No strike under Hun Sen's rule; Only pro-CPP unions are invited to meet Hun Sen

PM warns against strikes

Wednesday, 22 April 2009
Written by Sam Rith
The Phnom Penh Post

Says further disruptions could lead to employment losses.

PRIME Minister Hun Sen on Tuesday urged 3,500 garment workers to resolve labour issues through peaceful means including legal arbitration, warning that strikes and demonstrations could lead to further job losses in the troubled garment sector, which has contracted substantially since the onset of the global economic downturn.

In a speech at a meeting hall in Kandal province's Takhmao district, Hun Sen also said he had instructed the Ministry of Labour to organise training courses for garment factory workers who had lost their jobs and were looking to transition to other careers, said union officials who attended the speech.

Some 50,000 Cambodian garment workers have lost their jobs since June 2008, according to figures provided by Ath Thorn, president of the Cambodian Labour Confederation (CLC). Ath Thorn estimated that 60 to 70 percent of those workers had returned to their home provinces after being laid off, while 10 to 20 percent had found new garment factory jobs or other jobs. The remaining workers had started their own businesses, he said.

Van Sou Ieng, president of the Garment Manufacturers Association of Cambodia, told the Post last month that 70 garment factories had closed since last August and that 51,000 garment workers had lost their jobs or seen their contracts suspended.

Sem Sokha, a secretary of state at the Ministry of Social Affairs, said Tuesday's gathering of 28 unions was convened to mark International Labour Day, which is observed on May 1.

Ath Thorn, who did not attend, criticised the government for allegedly inviting only pro-government unions, a charge to which Sem Sokha declined to respond.

Ath Thorn said the six CLC unions along with the Free Trade Union of the Workers of the Kingdom of Cambodia and the Cambodian Independent Teachers Association would attend an alternate gathering in front of Wat Botum on May 1.

"We plan to have 2,500 workers, including garment, tourism, construction and other workers, coming from the provinces and cities throughout Cambodia to meet on International Labour Day," he said.

He said the demonstration's organisers planned to submit a petition enumerating several requests, including for the establishment of a labour court as well as a requirement that garment factories give severance pay to their employees when they close.

"WE WILL HAVE MORE DIFFICULTY in MAKING DEMANDS IN THE INTEREST OF WORKERS."

Ath Thorn said the workers will gather in front of Wat Botum at 8:30am on the morning of May 1, at which time the petition will be read by union leaders. They will then proceed to the Council of Ministers to file the petition, then walk to the site near Wat Lanka where trade unionist Chea Vichea was assassinated in 2004. Then they will walk to the National Assembly building to file the petition there as well.

Bargaining position

Ath Thorn said there was some concern on the part of union leaders that the economic downturn had weakened their bargaining position with factory owners.

"As a result of the global economic crisis, we will have more difficulty in making demands in the interest of workers, including higher salaries and improved working conditions," he said. "Companies have been more likely to ignore our demands."

But he said this would not discourage them from demonstrating because "there are big problems in Cambodia" and "the government has to solve them".

ASEAN: a potential lifeline for Cambodia's textile manufacturing industry?

Kampong Som (Cambodia). 04/07/2008. Truck going to the container port (Photo: Vandy Rattana)

12-01-2009
By Ros Dina and Stéphanie Gée
Ka-set in English
Click here to read the article in French
Click here to read the article in Khmer

Looking back at 2008, the extent of the catastrophe was finally not as disastrous as it was going to be. Indeed, according to figures published by the Ministry of Commerce, the production of textile goods simply proved alarming predictions wrong, with records of a mere 2% decrease after a 15-20% increase in the previous years. Van Sou Ieng, president of the Garment Manufacturers Association of Cambodia (GMAC), expressed his satisfaction in front of such results. On the occasion of the 26th Council Meeting of the ASEAN Federation of Textile industries (AFTEX), held on January 7th in Phnom Penh, he said, relieved but without however letting out too much enthusiasm, that “if 2009 could witness the same progression, then it would be fine!” The global financial crisis is forcing the garment sector to rethink its fundamental strategy by fully integrating the Cambodian textile industry within the ASEAN competitive market

Pistol at head
In Cambodia, out of the existing 400 factories, some twenty have recently had to close down due to a lack in order placements, and the next few months should equally see others shutting down in turn, Van Sou Ieng warned. The economic downturn in the United States, which up until now soaked up two thirds of Cambodia's textile exports, can now be felt not only through plummeting demand but also through new requests on the part of customers, who in that context go for whatever is cheaper, since they cannot afford expensive items.

According to the boss of all textile industry bosses, requiring lower prices and important discounts from retailers forces factories to produce at a great loss and eventually be faced with only two choices, either going bankrupt or accepting new conditions while awaiting an upturn in economy. The problem is, Van Sou Ieng stresses, that factories are not allowed any access to bank loans and not all of them have enough liquidities as a backup. In that perspective, he raised the idea stating that clients, in exchange for a buying price that would not favour the producer, could lend them loans to allow them to survive. He continued, arguing that “the matter must be properly thought through: ordering to cease trading has a cost! We must calculate whether closing down will make us lose more than deciding to produce at a loss for a certain period of time...”

