Skip to main content

Cambodia’s Factory Count Grew By 121 Last Year

Cambodia made it out of 2020 with mixed results.

While 100 factories shuttered as a result of pandemic-related factors, 221 new ones opened. At year’s end, the number of facilities totaled 1,853, providing employment for 900,000 workers, according to Secretary of State Heng Sokkong.

“[Despite] the Covid-19 crisis, [and] negative [impacts] around the globe, [investor confidence in] the Cambodian government resulted in many factories being opened,” Sokong told the Khmer Times.

In 2020, 178 new projects with an investment capital of $4.1 billion were approved by the Council for the Development of Cambodia. Most of them were involved in garments and textiles.

“Conditions in the labour sector are gradually normalizing in the beginning of this year,” Ministry of Labour and Vocational Training spokesman Heng Sour told the Phnom Penh Post. “The entire garment sector in Cambodia can return to normal if the Covid-19 crisis ends.”

To say that Cambodia’s $7 billion garment sector, the nation’s largest employer with 800,000, predominantly female workers, has had a tough year would be an extreme understatement.

The industry has had to weather the economic fallout of the pandemic, including declining orders and what one insider called “quite ridiculous payment terms.” In October, the country was beset by torrential floods that damaged 79 factories and forced at least 40 of them to temporarily halt operations. Cambodia faced another setback when the European Union partially withdrew its Everything But Arms privileges over what the trading bloc described as “severe deficiencies when it comes to [Cambodia’s] human rights and labor rights.” The higher tariffs will affect one-fifth of Cambodia’s annual exports to the EU, or roughly 1 billion euros ($1.2 billion) in merchandise.

Campaigners have also warned that some factory bosses in Cambodia, Myanmar and Thailand are using the pandemic as an excuse to erode labor rights and bust unions. “Clearly some employers believe they can take advantage of the COVID-19 pandemic and economic slowdown to violate workers and their rights with impunity,” Robert Pajkovski, Thailand program director at the Solidarity Centre, a Washington, D.C.-based nonprofit, told Reuters in June.

Related Stories

Though the Cambodian government has provided some assistance for some 150,000 laid-off garment workers, labor groups say the financial relief is neither enough nor easy to access. The $2 minimum-wage hike, which went into effect this month, is also unlikely to be much of a balm. Meanwhile, authorities have extended a program that provides $40 per month for the first three months of the year to workers with suspended contracts. Factory owners are required to mobilize an additional $30 for each furloughed worker, bringing the total to $70 a month.

Labour Behind the Label, a labor-rights group, told Reuters in December, however, that Cambodian workers continued to be owed more than $120 million in unpaid wages for the first three months of the pandemic alone. The situation there, it added, is that of a “mounting humanitarian crisis.”

Cambodia’s exports in clothes, footwear and travel goods fell 9 percent for the first 10 months of the year, according to data from the General Department of Customs and Excise.