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Ministries: Join BFC or lose export privileges

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Factory owners and directors in the bag, travel-goods, textile and garment export sectors have been told to register with Better Factories Cambodia (BFC) and obtain certification on working conditions. Post Staff

Ministries: Join BFC or lose export privileges

Two ministries on February 22 ordered factory owners and directors in the textile, garment, bag and travel-goods export sectors to register with Better Factories Cambodia (BFC) and obtain certification on working conditions.

Certification will allow factories, enterprises and labour contractors to export merchandise under Generalised System of Preferences (GSP) schemes provided by a handful of countries and an economic union, the ministries of Labour and Vocational Training, and Commerce said in a joint statement.

According to the UN Conference on Trade and Development (UNCTAD), the 13 countries and economic unions that grant GSP preferences are Australia, Belarus, Canada, the EU, Iceland, Japan, Kazakhstan, New Zealand, Norway, Russia, Switzerland, Turkey and the US.

The BFC project was established in 2001 in a unique partnership between the UN’s International Labour Organisation (ILO) and the International Finance Corporation (IFC), a member of the World Bank.

The ministries said registration to BFC requires a “financial contribution . . . in support of the project” paid to the Garment Manufacturers Association in Cambodia (GMAC).

From next year, operators in the sectors must have a certificate of compliance on working conditions issued by an inspector from the labour ministry who ascertains that the establishment is consistent with Prakas 434/20 K.B/Br.K.Kh.L, dated December 31, 2020, they said.

The prakas is on the “Issuance of Certification of Compliance Concerning Working Conditions and the Joint Action Plan of the Better Factories Cambodia Project and the Ministry of Labour and Vocational Training”, they added.

The statement said: “In the event that you fail to meet the above requirement, you will not be eligible to export.

“The ministries are firmly counting on all owners or directors of factories and enterprises as well as labour contractors in the textile, garment, bag and travel-goods sectors to take part in effectively carrying out this instruction.

GMAC secretary-general Ken Loo told The Post on February 23 that his association is actively engaging with travel-goods factories and encouraging them to join.

“We have had one workshop organised by [the labour ministry] and another one organised by GMAC for all the travel-goods factories to inform them of the regulation. We plan to conduct another session soon,” he said.

“Failure to comply might affect their export privileges,” Loo said. “BFC already covers all exporting garment factories. Now the government has decided to expand coverage to include travel-goods and bag factories.

“This is a clear indication of the government’s commitment to ensure that exporters in these two sectors uphold high compliance of local labour laws and international labour standards.

“GMAC is a signatory to the MoU [memorandum of understanding] with BFC, as are the [labour and commerce ministries]. We strongly support this initiative,” he added.

Cambodian Labour Confederation (CLC) president Ath Thorn noted that BFC has been largely successful, confirmed by the rising number of factories undergoing evaluation and a remarkable improvement in working conditions.

“The key thing about the project is that inspection reports on factory working conditions are made available to the public, and now all factories have to participate to be able to export goods,” he said.

According to ILO, the BFC project involves workers and the government to improve working conditions and sharpen the garment industry’s competitive edge. Today, there are 557 factories with 614,242 workers and 59 brands and retailers included in the project.

ILO said the BFC’s transparency database contains information on 78.2 per cent of Cambodia’s garment factories that have export licences.

The Kingdom’s total exports reached $16 billion last year, representing an increase of more than 14 per cent year-on-year, Prime Minister Hun Sen told a live conference on December 29.

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