Raising the bar at Better Factories Cambodia
A decade after the launch of the International Labor Organization's (ILO) Better Factories Cambodia scheme, a new report describes the initiative as a "positive development" - but says more should be done to make global buyers more accountable for the wages paid to garment workers.
Introduced back in 2001, there's no doubt the programme has played a significant role in improving working conditions in the country's production plants.
Its aim is to ensure facilities comply with international recognised labour standards and Cambodia's own labour laws, with knock-on benefits leading to better working conditions and productivity.
That said, research by labour rights groups the Clean Clothes Campaign and the Community Legal Education Center to mark the scheme's first decade concludes that despite its best efforts, Cambodia is not yet an "ethical sourcing option."
Their report '10 Years of the Better Factories Cambodia Project: A critical evaluation' found that despite its achievements, "working conditions in Cambodia's garment industry remain very poor generally."
Unions continue to face difficulties in their collective bargaining activities; workers are forced into excessive overtime; and they suffer severe health and safety problems, which are most dramatically exemplified by the mass fainting of workers.
Indeed, it has been calculated that 1,900 workers in 12 shoe and garment factories fainted in 2011 alone, with a combination of poor health, long working days and low wages thought to be the main causes.
The minimum wage for Cambodia's garment workers also lags far behind current inflation rates, and fails to meet basic needs. It rose by $5 to $66 a month in January, yet still remains among the lowest in Asia. Massive inflation has also meant Cambodian garment workers have seen a real wage loss of over 14% during the last 12 years.
Meanwhile, employers increasingly use fixed-duration contracts to avoid paying maternity leave benefits to female staff (the vast majority of workers) or to discourage workers from joining unions. And unionists are often confronted with dismissal, harassment and even violence.
Workers have increasingly resorted to strike action to demand more pay and better working conditions - with recent disturbances reported at Gap supplier Ocean Garment Factory and Singapore-owned garment maker SL Garment Processing (Cambodia) Company which makes clothing for Levi's and H&M.
The garment industry accounts for the bulk of Cambodia's manufacturing employment and foreign earnings. Indeed, in the first ten months of 2011, total garment export values reached over US$3.2bn, a jump of 32% year-on-year. Over the same time, exports to the EU surged 60% to over $886m.
Managed by the International Labour Organization (ILO), the Better Factories initiative also works closely with the Cambodian government, the Garment Manufacturers' Association in Cambodia (GMAC) and labour union federations, as well as international retailers, brands and importers who produce and buy apparel.
However, by its own admission the most recent semi-annual update from the BFC Project Advisory Committee in June this year noted that the number of strikes has doubled year-on-year, and that there has "been little significant improvement" in the causes of group fainting.
It also said there has "been a drop in compliance levels" in other areas too, including maternity entitlements and severance payments to workers on Fixed-Duration Contracts (FDC).
The Clean Clothes Campaign and the Community Legal Education Center propose recommendations around six areas where the BFC programme could be improved if it is to have a lasting effect.
- Sanctions for factories violating labour laws
The BFC can only report offences and urge manufacturers to comply with established labour standards; it cannot enforce compliance, which is a government task. Applying pressure on Cambodia's government to increase sanctions for those violating labour laws would, in turn, provide more incentives for factories to improve their working conditions.
- Increasing union involvement
Unions are key to the workforce's capacity to defend itself, but workers who want to organise are often confronted with anti-union measures, such as discrimination, demotion or the termination of their contracts. The BFC needs to focus on protecting and empowering unions and their members if it wants to seriously address the many problems that unions continue to face, the report notes.
- Expanding its scope to subcontracted factories
The current scope of BFC monitoring is restricted to factories registered with the GMAC and the Ministry of Commerce. Expanding its operations to include factories not registered with the GMAC, as well as efforts to root out and report illegal subcontracting, would help reduce the problem of manufacturers using subcontracting factories to escape the monitoring process.
- Improving the monitoring process
Likewise, the monitoring process itself could be improved to get a better understanding of factory conditions through unannounced inspections, more inspections, and by conducting worker interviews outside the workplace.
- Improving transparency
The BFC semi-annual reports include general compliance trends and progress made on improving working conditions - but needs more transparency, the report suggests. This could involve sharing factory reports with the unions involved; as well as more detailed reports that publicise findings such as the names of factories that have violated Cambodian labour laws along with details of specific violations. A list of buyers who purchase from BFC-monitored factories should also be made public in the hope this will put pressure on factories to improve working conditions or risk losing business.
- Taking the responsibilities of buyers seriously
The main focus of the BFC's program lies with the manufacturers, who also shoulder the costs of compliance. This is problematic because buyers can negatively impact working conditions through their sourcing and purchasing practices. For example, excessive working hours are closely related to low wage rates - but can be hard to address if the prices that brands and retailers pay for their merchandise continue to fall. Buyers must begin to play a larger role in the BFC's program, researchers believe, not only financially but also with other activities such as factory-level training. This then offers scope to highlight those buyers that are actively participating.
Finally, it is recommended that the BFC program should assess the impact that purchasing practices have on working conditions, including the possibility of paying a living wage.
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