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Massive Floods Deliver Fresh Blow to Cambodia, Vietnam’s Garment Sector

Flash floods in Cambodia have damaged 79 garment factories and forced at least 40 of them to temporarily freeze their operations, pushing to the limits an industry already on the brink due to the coronavirus crisis. The disaster has to date claimed 25 lives and forced the evacuation of more than 37,000 people, Seak Vichet, a spokesman for the National Committee for Disaster Management, said on Monday.

Local media reports that 62 factories in Phnom Penh, 13 in Kandal and four in Kampong Speu were affected by the tropical-storm-triggered heavy rainfall, and just over 30 factories are still operating normally. Since the beginning of October, 19 of Cambodia’s 25 cities and provinces have experienced flooding, Vichet said, affecting more than 312,000 people. Garment factories aside, more than 200,000 hectares of paddy fields, nearly 80,000 farms and more than 500 school buildings have been destroyed, authorities said. Roads, hospitals, and dams have also been impacted.

For Cambodia’s garment manufacturers, the floods are another setback after the European Union’s partial withdrawal of Everything But Arms privileges on Aug. 12, a result of what the trading bloc described as “severe deficiencies when it comes to [Cambodia’s] human rights and labor rights.” Orders have also declined because of slackened demand for non-essential goods during the pandemic, resulting in at least 400 factory suspensions and more than 150,000 job losses for Cambodia’s biggest export earner, which employs some 800,000 workers and contributes 40 percent of the nation’s gross domestic product.

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Labor ministry spokesman Heng Sour told the Phnom Penh Post on Monday that more than 40,000 garment workers are affected by the disrupted production. Choek Borin, director of the Kampong Speu provincial labour department, told the Post that four factories were previously submerged but their supply chains remain intact and work will be continuing. “The department is still monitoring [these] factories and workers,” Borin said. “When the workers run into problems, we help them out. When commuting to the workplace, they experience flooded roads and they are late for work. We coordinate with factory employers to help them.”

Not all factories will be able to resume business as usual so quickly, however. The delays may even cost them, since brands and retailers typically fine or demand discounts from suppliers if they don’t make their deliveries on time. It’ll take a while to assess the full damage even after floodwaters recede, said Kaing Monika, deputy secretary-general of the Garment Manufacturers Association in Cambodia, since factories will need to make sure their machinery and other tools are functioning properly.

“The flooding damaged factory property and also disrupted the production processes. It slows the supply of goods to buyers,” he told the Post. “In the case that we cannot continue production because of internal or external factors, the association asks for permission from the government, especially the labor ministry, to suspend work as quickly as possible.”

Neighboring Vietnam has also been ravaged by floods, with more than 100 people dead, 27 missing and 90,000 residents from the Nghe An, Ha Tinh and Quang Tri provinces evacuated to higher ground. Nearly 7,000 hectares of rice and crop fields have been submerged, and more than 5,800 cattle and 685,000 poultry birds have died or been whisked away by torrents.

Of the Vietnam Textile and Apparel Association’s 46 affiliated and official members, 24 have experienced heavy losses, including hundreds of damaged electronic devices, mold- and water-stained finished goods and electricity disruptions, according to Anh Hoang Ngoc, the trade group’s acting general secretary. More than 8,800 families of garment workers in low-lying areas have been cut off because of storms, and 1,215 houses have been “deeply flooded,” with “completely damaged furniture,” she told Sourcing Journal. A number of finished garments will have to be recycled entirely, “causing many risks for businesses” and exacerbating the problem of reduced orders amid the pandemic.

Storms have similarly battered the Savannakhet province in central Laos, where many areas are inaccessible because of damaged roads and a lack of boats to transport aid and other supplies. More than 125 villages in eight districts are now flooded and more than 10,000 hectares of paddy fields submerged, officials said, affecting 30,000 people.