Greedy labor killing garment industry, management says

Garments exports, one of the main pillars of the economy, are down 25 percent so far this year. Exports to the United States, Cambodia’s leading buyer, are down 31 percent. Exports to the EU are down 10 percent.

Ken Loo, director general of the Garment Manufacturers Association of Cambodia (GMAC), said he told buyers Monday evening that they should maintain orders in support of the International Labour Organisation (ILO)-led initiative Better Factories Cambodia that attempts to guarantee labour standards.

He conceded, however, that “some buyers do not want to order garment products from Cambodia because they think that Cambodian [garments] … are too expensive”.

Cambodian garments are too expensive? Why?

The insinuation here is that Cambodian garment workers make too much money, thus driving the cost of garments beyond what is tenable on the open market. Macro-economists have a name for this kind of argument. In technical terms, it’s called as “a load of bollocks.”

Labor costs account for a small fraction of a garment’s total cost, typically 15 percent or less. In Cambodia, the average garment worker makes less than 35 cents per hour ($67 monthly wage average / 192-hour work month). The Gap, which sources from Cambodia, made roughly $221 million in profits between January and August this year.

Priced out of the building boom

John Vink reports on the skyrocketing cost of bricks, the primary building block of Cambodia’s current boom.

The price of Cambodian bricks has exploded. There is such a demand by building companies for bricks (semi-handmade, Cambodian style and supposedly without child labour) that the big contractors, anticipating a supply gap, have started hoarding huge amounts of bricks, increasing demand to such an extent that the price of a truckload of bricks has soared nearly twofold, going from 370$ for one truckload to 850/1000$ in March 2008. The smaller contractors and builders are stuck: they used to buy one truckload at a time and now can’t afford to buy the next one unless they make their customer pay more..

Excellent photos, too. These kids are probably just “playing.”

And about those bricks: When building costs double, people stop building. In terms of signs of a cooling economy, a slowdown in construction is a good leading indicator.

Labor protest turns violent

VIA KI: Angry mob of garment workers destroy sewing factory.

The more than 1,000 workers exploded into a demonstration, they were all armed with wooden sticks and steel rods, and they all had pieces of rock in their hands. They forced themselves in and smashed the doors, the glass windows, as well as a number of other equipments including computers inside the factory which were completely destroyed. The workers indicated that they held a strike to ask the factory owner to resolve the labor issue inside the factory for the past two months already, starting since November 2007, but the owner refused to resolve the dispute, not only that, he also decided to close the factory and refused to pay the money owed to the workers, and the workers are left with no other choice but to resort to violence.

No matter how valid the perceived provocation, the sight of angry garment workers looting their workplace is definitely not the kind of image the Chamber of Commerce likes to promote. To the contrary, such violent convulsions send a decidedly uninviting message to potential investors. You would think that was obvious.

Labor unrest, cont.

Licadho reports:

At least 10 members of the Cambodia Confederation of Apparel Worker Democratic Unions (CCAWDU) were injured in the violence. Four were struck by vehicles leaving the factory at high speed, and the remainder beaten by police or military police officers.

Getting paid

VIA KI: In a story about Sam Rainsy and striking factory workers, a story translated from Kampuchea Thmei says this about factory workers demands.

In the morning of 28 January 2008, opposition leader Sam Rainsy, accompanied by Phnom Penh SRP MPs Ho Vann and Nou Sovath, visited the Phnom Penh Garment City Ltd. where 400 striking workers were demanding (1) for a $6.83 monthly food supplement, and (2) that they be paid in cash salary rather than factory tickets.

Paid in factory tickets? What? More details, please.

If this is just a bad translation for “checks,” then it’s a really, really bad translation. But that seems unlikely. Nobody complains about getting a check as long as it doesn’t bounce. The chances seem much greater that this is some half-clever racket to gyp factory workers out of their monthly pay packets.

Or not. Who knows? Maybe in a subsequent issue the Kampuchea Thmei might be kind enough to let the rest of the world in on their little secret.

Management v. labor

On Monday the ILO released a report that said productivity in Southeast Asia was “stagnant,” and Cambodia was one of the worst performers. On Tuesday, the Garment Manufactures of Cambodia all but accused organized labor for the problem.

Cambodian garment makers Tuesday urged the government to better regulate labour unions, saying illegal strikes and power struggles among more than 1,000 workers’ groups threaten the key textile trade.

With an average of four unions per factory, managers spend more than half of their time negotiating often conflicting demands while productivity plummets, said Van Sou Ieng of the Garment Manufacturers Association of Cambodia (GMAC).

“In short, there are too many unions,” he told a meeting between the private sector and government officials.

Too many unions? Of course the garment manufacturers would say that. No matter what happens, management always claims that unions are but a single collective bargaining agreement away from bankrupting the entire industry. The truth, however, is that management hopes to screw even more blood from the turnip. After all, they didn’t kill Chea Vichea,  Ros Sovannareth, and Hy Vuthy because those guys were good for profits.

