More than 10,000 garment workers are unemployed after 27 factories in the Yangon Region shuttered in the wake of supply-chain disruptions due to the COVID-19 outbreak, Cambodia’s department of labor announced over the weekend.
The number is double previous estimates by organizations such as IndustriAll Global Union, which sounded the alarm last week about predatory companies that may take advantage of the reduction in minimum wage.
Factories that have frozen operations are required by law to pay workers 60 percent of the minimum wage, with the Cambodian government offering to chip in 20 percent of the amount. Annie Adviento, regional secretary of IndustriAll South East Asia, has called on the government to be prudent about approving applications, however.
“It’s an emergency measure that could easily be exploited by employers by not paying minimum wage to workers,” Adviento, warned in a statement Thursday. “There must be a due diligence process to prevent frauds.”
More factories are expected to slow or cease operations. “Currently, 27 factories have submitted letters for shut-down,” Moe Moe Suu Kyi, minister of immigration and human resources, told Eleven Myanmar. “Two factory owners ran away now. Most of factories have paid compensations to workers.”
The department of labor says it will issue job vacancies for unemployed workers. Suspended workers are also to receive training at their workplaces.
Cambodia is home to more than 600 garment factories. The sector employs more than 700,000 workers, most of them young women, and contributes 40 percent of the country’s gross domestic product.
In 2019, the Southeast Asian nation’s garment and footwear sectors delivered $9.32 billion in gross revenue—11 percent more than the year before. According to the Garment Manufacturers Association in Cambodia (GMAC), more than 60 percent of the raw materials used by the country’s garment factories originate from China, which cut off workers from assembly lines after the novel coronavirus emerged last last year. Cambodia diagnosed its first case of COVID-19 a week ago.
But the country may see some of its difficulties ease after China said it will be dedicating shipping vessels to fast-track raw material until at least the end of May. Prime Minister Hun Sen told the Khmer Times Monday that 1,000 containers of raw materials had arrived at the Sihanoukville Autonomous Port. Minister of Industry and Handicraft Cham Prasidh has also instituted a “Green Lane” to expedite shipments through customs and logistics processing.
Whether it’s enough to prevent further closures remains to be seen, however. Ken Loo, the general secretary of the GMAC, told Radio Free Asia’s Khmer Service on Wednesday that the country’s garment factories “normally [need] around 1,200 containers each week.”
“For the time being, we still need more raw materials,” he added.