With governments in Cambodia’s export markets threatening sanctions as Phnom Penh backslides on democratic reforms, garment workers worry about losing their jobs.

By Ten Soksreinith | VOA Khmer | July 12, 2018
អានអត្ថបទ​នេះជាភាសាខ្មែរ

Sangkat Preak Leap, Phnom Penh Of Cambodia’s 15.7 million people, 800,000 work in the garment industry, which employs more than 85 percent of all factory workers. Most of the garment workers are young women who left their families in the provinces for big-city factory work, which allows them to regularly send home needed cash.

Today, that hard-won stability faces disruption as Cambodia backslides from more than two decades of democratic reform that contributed to the growth of the export-driven garment industry.

The government of Prime Minister Hun Sen, in power since 1985, has dissolved the main opposition party which had long backed higher wages for garment workers, jailed its leader – who took over from the standard-bearer forced into exile – and shut down the independent press in the run-up to the country’s sixth general election on July 29. The ruling party, which has been courting the garment workers, is expected to win.

In response to Hun Sen’s prevote actions, the European Union has threatened to withdraw Cambodia’s preferential tariff-free export status, Generalised Scheme of Preferences.

The EU, which is closely monitoring human rights and the political situation before the election, imports more than 40 percent of the garments Cambodia produces.

If those threats become reality, among the hardest hit will be women attracted to the security offered by the garment industry, women like Khut Samphors, 25, Ly Reaksmey, 23, and Ouk Dalin, 32, and their families.

Each woman started working in garment factories in her mid-teens.

Each is a mother responsible for the support of elderly parents, some of whom care for the women’s babies and toddlers back home.

“I send about $300 a month to my parents,” said Khut Samphors, who with her husband has a combined monthly income of $400.

Each is worried because, as Ouk Dalin told VOA Khmer: “I don’t really know what is going to happen.”

Um Dina, general secretary of the Coalition Free Trade Union of Women’s Textiles, has a sense of what the future may hold.

“Losing [preferential status] would mean fewer or smaller orders from buyers,” she told VOA, “and that means factory owners will have to reduce working hours and lay off hundreds of workers.”

Cambodia’s garment industry developed in the mid-1990s, after the remaining forces of the Khmer Rouge regime signed a peace accord in 1991. The agreement ended a prolonged civil war that began in the aftermath of the Khmer Rouge era, during which 1.7 million people died.

Peace was followed by stability, which sprang in part from Cambodia’s 1994 Law on Investment establishing what the U.S. State Department described as “an open and liberal foreign investment regime.”

Garment industry investors from Hong Kong, Taiwan, Malaysia and Singapore flocked to Cambodia to take advantage of the country’s “quota-free access to the U.S. and EU markets and, secondarily, its relatively low wage rates,” wrote Sithong Soeng and Vijit Supinit in The Analysis of Foreign Direct Investment in Textile and Garment Industries in Cambodia.

By 1998, as industry wages in China and Taiwan were escalating at double-digit annual rates, the minimum wage in Cambodia was $40 a month.

Today, as it reaffirms its reputation as a political battleground, Cambodia’s garment industry accounts for 46.6 percent of the nation’s total exports by 2017 (PDF).

The voting force of garment workers has long bedeviled the Hun Sen government and the Sam Rainsy Party (SRP), eponymously named after the opposition leader now exiled in France, aligned with garment workers over 20 years ago in their quest for better wages and recognition.

That support paid off: The SRP won 15 of the 123 seats in the National Assembly in the 1998 elections, 24 seats in the 2003 elections, and 26 seats in the 2008 elections. The SRP won two seats in the 2006 Senate elections, and nine new Senate seats in 2012. By the July 2013 general election, after the SRP had merged with the Human Rights Party to form the Cambodia National Rescue Party (CNRP), the opposition party won 55 of the 123 seats in the National Assembly.

That rebuke of Hun Sen’s ruling Cambodian People’s Party (CPP) stemmed, in part, from the opposition’s continued efforts to raise the minimum wage. The CNRP’s alignment with the garment workers did not go unnoticed.

On Friday, January 3, 2014, at a Phnom Penh demonstration for raising the minimum wage, military police killed at least five garment workers gathered along Veng Sreng Boulevard.

Khut Samphors saw the demonstration, but “I didn’t participate,” she told VOA. The minimum wage has risen from $61 a month in 2012 to $170 a month this year, and Hun Sen has been making regular appearances at garment factories, making speeches that hint at a $230-a-month minimum wage by 2023.

Each day, Khut Samphors estimates she sews 1,000 seams, her role on an infant clothing production line owned by U.D.S. Garment Co., Ltd.

The finished products sell outside Cambodia for between $70 to $80 apiece, according to the hang tags affixed before shipment. Before overtime, Khut Samphors earns about $200 a month.

Under Cambodia’s National Social Security Fund (NSSF), Khut Samphors and her co-workers are entitled to maternity leave, 28 public holidays and up to six months of paid sick leave with a certified notification from a doctor (PDF). Hun Sen’s government has increased the required amount businesses must pay into their workers’ NSSF funds.

Although those benefits meant that Khut Samphors had three months of maternity leave after her son’s birth, garment workers want more as the benefits, which appear good on paper, aren’t always a given.

Ly Reaksmey, a garment worker in Kampong Speu, powered through her pregnancy and stayed on the line until just before she delivered her first child in March. She said she was afraid of taking frequent sick leave because she, her husband and her sister owed payments to a microfinance institution for a motorcycle and home renovations that transformed their wood and leaf hut into a brick home. If she had lost her job for not making her share of payments on the loan, Ly Reaksmey told VOA the family “would lose everything.”

Ouk Dalin, who works at the Can Sports Shoes factory in Kampong Chhnang, is the new mother of a boy, her second child. She’s on a three-month maternity leave, funded by a one-time $360 payment from her employer. Her husband also works in the garment industry, and Ouk Dalin says the family is doing well financially. They do not owe anything, and grow enough rice for household consumption.

Like Khut Samphors and Li Reaksmey, Ouk Dalin says she is “satisfied” with increases in the minimum wage and Hun Sen’s push for reforms in their industry. The women all say they know there’s a need for stronger, and wider, regulation and laws that hold employers accountable for violations.

If the government continues to reform the garment industry, Ouk Dalin believes “the livelihood of the workers will actually get better.”

But they’re seeing the impact the mere threat of sanctions can have in a sector already battered by lessening retail demand and increasing regional competition. By April, at least 20 factories had closed, or were retreating from Cambodia, said the union’s Um Dina, who refuses to attend events where Hun Sen speaks to workers.

In late March, the American Apparel & Footwear Association and the U.K. group, Ethical Trading Initiative, wrote Hun Sen, warning that Cambodia’s 2016 Trade Union Law, which places restrictions on freedom of association and union rights, made “Cambodia an unattractive and expensive place to do business,” according to the Phnom Penh Post.

Although Um Dina says she “supports what the government has been doing” and what it says it intends to do to improve workers’ lives, “it’s not enough.” A $4.6 million government fund to compensate workers from nine closed companies is paying as little as $41 in severance for nine years of labor.

Whether or not the shutdowns are inherently linked to the possibility of sanctions remains unclear. But Um Dina continues to believe Cambodia’s political environment matters to the garment industry and the hundreds of thousands of people who rely upon it.

“When the political situation gets heated, we see factories are closing,” she said. “Political stability is needed to attract investment.”