Garment workers leave a Phnom Penh factory at the end of their shift on July 5.
Seven garment factories have been forced to shut their doors this year because of rampant corruption and a scarcity of factory labor, according to Chea Mony, president of the Cambodian Free Trade Union (FTU).
Chea Mony, who represents Cambodian garment workers, said the factories were unaffected by rises in the minimum wage, but have been hit hard by street-level corruption and a wave of resignations by employees tired of the monotonous work and low salaries.
“Even with salaries increasing to $70 [per month], factories were still operating. Labor costs did not force the closure of these factories,” Chea Mony said. “They closed because of corruption and demands for money by government officials.”
Of the 180 factories covered by the FTU, 12 wound up their operations in 2007 and 2008, not including those factories monitored by other trade unions, said Man Seng Hak, Secretary General of the FTU.
Ath Thorn, President of the Coalition of Cambodian Apparel Workers Democratic Union (CCAWDU), estimates that between February and July this year, almost 10,000 garment workers quit their jobs at the 53 factories observed by CCAWDU. He agreed that the main source of the closures was corruption and the dwindling number of workers willing to put up with the bad working conditions.
“The factory closures have been caused by corruption, a weak labor market, inflation and unfulfilled orders,” said Ath Thorn, adding that strict and unreasonable factory owners were driving employees to seek work elsewhere.
“Factory owners have not obeyed the law 100 percent. Labor law enforcement is still weak, despite improvements in Cambodia’s labor laws.”
Many factory owners have signed workers on contracts of two to three months, making it easier to dismiss them at short notice. These contracts also enable factories owners to do away with benefits such as break time and overtime pay, Ath Thorn said.
But Oum Mean, an undersecretary of state at the Ministry of Labor, rejected the idea that corruption was responsible for the recent factory closures, pointing the finger instead at the recent spate of garment worker strikes.
“Factories have closed because of the strikes, which have caused big losses in productivity. This makes buyers stop ordering apparel,” Oum Mean said, adding that some factories appeared to have shut down merely because they had shifted their operations to bigger facilities elsewhere.
Kaing Monika, external affairs manager for the Garment Manufactures Association of Cambodia (GMAC), said that 22 out of 310 garment factories registered with GMAC had closed their doors.
But she said that an additional 12 factories had opened in 2008, outweighing the year’s closures. She could not say what caused the factories to close, but noted that orders from American companies have decreased by 1.5 percent this year in the face of competing exports from China and Vietnam.