ACT is a new collective bargaining initiative in Cambodia to secure a living wage

ACT is a new collective bargaining initiative in Cambodia to secure a living wage

Nothing less than industry-wide collaboration will work when it comes to creating living wages in the garment industry, unions say, as talks get underway in Cambodia to try to change the way companies source garments to ensure higher wages can be paid.

The IndustriAll Global Union last week met with clothing brands, suppliers, the International Labour Organization (ILO) and government ministries in Phnom Penh to discuss ACT, a new initiative launched this year to find a way of linking the supply chain responsibilities of buyers to the collective bargaining process between local unions and employers.

Around 14 global brands and retailers are involved in the process, which IndustriAll first mentioned last month, including H&M, Inditex, Primark, C&A and Topshop, with Cambodia chosen as the first country in which to start the process.

Jenny Holdcroft, policy director at IndustriAll, believes Cambodia - with a garment and footwear industry worth in excess of US$5bn a year - was an obvious starting point.

“We've had a lot of disputation and violence in the streets, so clearly we need a better mechanism for Cambodia," she tells just-style. "A lot of the brands are sourcing from Cambodia and are already engaging in the wage issue there, so it seems fairly obvious as a first place to start and it's well unionised. All of the countries are going to be difficult, but we had to pick one.”

Positive reaction

Holdcroft says the response and feedback from those involved in the discussions to date has been “very positive”.

“People can see that this actually makes sense. It has the capacity to deliver in a way that what is happening at the moment can't. What you're seeing with minimum wage negotiations is the suppliers saying they can't pay more because the brands aren't paying more. The government says it can't raise wages because there's an impact on other industries, and it will impact on competitiveness. And then unions are saying we want more money for our members because they're not living wages. So we struggle with these processes to get small, incremental raises. But it is never going to address the fundamental issue of garment industry wages not matching production.

“This initiative is so important and it's just going to grow and grow, and it's going to become the initiative for wages in the garment sector, and everything else will just fall away. If we can get everybody promoting this, then we've got an actual chance of achieving it.”

Holdcroft also points out that “industry-wide collective bargaining takes wages out of competition, which means supplier factories can’t push down wages to win business. Support of the brands through their purchasing practices will mean that factories will be able to pay workers more, while improved working conditions, productivity and efficiency can also be covered in an industry-wide agreement.”

The talks come as Cambodia's Government begins discussions on raising the country's garment sector minimum wage from $128.


The Garment Manufacturers Association in Cambodia (GMAC), however, which was also present at the ACT meeting, is understood to have warned of a slowdown in the country's garment industry, as brands faced with rising wages pull out in favour of other markets.

Holdcroft dismisses this suggestion and says the comments are not borne out by the evidence.

“We find it a very strange position for employers to take, talking down the industry instead of talking it up. There is no evidence of that. Of course there will always be a shifting of orders in the industry, but if you look at the export figures, as the minimum wage has gone up, so have orders.”

Holdcroft says the Cambodian Government has been involved in the ACT talks, but admitted it has been “cautious” due to doubts over the brands' bona fide.

“They want to see how it develops. But the Ministry of Labour has expressed a willingness to work with us to look at technically how it might be done. That's more than we expected.”

Addressing the wage issue

She suggests that, to date, unilateral, voluntary and non-binding efforts by all have overwhelmingly failed to improve wages and working hours.

“We believe this model will help address the issue of wages in the garment industry because it provides both a mechanism for raising wages through industry bargaining, but also a mechanism that can be linked to the purchasing practices of brands in a way that the current minimum wage fixing mechanism that still exists in many of these countries cannot.

“It's about acknowledging the reality of the industry and the way purchasing is done and the impact it ultimately has on wages in factories, instead of just demanding that brands pay more, which we know isn't practically feasible for any single brand to do in relation to it's factories that it shares with other brands. We've taken a really deep look at what mechanism we need to develop, so it's a long-term vision because it's not going to give quick gains. That is the philosophy behind it, which is why it has to be industry-wide. Nothing less than industry-wide change will work.”

The framework for action detailed in the MoU includes: working with the ILO to engage all partners for an “holistic approach” to joint goals; corporate signatories ensuring their purchasing practices facilitate the payment of a living wage; and that they exchange the necessary information regarding their strategic supplier factories with IndustriAll for the purpose of effective implementation in the target countries; and making joint approaches to governments in support of higher minimum wage outcomes, including brand commitments to continued sourcing.

Managers and workers will also be trained on freedom of association and collective bargaining, and coordinators will be appointed at global and local levels to ensure effective implementation of joint goals.

Holdcroft says there is no timeframe for the completion of the first programme in Cambodia and no plans at this stage to “seek out new members”.

“The ACT process is a global one, and Cambodia is the first country. There will be others, but we need to get the willingness of the actors at country level to work with us to see what it might look like for Cambodia. So we're not going to impose this on anybody, and we're not going to set any timeframe.”