European and international business associations representing apparel, footwear and travel goods buyers have voiced concerns at the labour and human rights situation in Cambodia, noting the potential withdrawal of EU EBA benefits and US GSP benefits are “worrying developments” for companies that source from the country.
In a joint letter addressed to Samdech Hun Sen, prime minister of Cambodia, eight business associations – including the American Apparel & Footwear Association (AAFA), Amfori, and the Federation of the European Sporting Goods Industry (FESI) – are calling for a roadmap of timebound commitments to tackle the issues.
The international coalition – which also includes the World Federation of the Sporting Goods Industry (WFSGI), and the Fair Labor Association (FLA) – also says recently introduced legislation in the US Congress to review Cambodia’s Generalized System of Preferences (GSP) benefits “will severely damage the Cambodian industry, and the millions of Cambodians who work in the industry.”
The letter follows confirmation by the European Union in February that it is to start the process that could temporarily suspend Cambodia’s duty-free trade benefits under the Everything But Arms (EBA) trade scheme. EBA preferences can be removed if beneficiary countries fail to respect core human rights and labour rights – and the EU has for some time been concerned about human rights violations in Cambodia.
Among the issues, the groups say “criminal charges and convictions remain in place against many labor leaders, the Trade Union Law of 2016 continues to restrict the establishment of unions and union activity, and the diminished role and reduced independence of the Arbitration Council continues to undercut what was a very effective dispute resolution mechanism.
“The very real threat of withdrawal from EU EBA benefits and US GSP benefits will severely damage the Cambodian industry, and the millions of Cambodians who work in the industry”
“Each of these developments undermines progress towards improving worker rights and stabilising the garment, footwear, and travel goods manufacturing sector. These issues are emblematic of some of the larger human rights issues in Cambodia.”
Cambodia is a strategic supplier to many of the world’s largest garment, footwear, and travel goods companies. It was the sixth largest garment supplier and the fourth largest footwear supplier to the US last year, and the fifth largest garment and footwear supplier to the European market.
Sales to Europe and the US combined in 2018 reached US$$8.5bn, or more than one-third (38%) of Cambodia’s total Gross Domestic Product (GDP). Further, apparel, footwear, and travel goods account for 80% of Cambodia’s total exports.
“As we discussed with your ministers in October, we stand ready to work with your government to address these issues to ensure that international brands and retailers increasingly look to Cambodia as a major sourcing destination,” the groups say.