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ILO Releases Report on the State of Cambodia’s Garment Industry

The International Labour Organization’s (ILO) Better Factories Cambodia (BFC) has released a new report providing an overview of working conditions in Cambodia’s garment and footwear industries, following a tumultuous year for the sector.

In the Thirty-First Synthesis Report, which surveyed factory conditions and respect for worker rights in 362 garment factories and nine footwear factories between May 1, 2013 and April 30, 2014, found that compliance with legal requirements has both advanced and declined.

Over the last year, the garment industry saw an increase in the incidence of strikes, an industry-wide wage protest and an increase in strike-related violence, drawing negative media attention for Cambodia’s leading export sector. At the policy level, the country saw two minimum wage increases, an effort to revamp the government’s wage setting mechanism and a renewed push for trade union law.

According to the report, BFC, a project centered around improving the lives of Cambodia’s garment workers, found a slight increase in correct payment of wages this year, but at the same time, noted the number of factories experiencing strikes is now 24 percent, up from 19 percent in last year’s report and just 8 percent in 2011.

ILO Cambodia

Cambodian garment workers have staged ongoing protests against what they consider unfairly low wages, and their walkouts have, at times, caused delays in factory production and halted transportation in the country. Until recently, wages in Cambodia were determined arbitrarily, but the country’s wage council agreed this month to raise rates as of Jan. 1, 2015 and regularly at the start of each year.

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Currently, Cambodia’s monthly minimum wage for garment workers is $100. The LAC raised the wage from $80 to $95 late last year, but since unions had been seeking a hike to $160 monthly, workers took to the streets to express their displeasure. The strikes turned deadly in January when military forces killed five protesters and wounded at least 40. In order to quell the unrest, the Cambodian government offered to raise the rate to $100 per month in February 2014, marking the first time the minimum wage rose above its 2001 level. The new wage rate set to take effect Jan. 1 has not yet been settled.

In terms of compliance with worker health and safety, the report noted an 8 percent increase in factories providing protective equipment to workers. Two-thirds of the factories covered in the study report excessive heat levels, but BFC noted an 8 percent increase in factories taking steps to reduce indoor temperatures.

Cambodian factories surveyed showed improvement in limiting overtime to two hours per day, with 18 percent complying with the requirement. Although up from 15 percent the year prior, the level of compliance remains considerably low.

Perhaps the biggest concern in garment factories in light of recent tragedies in Bangladesh, fire safety and emergency preparations remain key issues in Cambodia’s garment industry. More than 20 percent of factories were found to still have locked emergency exits.

Mandatory overtime was the top non-compliance issue, according to the report, with 95 percent of factories found to have employees working extra hours, and 82 percent did not limit overtime to just two hours. At 72 percent of the factories, workers had no chairs to rest on, and 69 percent had no access to cups for drinking water. Sixty-five percent of factories were found to have unacceptable heat levels, and access paths were not free of obstruction at 62 percent of facilities surveyed.

BFC did note improvements in factory-floor relationships, with a 12 percent increase in workers reporting being treated with respect, a 10 percent increase in protective masks provided to workers and a 9 percent increase in better handling of annual leave requests. Nearly 7 percent more workers cited being better informed about their workplace, and 5 percent more said they can more freely express concerns about health and safety issues.

Addressing the root causes of the Cambodian garment industry’s turbulent year certainly go beyond the scope of this report, according to BFC, but the organization outlined steps stakeholders can take to aid in bettering conditions:

  • Royal Government of Cambodia can make effective use of numerous enforcement mechanisms to uphold the provisions in the labor law, especially in factories with low compliance.
  • Employers have an obligation to improve working conditions even in the absence of effective enforcement of legal requirements. GMAC can foster a culture of compliance among their members.
  • Trade Unions should strengthen their understanding of and commitment to the responsibilities of unions–including following strike procedures. Unions are in a position to use the data in this report as well as the information recently made available through transparent reporting to engage management and/or employer organizations in dialogue and collective bargaining to find solutions to factory- and industry-level problems.
  • International buyers sourcing from Cambodia wield considerable influence in the factories in which they source. Their willingness to engage suppliers using this report and data from the project’s Transparency database can help drive improvements in factories and thereby improve working conditions and the industry’s reputation globally.