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Cambodia Labour Standards in the Garment Supply Chain

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Cambodia Labour Standards in the Garment Supply Chain Country study Cambodia Labour Standards in the Garment Supply Chain Strategic Partnership for Garment Supply Chain Transformation COUNTRY STUDY CAMBODIA 2016 Labour Standards in the Garment Supply Chain By Jeroen Merk, with inputs from Veasna Nuon Country study Cambodia - Labour standards in the garment supply chain 2 Table of Contents 1. Introduction 4 2. Country Information 6 2.1 General country information 7 2.2 Economic indicators 7 2.3 Social, political and governance indicators 8 2.4 General Human Rights Situation 9 3. Stakeholders 10 3.1 Government institutions 11 3.2 Employer organisation 11 3.3 Trade unions 11 3.4 Labour NGOs 12 3.5 Gender focus and women groups 14 3.6 Brands and factories 14 4. The garment industry 16 4.1 Organisation of the garment industry 17 5. Industrial Relations 20 5.1 Union density in country 21 5.2 Collective bargaining agreements (CBAs) 21 5.3 Labour Dispute Resolution Process 22 5.4 Social dialogue on the national and sectoral level 22 6. Implementation of the core labour standards 24 A. Employment is freely chosen 26 B. No discrimination in employment 26 C. No exploitation of child labour 27 D. Freedom of association and the right to collective bargaining 28 E. Payment of a living wage 30 F. No excessive working hours 32 G. Safe and healthy working conditions 33 H. Legally-binding employment relationship 35 7. Possible areas of ‘intervention’ 36 7.1 Living wage 37 7.2 Freedom of association and right to collective bargaining. 39 7.3 Gender-based violence 40 Appendix List of interviews 42 Country study Cambodia - Labour standards in the garment supply chain 3 1. Introduction Strategic Partnership for Garment Supply Chain Transformation Country study Cambodia - Labour standards in the garment supply chain 4 1. Introduction The present country study on Cambodia, has been carried out for CNV Internationaal in the context of the Partnership for Supply Chain Transformation. is based on desk and original research on the current status of the industry structure, social dialogue, gender-based violence and living wage debates in the apparel industry in Cambodia for use in the first phase of this project. The Fair Wear Foundation with its alliance partners CNV Internationaal and FNV Mondiaal has been selected by the Dutch Ministry of Foreign Affairs for a five year Strategic partnership for Garment Supply Chain Transformation starting 2016 as part of its “Dialogue and Dissent” policy framework. The primary goal of this initiative is to improve the lobbying and advocacy capacity of Trade Unions and labour related NGOs by enhancing their understanding of international RMG supply chains, access to critical information and know-how. Opportunities will be identified to develop pilot experiences in the supply chain resulting in good practices related to living wages, gender-based violence and freedom of association and collective bargaining, which will facilitate more effective social dialogue and monitoring of human rights compliance at the factory level and reinforce the value of NGOs and trade unions to all supply chain stakeholders. It provides the following information: Chapter 2 provides general country information, describes the economic, social, political, and governance situation as well as the general human rights situation, using international indicators and comparing the country to other garment producing countries. Chapter 3 lists the main stakeholders that have an impact on labour conditions in the garment/textile industry, or that play an active role in monitoring the situation for workers in the industry. This chapter serves as a reference point for stakeholders and brands that want to engage with or consult a local stakeholder to find further information or help concerning their activities in Cambodia. Chapter 4 presents an overview of the situation for the garment industry in Cambodia, including main areas of production, products and prospects. Chapter 5 describes the trade union situation in general and specifically for the garment industry. This chapter provides important information for understanding how well challenges regarding working conditions are handled through social dialogue. Chapter 6 provides an assessment of the implementation of every core labour standard based on national laws and regulations, as well as different stakeholders’ views on implementation. It also references official statistics on compliance where available. Chapter 7 discusses possible areas for the introduction of ‘pilot projects’ resulting in good practices related to living wages, gender-based violence reduction and freedom of association and collective bargaining in Cambodia’s garment sector with various possibilities for cooperation among labour rights advocates. Country study Cambodia - Labour standards in the garment supply chain 5 2. Country information Strategic Partnership for Garment Supply Chain Transformation Country study Cambodia - Labour standards in the garment supply chain 6 2. Country information 2.1 General country information The Kingdom of Cambodia (hereafter Cambodia) is located in the southern part of Southeast Asia’s Indochina Peninsula. The country covers an area of 181.035 km2 and shares a border with Thailand, Vietnam and Laos. Cambodia’s southeastern border lies along the Gulf of Thailand. Its population exceeds 15 million. 