Clothes on your back: Inside Cambodia's garment industry

By: Jennifer Wells Feature Writer, Published on Sun Oct 20 2013

PHNOM PENH, CAMBODIA—Neang Seap and his wife, Em Mom, arrived in Phnom Penh bearing the lacerating wounds that mark Cambodia’s rural migrants. Evicted by the Khmer Rouge in the late ’70s from his village in the country’s eastern zone, Neang was part of the long forced march west, ending up at the Khao-I-Dang refugee camp, just across the Thai border. It was there that he met his 15-year-old bride-to-be. The couple married and brought five babies into the world before moving to the capital, where Em bore four more children.

Neang, now 59, tightens the towel that wraps about his waist, scrapes a chair across the parched hardwood and settles his sinewy frame. Once he was a rice farmer, before his land was taken away, before the music was taken away, before the books were taken away. His is one story, but thousands are identical. Hundreds upon hundreds of thousands.

The garment industry is a huge employer in Cambodia. But there is also a lesser-known economy. Jennifer Wells explains. Watch Video http://bcove.me/kkhulidh

The Pol Pot genocide wiped out more than 1.7 million Cambodians as the despot hauled the country back to “Year Zero,” slaughtered the doctors, all but eviscerated the teaching class, abolished money and closed markets. For the lucky ones, displacement went hand in hand with survival. What one once possessed was lost. Cambodia became the disappeared.

Neang ended up in Phnom Penh, where he tried to make a go of it selling mattresses and pillows. Short of capital, that endeavour collapsed.

Em places a piece of trey bra on the brazier for lunch. She can thank two of her daughters for providing the means to purchase the fish. Srey Sar, who introduces herself as Miss Srey Sar, is 22. Srey Moch is 19. Both women work at the Great Union garment factory. Sar was 13 when she entered Great Union’s employ. Three years ago, Moch joined her. Both lied about their ages, borrowing family books — identification for Cambodian nationals — from others.

Moch’s first job was as a shirt measurer, a job for which she was paid $55 monthly. In May, the country’s minimum wage for garment and footwear workers was raised to $80 (U.S.), including a $5 health benefit. The industry’s increasingly radicalized workforce will not be assuaged, and has taken to the streets.

The clothes on our back: Cambodian unrest

Moch starts work at 7 a.m., sewing T-shirt sleeves until eight or nine in the evening, six days a week. She is given a one-hour break for lunch at 11. Her sewing quota is 950 shirts a day. For every 100 shirts above the quota she is paid an additional 25 cents. After adding the two or three hours of overtime, shift after shift, Moch can boost her monthly earnings to $130. Both Moch and Sar work under short-term contracts. Contracts for some workers run as short as three months. The sisters say theirs run for a year.

Neang listens to his daughters’ cost accounting: the minutes in; the pennies out. “This is the source of economy for the family,” he says. “If no factory, we will face many problems. If the two daughters were not working, the family would be deficient in living.”

The garment industry is the glue that holds Neang’s household together, as it is the glue that binds the country’s economy. While a fraction of the size of the Bangladesh garment industry in dollar terms, the value of Cambodian garment and textiles exceeded 80 per cent of the country’s $5.5 billion (U.S.) in exports last year. Add footwear — Nike, Adidas, Puma, etc. — and the figure exceeds 90 per cent. The top 20 Canadian consignees accounted for just over $121 million of that, with Walmart Canada Corp., Loblaws Inc. and Reitmans (Canada) Ltd. topping the list.

George jeans shipped to ASDA in the U.K., knit sweaters in colours of persimmon and goldenrod shipped to Joe Fresh in Canada; stonewashed Levi’s shipped to the U.S. market. In less than two decades, garment factories have exploded to more than 600 from fewer than a dozen in 1994. In excess of 400 are exporters, with the U.S. being the largest recipient of Cambodian product. That’s shifting: the EU will supplant the U.S. soon, if not this year, then likely next.

The bottom line: should the pins be kicked out from under the Cambodian garment industry, the country’s economy would collapse.

