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May 11, 2021

Latest lockdown adds to Cambodia garment sector woes

Cambodia's latest Covid-19 lockdown restrictions were eased last week – but many of the capital's garment factories are still dealing with impacts after a third wave of the virus surged through dozens of factories.

By Leonie Barrie

The Phnom Penh city municipality on Wednesday night (5 May) reduced the number of areas under strictest ‘red zone’ lockdown measures to a few patches on the map, where factories are unable to open.

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This includes parts of Choam Chao I commune (city district), Toul Sangke I commune, and neighbourhoods just outside the city in Kandal province’s Bek Chan commune.

However, these areas have a high density of factories and worker housing, with the continued restrictions sustaining the industry’s troubles after 1,673 factory workers in Cambodia (1,598 in Phnom Penh) were found Covid-19 positive.

Red zone restrictions ban almost all economic activity, down to the small local markets providing fresh vegetables, meat and staples to workers, while individuals living in these areas are forced to remain in their homes unless there is a medical emergency.

As of Thursday (6 May), some other areas of the capital had been allocated easier ‘orange zone’ rules. Here factory owners and unions had hoped their factories might open, but they are expected to remain shut.

Only in the ‘yellow zones’ proportion of Phnom Penh can manufacturing plants reopen, albeit at partial capacity. Also, some workers live in the restricted zones, making a return to work impossible.

Ahead of the easing of restrictions, a labour advisory committee – including labour and vocational training ministry officials and garment industry members – drafted suggestions for reopening factories outside the red zones.

The committee suggested that factories resume operations at 50% of their workforce, splitting workers’ shifts at two-week periods and paying 50% of wages.

Along with previously recommended measures to spray disinfectant frequently and provide masks, the committee also recommended supplying worker names and contacts to the labour ministry to aid testing.

It also pushed for the vaccination of workers, as well as food vendors and drivers who operate near factories. The committee also recommended closing factory operations if one employee tested positive, according to the document.

Mixed experiences

Khun Tharo, a coordinator for labour advocacy group Central, praised the committee’s stricter health and safety proposals, but added a proposal that workers should be allowed to stay home out of concern for their health without losing pay, and that such measures should be implemented transparently.

He also said there was no real assurance regarding workplace health standards “unless there’s a concrete measure to inspect or monitor” plants. Without that, “I still imagine there’s a risk of workers going back at this time,” he said.

Ken Loo, secretary general of the Garment Manufacturers Association in Cambodia (GMAC), said its members had had mixed experiences – some were able to continue operations in recent weeks, while others closed completely or had limited because workforces lived in red zones.

“It looks like factories that continue to be in red zones will not be able to resume operations, and this has impacted our ability to fulfil our contract obligations to buyers – if we don’t deliver, we don’t get paid,” he said.

Asked about the government’s changing lockdown measures, he said it would have an impact on factories, noting that factories just had to adapt.

However, Raymond Tam, executive director at Phnom Penh-based Jie Wei Cambodia Garment Factory and a GMAC member, noted that factories were under pressure from big financial losses after losing four weeks’ production time or reduced operations through limited worker availability.

He said some buyers’ production demands were “crazy.” He warned that brands may move production in future to “more stable” countries like Vietnam and China, where the pandemic is more controlled.

“This is now the whole world’s problem and [buyers are] still pushing us for on time shipment,” he commented.

As reported on just-style last autumn, the Covid-19 pandemic and the partial withdrawal of Cambodia’s duty-free access to the European Union (EU) have dealt a double blow to the country

Related Companies

Free Whitepaper
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What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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