In an open letter to global apparel brands that buy from factories in Cambodia, the International Labour Organization urges the companies to “play their part” in absorbing the financial strain local garment factories expect from the Kingdom’s new minimum wage.
The January 1 letter estimates that factories in Cambodia will take more than an 18 per cent hit from the Ministry of Labour’s November decision to hike floor salaries from $100 per month to $128 in 2015.
“It is important that all sides work together to ensure Cambodia’s garment industry remains economically viable”, said Maurizio Bussi, the ILO’s country director for Thailand, Cambodia and Laos, is quoted as saying in the letter. “We call on the global brands to play their part. We have received encouraging signals that key buyers will honour the pledge they gave the Cambodian Government in September.”
In a September 18 letter to Deputy Prime Minister Keat Chhon and the heads of three ministries, eight brands – including H&M, Inditex, C&A, N Brown Group plc, Tchibo, Next Retail Ltd, Primark and New Look – pledged to alter their pricing structure to ensure workers earn a living wage.
A 2013 government survey found a living wage in the Kingdom to be between $155 and $177 per month.
As of press time yesterday, none of the brands contacted for this story had replied to emailed questions about whether they would take action to ease financial pressure on the factories that supply them.
The eight European brands that pledged support for their suppliers, and American brands that have implied willingness to do so, are obliged to change pricing structures to ensure factories can pay at least minimum wages, said Dave Welsh, country director for labour rights group Solidarity Center.
“Those brands that are committed to a living wage can work with their suppliers . . . to make sure their suppliers pay not only the minimum wage, but a living wage,” Welsh said yesterday. “Ultimately, the brands set the costing . . . They really do have the most leverage.”