Brands, Unions Urge for Stability in Cambodia’s Industry

Representatives met with Cambodia’s deputy prime minister on Monday to stress the importance of stability in the $5 billion industry.

PHNOM PENH, Cambodia — About 30 representatives of major clothing brands and international trade unions met with Cambodia’s deputy prime minister on Monday to stress the importance of stability in the $5 billion industry and credibility for the country’s rule of law.

This story first appeared in the May 27, 2014 issue of WWD.  Subscribe Today.

This is the second such meeting since the Jan. 3 clash when a demonstration for higher wages descended into violence after armed security forces opened fire at protesting workers. The incident, which left at least five workers dead and more than 40 injured, was of great concern to major exporting brands — such as Gap, H&M, Levi’s, Inditex and Puma. The first meeting between all parties was held here on Feb. 19 to discuss the violence perpetrated against the workers and the importance of setting a methodology for the minimum wage.

Monday’s meeting with Cambodian Deputy Prime Minister Keat Chhon also comes a day after eight representatives of an independent union, Cambodia Coalition of Apparel Workers Democratic Union, were charged with incitement for taking part in a garment protest in the southwestern province of Takeo.

Labor and human rights activists have said the government’s increasing use of incitement charges since the Jan. 3 shooting was a way to intimidate workers and unions, and that the space for freedom of association has shrunk significantly in the last year.

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Jyrki Raina, secretary general of IndustriALL Global Union — who attended the nearly two-hour meeting — said the issues of respecting workers’ rights and maintaining industry stability were the main concerns.

“The brands underlined the need for stability. They talked about the increasing pressures from consumers so the image [of Cambodia] is very important,” Raina said, adding that because of this instability, one major brand — which he declined to name — has scaled back production by 50 percent.

“My attitude is we need to get rid of the court cases, all the court cases,” he continued. “If the government is serious [about] building constructive labor relations, you cannot do that if you, at the same time, have court cases against independent unions.”

As for the discussion on minimum wage, Raina said the process has been “too slow,” and that the brands have reiterated their commitment to raise prices for factory owners if the minimum wage was raised to a living wage — a term used to describe a salary that can provide an average worker with a decent living.

Heng Sour, spokesman for the Ministry of Labor, called the discussion “fruitful and positive.” He also said that any blame for withdrawal by the brands should be pinned on the employers and the workers.

“Who causes the uncertainty and unpredictability? I think both unions and employers. So if they think employment and work is beneficial to all of them, they have to find a way out,” Sour said. “That’s why we need to be patient and bring all parties together.”

He added that Cambodia’s Labor Law only mentions the need for a minimum wage.

“We are not talking about a fair wage; we are not talking about a living wage,” Sour said, adding that all parties need to come together to set a transparent and fair method to setting the minimum wage.

H&M spokeswoman Anna Eriksson said by e-mail that the Swedish retailer wants to continue its business relationship with Cambodia, and that the country needs to develop an “advanced and mature textile industry.”

“We are dependent on stable markets in which people are treated with respect, and with our dedication, we can contribute to positive development,” Eriksson said.

IndustriALL’s Raina stressed that while none of the brands made any “threats” about leaving the country, there are serious issues with the government’s ability to maintain a secure and reliable industry, while projecting with a positive image for labor rights.

“This, again, is a question of Cambodia’s credibility and its rule of law,” Raina said. “The world is watching. This is an opportunity. We all want Cambodia to maintain and keep the garment industry and not lose it.”

The government has steadfastly insisted that the shooting in Jan. 3 was to maintain law and order, and no one from the security forces has ever been charged or punished. Meanwhile, the Municipal Court is currently processing a trial against 23 workers, union representatives and bystanders charged with causing violence and destruction of property from the Jan. 3 demonstration.