Cambodia's garment workers stand firm as sector reels

DPA Phnom Penh | Updated on March 12, 2018

The economic fallout from the protests and the industry’s response to them may impact significantly on the industry’s revenues while tarnishing Cambodia's reputation among international buyers, says IMF.

One of Chenda’s biggest hopes is that she might one day make enough money to bring her daughter back to the Capital.

When the Cambodian government and unions began discussing a rise in the minimum wage for garment workers last month, she believed her six-year-old, currently living with grandparents in a neighbouring province, might be able to return home.

“I really want to bring my daughter to town, but we just can’t afford to spend money for someone to look after her,” said the 34-year-old.

When the Ministry of Labour announced they would be bumping up the $80 minimum monthly wage by only $15, Chenda, like many of her colleagues, was deeply disappointed.

Factories shut down

She and hundreds of thousands of garment workers have been on strike since the new minimum wage was announced on December 24.

“If all workers in Cambodia strike together, the Government will offer a better salary,” she hopes.

The government’s initial offer has since been increased by $5, taking it to $100 a month, with the increase taking effect two months earlier than originally scheduled.

The proposal still falls far short of the $160 a month that unions have been pushing for.

In the meantime, hundreds of factories have shut down operations, grinding a $5-billion industry to a near standstill.

Malnutrition, mass fainting

Kong Athit, vice-president of the Coalition of Cambodia Apparel Workers Democratic Union, one of the nation’s largest, said he had no intention of backing down.

“Whoever says $80 is sufficient — invite them to live with the workers one month. Sleep in the same room that they sleep and eat the same food. Can they do that?” Factory workers generally put in 10-plus hours a day for at least six days a week to earn enough to live on. Chenda, for instance, says she just gets by on $120 a month, for 60 hours a week.

Younger, single workers sometimes work 12 hours, seven days a week.

Mass faintings linked to malnutrition are not uncommon.

Real wages down

While the minimum wage has risen steadily over the years, real wages have fallen. According to a February 2013 study by the Worker’s Rights Consortium and Stanford Law School, real wages in Cambodia were projected to drop 30 per cent between 2000 and 2014.

Workers have come to expect wage rises to be soon followed by hikes in the price of rent and food.

But factory owners argue that if the industrial unrest continues, it is only a matter of time before owners — most of them foreigners — shut their operations and move elsewhere.

“As far as I know, already seven factories are moving,” said Van Sou Ieng, chairman of the Garment Manufacturers Association in Cambodia.

“We have to compete in the international market with other major suppliers.”

IMF warning

“The economic fallout from the protests and the industry’s response to them may impact significantly on the industry’s revenues while tarnishing the country’s reputation among international buyers,” the International Labour Organization (ILO) has warned.

The garment industry here is a minnow compared with Bangladesh, whose exports are worth $19.9 billion in 2012 according to a recent McKinsey survey, or India’s $13.8 billion, or China with $159.9 billion. Cambodia’s exports were valued at $4.3 billion in 2012, although that figure is expected to top $5 billion for 2013.

A trade deal struck with the United States in the late 1990s gave Cambodia access to some of the world’s biggest clothing brands in exchange for adherence to certain industry standards.

Levi’s, H&M, Puma, Adidas and Walmart are just some of the major brands which started sourcing their products in Cambodia.

Industry in doldrums

But since the deal expired in 2005, analysts say conditions have deteriorated. In recent years, the industry has been rocked by strikes, mass faintings, and factory collapses.

Swedish multinational H&M, which hit the headlines in May last year after 23 workers were injured in a Cambodian factory producing their clothes, insisted in the wake of the strikes that the firm remained “committed to Cambodia as one of our key sourcing countries.”

“We will continue to encourage all relevant parties to renew negotiations and to come to a mutually—agreeable solution to this conflict,” press officer Elin Hallerby said.

That solution seems far away.

The GMAC has warned that factories might not be able to pay workers because of fines from buyers for late deliveries of their products.

The Government meanwhile has vowed to take strong action against unions and strikers.

Workers like Chenda say the government’s proposed wage hike will not make any difference if, as she fully expects, it is followed by another rise in the cost of living.

“Everything is getting more and more expensive. The people in the city are so smart. They know if there’s going to be a wage increase and immediately the prices go up.”

Published on January 02, 2014

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