Sar and Moch are beautiful. Soft-spoken. Unadorned, save for string bracelets around one wrist. The Sunday washing the women have put out on the line stirs in the afternoon breeze. Sunday is the only day they don’t work at the factory. Instead, they work at home. Moch retrieves a pair of Zara jeans, the single item of clothing she has purchased new, she says, and for which she paid $8, an enormous sum. Srey’s favourite T-shirt is drying: bright yellow with the phrase “Happy Alive Style” printed upon it. The first time I met Moch she was wearing a T-shirt with an ironically misspelled phrase: “Thank you for eviryting you’ve done for me.”

What is “style”? For Moch it’s a pair of short shorts, a brazen look that Srey dislikes. Srey sits primly, her hair tightly pulled back in a blue plastic hair clip. Dressed in a black sleeveless top, ruffled at the shoulder, and a dusty pink printed sarong, she says she has never, not once, purchased a new item of clothing.

Neither has heard of Nike. Adidas? McDonald’s? No. No.

How do you know when something is fashionable? “When many people are wearing something, that’s how you know it’s fashionable,” Srey says. Starbucks T-shirts and ball caps are ubiquitous in the notably westernized capital, the T-shirts in cobalt blue and toothpaste white piled high at the Russian Market. The coffee chain hasn’t launched in the country and, stopped on the street, the T-shirt wearers say they don’t know what Starbucks means, but they like the logo. That’s style.

Each month the Srey sisters keep $5 of their pay. Sometimes Srey will buy face powder. Occasionally Moch will buy lipstick. They don’t know “the appearance or even the touch” of computers. They have never been inside a store. Explaining the concept of “fast fashion” elicits looks of bewilderment. The women say they are sorry for the waste of money.

A cleated gangplank runs from the alleyway up to the raised dilapidated shelter that houses all 11 members of the immediate family. A covered area, opened on one side to the outside, provides a gathering space for cooking and washing. Behind, two adjoining rooms sleep eight in one room, three in the other. There is power, as the hysteria of wires running through one room attests. There is no running water. A damp thickness of refuse carpets the ground below, nuzzled at the moment by an enormous rat.

Neang pays a monthly rent of $30 (U.S.) for the shanty. The monthly utilities total 75,000 riels, or about $18. Three years ago, he borrowed $1,000 from a neighbour to cover the extended hospital care costs for one son, who was critically injured in a traffic accident. As the family had no assets against which to secure the loan, the lender extracts an extortionate monthly interest of 13 per cent — the equivalent of a full wage, in other words. In three years, not a dent has been made in the principal.

There are other costs, including the daily payoff to Srey Len’s teacher. Len is 8, the youngest child and the only one to attend school. Before entering class, Len, as is the practice in Cambodia, must grease the palm of her teacher with 1,000 riels (25 cents) daily.

With real wages declining against increasing food prices, and with no asset base — nothing to build upon — Neang’s family will be lucky to just stay in place.

The Canadian consumer sporting this fall’s Joe Fresh cardigan may be oblivious to Cambodia’s growing role in the low-wage global garment trade and the role women like Sar and Moch play in making Joe Fresh blouses and Nygard trousers and Lululemon workout wear. The Canadian consumer undoubtedly has little understanding that Cambodia is a test case for change. No question, the collapse of the Rana Plaza in Bangladesh, which claimed the lives of 1,129 workers in April, has played a role in that.

There was an earlier point of promise for the Cambodian garment industry. In 1999, a bilateral trade agreement struck with the U.S. was tied to provable improvements in labour standards. The landmark deal, initially for three years, stipulated that the partners would “seek to create new employment opportunities and improve living standards and working conditions through an enhanced trading relationship.” Significantly, the goal was to “foster transparency in the administration of labour law” and to raise working conditions in the sector to internationally recognized labour standards.

In exchange for being good, or at least incrementally better, the industry would reap the benefit via repeatedly increased quotas. The U.S. government would be the decider. Should the sector “substantially comply” with labour standards, the sector would see a 14-per-cent quota increase annually. Set to expire at the end of 2001, the agreement was extended for a further three years. In that three-year period, the country’s garment and textile exports almost doubled, to roughly $2 billion. U.S. Trade Representative Robert Zoellick called the renewal “an excellent example of the way trade agreements lead to economic growth and promote a greater respect for workers’ rights.”

