PHNOM PENH, Cambodia — Levi Strauss confirmed Tuesday it has scaled back orders from the denim company’s supplier factories in Cambodia for this year due to the country’s political instability and its repression of workers’ rights.

This story first appeared in the May 28, 2014 issue of WWD. Subscribe Today.

The country’s $5 billion apparel industry has been plagued with frequent demonstrations since late last year when workers launched a nationwide strike for a minimum wage raise to $160 a month. On Jan. 3, government security forces opened fire on rioting workers in Phnom Penh, leaving at least five dead and more than 40 people injured. Twenty-three unionists, workers and bystanders were arrested for participating in the demonstrations and charged with causing violence and destruction of property.

The crackdown has been a major cause of concern for international unions and major clothing brands — such as Levi’s, Gap, H&M and Puma — and high-level meetings between all parties were convened in February soon after the shooting, and again on Monday. A representative for IndustriALL Global Union said after Monday’s meeting that one of the brands had reduced their sourcing by 50 percent due to these issues, though he declined to name it.

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Levi Strauss & Co. confirmed Tuesday it had cut back production from its suppliers to “reduce supply-chain risk and ensure delivery,” adding that political stability and respect for human and worker rights are “essential” for the company.

“Continued repression of workers and human rights in Cambodia is a serious concern for us,” a Levi’s spokesperson said via e-mail, which did not specify how much the reduction in exports is worth in value terms.

“[W]e share the Cambodian government’s interest in a peaceful, constructive way forward on the issues at the root of current labor unrest,” Levi’s said. “We hope to see swift progress on the outstanding labor and human rights concerns so our sourcing can return to previous levels.”

Since the Jan. 3 shooting, labor activists have said trade-union rights and freedom of association are being threatened, referring to the authorities’ frequent arrests and detention of workers and union members participating in demonstrations.

On Sunday, eight members of the independent Coalition of Cambodian Apparel Workers’ Democratic Union were charged with incitement for taking part in a garment factory strike in southwestern Cambodia. Before that, in early May, six union representatives in Kampong Speu province, which borders Phnom Penh, were arrested for helping workers stage a strike at a shoe factory, and three more were seized a week later. All were charged with incitement.

The government has stated that the armed forces shooting at workers during the Jan. 3 demonstration were maintaining law and order, and no one in the armed forces has been punished or charged.

David Welsh, the Cambodia country director for the Solidarity Center — an international labor rights organization affiliated with AFL-CIO — said this “ongoing assault on trade-union workers’ rights” is having a direct commercial impact on the country’s apparel industry.

“If this continues, it’s going to result in a pullout and it would show the government that [the brands] are serious about withholding orders,” Welsh said. “At this stage, to get the government and industry’s attention — and to focus on changing behaviors — are things that have commercial impact.”

The impact has yet to be seen in export data, however. For the year ending March 31, apparel and textile imports to the U.S. from Cambodia were up 0.8 percent to 1.1 billion square meter equivalents, valued at $2.6 billion.

Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, said Levi’s decision to reduce sourcing is their choice.

“That is their prerogative. Whatever their reason, they don’t have to explain their stance to us,” Loo said, declining to comment further.

The verdict for the 23 men arrested on Jan. 2 and 3 for participating in the demonstrations will be delivered Friday by the municipal court, said Ny Chakrya, chief investigator for local rights group Adhoc, which has been closely monitoring the trials.

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