2.2 Economic indicators The Cambodian economy has grown consistently from a state of extreme poverty in the early 1990s. Over the period 2010 and 2016, its GDP grew some 6 to 7% on a yearly basis.1 In 2015, Cambodia’s per capita income was $3,487 (in PPP terms) and $1,168 in nominal per capita terms.2 Cambodia’s per capita income is comparable to that of Bangladesh, but is less than Vietnam’s and Indonesia’s. Most Cambodians remain dependent on agriculture for their income and many Cambodians continue to live in poverty. Official state figures indicate that 17.7% of Cambodia’s population lives below the poverty line, while the UNDP estimates that almost 70% live in or near multi-dimensional poverty (a more nuanced definition of poverty, beyond mere income-centred poverty measures).3 Cambodia’s total workforce is 7,974,000,4 which is relatively small compared to Indonesia, Vietnam and Bangladesh. Its official unemployment rate is negligible, namely, 0.3%.5 Nearly half of the population, or 48.7%, is employed in agriculture, 19.9% in industry and 31.5% in the service industry. 6 The overwhelming majority – over 80%, of workers aged 15 or older – is employed in the informal sector, with only 17.7% employed in a registered workplace. The share of women wage earners is 80.8%, which is high compared to that of other Asian countries.7 However, the percentage of women workers in vulnerable employment is higher compared to men (70% and 59% respectively). 8 Since its transition from a central planning to a market economy in the early 1990s, Cambodia has used the garment industry to promote an export-oriented policy. Manufacturers were lured here from Taiwan, Singapore, Korea and Malaysia to establish factories in Cambodia. These manufacturers continue to dominate Cambodia’s garment industry. In 1998, a trade agreement between the US and Cambodia permitted increases in annual import quotas with the stipulation that Cambodia would improve its working conditions. This resulted in the establishment of Better Factories Cambodia, an organisation that monitors working conditions in the garment industry, which factories must officially join in order to get an export license. Two decades later, the garment industry is still of vital importance to Cambodia’s export industry. Approximately 800,000 workers, 90 to 95% of whom are young women (18-35), were in March 2015 employed in 640 registered (formal) garment factories.9 The industry accounts for 16% of GDP and 80% of export earnings. The garment and footwear sectors account for 77% of all manufacturing employees in Cambodia.10 Other important industries include tourism, construction and agriculture. Cambodia’s footwear industry has grown rapidly in recent years, although it remains relatively small compared to the garment industry. The country is currently seeking to move into higher-value-added global supply chains, such as auto parts and electronics production. Country study Cambodia - Labour standards in the garment supply chain 7 CNV Internationaal (logo klein) policy. Manufacturers were lured here from Taiwan, Singapore, Korea and Malaysia to establish factories in Cambodia. These manufacturers continue to dominate Cambodia’s garment industry. In 1998, a trade agreement between the US and Cambodia permitted increases in annual import quotas with the stipulation that Cambodia would improve its working conditions. This resulted in the establishment of Better Factories Cambodia, an organisation that monitors working conditions in the garment industry, which factories must officially join in order to get an export license. Two decades later, the garment industry is still of vital importance to Cambodia’s export industry. Approximately 800,000 workers, 90 to 95% of whom are young women (18-35), were in March 2015 employed in 640 registered (formal) garment factories.9 The industry accounts for 16% of GDP and 80% of export earnings. The garment and footwear sectors account for 77% of all manufacturing employees in Cambodia. 10 Other important industries include tourism, construction and agriculture. Cambodia’s footwear industry has grown rapidly in recent years, although it remains relatively small compared to the garment industry. The country is currently seeking to move into higher-value-added global supply chains, such as auto parts and electronics production. Figure 1. GDP per capita (current USD) in Selected Garment Producing Countries Cambodia’s gross domestic product (GDP) per capita is more or less equal to Bangladesh’s but remains significantly lower than in Vietnam and Indonesia, both significant garment exporters (figure 1). Cambodia’s Human Development Index value for 2014 is 0.555, a medium human development figure, which ranks it at 143rd of 188 countries.
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