Cambodia was meant to be the standard bearer for fair labour practices that would eventually roll out throughout Southeast Asia: Bangladesh, Thailand. Clothing manufacturers would, theoretically, reap enormous PR benefits. They were certainly in need of public relations burnishing. In 1996, CBS News documented Vietnamese workers at Nike Town, just outside Saigon, who were earning 20 cents an hour at a time when Michael Jordan was pulling down $20 million annually to promote Air Jordans. A subsequent report from Vietnam Labor Watch documented workers who were subjected to corporal punishment, worked more than 80 hours of overtime, were not allowed to go to the washroom more than once a shift and allowed water no more than twice per shift.

U.S. President Bill Clinton unveiled the U.S. Apparel Industry Partnership the following spring. Anti-sweatshop may have been the buzzword, but partnership was voluntary and the process of monitoring vague. What Clinton called the “strict rules of conduct” was an embellishment. And while the phrase “corporate social responsibility” would become an appealing catchphrase, the financial focus of corporations remained clearly on exceeding quarterly earnings projections

But Clinton was right about one thing. “We know sweatshop labour will not vanish overnight,” he said. That was April 1997.

Two years later, the bilateral agreement with Cambodia set a new standard. The issue of independent monitoring appeared to be resolved via the creation of Phnom Penh-based Better Factories Cambodia, which was to investigate working conditions under the aegis of the International Labor Organization. This “neutral monitor” was charged with conducting regular inspections and producing factory-by-factory reports to both managers and buyers. Significantly, BFC would publicly disclose its findings. Theoretically, garment manufacturers could gain a significant reputational advantage by doing business in Cambodia. It was a huge step forward.

Followed by a giant step backward.

Along with the expiry of the bilateral agreement at the end of 2004, Cambodia was fast-tracked to join the World Trade Organization. Under pressure from the garment industry, BFC changed its reporting methods. As garment factories spread like wildfire in Phnom Penh and as garment exports exploded, transparency was abandoned. BFC adopted a policy of disclosing audits only to its paid subscriber base, and fewer than two-thirds of that subscriber base bothered to even take delivery of the BFC reports. Whether any remedial action was taken on those audits was anyone’s guess.

Then came the grenade. In February of this year, BFC was slammed by a report entitled “Monitoring in the Dark,” a project of the International Human Rights and Conflict Resolution Clinic at Stanford Law School working alongside the Worker Rights Consortium, which has been advocating for labour rights in the garment sector since its founding in 2000. Providing information on factory conditions only to factory managers and the brands that source from the factory has resulted in “a glaring lack of transparency and an institutional overemphasis on protecting the interests of factory owners and international buyers, rather than responding to appeals from garment workers to protect them from abuse.”

As a result of this “black-box monitoring,” the true picture of poor health and safety conditions, non-voluntary overtime and a preponderance of fixed duration contracts used, in part, to disrupt union organizing and skirt labour laws is known only to those on the inside.

Thousands protest

The riverfront area of Phnom Penh was in lockdown the Monday morning I was to meet with Jill Tucker, program manager for Better Factories Cambodia. Razor wire cordoned off the area encompassing the palace of King Norodom Sihamoni and the National Assembly. A day earlier, protesters attempted to deliver a petition bearing tens of thousands of signatures asking the king not to open parliament, alleging electoral fraud on the part of Prime Minister Hun Sen, who had claimed election victory in July. The reign of power of the one-time Khmer Rouge division commander extends now to more than 10,000 days. Opposition leader Sam Rainsy, who campaigned, in part, on a promise to raise the monthly minimum wage to $150, drawing enormous support from garment workers, announced a boycott of the opening session, and kept his party members north of the capital, at the historic seat of the kingdom at Angkor Wat. Rainsy has called for a mass rally on Oct. 23, the 22nd anniversary of the Paris Peace Accords, to which Canada was a signatory and which were designed to not only ensure peace but to introduce a “system of liberal democracy” to the country.

