The Garment Manufacturers Association in Cambodia (GMAC) said 180 factories have suspended operations and another 60 will do so soon, with some 200,000 workers bearing the brunt. There is no indication of when work will resume.
Hence, it urged buyers to honour payment terms for goods that had been received or are still being shipped amid the Covid-19 pandemic.
Some buyers, it said, had made commitments on payments since its appeal early last month, but the situation has become worse, especially for Cambodia’s garment sector, as the pandemic paralyses global trade and economies.
“We understand the difficulty that buyers are facing, but we strongly appeal to all of you to honour your payments for goods already received and or in transit to you.
“Cambodian manufacturers are already suffering from many cancellations and no new orders and cannot withstand any defaults in payment,” it said.
“Products are shipped in good faith and our manufacturers shall be paid what they are owed, anything less would not be fair.
“Payment terms can be discussed but no payment is unacceptable, and we, therefore, appeal to your sense of decency to make good on your debt,” it said.
With the factory suspensions, lay-offs, it said, will affect not only the workers but also their families who depend on them to sustain their livelihoods.
Ministry of Labour and Vocational Training spokesperson Heng Suor declined to comment, referring reporters to GMAC.
Cambodian Labour Confederation president Ath Thorn said the Kingdom’s garment sector could face a crisis if buyers default on payments. He said while no new orders have been placed due to the pandemic, factories still have to pay workers’ wages every month.
He said that could eventually lead to workers protesting for a solution.
“If there are measures in place, it would help not only the factories but also the workers because they [workers] can at least receive $70 [allowance] per month now.
“We should also let the factories suspend instead of shutting down because by doing so the workers will still receive their wages amid the pandemic,” he said.
Thorn called on the government to provide incentives to the factories in the meantime.
“The government should exempt the factories from some obligations because it can help workers. Of course, there might be no new orders for their products amid the crisis, but unlike workers, employers make profits. If workers have no work and no salary, they will face hardship in life,” he said.
Thorn said he was unsure if the 180 factories that have suspended workers have fully complied with the labour ministry’s guidelines. The factories, he said, are required to pay suspended workers in two stages – 40 per cent in the first and 30 per cent in the second.
He said he had observed that the factories have complied with the first stage.
“In the second stage, the factories are required to pay only $30 to the workers. We don’t know if the workers have received their allowance.
“As to how long the factories can afford to pay the allowance, it depends on when the Covid-19 crisis is over. To be fair, if there are no new orders for their products, whom will they sell them to?” he asked.