Better working conditions: the key to survival in the post-quota era

(2007)

Article published in September 2007 in "Union View" n°5, also available at http://www.ituc-csi.org/IMG/pdf/CambodgeEN.pdf

Cambodia has managed to withstand the shock of textile quota removal, partly thanks to two ILO projects designed to improve working conditions and reduce the scale of labour disputes.

The end, in 2005, of the quota system, which had long regulated a number of countries’ textile and clothing exports to the world’s biggest markets (primarily the United States and the European Union), was met with great trepidation in Cambodia, where clothing accounts for 80% of all exports. Garment manufacturing is the largest privatesector employer in the country, employing 330,000 workers, mostly young women. Taking into account the remittances they send to their families back in Cambodia’s rural areas and the number of indirect jobs generated by the sector (transport, factory construction, meals produced for the

workers, etc.), the livelihoods of approximately 1.7 million people depend on this sector. Given the lack of infrastructure in Cambodia and the high “administrative costs” (owed largely to corruption), the prospect of increased competition with the Chinese giant following quota removal was indeed a cause for concern.

Two and a half years after the lifting of the quotas, however, the garment sector continues to thrive in Cambodia, with the number of jobs constantly rising. The key to Cambodia’s success is its reputation for respecting international labour standards, placing Cambodia among the countries of choice for buyers anxious to preserve a clean brand image. This respect for international labour standards within factories is a direct consequence of a trade agreement signed in January 1999 between the governments of the United States and Cambodia. The quota system was still in place at the time and the agreement provided Cambodia with the opportunity to increase its textile export quota every year in return for proof that its labour laws and international standards were being duly applied in the sector.

500 criteria to be met

Since the signing of the agreement, the ILO has been publishing two reports a year on Cambodia’s compliance with the criteria laid down, based on factory visits carried out by a team of ILO monitors who check the working conditions against a list of 500 criteria drawn from Cambodia’s labour legislation and the labour standards of the ILO. The monitors interview the employers, trade union representatives and workers separately, as well as meeting workers outside the factory to avoid any sway the managers may have over their comments. When irregularities are detected, the company is not quoted in the next report, but given a period of grace during which it can take measures to remedy the situation, failing which its name is published in the following report.

ILO monitoring has been kept in place since the end of the quota system and its contribution to improving working conditions in Cambodia’s garment factories is widely recognised. It is not, however, without limitations. It does not, for example, cover violations committed outside the factory gates, even in cases where trade unionists are murdered or assaulted. Another shortfall, as expressed by Chea Mony, general secretary of the FTUWKC (1), is that: “monitoring doesn’t necessarily improve social dialogue between workers and employers. In more than half of the factories visited by the ILO, our representatives still have great trouble securing a meeting with the managers”.

The fact that so many different trade unions exist side by side in Cambodia (over 900 in around 300 factories) does nothing to contribute to social dialogue with employers, especially given that many are trade unions in name only. “There are sometimes seven or eight unions in the same factory,” underlines Ken Loo, general secretary of the GMAC, the Garment Manufacturers’ Association in Cambodia. You can imagine how difficult it is for the management have to deal with seven unions, especially given that they often have different ideologies.” Another obstacle to social dialogue is communication problems on the shop floor. “Most of the supervisors are Chinese and the workers are Cambodian. Some supervisors don’t speak Khmer and have to rely on interpreters, who are often not very good,” explains Ken Loo. Many strikes arise out of disputes that escalate because the supervisors and workers don’t speak the same language or understand each other’s culture. Others are linked to the abusive use of short-term contracts, anti-union conduct, non-payment of bonuses, etc.

     “It’s difficult to remain patient under such circumstances”

Employers argue that Cambodian trade unions tend to go on strike before negotiating. “This is not entirely true, says Noun Rithy, coordinator of the ILO workers’ education project. Some employers refuse to talk to the unions until they are on strike. Once a strike is called, they are quick to negotiate and the dispute is settled. So who is to blame? People in high places don’t tend to understand the plight of workers, who have to live in cramped accommodation, sharing with several other people, and with less than a dollar a day for food. It is extremely difficult to remain patient when one works so much and has to live and eat in this way. If

the managers had to put up with the same as the workers, they would go on strike immediately.”

Many disputes are resolved quite rapidly thanks to another original mechanism, the Arbitration Council, set up as part of an ILO project. It is a tripartite body that fills the role of employment tribunals, which have not yet been introduced in Cambodia. The Council is highly respected for the quality and impartiality of its procedures and rulings. John Ritchottee, chief technical advisor of the labour disputes resolution project: “According to Cambodian law, when a labour dispute arises, the Ministry of Employment has to send in its own arbitrators. If they fail to resolve the dispute within 15 day, it is sent to the Arbitration Council, which has 15 days to hear the parties and deliver a ruling. The parties have to decide whether the ruling is to be binding or not before the hearing starts. So the proceedings are compulsory, but their outcome is not necessarily binding. 70% of all disputes are settled in this way”. Given that one of the Arbitration Council’s missions is to ensure the transparency of its proceedings, the rulings it delivers, and the grounds for them, are published on Internet. (2)

Since its creation in 2003, the Arbitration Council has made some contribution to improving social dialogue in Cambodia. “We always advise the parties about good practices in the area of social dialogue and respect for the law, about ways of developing good cooperation and better communication in the workplace, explains one of the arbitrators. When workers go on strike and the employer asks the Arbitration Council to settle it, the workers generally agree, because they are given a chance to appear before a neutral body to try and reach a settlement or obtain a clear decision. Waiting for a ruling from the Arbitration Council also allows workers to find out whether their demands comply with the law.”

(1) Free Trade Union of Workers of the Kingdom of Cambodia, www.ftuwkc.org

(2) See http://www.arbitrationcouncil.org/

BOX

“Buyers want more for less”

The globalisation of the garment trade has made things more complicated for Cambodian suppliers. “The situation is becoming more difficult the world over, explains Ken Loo, general secretary of the GMAC, the Garment Manufacturers’ Association in Cambodia. The buyers use international competition to place more demands on their suppliers – more services, better quality, shorter delivery deadlines, lower prices, etc, - and give us nothing in return. They want more for less. It’s all the more difficult given that garment manufacturing is generally based in the least developed countries, where there are major problems with infrastructure and corruption, like in Cambodia.”

According to the employers’ representative, it is because of the growing difficulties arising from the globalisation of demand that companies are having to resort to short-term employment contracts. “It’s true that some factories try to escape their legal obligations by resorting to short-term contracts, and we condemn this practice. But most of them fulfil all their obligations and are forced to resort to short-term contracts because their orders are not stable, they never know whether they’ll be renewed or not the following season.”