Established in 2000, The Cambodian Federation of Employers and Business Associations (CAMFEBA) has promoted and safeguarded employer rights and interests through a unified voice. As one of the largest business federations, CAMFEBA pushes for the adoption of sound principles and stable industry relations. CAMFEBA represents over 2,000 employers over 11 business associations, 224 individual companies and 27 non-profit organizations.

Post Plus spoke with vice president Sandra D’Amico about the need for solid industrial relations, diversifying Cambodia’s economy and the role of education.

How can industrial relations improve between employers and employees in garment factories?

It really comes down to improving the workplace environment and incorporating stronger employment relation structures. It is also important that unions and employers agree to disagree in order to avoid strikes, and to be more proactive in terms of how they deal with challenges and the needs of the workers. One of the biggest challenges employers face is having to negotiate with so many unions. Instead of having 50 unions in a factory, it is better to have two or three unions that are truly representing the interest of workers genuinely and proactively.

Also, human resources need to play a bigger role. Right now human resources focus on administrative, payroll, labor, compliance and recruitment—which all give workers jobs. However there has been less focus on managing people and providing training programs. Now, as we continue to move forward, we have more and more people who really understand how to make relations better.

How important is it for CAMFEBA tohave stable industrial environment?

It is important to have stable industrial environment because the garment sector is the largest formal employer in Cambodia.You need a predicable environment in order to guarantee your order delivery from buyers. Getting our orders back up, which keeps investors in the country, is CAMFEBA’s main priority. The strikes at the end of 2013 and early 2014 showed everyone how strikes can slow the economy. So CAMFEBA is really about creating a peaceful and stable industrial environment.

How have industrial relations within factories improved?

We have employer representatives that have developed extremely good relationships with unions by holding regular meetings to discuss the problems. When things go wrong, factories are continually updating their policies to try to solve the issues.

Turning towards Cambodia in general, why does the economy need to diversify quickly?

With the upcoming ASEAN integration and the free flow of labor, Cambodia needs to diversify their industries to create more attractive job opportunities with higher wages. Otherwise workers will travel overseas to places like Vietnam and Thailand.

However, diversification is already happening on a large scale, especially in the SME sector. The question is if we can take the vast SME sector and connect it with the global value chain. Can we use foreign investment to help young entrepreneurs start and manage their own businesses by giving adequate training?

With that being said, we can’t rely solely on the SME sector to diversify the economy because it creates informal employment that doesn’t pay taxes. We need to focus on creating more formal employment that can eventually pay into a social safety net.

We can’t rely on the garment sector forever, we can’t rely on an informal SME sector, or we will lose the opportunity to become regionally integrated. With ASEAN opening up, there will be a lot more competition, and carving out our niche in Cambodia is incredibly important to make sure the country does not become a low wage destination.

What are some of the challenges in diversifying the economy?

Corruption and transparency needs to be addressed in order to diversify. I think it is corruption at all levels, not just with the government being paid to get better deals, paying to get orders, or unions paying to stop strikes.

The high cost of electricity and imports are also factor. These things need to be sorted out to drive in more investment. But most importantly, we need a stable and peaceful industrial relations without strikes that disrupt and turn away investment.

How important is vocational training and education to accomplish diversification?

Education and vocational training has traditionally been a problem in Cambodia.The government must focus on primary and secondary education, the quality of teachers, quality of schools and increase the budget for education.

I believe that technical and vocational education training (TVET) should come in at the secondary school level, because we absolutely need more training for young people. We should have longer-term training like a six-month program or one-year program, which teaches people a comprehensible set of skills, or offer two-year programs that allow people to work part time, while also giving them the time to study—which is already happening at the university level.This will help people get into the workplace quicker instead of a four-year degree while also having developed necessary skills.

I believe there is room to take some of these universities and turn them into technical institutes with more practical programs to service the growing demand in the job sector.

How can the government help the private sector when it comes to TVET?

The government needs to be very strategic about this approach, such as where the government is going to focus and where is the private sector is going to focus. Give the private sector the incentives to set up TVET for these sectors because that is what they are doing anyway. The private sector has already built the banking sector and the garment sector without any university curriculums servicing those sectors. Because Cambodian Universities cannot compete with other universities in the region, Cambodia can become the regional hub for vocational skills training. This would allow the private sector to keep our workforce here, while also bringing people in from the region to receive a valuable education.