Disorganized labor

As much as everybody really should sympathize with the Chea family and the plight of organized labor, it’s exactly this kind of idiocy that gives unions a bad name.

Phnom Penh – Members of Cambodia’s largest and most powerful union will call a national strike if the National Assembly votes to decrease night wages this month, its president said Monday.

Chea Mony, president of the Free Trade Union of Workers of the Kingdom of Cambodia (FTU), warned that the union’s members would strike if the National Assembly decides to lower night wages from 200 to 130 per cent of day rates in a vote scheduled for May 17.

At last check, there were approximately zero garment factories in the Kingdom that offered night work. The reason for that, the garment manufacturers say, is that the 200% wage makes nighttime shifts unaffordable. In fact, the very reason the government intends to lower the nighttime wage is to encourage garment factories to create more jobs.

Chea Mony is against this?

UPDATE: Not zero. Ten!

Court upholds conviction for union leader’s “killers”

That Cambodia’s court system is irredeemably corrupt really should come as no surprise.

Phnom Penh – The Cambodian Appeals Court on Thursday dismissed the appeal of the convicted killers of a prominent union activist and said 20-year jail sentences would stand in a verdict that infuriated human-rights groups who have campaigned for the defendants’ release.

Judge Saly Theara took minutes to uphold the August 2005 sentence against Born Samnang, 27, and Sok Sam Oeun, 40, for the January 2004 shooting death of opposition-aligned union leader Chea Vichea. The two men were not present in court.

Outrageous. But not at all unexpected. Surely there is a special place in hell for the men behind this travesty.

1,000 days

The Cambodia Daily this morning revisits the story of Born Samnang and Sok Sam Oeun, the two men convicted three years ago for the murder of Free Trade Union leader Chea Vichea.

Supporters of the two men jailed for the 2004 killing of union leader Chea Vichea gathered in Phnom Penh on Monday to mark the 1,000th day that the pair have spent in detention and to call for their release.

Some 70 people, including rights workers and the parents and relatives of Born Samnang and Sok Sam Oeun, congregated at Wat Svay Popey on Sothearos Boulevard to pray for the pair.

“These two men, who no one believes are guilty, have already lost 1,000 days of their lives locked up behind bars,” Kek Galabru, president of local rights group Licadho, said in a statement. “They must be set free, so they can return to their families and to their normal lives,” she added.

Considering that disgraced police chief Heng Pov headed this investigation, the court really should release the two men on bail and reinvestigate the case. The court’s continued indifference only fuels suspicions that those at the very top of the heap have something to hide.

The Chea Vichea appeal

As James Welsh and Yun Samean explain in the Cambodia Daily this morning, the Phnom Penh Appeals Court is scheduled to hear the case of Born Samnang and Sok Sam Oeun on Friday.

In 2004 the Phnom Penh Municipal Court convicted Born Samnang and Sok Sam Oeun of killing Free Trade Union president Chea Vichea. In its case against the two men the court presented virtually no evidence to support its guilty verdict.

The lawyer handling the appeals case — executive director of the Cambodian Defenders Project Sok Sam Oeun, who shares the same name but is not related to the defendant — holds out hope that new evidence will persuade the court to overturn the convictions against his clients.

In a statement written in August in Bangkok, where she was seeking asylum with the UN for fear of her life, Va Sothy said she is certain Born Samnang and Sok Sam Oeun—who is not related to the CDP executive director—did not kill Free Trade Union leader Chea Vichea

A copy of her statement, which was thumbprinted and signed in the presence of a Bangkok-based notary lawyer Aug 10, was obtained Sunday.

Va Sothy, who ran the Phnom Penh newsstand where Chea Vichea was gunned down in broad daylight Jan 22, 2004, said she was told to remain silent in the wake of the killing by now-disgraced former Phnom Penh police chief Heng Pov. Va Sothy added that she feared for her life if she remained in Cambodia.

Despite the CDP lawyer’s optimism — he believes there is a 70 percent chance of the court accepting Va Sothy’s statement –  it seems a virtual certainty that the Appeals Court will take about two seconds to dismiss the new eye-witness account and re-affirm the lower court’s decisions.

After all, the Municipal Court originally convicted Born Samnang and Sok Sam Oeun based on coerced confessions and in spite of credible accusations of witness intimidation. To think that the court for some reason has got religion on the matter not only seems irrationally optimistic, but puts an incredible amount of good faith into a court system virtually devoid of  integrity.

Sweatshops in Cambodia

In an otherwise accurate, even-handed and well-presented view of Cambodia, Steve Goodman offers this statement about Cambodia’s garment industry and the economy it drives.