Initiating changes
Times of crisis remind industries of their need to diversify their markets and jump on new opportunities. In December, a delegation of Cambodian textile manufacturing industry managers went to Japan with this aim in mind. The process was launched but will be “very slow, Van Sou Ieng predicted.

“Japan is interested in buying in Cambodia but they still find the quality of our goods insufficient. As a consequence their orders only come in small quantities, but they choose high quality products.They also advocate that a factory foreman should be in charge of ten workers, when our foremen are currently in charge of twenty... Increasing their number comes to a cost and on top of that, trade unions are opposing such reforms. Union representatives came with us to Japan and understood that this requirement did not come from management but from clients themselves”, the GMAC president detailed.

Besides, he adds, in order to keep the market shares they gained in the United States, employers are actively lobbying the American government into obtaining the elimination of customs barriers, since Cambodia is listed as a Least Developed Country. This approach also consists in reminding America of its commitments, i.e. encouraging the trade of products coming from developing countries on developed countries' markets, as agreed at the Doha Development Round organised by the World Trade Organisation.

Boosting the establishment of an ASEAN economic market
The industry of textile and textile-manufacturing is among the ASEAN's top priority sectors and to Cambodian Minister of Commerce Cham Prasidh, the only solution for ASEAN members to survive the world financial crisis is to act and speak “with one voice”, a strategy which would first require harmonisation of textile industry standards and a facilitation and simplification of exports and imports through the fast-track Green Lane system.

“In a context of high petrol prices (they went down but will go up again...) and expensive food, people and goods will not travel far. So, instead of looking for markets situated tens of thousands of kilometres away, we should find markets which are nearby and explore for instance markets in Japan, Korea, China, Australia, and maybe even India...”, the Minister suggested.

“Things have evolved and we must not fight each other but try and secure better positions from our neighbours within the ASEAN” and develop trade between ASEAN members, Cham Prasidh urged, adding that ASEAN members, on an individual basis, could not afford to compete with China or India, a lot “bigger” than them. Cham Prasidh thus put forward the need for unity and the building of a sense of complementarity among ASEAN country-members, who represent together all the different steps and specialities of the garment sector production.

An ASEAN brand
Material producers like Indonesia or the Philippines could then sell to countries like Cambodia and Laos, who for their part are more specialised in the manufacturing of clothes and could benefit from certain privileges like low customs tariffs regarding exportation to markets in developed countries, on account of their status as Least Developed Countries. This would eventually lead to products 100% “made in ASEAN”.

“Buyers must understand that we are coming from the ASEAN and that we will negotiate as a block. Leaders of the ASEAN repeatedly expressed the desire for all of us to start an ASEAN brand and promote it. But can we do it? Selling our products under one same name and one origin, the ASEAN?This would increase our competitiveness... A country on its own cannot do this, but several countries united together can achieve that!”, the Cambodian Minister of Commerce estimated. He expressed his determination as to the fact that this strategy would reduce countries' dependence on external buyers and should consequently and also make them less permeable to shocks coming from outside the ASEAN regional area. This 26th AFTEX Council Meeting also saw other representatives suggest, in the same spirit of unity, the creation of a fashion line and products that would be peculiar to the ASEAN and would be a concrete example of the synchronisation of efforts and energy deployed by all country-members.

Economic cooperation under way
“If we can buy our material from other ASEAN countries, this will mean quicker delivery, and cheaper too, since transportation will be shortened and smaller in quantities. As a consequence, our products will be less expensive and we will be more competitive” Van Sou Ieng insisted, arguing that some clients requested Cambodia to buy their material from suppliers within the ASEAN.

A few of the ASEAN countries have already passed duty-free bilateral agreements on the import of some of their products and reduce administrative customs paperwork. The idea put forward by all is therefore to see the development of a unique market peculiar to Southeast Asia and promoting the free circulation, exportation and importation of goods within the region, following the model of the European Union in building a strong economic block.

At regional level, ASEAN countries have already reached arrangements, such as a cooperation regarding the exchange of information – the AFTEX has already set up its own website in order to become better known and present factual information about the garment industry in each AFTEX country – and cooperation regarding the training of human resources, as reminded by the Vietnamese outgoing AFTEX chairman Le Quoc An, who will be replaced by Van Sou Ieng.

The AFTEX, with such ambitious strategies, hopes to become one of the world leaders in the textile industry.
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AFTEX: short presentation

The ASEAN Federation of Textile Industries (AFTEX) was formed in 1977 by the textile and textile manufacturing trade unions of 6 ASEAN nations at that time. Cambodia, Laos , Vietnam and Myanmar joined the group after their respective countries joined ASEAN.