The distemper in the city is palpable.

The night I arrived in Phnom Penh, protesters by the thousands had fanned out from Freedom Park in opposition to the election results. The military police responded with electric prods and tear gas. And then with open fire. Mao Sok Chan, 29, was shot dead through the forehead at the Kbal Thnal overpass.

The meeting with BFC had been rescheduled at the last minute, for reasons Tucker was quick to explain. Suddenly, in what will surely be interpreted as a reaction to the “Monitoring in the Dark” report, BFC has announced a return to its prior practice of public disclosure commencing next January.

“I’m sure that’s how it will be interpreted,” Tucker says of the timing of the announcement. But she insists her group has been working on the return to transparency for more than a year, and that, if anything, it was the Rana Plaza tragedy, and the death in May of two workers at the Wing Star shoe factory in Phnom Penh, that spurred the group to announce the change now.

Kim Dany was one of those who died when the roof collapsed at Wing Star, a Taiwanese-owned factory and maker of Asics runners. Dany was 13 and had worked there for just two weeks. Her mother told reporters that her daughter had lied about her age, and used faked documents, in order to join her three older sisters who already worked there.

Wing Star was not a member of the BFC monitoring program. Among those manufacturers that are, BFC monitors have uncovered worker discrimination, dismissal during maternity leaves, locked exits during working hours, unclean drinking water, nonpayment of overtime wages, insufficient emergency exits, union interference by management, unequal pay between men and women and management-controlled unions. (Factories that have remediated cases of child labour will continue to have their identities shielded.)

“One hundred years after the Triangle Shirtwaist Factory fire (which killed 146 immigrant workers in New York in 1911) we have got to do something completely different,” Tucker says. “What we’re doing isn’t the biggest revolutionary thing. But it’s a start.” The majority of BFC members are American. The European presence is growing. But Canada, Tucker, says, is “behind the curve . . . We have only one tiny (member), and only in the last few months from Canada, and that’s Lululemon.”

The Garment Manufacturers Association of Cambodia wasted no time lambasting the BFC’s return-to-transparency announcement, complaining that their requests for more discussion on the matter were ignored. Henceforth, GMAC announced, manufacturers should insist that BFC inspection monitors be accompanied by an official of the Royal Government of Cambodia or an authorizing letter from the government. A dire warning was issued by the Ministry of Labour’s undersecretary of state: “If buyers have this information and they decide to cancel an order or put a sanction on a factory in Cambodia, it will have many drawbacks: The factory loses, the worker loses, Cambodia loses.”

Even with disclosure, the question arises: then what? “Our role is limited,” says Jason Judd, a technical specialist with BFC. “We monitor and report. Compliance and enforcement functions belong to brands, factories themselves and the government.”

Tucker echoes the point: “The buyer puts pressure on the factory to change,” she says.

Does it?

David Welsh is the Cambodia country director for the Solidarity Center, the international labour rights organization launched by the AFL-CIO in 1997. “Stakeholders who benefit most from the presence of the Better Factories program, namely the brands, the government and the industries, have been pushing this notion that if you’re the average consumer in Washington, Toronto or London you’re not to be blamed for thinking, well, the ILO is monitoring every factory there. Surely when they unearth infractions something’s done about those findings. That is exactly not the case. Quite the opposite. So it’s a real misnomer. They’re doing a great job monitoring. But it’s not within their mandate, deliberately not within their mandate, to do anything beyond that . . . I can tell you first hand, all the data that’s given to the government, to the brands and to the factories — it’s virtually always the case that never is any proactive measure taken unless they’re pressured to do so.”

Welsh says he finds it “a bit ominous and a bit doomsdayish” to equate disclosure with the country’s economic death knell. “What they’re saying, in other words, is if you force us to comply with the labour law, or international labour standards, we’ll pull out of the country, is how I take that.”

There’s an opportunity here for Canadian companies to seize the high ground. Jill Tucker says that BFC has reached out to Loblaw, which makes Joe Fresh. “We saw a lot of their production in factories that I think they would not want to be in,” Tucker said in that interview in her Phnom Penh office. Citing one example, she states, “The union was under management control, workers were not free to join the union of their choice . . . there was no OSH policy (occupational health and safety), two locked exists and the poor use of chemicals.”

