Roundup: Labor report shows shrink of Cambodia's garment industry

Altogether 62 garment and shoe- making factories were closed in Cambodia in 2006, while 20 others have suspended their operation, a sign of shrink of the kingdom's pillar industry, an official report said on Tuesday.

As a result, 27,644 workers became unemployed, 20,441 of them women, while 150,000 went home to wait for their factories to re- open, if possible, said the labor report released to the media during a seminar organized by the Ministry of Vocational Training and Labor here on Tuesday.

Meanwhile, the report said that from 2004 to 2006, there were 594 labor disputes, 288 of them organized by unions, or 48.48 percent of the total.

Some 557 factories were vexed with such disputes, 180 in 2006, 148 in 2005 and 229 in 2004, it said.

The report did not say the rise of labor disputes led to the shrink of the industry, but local media have widely reported that the disputes and ensuing strikes, together with Vietnam's entry to the World Trade Organization (WTO), have driven garment and shoe makers to directly close their factories in Cambodia, or close first and then transfer to the neighboring country to enjoy better operation climate.

In addition, the report said that there are currently in Cambodia 420 garment factories and 19 shoe factories with 287,005 workers, 256,934 of them women.

Earlier on Jan. 15, reports said that the number of strikes and labor disputes in the garment industry in 2006 has been the largest that the kingdom ever experienced.

Compared to 67 cases of garment strikes in 2005 in Cambodia, 2006 saw 103 such incidents, according to a recent report from the Labor Ministry's Labor Dispute Department.

Labor disputes also increased from 148 cases in 2005 to 217 last year, a number significantly higher than the one that was disclosed on Tuesday.

Some 65 percent of the disputes were resolved with ministry brokering and the rest sent to the Arbitration Council, a body that issues awards on labor disagreement.

Out of last year's strikes, 78.61 percent occurred due to employers' failure to respect the labor law, 3.5 percent due to employee demands for compensation as their factories closed and bosses ran off to dodge the responsibility and 1.4 percent due to discrimination against unions, said the department's report.

"This year (2006) was bad. Workers took industrial action, failing to seek prior negotiation with factory management. They should clarify reasons behind a strike," said Van Sou Ieng, president of the Garment Manufacturers Association in Cambodia ( GMAC), adding that strikes claimed 15 million U.S. dollars of loss for the industrialists in 2006 or 40 percent higher than the previous year.

Due to the strikes and after rounds of negotiations, the minimum monthly wage for an average garment factory worker has been increased from 45 U.S. dollars to 50 U.S. dollars starting from 2007, a good news for the employees but another burden for the producers.

Garment has been one of Cambodia's major pillars of foreign currency attraction.

In 2005, the kingdom exported 2.29 billion U.S. dollars' worth of garment and textile products,
accounting for 79 percent of its total exports.

Source: Xinhua