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Cambodian dilemma: Labor rights or investors?

Cambodian dilemma: Labor rights or investors?

A LABOR official says the government should exercise restraint in punishing foreign-owned

garment factories which blatantly violate the soon-to-be revised labor law, or risk

scaring off outside investment.

The long-awaited draft law, which would introduce the right to strike and to collective

bargaining in Cambodia, will replace a labor law passed by the State of Cambodia


But there are signs that the new law, like the current one, will not be enthusiastically


Most of the sweat shops in greater Phnom Penh which have been inspected by the Ministry

of Social Welfare, Labor and Veterans Affairs since 1994 are violating basic workers'

rights, according to Haing Sitha, director of the ministry's labor inspectorate.

Of about 20 garment factories inspected by the ministry - out of a total of more

than 700 factories - "many of them have ignored the official notices we have

served on them to change their labor practices or be fined."

Sitha said that apart from being paid a pittance - an average monthly salary of $35

- thousands of factory workers, mainly single women, work on average 12 hours a day

in dangerous, cramped conditions.

"This is not sufficient to sustain the life and dignity of garment factory workers,"

he said.

However, he warned that any action against the factories - many of them owned by

East Asian companies - could hinder much-needed investment in Cambodia.

"Before we can take action, we must think carefully about the possible consequences.

If we punish them too severely we risk losing these investors, so we have to take

it step-by-step."

His comment comes at a time when China, Malaysia, South Korean, Taiwanese and Thai

businesspeople are rapidly turning Cambodia into a cheap labor-driven garment export

base for overseas markets.

The Economist Intelligence Unit, in its 1996 first quarterly report on Cambodia -

handed out to participants at last week's Economist Roundtable - states that garments

made up 96 percent of Cambodian exports to 26 countries last year. Garment output

this year is expected to increase sharply "to meet increased demand from Europe

and the USA."

The Economist puts the total number of people working in "some 30 garment factories

in Cambodia" at between 500 and 1000.

But, according to the Asian-American Free Labor Institute (AAFLI), a Washington-based

group which endorses the new labor code, about 10,000 women are employed at 26 such

factories in Phnom Penh.

Buddhist Liberal Democratic Party MP Son Chhay - a key supporter of revising labor

regulations - says the new law will be pointless unless fundamental workers' rights

are enforced.

"The question of laws and how they are practiced are two separate issues in

Cambodia," he said. "Investors are aware that Cambodia is one of the most

corrupt countries in the region, so they move in to make a quick profit, while the

government cannot maintain discipline within its ministries.

"The young women who work in these factories are no different from prisoners,"

he added. "They themselves have compared themselves to the many people who were

forced to work under Pol Pot."

His comments were substantiated by an interview with 30 garment workers from three

factories in Takhmao, who spoke on condition of anonymity for fear of reprisals.

One woman from a Chinese-run factory said staff worked seven days a week for a dollar

a day.

"During work hours, we are not allowed to talk with one another," she said.

"If we want to drink water, the Chinese supervisors deduct money from our salaries."

"Once, when I myself did not work on a Sunday, the employer deducted one week's

pay from my salary," she added.

Son Chhay also had harsh words for the labor ministry while accusing it of complicity

in the exploitation of garment workers.

He related one incident at a factory, which he would not name, along Route 6A. On

May 16, he and Funcinpec MP Kan Mann inspected the factory, accompanied by two ministry

officials sent to investigate a complaint about working conditions.

To Chhay's astonishment, "when we questioned the owner of the factory about

these allegations, we found that the officials seemed to be on friendly terms with

the owner. They were protecting him."

Defending his ministry, Sitha said the prosecution of garment kings who flout the

law was a laborious process. He said it had required a two-year citywide information

campaign, just completed, to tell employers and workers about labor rights and responsibilities.

The new law, according to Bama Athreya, country representative for AAFLI, will include

stiffer penalties for offenders and permit workers to strike and bargain their employment

conditions collectively.

Such provisions, she said, need not frighten off investment.

Athreya explained that collective bargaining is a legal instrument "designed

to reduce threats of civil disobedience in the form of strikes."

"From an investor's point-of-view, it is better to know what are the conditions

under which workers can strike," she added. "They need a peaceful mechanism

to address grievances in industrial relations."

When asked whether Western companies would honor the law, Athreya said that from

her own experience in Indonesia, Nike and Reebok - the sports shoe giants - had subcontracted

their operations there to local firms.

Those subcontractors were later found to have violated globally recognized labor

conventions, she said.

Cambodia's new law - approved by the Council of Ministers in early May and now on

its way to the National Assembly's permanent standing committee - may not go to a

vote for six months, according to Son Chhay.

In the meantime, thousands of women will remain stooped over their Singers for hours

at a stretch, waiting for word of the law which may or may not change their lives.


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