Better factories for Cambodia

By Eric Beauchemin

In 1994, Cambodia began to emerge from decades of instability, war and genocide. Companies started setting up garment factories, which today account for 80 percent of Cambodia's export earnings. Initially, most of the factories were sweatshops, but since 2001 the International Labour Organisation (ILO) has been running a unique programme to improve working conditions in the industry.

The Better Factories programme is the result of a trade accord signed between the United States and Cambodia in 1999. Washington agreed to give the Southeast Asian nation quotas in return for an improvement in working conditions in the garment sector. Neither side knew how to measure whether that was actually happening, so they approached the ILO.

Poor conditions
Initially, says Ros Harvey, the Better Factories' chief technical advisor, the conditions were quite poor. "But over the past five years," she says:
"We've seen a significant improvement. For example, wages are now regularly paid, as is overtime, and women get maternity leave. However there are still problems. It's not a perfect world in Cambodia, but we are engaged in a process of improvement that is delivering real benefits to working people."

The Better Factories programme doesn't only monitor the garment industry. It also helps factories improve working conditions. Over half of the Better Factories' budget is spent in training and education.

GATT
In 1995, GATT, the General Agreement on Tariffs and Trade, decided that industrialised countries had 10 years to open their textile and garment industries. It gave developed countries some breathing space, forcing companies in developing countries, such as China and India, but also Cambodia, to pay extra to export their products to countries in the European Union, North America and elsewhere.

Experts predicted that the phasing out of quotas would decimate the garment industries of countries like Cambodia because they wouldn't be able to compete. But that hasn't happened, says Ros Harvey.

"The government, employers and unions have agreed that they're trying to pursue a market niche, where compliance with labour standards matters. As a result, both the quantity and value of Cambodian garment exports have increased."

"I think that this creates a degree of optimism that there are companies that care about this. It shows that a developing country can capture the benefits of globalisation for its workers by insisting that the labour laws are respected."

Success story
One of the success stories in the Better Factories programme is New Island Clothing (Cambodia) Limited, which was set up five years ago by a British group on the outskirts of the Cambodian capital, Phnom Penh. It employs nearly 600 people and manufactures clothes for companies around the world.

The company has committed itself to exceeding government and international employment and labour standards. General manager Adrian Ross (photo) says:
"Our intention was to bring to Cambodia a factory that would be considered to be of a world-class standard and to create a good environment for our potential Cambodian employees. We believe that a good factory is well-organised, creating the products and environment for good quality work. When customers come along and see that the place is properly structured and looks right and feels right, they're confident to put their product in with us."

Corporate social responsibility
Cambodia is the only country in the world where the ILO publishes the names of factories and their progress in making improvements. Ros Harvey: "This is very unique, particularly in the context of corporate social responsibility or CSR. It means that international companies that are sourcing in a developing country should try to ensure that working conditions in their supply chain comply with the law. In Cambodia, we're actually monitoring that and also providing information in a transparent manner. This ensures that CSR is not just window-dressing."

Unexpected results
Most of the workers in the garment sector, which represents 80 percent of Cambodia's export earnings, are women. On average, they earn 60 dollars, compared to the average monthly salary of 20 dollars. It may not seem like much, but it can make a huge difference in the lives of these women and their families. Many of the employees send up to half the wages to their families in the countryside.

The Better Factories programme is having unexpected results, says Ros Harvey.
"The status of women has improved significantly in their families, where they are the principle breadwinner. In Cambodia, that is a very important thing. Women have very low status compared to men. There are very worrying trends in terms of domestic violence and the attitude of men to women. If this sector of the economy and these opportunities can correct some of that and create a better status for women, I think that is a really positive impact as well."

Child labour
The Better Factories programme is also helping eliminate one of the major problems in Southeast Asia: child labour. Most of the women working in factories today are over 18. According to Ros Harvey,

"The ILO puts a lot of lot of emphasis on maternity protection and the right to breast-feeding, which is protected by Cambodian law, to ensure that women really do have those options so that they can combine their family and their working life. Because this is one of the few opportunities for what are relatively good incomes in Cambodia, you're seeing more women staying in the work force rather than just leaving when they get married."