Report says Ngo factory initiative a failure

Garment workers make clothing at the Tai Yang Enterprises factory in Kandal province. Photograph: Vireak Mai/Phnom Penh Post

19 February 2013 By Shane Worrell and Mom Kunthear
The Phnom Penh Post

Hamstrung by its own confidential reporting system and an unwillingness to take a stand on rampant labour issues, the International Labour Organization’s Better Factories Cambodia (BFC) initiative is no longer a “best practice” model for improving conditions in garment factories, a report by a leading US university says.

Monitoring in the Dark: An Evaluation of the International Labour Organization’s Better Factories Monitoring and Reporting Program, released yesterday, says workers have lost confidence in BFC, founded in 2001, partly because its factory reporting process catered more to the needs of brands and bosses than theirs.

“BFC’s current operating practices... contribute to the program’s under-effectiveness, due primarily to a glaring lack of transparency and an institutional over-emphasis on protecting the interests of

factory owners and international buyers, rather than responding to appeals from garment workers to protect them from abuse,” the report says.

Launched yesterday in Phnom Penh by the International Human Rights and Conflict Resolution Clinic at Stanford Law School and the Workers Rights Consortium, the report speaks of a lack of clarity regarding BFC’s methods and says it has no formal procedure to handle complaints from workers.

It also claims BFC rarely takes a stand on labour issues, such as a decline in real wages over the past decade.

“BFC has not... used its public reports or newsletters to present statistics that document the growing gap between garment workers’ wages and the cost of living,” the report says.

“Labour activists believe that the BFC needs to focus more of its energy on the issue of declining wages.”

Excessive overtime has been widespread in the past decade, the majority of the industry’s workforce has been shifted to fixed-duration contracts and collective bargaining has been scant, the report continues.

Apparel from the garment industry, most of which goes to the US and the EU, is exported at a rate of $4 billion per year – about 85 per cent of the Kingdom’s total exports.

Since the end of quotas in 2005, under which BFC reported to the US government about factory conditions in exchange for a guaranteed level of imports, some conditions had worsened and little scrutiny

on BFC’s monitoring role had been placed, the report says.

“BFC’s role has changed to resemble more closely that of most other factory auditing bodies: providing confidential factory monitoring reports to owners, and, on a for-pay basis, to international buyers.”

“This confidential reporting practice... significantly reduces the incentives for factory owners and the brands... to improve working conditions.”

The report urges BFC to issue public reports on individual factories and respond to workers’ concerns. Other recommendations include that BFC expand worker outreach, reduce opportunities for factories to hide violations, report findings to workers, publish remediation efforts and engage with factory owners and brands.

Stephan Sonnenberg, clinical lecturer at Stanford Law School’s International Human Rights and Conflict Resolution Clinic, said yesterday that the need to push big brands to be accountable was vital.

“Buyers can insist the factory managers improve labour conditions and insist they co-operate with BFC, but... they can threaten to [leave Cambodia] and they have a global distribution network that’s engineered very specifically to be able to do that at very short notice.”

Brands that source from Cambodia include Levi’s, Gap, H&M, WalMart, Puma and Nike.

BFC employees were doing their doing their jobs competently, Sonnenberg said, but the institutional design within which they were operating was hindering them.

“We see so much potential promise for BFC to actually bring together various stakeholders and be a catalyst for positive change in Cambodia.”

Asked whether funding should be withdrawn if recommendations were not met, Sonnenberg said: “I think if BFC is left to languish, and more and more voices grow critical and sceptical of BFC’s efficacy, then that question will be a very appropriate one.

“There are certainly some stakeholders we spoke to who believe BFC not to be worth the money as currently designed.”

Better Factories is funded by the government, the Garment Manufacturers Association in Cambodia (GMAC), the World Bank, the US Department of Labor and AusAid. It also makes money by selling its reports to brands.

Under its monitoring system, factories not in compliance with the Labour Law are not named publicly. General monitoring results are released in biannual synthesis reports.

Jill Tucker, BFC’s chief technical adviser, said yesterday she had not seen the final report, but said an early draft had wanted BFC “to be everything”.

“We don’t have that capacity,” she said, adding that BFC was not an advocacy organisation, but a tripartite body that works with unions, the government and GMAC, whose secretary-general, Ken Loo, could not be reached yesterday.

“Whenever we take a stand, not everyone’s happy. We agree there should some transparency, but we’re not going to post every report,” Tucker said. “We do not have enforcement power. Everyone wants us to – but we don’t.”

Many examples existed, however, of issues BFC had pushed that had brought change for workers, Tucker said.

“We have coverage of the whole industry. We can push issues – like the prison labour issue,” she said. “The wage issue is another one.”

“We’re always trying to improve our programs. We took on the footwear industry. We’re taking on the worker nutrition issue.”

Dave Welsh, American Center for International Labor Solidarity country manager, said it was crucial that BFC be able to enforce its findings by issuing a penalty or punishment – or at least by publicly naming a factory violating the law.

He added, however, that the more transparent BFC became, the less likely it was that the government and brands would want it in the country.

Welsh said the BFC model was planned for Bangladesh, where the number of factories is “tenfold” and problems, including assassinations, were rife.

“If it’s the same model with no transparency, there’s going to be problems.”

Sath Samuth, secretary of state at the Labour Ministry, said his ministry supported BFC because it helped improve the reputation of Cambodia’s garment industry overseas.

“We do not reject recommendations [in this report], but we would need all parties to follow them. If we want change, we can discuss these issues.”

Rong Chhun, president of the Cambodian Confederation of Unions, said the BFC was a good idea, but it often did not respond to real issues faced by workers.

“What they report and what really happens are two different things,” he said.

Personifying the challenges confronted by workers was a woman at yesterday’s launch.

“Last month, I did not have enough money, so I had to borrow $10,” the worker, who asked not to be named, said.

Clutching a bag filled with sandwiches provided to guests at the launch, the woman said she would take it back to her factory for her co-workers, who sometimes can’t afford to buy enough food.