GENEVA — Cambodia’s apparel sector shed nearly 70,000 jobs and witnessed the closure of 70 factories during the 12 months through October, largely the result of the global economic crisis, according to a report by the International Labor Organization.
This story first appeared in the December 29, 2009 issue of WWD. Subscribe Today.
The impact has been mitigated to some extent, however, by some new factories opening, the ILO said.
The cuts include the loss of 48,000 jobs in 172 apparel factories monitored by the ILO to ensure working conditions are in compliance with international labor standards as part of its Better Factories Cambodia project that works with the government, the garment manufacturers association and labor unions to enhance conditions in the sector.
But even among apparel workers who are employed, the report said, “nearly half have experienced a reduction to their income compared to one year ago.” More than 80 percent of the apparel factories monitored had less than 2,000 employees, the report said.
“Now more than ever, industry partners must focus on increasing productivity and preserving industrial peace in order to strengthen the industry post-crisis,” said the report.
Trade analysts point out Cambodia’s lack of market diversification, marked by a heavy reliance on the U.S. for its apparel exports, have hit the industry this year more than some other poor, but more diversified, Asian exporters like Bangladesh.
In 2008, Cambodia’s apparel exports were valued at $3.6 billion, with the U.S. its principal market outlet, according to World Trade Organization data. The value of apparel shipments in 2008 to the U.S. fell 2 percent to $2.5 billion and are expected to post steeper drops this year.
Factory conditions in Cambodia “remain generally good,” the ILO report said, noting that in the plants surveyed in the six months through October, there was full compliance with minimum wage requirements for regular workers and stood at around 89 percent for casual workers. Moreover, 58 percent provided protective equipment such as goggles and gloves, and 59 percent had installed needle guards on sewing machines.
One factory was found to have underage workers, the report said, but noted that as Cambodia does not have a universal birth registry system, falsification of age-verifying documents “significantly impeded the detection of underage workers.”
The report also noted that the ILO project is aware of allegations of corruption in Cambodian apparel factories “between some managers and union representatives, but this is difficult to independently verify.” The survey found that five factories had interfered with freedom of association and two had engaged in antiunion discrimination.
The report notes that 131 apparel factories had workers who belonged to labor unions, a drop of 8 percent from the previous six months to around 76 percent of plants monitored.