The biggest and only cash cow for Cambodia is textile production and export, which bring in about $3 billion a year. Unfortunately, many textile factories operate with sweatshop conditions with long hours, low pay, and few rights for the poor workers.

Not only does this breezily dismiss all the hard-working souls in the tourism and heroin-smuggling industries, but it must drive the International Labour Organization nuts.

Whether through lack of a proper publicity campaign or something else, the work of the ILO gets consistently overlooked in conversations about Cambodia’s garment industry, and not a month goes by that someone or other has this or that to say about Cambodia’s sweatshops. While bad factories certainly exist, this IPS story from June makes pretty clear that the 6-year-old Better Factories Cambodia program has made remarkable improvements in the employment conditions of Cambodia’s garment factory workers.

The clothes produced by the 270,000 factory workers, of whom 90 percent are women, bring in over two billion US dollars annually in foreign earnings to the country’s coffers. That amounts to 80 percent of earnings from Cambodia’s exports.

Underpinning this feat is a unique programme to uphold high labour standards in each factory — rather than reduce them to sweatshops –that have won wide acceptance by international clothing buyers in the West, which include such well-known brand names as ‘Gap’, ‘Banana Republic’ and ‘Polo’. …

A 2005 World Bank study also gives high marks for the ‘’sweatshop-free” environment of the Cambodian garment sector. The working conditions in the Phnom Penh-based industry ranked higher than other Asian countries that have a similar industry, such as Bangladesh, Thailand, Vietnam and China. Cambodia outperformed these countries on ”union rights,” too, according to the Bank. …

”It is a unique programme since no other garment factories in South-east Asia are monitored by the ILO,” Ros Harvey, chief technical advisor for the global labour agency-run programme, told IPS. ”The ILO’s engagement with the industry has created the space for labour issues to be addressed. Many buyers are concerned about these ethical issues.”

Besides the right to form or join unions, the predominantly female labour force has also seen improvements on such fronts as receiving the agreed wages, getting overtime pay, enjoying annual leave and also being guaranteed maternity leave, says Harvey. ”These concerns were not fixed overnight. We are always working to improve standards.”

Unfortunately, the ILO is expected in 2009 to hand over financial control of the Better Factories program to government and industry groups, and it’s not at all clear how that shift in financial support will effect the current balance of power.

Perhaps unsurprisingly, the government so far has shown an affinity for business, not labor, and whether the government can stay neutral in a post-ILO environment will have a tremendous impact on the ability of unions to continue their advances or see them whittled away.

Labor talks

This is admittedly a minor grievance, but today’s story in the Cambodia Daily about negotiations between the Garment Manufacturers Association of Cambodia and union representatives doesn’t really get it right.

The Daily gives the story this headline, “Garment Unions Retreat in Latest GMAC Talks,” and leads with this:

Garment factory unions backed down from their demand for an $82 monthly minimum wage during negotiations with the Garment Manufacturers Association of Cambodia in Phnom Penh Monday, officials said.

But to say that the unions “backed down” is not really what happened. The two sides are involved in negotiations, and as anyone who knows how these things work will tell you, each side opens with a list of “in a perfect world” demands, and from there the bargaining proceeds to an equitable middle ground.

No one ever expects the other side to accept their opening proposal.

The unions no more “retreated” from their initial demand of $82 per month than the Manufacturers Association “retreated” by raising their initial offer of a monthly increase from nothing to $2.50. That’s just how negotiations work, and by itself gives no indication of who may be winning or losing. It’s still way too early to discern that.

Strike threats

This news brief comes from the Thursday edition of the Cambodia Daily and seems to indicate that the leadership of Cambodia’s largest union holds a dangerously flawed understanding of why unions exist and how they work.

FTU Threatens Strike If 3 Members Aren’t Freed

The Free Trade Union sent a petition Thursday to the Kandal Provincial Court threatening a general strike if three of its activists are not immediately released. Three former Genuine Garment Factory workers — Lach Sambo, 43, Yin Khun, 31, and Sal Kimsan, 29 — were arrested on July 4 for allegedly detaining Chinese staff members for several hours during a strike in late June. FTU Deputy Secretary-General Sam Srey Mom said that no date had been set for the strike. The court’s chief prosecutor, Hout Vuthy, said that he was unaware of the petition.

The sole idea of unionized labor is to improve the working conditions of its members. This happens through a process known as collective bargaining, whereby working conditions are negotiated between labor and management.

The sole reason management listens to labor’s demands is because the union holds the right to strike, thus shutting the employer down and causing financial and other losses.

At risk of pointing out the obvious, the Kandal court does not employ FTU members, so threats of a strike are virtually certain to fail in moving the court to action. Even worse, striking for political reasons is almost certainly illegal.

That the leadership of Cambodia’s largest union would make such a clearly bad decision does little to inspire hope in the immediate prospects of the FTU and its members.