Via its public relations department, Loblaw responds that it is still unclear as to what BFC has to offer. “We have a robust audit process in place and want to understand what Better Factories offers compared with what we have in place with our third party auditors.” The PR representative asks that the offered quote be attributed to Bob Chant, the company’s senior vice-president corporate affairs and communication.

Loblaw, again via email, says it recommends corrective action plans when necessary. Should the factory refuse “we would not do business with them.” The company did not respond when asked whether it took any corrective action specifically against the supplier factory after being notified by BFC.

In terms of corporate representation, the brand is invisible in Phnom Penh, save for the navy pants with the distinctive bright orange Joe Fresh label on sale for $8 at the Russian Market. The company says it has now identified “a senior Loblaw individual” who is relocating in the region and will be looking to hire “several additional staff” in the new year.

Labour violations

Two minutes from Great Union, the female workers are spilling through the sky-blue gates of the Kin Tai garment factory. Phim, a young entrepreneur in his 20s, waits as the workers step onto his rigged-up trailer before he drives off into the night sky. He proudly says he can squeeze 22 women onto his truck, charging 300 riels, or about seven cents, to those women he delivers to the worker dormitories on the near side of Mony Vong bridge, and 500 riels to those who live across the other side. Before hopping onto Phim’s trailer one worker presses a deep blue Armani Jeans label into my hand so I will know what has been sewn in the factory this day.

Kin Tai worker So Thea wheels her bicycle out to National Road Number 2. We follow her into the gloaming. It’s the beginning of the Pchum Ben festival, and offerings to the spirits are being made at the pagodas so the dead may be blessed with peaceful mind. Children are playing with paper lanterns this evening. Water has been placed in vessels for the moon to drink.

Our tuk-tuk pulls up at Thea’s home, a conventional thatch and wood shanty, built on stilts. Except that Thea and her husband and her 5-year-old son live underneath the shanty. It’s not the dirt and stone floor that’s a bother so much as the crossbeams running at a height of about a metre and a half. Even Thea, who is tiny, cannot stand in her own home. Her husband, who drives a motor taxi, hits his head a lot.

Thea came to Phnom Penh from Svay Reany village in 1999, when she was 19. A broker said he could place her at a factory for a fee of $50. Thea’s mother had three cows, and so she sold one to pay the broker’s fee.

Her current job, at Kin Tai, is a short-term contract. Bent Gehrt, Southeast Asia field representative for the Washington-based Worker Rights Consortium, points to these contracts, or FDCs, as the next big battle for Cambodian garment workers. A database of factories reveals that the vast majority operate while skirting so-called unlimited duration contracts, which, according to Cambodian law, are supposed to kick in after two years of employment. Kin Tai, which sews for Nygard as well as Armani Jeans and an American workwear label called 511 Tactical, keeps its workers almost exclusively on short-term contracts. “It’s one of the key root causes of a host of labour violations,” Gehrt says, citing forced overtime, deprivation of seniority bonuses and non-renewal of contracts held by pregnant employees.

Thea’s son, So Heng, is swinging in a hammock that has been strung under the shanty struts. The monsoon winds are kicking up. “Many people work for many years on short-term contracts only,” Thea reflects. “If the worker makes some mistake, they will be dismissed.”

Camitex (Cambodia) Manufacturing, which sews for Canadian brands, including Loblaw, is included in a list of “only FDC” factories in the country. Asked about its corporate policy regarding FDCs, Loblaw responds: “Details of our contracts are competitively sensitive.”

So Thea can’t hope to pull herself and her family out of poverty in a life of uncertainty, in circumstances such as these. During the day, she sets the family’s uneaten potato or rice out by the pomegranate tree to dry. She tries to sell it as fish feed for a penny or two. She voted for Sam Rainsy in the July election “because Sam Rainsy promised to give $150 if he won.” The election, she says, wasn’t free and fair. The day of mass protest approaches.