WASHINGTON — Cambodia’s commerce minister, here on Monday to make a pitch for more foreign direct investment, revealed that a second major U.S. company — Target Corp. — has reduced its orders in the Southeast Asian nation over labor unrest.
Speaking at the Center for International and Strategic Studies, Cambodian Commerce Minister Sun Chanthol said Target has pulled some production out of the country following a similar move by Levi Strauss & Co., which said in late May that it was scaling back on orders based on labor and human rights concerns.
“Levi Strauss reduced their orders from Cambodia,” Chanthol said. “Target also reduced their orders from Cambodia because they are afraid of the labor unrest and so on, but so far since the incident in January it is practically calm and safe.”
A Target spokesman said, “We can’t speak directly to the comments of the commerce minister as we don’t detail sourcing plans by region. As with any country, we adjust sourcing based on a number of factors.”
Cambodian workers, labor groups and union leaders have staged months of protests and strikes, calling for an increase in the country’s minimum wage to $160 a month from the current rate of $100 a month. The Cambodian government, under pressure, raised the minimum wage to the current rate from $80 in February.
A nationwide strike in Cambodia turned deadly on Jan. 3, when Cambodian security forces opened fire on thousands of workers, leaving five dead and injuring more than 40. The violence against garment workers has not only caused a backlash among U.S. buyers, but it has also raised the scrutiny of the Obama administration.
Chanthol said he met with U.S. Trade Representative Michael Froman on Thursday to discuss a potential bilateral investment treaty. The U.S. and Cambodia agreed to begin exploratory discussions of a potential BIT in 2012.
A USTR spokesman told WWD that Froman raised concerns about the Jan. 3 violence that killed five garment workers and the reported subsequent crackdown by the Cambodian government on the right to demonstrate and freedom of association. The spokesman did not respond to whether the violence and repression has hurt Cambodia’s prospects for a BIT with the U.S.
Chanthol said the government’s hope is that a BIT will serve as a stepping stone for the country to potentially join the Trans-Pacific Partnership talks between the U.S. and 11 other countries, including Vietnam, Malaysia, Japan and Singapore.
“Cambodia is not a party to TPP, but it doesn’t mean we do not want to be a part of TPP,” he said. “So we need to get ready — sign the bilateral investment treaty with the U.S., that is one condition that will lead us to TPP,” adding that Cambodia could be ready to join TPP, if accepted by the TPP partners, in three years.
Chanthol sought to reassure foreign investors that the government is making reforms on a wide range of issues, including corruption, minimum wage and the freedom of association. He said officials are meeting with the International Labor Organization and the World Bank to discuss the minimum wage issue and labor reforms.
“We are working with the ILO and sitting down with the World Bank to do a scientific calculation on what the number should be,” he said. “Is it $160 or should it be $200, or should it be $157? Before, we just pulled the number out of the air…but now we have to do it properly.”
Chanthol noted that a major factor in considering whether to increase the minimum wage rate again is global competitiveness.
“When we do this, we want to make sure Cambodia is still competitive,” Chanthol said. “You cannot price yourself out of the market. If you say $160 or $200, then [buyers] will say ‘Look, I’m going to Myanmar,’” because they pay a lower wage.
A group of representatives from 30 major clothing brands and international trade unions met with Cambodia’s deputy prime minister late last month to discuss concerns about violence and labor unrest, and stress the importance of stability in the garment sector.
It was the second meeting since the violence began on Jan. 3. Major buyers, including H&M, Levi’s, Gap, Inditex and Puma, have pressed for an end to the violence and a methodology for calculating the minimum wage.
Labor and human rights activists have argued that the government is intimidating workers and unions by bringing incitement charges against them and has also significantly reduced the space for freedom of association in the last year. Chanthol contended that the government upholds the rights of unions and said some factories have representatives from several different unions.
He said the government is in the process of drafting a union law “not to stop them from organizing a union, but at least for them to understand the role and responsibilities of employers, employees and unions.”
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews