In Cambodia, the textile sector discovers social dialogue

Since 1er October, all Cambodian textile employees contribute towards their retirement. They had been entitled to a health insurance system for three years. And from 1er next January, the minimum wage will increase from the equivalent of 192 to 203 dollars (198 to 209 €). Added to this are some advantages: a transport and meal bonus, the increase in overtime which also increases.

“The unions were asking for $215 (221 €). It is unreasonable, because we are in direct competition with Vietnam. It is impossible for us to have higher salaries than them…”justifies Monita Kaing, Deputy Secretary General of the Association of Textile Manufacturers of Cambodia, the employers’ union.

In this country which is one of the poorest on the Indochinese peninsula, this increase is still progress. It was obtained during tripartite negotiations between textile bosses, unions and government representatives. It is now an established fact: these negotiations take place every year. They have enabled spectacular growth in wages, which were still around 70 dollars (72 €) eight years ago.

“In town, it is still difficult to live on this income. But for those working in factories in rural areas, the situation has improved considerably. We see families who have been able to buy a motorcycle and get out of the poverty that was their lot a few years ago”says Béatrice Montariol, project manager at Sipar, an association that works for the literacy of textile workers, by creating libraries in factories.

More than a million employees in the textile industry

Cambodia has become, in fifteen years, a large production base for the global textile industry. This country of 16 million inhabitants has 900 factories that employ more than a million workers, mostly women. The sector covers clothing, footwear and travel bags. It represents 70% of the country’s exports, i.e. more than 10 billion euros in 2021.

The textile industry has developed thanks to Chinese investments, whose industrialists have sought a place to relocate when Chinese wages have increased. Then came investors from Taiwan, Singapore, and Europeans. For Cambodia, which emerged bloodless from the years of the Khmer Rouge dictatorship and long remained on the sidelines of Asian take-off, this represented an opportunity, even if the daily life of employees remains difficult.

Chaoum, 36, works for example in the manufacture of English suits at Dewhirst, a British company which also has factories in China and notably supplies Marks and Spencer. She is behind her sewing machine six days a week, from 7 a.m. to 3:45 p.m. Her husband is employed in the same factory and the couple live in a room rented for $50 (€51) a month. “Our rent is rising faster than our salary”, she regrets. Despite this, she manages to send $100 a month to her parents in her home village, who are raising the couple’s two children.

60% of staff are unionized

The plant employs 3,400 people. It is located on Veng Craing, the main textile avenue in Phnom Penh. It is a district where rowdy shopping malls, which appeared only a few years ago, adjoin the working-class housing estates where workers live, many of whom have recently arrived in the capital. Dewhirst, like all factories, is organized into production lines. The workers work in rows of sewing machines in the main hall. The design offices and cutting rooms are upstairs. It takes 200 operations to assemble a costume.

“Here, the canteen is free and the salary is $2 higher than the legal minimum”, says Ratha Wong, Dewhirst’s director of human resources. He notes that 60% of employees are unionized, a union with which “relations are good”. He meets with union representatives twice a month to discuss working conditions.

The rise of trade unions in Cambodia is the major fact that has made it possible to change the condition of textile workers. After the big protests of 2014, they achieved a number of advances. “There is now a national conciliation commission to resolve collective disputes. Unions can seize it. It examines 40 cases a year”notes Antoine Fontaine, a French lawyer established in Cambodia for twenty-five years.

There is still a lack of employment tribunals that would allow employees to defend themselves in the event of individual disputes. “A number of factory unions are still very much controlled by the bosses”nuance a good connoisseur of the sector.

Factory inspections and audits

If things have improved, it is also thanks to international pressure: the European Union and the United States granted Cambodia the right to export without taxes in exchange for the establishment of a system of inspection, known as Better Factories. Inspectors from the International Labor Organization visit factories and publish the results of their audits. Major contractors are turning away from poorly rated factories, which has forced the sector to evolve.

“These inspections are conducted in a serious way, even if they leave out a number of clandestine workshops which work under contract, and where the situation remains much worse”says Béatrice Montariol.

This trade preference system was challenged by the European Union in 2020. Due to Cambodia’s human rights failures, the EU reintroduced taxes on a number of products. “It had an impact on us, especially since this measure came at the time of the pandemic”, regrets Monita Kaing. Cambodia, on the other hand, benefited from the coup in neighboring Burma in 2021. Many orders shifted to Cambodia, so exports continued to increase.

The United States, the first customer of Cambodian textiles

Cambodia has 700 companies working in the garment industry employing 800,000 workers. Added to this are 120 factories that make travel bags and luggage, with 150,000 employees, as well as 120 shoe factories that employ 130,000 employees, according to figures from the Association of the textile industry and the Clothing of Cambodia (GMAC).

43% of exportsfrom the countryheaded for the United States, 19% to the European Union and 9% to China.

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