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Why Cambodia is not Bangladesh

Following the Rana Plaza tragedy, Bangladesh’s garment factories and labor conditions have magnetized the scrutiny of the Western press, often to the exclusion of other small, developing nations also struggling to stay afloat in a modern economy. Cambodia has certainly received considerably less attention, though in many ways it faces similar challenges.

For example, Cambodia’s garment factories have also 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 in the 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 unlocked 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.

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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.

One important difference between Cambodia and Bangladesh, many argue, is that Cambodia is blessed with a much more proactive and less dysfunctional 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 are simply harder to police. While its more than 400 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 the 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.

While Cambodia strains to maintain its hard won reputation for factory and labor compliance, many companies are reassured by its bureaucratic competence and historical commitment to future  improvement. Bangladesh’s factories are not so well superintended, and both the challenges its factories face, and the pressures they bear, are far greater than anything Cambodia currently endures. It has had its share of missteps lately, but Cambodia is not Bangladesh.