Blog: Leonie BarrieTextile sourcing spotlight shines on Cambodia

Leonie Barrie | 4 November 2013

The sourcing spotlight seems to be shifting to Cambodia's garment industry, which is currently fighting to maintain its competitive edge while tackling a range of labour problems.

Although exports are up 32% in the first six months of the year, the country has suffered from poor working conditions and industrial unrest sparked by poor pay. It is, however, trying to improve its standards, bolstered by the ILO's Better Factories Cambodia monitoring initiative.

One such project has seen thousands of garment and footwear workers take part in a pioneering mobile phone call-in project. But while many callers had a good knowledge of the issues covered, 32% incorrectly believed that striking workers were entitled to receive wages.

Clothing retail giant H&M is leading calls for the Cambodian government to conduct an annual review of the minimum wage, to help ease worker unrest. The review should take into account national inflation and the consumer price index, the fashion firm says.

But government officials, garment manufacturers and union leaders in Bangladesh last week failed to agree on a rise in the minimum wage paid to garment workers. A 50% increase to BDT4500 (US$57.88) per month offered by factory owners was rejected as "unacceptable".

The latest update from The World Bank sees Bangladesh's apparel industry at a critical crossroads, describing the industry's image as "severely tarnished" following a series of deadly industrial incidents.

Meanwhile, environmental pressure group Greenpeace International is stepping up efforts to assess companies' progress at eliminating toxic chemical discharges from their supply chains. Its new Detox Catwalk describes Nike, Adidas and Li Ning as "greenwashers" who have failed to follow through on commitments - although both Adidas and Nike say they have made "meaningful progress" towards their goals.

And apparel group Hanesbrands has posted a double-digit third quarter profit increase, boosted by fatter margins and improved market share. The US company said all four of its business segments had recorded double-digit operating margins, while the group's overall gross margin rose 240 basis points to 35.2%.

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