been monitored by the BFC at least five times. These factories have had many opportunities to correct areas of non-compliance.”

The BFC report discovered that more than 15 percent of the factories surveyed failed to maintain unlicked emergency doors during normal working hours, that 45 percent did not fulfill their legal obligation to conduct fire drills every six months and that 53 percent had key fire exits illegally obstructed.

Part of Cambodia’s problem has been accommodating breakneck economic growth, saddling it with inordinate pressure to absorb more business before its infrastructure can catch up to the new demand. Between 2012 and 2013, Cambodia increased the number of its factories by a hefty 8 percent to 412. This is partly due to the changing topography of sourcing created by the increasing expensiveness of China, once a prime destination for retailers and brands looking for bargain manufacturing.

Still, Cambodia continues to show signs of steady improvement in other areas. For example, minimum wage was recently raised $14 to $75, from $61. According to the BFC, a $5 health care allowance per worker was also instituted as part of the same legislation.

Cambodia, many argue, has been able to make some progress since blessed with a generally functional government. Recently, relentless public pressure was exerted on Cambodia’s factories to reverse the systematic lowering of the maximum wage by Monika Kaing. Kaing is not a private union leader or a spokesperson for some Western NGO; in fact, she’s a top executive for the Cambodian Garment Manufacturers Association (GMAC).

GMAC has cultivated a powerful reputation for workers’ advocacy. In fact, when Nike recently uncovered a brewing dispute between its factory workers and local management, it turned to GMAC for its expert counsel and intervention. Many argue that Bangladesh’s version of GMAC,  the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) commands neither the respect nor the trust enjoyed by its Cambodian counterpart.

And Cambodia also has the advantage that its garment factories ares imply harder to police. While its more than 40o factories is undergoing rapid expansion, testing the efficiency of its governmental oversight, Bangladesh has more than 5,000. The two Western consortia assembled to steward Bangladesh’s working conditions to acceptable levels covers barely 1,500 of them.

Also, Cambodia is under far less pressure to keep cost of business hyperbolically low since the expectations for pricing there are not as high as in Bangladesh. Finally, Cambodia’s economy is not quite as monolithic as Bangladesh’s, permitting it to also rely upon other, independent streams of revenue.

Some retailers that do business in Cambodia were quick to endorse the new BFC measures. A spokesperson for Wal-Mart said, “We know that transparency is vital to make progress in improving factory conditions throughout the global supply chain, and can only be accomplished by working with stakeholders across the industry.”

Other retailers expressed support more cautiously. H&M reported that its policy is to continue to use factories that suffer from compliance issues as long as there is a demonstrated effort to resolve them in the proximate future. Spokesperson Andrea Roos said, “H&M is aware of the challenges the factories in Cambodia face.”

The BFC was created in 1999, in concert with a new US trade deal that offered to lift strict quotas on garment imports if Cambodia noticeably improved its factory safety and labor conditions. However, the organization lost a good deal of its influence once that deal expired in 2005. The renewed emphasis on heightened levels of transparency is a strategy meant to recover some of  that leverage.

Many in the labor community are taking an uncompromising view of any resistance to participating in the new program. David Welsh, Cambodia director for the Solidarity Center, a non-governmental group linked to the AFL-CIO labor union, said that such resistance on the part of retailers and factory owners amounts to a “de facto admission that they either can’t or won’t monitor what’s going on in their factories and an admission that presumably, they suspect what’s going on doesn’t meet international labor standards.”