Restoration of the US generalized system of preferences (GSP) programme in April, a decision in October to raise the minimum monthly wage of garment workers to $182 and the International Labour Organisation (ILO) noting remarkable improvements in labour standards in the garment and footwear industry marked the year for Cambodia’s garment sector.
The US generalized system of preferences (GSP) programme was restored for Cambodia beginning 22 April, renewing access to duty-free privileges for exporters. The renewal was retroactive, allowing exporters from beneficiary nations to claim refunds for transactions made after the GSP scheme expired on December 31 last year.
Clothing is the country’s main export, bringing in some $5 billion a year, with Europe being its largest market.
The commission comprising representatives from trade unions, the Cambodian Government and employers tasked with deciding the minimum wage for workers in the textile, garment and footwear sector agreed in October to raise the minimum wage to $182 starting January next year. Most members accepted $177 proposed by the employers. Prime Minister Hun Sen added $5 to that.
The Cambodian National Assembly in June passed the draft minimum wage law aimed at promoting decent living for workers. The draft law with 33 articles was aimed at creating employment opportunities, increasing worker productivity and pushing for more scope for investment.
Cambodia witnessed remarkable improvements in labour standards in the garment and footwear industry, according to a recent International Labour Organisation (ILO) report. The total number of violations on 21 critical issues fell from 811 in 2014 to 631 this year, the report covering 464 factories found.
However, not all areas have shown progress, the report noted. Over the same time, the proportion of factories in compliance with all publicly reported issues rose from 32 per cent to 41 per cent.
While critical issues related to emergency preparedness, discrimination, child labour and payment of wages and allowances have shown steady gains, other areas are stable and some have declined in rates of compliance, the report said.
The country’s commerce and labour ministries, the Garment Manufacturers Association of Cambodia and ILO Better Factories Cambodia (BFC) programme signed a memorandum of understanding (MoU) in November to improve working conditions and boost competitiveness in the country’s garment industry.
The MoU has been signed to extend the partnership for three years, covering a period from January 2017 to December 2019, during which the partners will collaborate to work together to build the institutional sustainability of the programme.
Cambodia has agreed to contribute approximately 25 per cent to the BFC budget over the next three years, while international garment buyers sourcing from Cambodia who use the ILO BFC programme assessment reports and factories that participate in BFC training courses will contribute to programme operation based on fees for services rendered.
Cambodia’s garment and footwear exports rose by 11 per cent to around $4 billion in the first half of this year compared to the same period last year, according to the National Bank of Cambodia. The year-on-year growth rate last year was 6.9 per cent.
Cambodian labour minister Ith Samheng issued guidelines in January to owners of garment and footwear units to prevent workers from fainting in workplace. The 11 guidelines included operating ventilation fans an hour before workers arrive, installing thermostats, and maintaining fire protection systems and adequately trained boiler operators.
In the same month, Walmart said it will raise orders of Cambodian garments and footwear products this year and will also start buying travel goods manufactured in the southeast Asian nation. The announcement followed an escalating diplomatic row between Cambodia and Western nations who have criticised its government’s crackdown on opposition and civil society.
Nine projects belonging to the textile, garment and footwear industry were given preliminary final registration certificates by the Council for the Development of Cambodia (CDC) in the first three months of this year. In addition, CDC also issued preliminary final registration certificates to two projects related to manufacturing of travel bags.
The Cambodia Garment Training Institute (CGTI) and the National Employment Agency (NEA) signed an agreement in July to make vocational training widely available in the country and build up the local labour force. The agreement will facilitate the dissemination of CGTI training courses through NEA’s communication channels and make the courses available to NEA staff.
CGTI was founded last year by the Garment Manufacturers Association of Cambodia (GMAC) to raise competitiveness within the industry. A soft loan from the French Development Agency helped finance the centre.
In a letter to US lawmakers in September, the American Chamber of Commerce Cambodia representing US businesses there cautioned that any US Government sanctions against the country’s garment industry would result in ‘dire consequences’, harming most at the bottom of the socioeconomic pyramid and pushing the southeast Asian nation further into Chinese arms.
The chamber observed that despite significantly increased levels of investment from China, many of the skilled labour and management jobs within Chinese-run garment companies are held primarily by Chinese professionals.
The US House of Representatives passed the ‘Cambodia Democracy Act of 2018’ on July 25 that was expected to pave the way for sanctions against the country.
This was after former opposition leader Kem Sokha was charged with treason and his party was dissolved by the supreme court last year.
Staff at the Senate’s foreign relations committee reportedly said there are no plans to review the bill. But US lawmakers have vowed to reintroduce the bill after Congress reconvenes early next year.
The European Union (EU) is mulling over imposing tariffs on Cambodian garments as the country had failed to respect the democratic and humanitarian principles of the UN charter, the EU’s Lisbon Treaty and the conventions of the ILO on workers’ rights, European Commissioner Cecilia Malmstrom cautioned Cambodia in October.
Pressure is also there on the government from foreign clothing brands to ease up. A delegation from such firms like Nike and Adidas visited Cambodia in the last quarter of this year to press for better treatment of labour leaders and other activists.