For 30 years, AFTEX members have been meeting regularly to discuss policies and implement ASEAN-wide projects with the aim of having a common position on international trade policies, promoting intra-ASEAN trade and promoting ASEAN textile and garment to the global marketplace

Since 2008, the structure has an AFTEX permanent Secretary-General, a decision which came following the abolishment of the textile quota system in January 2005.

Apparel Slowdown: Cambodian garment workers worry about future prospects

PHNOM PENH, July 13, 2008 (AFP) - Sath Vanny sits anxiously at the door to her tiny one-room hut in the factory district of Cambodia's capital.

She left her hometown in the southern province of Takeo seven years ago to work at a women's shirt factory, sending most of her earnings back to help the family farm.

But a slowdown in orders has the 25-year-old worried about her job.

Overtime work has fallen off as Cambodia's textile sector, the country's biggest industrial employer, struggles against stiffer global competition and slowing demand.

More than 10 Chinese-owned factories have moved to cheaper markets, leaving hundreds of thousands of garment workers -- mostly young women like Vanny who support their impoverished families -- facing destitution.

"I was told that we didn't have as many orders as we used to, but with the basic wage I don't have money to send to my parents," says Vanny, who now earns less than 60 dollars per month.

"I can't imagine living without a factory job. I am so worried about my family," she adds, wiping away tears.

The garment industry earns 80 percent of Cambodia's foreign exchange earnings and employs an estimated 350,000 people in more than 300 factories.

The industry thrived after a unique labour-friendly deal with the United States in the 1990s.

Under the deal, Cambodia passed new labour laws, encouraged labour unions and allowed the International Labour Organisation (ILO) to inspect factories and publish its findings.

In turn, the United States cut tariffs on Cambodian garment exports, buying 70 percent of all of the country's textiles.

Cambodia maintained its higher working conditions after the deal expired in 2005, and garment-making has made the economy one of the fastest growing in the region. But it does not look built to last.

The industry grew only 8.0 percent last year after suffering a dismal fourth quarter that saw orders plummet by nearly half, according to the World Bank. It previously enjoyed growth of up to 20 percent.

Apparel exports have declined since October, mainly due to the US economic slowdown, according to Cambodia's commerce ministry.

Exports to the United States slipped 1.44 percent in the first quarter, compared with the same period last year, to some 500 million dollars, it added.

Meanwhile factory owners are looking abroad for greater productivity and lower costs, says Cambodia's Free Trade Union (FTU).

Sok Vannak, who has been working at a factory for almost 10 years, says her Chinese bosses often threaten to move the factory to Vietnam, where costs are cheaper.

"They warn us all the time. I'm afraid that it could come true," says the 27-year-old.

"I have no land to farm. Without the factory we will have a hard time surviving," Vannak says.

Garments are a shifting industry, says Kaing Monika, manager at the Garment Manufacturers Association of Cambodia. Many manufacturers could move to Vietnam, Bangladesh or India, he adds.

"Production costs -- oil and power -- are high in Cambodia, and the demand for higher wages also put the country's garment industry in danger," he says.

Factory owners complain about a proliferation of labour unions and illegal strikes, but workers say they merely want proper wages.

About 27,000 garment workers have quit in the last year in search of higher pay, according the FTU.

Some have gone to look for work in rural areas where the cost of living is lower, while others have found work at karaoke parlours where they're in danger of falling into prostitution, says FTU president Chea Mony.

Next year will bring even more competition when US restrictions on Chinese textile exports are scheduled to end.

"China and Vietnam are still our direct competitors, and so far we have nothing special to offer buyers. That is why we're very concerned," says Oum Mean, of Cambodia's labour ministry.

"To counter this competition, we must increase productivity, quality and extend our reputation as having high labour standards," he says.

Cambodian garment exports to U.S. decline seriously

PHNOM PENH, June 10 (Xinhua) -- Apparel exports to the United States, Cambodia's largest market, have been on serious decline since last October, national media Tuesday quoted the Cambodian Ministry of Commerce as saying.

Officials attribute the decline to increasing competition from Vietnam, which joined the World Trade Organization in January 2007, and the brewing U.S. economic slowdown, said English-Khmer language newspaper the Cambodian Daily.

Nevertheless, exports to Canada and the European Union have grown marginally, mitigating the effects on the country's garment industry, it added.

In the last three months of 2007, apparel exports to U.S. were 352 million U.S. dollars, 30 percent below the 2006 level, according to the ministry.

In the first three months of this year, exports to U.S. slipped1.44 percent compared with the same period last year, to some 500 million U.S. dollars, it said.

But overall, Cambodian apparel exports have increased slightly,4.78 percent in the first three months of this year over the same period last year, because of rising demand in Europe and Canada, it added.

Exports to EU have been on the rise since 2003, a trend that has been bolstered by the falling dollar, said Kaing Monika, external affairs manager for the Garment Manufacturers Association of Cambodia.

Rising production costs in China have worked in Cambodia's favor, as buyers search for alternative sources of clothing, he added.

In the past decade, garment has been the kingdom's foremost pillar industry and largest foreign currency generator, whose export volumes used to account for some 75 percent of the country's total during its peak years.