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Better Factories loosens ties with ILO

Better Factories loosens ties with ILO


At the Factory Gates, a Cambodian soap opera.

Better Factories Cambodia (BFC), an organization that monitors working conditions

in Cambodia's garment factories, will become locally managed, with government funding.

The International Labor Organization (ILO), a United Nations agency, presently funds

BFC. It was set up in 2001 to monitor the burgeoning Cambodian garment trade, helping

factories improve working conditions, comply with labor standards and increase productivity.

It works with employers, trade unions and governments.

BFC was a response to a trade deal between the US and Cambodian governments that

provided export quotas based on improvements in Cambodia's labor conditions and respect

for workers' rights.

These quotas were crucial in boosting Cambodia's garment exports at a vital time,

as they coincided with restrictions imposed by the US and the EU on imports from

the industry super-producers - China and India - under the 1995 Multi-Fiber Agreement


ILO plans to phase out its BFC funding by 2009, and the project will become a locally

run enterprise. In May the Ministry of Commerce, with World Bank funding, committed

$600 000 to BFC over the next three years. Also, Cambodia's two largest union confederations,

the Cambodian Confederation of Trade Unions and the Cambodian Labor Confederation,

have recently agreed to fund BFC during this transition period.

From 2009 the government will provide most of BFC's funding, with additional money

coming from union confederations, the Garment Manufacturers Association in Cambodia,

and international buyers.

BFC Officer-in-Charge Conor Boyle said BFC was unique because UN agencies did not

usually act as industry monitors.

"Credit has to be given to the Cambodian government because of lack of resources

and expertise," Boyle said. "They realized the industry was very much in

its infancy."

Boyle said government cooperation with BFC, coupled with the US import system, which

rewarded Cambodia for better labor conditions in its factories, helped create a niche

for Cambodia that focused on high labor standards.

"We wanted to create a 'non-sweatshop' environment; it was a win-win situation

for all sides," Boyle said.

He said that in spite of the end of the MFA in 2004 and the gradual phasing out of

US and EU trading restrictions on China and India by the end of 2008, Cambodia's

export garment industry was still fairing strongly, as international buyers had become

more committed to fair trade.

"Cambodia has only about two percent of the world's industry - but it has the

niche, and besides, international buyers don't want to keep all their eggs in one


Boyle said that generally Cambodia's garment factories were positive about the presence

of BFC.

"They appreciate the niche Cambodia has and want to keep it."

This was despite the level of BFC's monitoring being much higher than in other countries,

and their visits being unannounced, which was not always appreciated.

He said there were fewer "money sharks" in the garment business these days.

"All garment factories who want to export have to sign MOUs [with the government].

The minimum wage level is being met, and generally there is a move towards a sweatshop-free


"We want to help factories fix their problems - not shame and monitor them."

Boyle said many successful developing countries had started off with the relatively

simple garment industry, for example Taiwan and Hong Kong.

Boyle said all the stakeholders wanted the ILO to retain some role in BFC's governance,

but the precise role was yet to be decided.

To make the transition to independent local enterprise possible the ILO has asked

the Mekong Private Sector Development Facility (MPDF) to assist the project. MPDF,

a multi-donor initiative of the International Finance Corporation, the private sector

arm of the World Bank, will help BFC develop staff skills, appropriate systems, and

a long-term business plan.

"BFC is highly regarded by all the players in the industry - the buyers, the

manufacturers, the unions and government - for helping to ensure the survival of

the garment industry," said Karla Quizon, MPDF garment program manager.

"Buyers continue to source garments from Cambodia because of the country's comparatively

good labor record, and they credit BFC with contributing to this success."

BFC recently produced a television soap opera, At the Factory Gates, which is set

in a Cambodian garment factory. It was originally conceived to be only a tool to

train workers on their rights and responsibilities, however the Ministry of Commerce

promoted it and the two episodes have had repeat showings on Khmer television. Two

more episodes were now in the pipeline, Boyle said.

Next week, Tuomo Poutiainen will replace Ros Harvey as head of BFC. Harvey has been

in the position for three years, and will go to work for similar ILO projects at

the Geneva headquarters.

Boyle said these projects would build on expertise Harvey had gained working for

BFC in Cambodia. Poutiainen has worked for eight years in the ILO, with special expertise

in the development of training programs and child labor monitoring.


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