Cambodia & Quotas & Labor Rights

Michael Pollak mpollak at
Mon Apr 10 03:22:20 PDT 2000

[The FT puts a very different spin on this from the WSJ article posted on this a couple months back. The WSJ said "everyone agrees labor conditions have improved." The FT says everyone agrees they haven't, and that Cambodian labor is for not raising the quota until their demands are met.]

Financial Times, 07-Apr-2000

Rocky road links trade privileges and labour rights

Ted Bardacke on progress in a deal that links working standards in Cambodia with a US clothing trade bonus:

The congested main road that links Cambodia's capital city with its airport has become a battleground. This is not new for an artery that for decades held strategic significance for the country's warring factions and their international backers.

The most recent battle is, however, largely peaceful. Yet the stakes are almost as high. The dozens of garment factories that line the road and the thousands of women workers who routinely march down it to complain about unpaid wages, unjust sackings and abusive working conditions are foot-soldiers in the world's first attempt to make an explicit linkage between trade privileges and labour rights.

In late 1998 the US and Cambodia signed a precedent-setting agreement which imposed quotas on Cambodian garment exports to the US. It said Cambodia's garment export quota allocation would increase by 14 per cent - meaning additional foreign investment and jobs in the desperately poor country - if the garment industry complied with "internationally recognised core labour standards" and the government showed progress in enforcing its labour law.

That law was passed only two years earlier as a prerequisite to obtaining preferential US trading status.

Many developing countries, fearing a breakdown in their consensus to resist US attempts to link trade and labour, pleaded with Cambodia not to sign. But Cambodia went ahead, fearing the US would introduce unilateral quotas if it did not negotiate.

Although it was not stated explicitly in the agreement, there was an understanding that the US would fund a monitoring programme run by the International Labour Organisation (ILO), which would provide the data for the US to judge whether Cambodia deserved the 14 per cent bonus.

Now, more than a year after it came into effect, the agreement is barely functioning. The ILO monitoring programme never happened and is unlikely to begin until this summer. At least one of Cambodia's 195 garment factories has had a labour walkout every week and unions say that, while workers are getting lots more attention from the government, the law is still not enforced.

"If the government is serious and forces the factory owners to respect the labour law, then things would get better quickly," says Chea Vichea, president of the Free Trade Union of Workers of Cambodia. "The government must listen and take its responsibility more seriously."

In its annual review of the garment agreement last year the US largely agreed with this assessment and withheld the 14 per cent bonus. But, desperate to keep alive the principle that linking trade and labour can work, it awarded Cambodia a provisional 5 per cent quota bonus and is trying to put the ILO monitoring programme on track despite reservations from within the organisation itself.

Cambodian officials, meanwhile, are miffed that poor relations between labour unions and some abusive garment factory managers have given protectionists in the US an excuse for denying the country extra trade privileges.

"It's all because of bad labour relations. The general tenor of labour-management relations are very bad," Cham Prasidh, minister of commerce, said recently.

The ethnic Chinese who dominate the garment sector in Cambodia blame the "undisciplined" 120,000-strong garment labour force - overwhelmingly illiterate young women in their first factory job - of denying themselves extra work by blowing petty squabbles out of proportion.

"Do the unions want to help or not? If the quota gets raised there will be more jobs. Do they want that or not?" asks Roger Tan, secretary general of Cambodia's Garment Manufacturers Association. "The matters that spark off a strike are so small. All the attention (from the trade agreement) gives the workers the comfort level that they are calling the shots."

Mr Vichea responds: "I want an increase in the quota. Workers need work. But if there is an increase in the quota without improvements for the workers, then I don't support it. More workers would just bring more problems."

That such a debate takes place in the open is just one of the reasons Cambodia seemed the ideal candidate for the US to test the linkage between trade and labour. Another was that by all accounts there are no dramatic images of child labour or indentured servitude to be exploited.

What was to be tested were modern labour issues such as freedom of association and due process, as most worker complaints turn on the sacking of union representatives and disputes about pay for overtime work, which is often forced.

Corruption is a problem. It is an open secret that most garment factories in Cambodia have powerful Khmer partners who can offer things like protection from the enforcement of court orders and police units to attack strikers.

On top of this is the lack of international consensus on the role of the ILO, the upshot of which has been a sparring match between ILO staff in Asia, its leadership in Geneva, the US government and organised labour in the US over the terms of the programme.

This leaves the annual review of Cambodia's labour standards in the hands of people more interested in the level of garment imports than in the welfare of Cambodian workers or the health of the Cambodian garment industry. In this new international political war, Cambodia, it seems, has become a pawn again.

Copyright © The Financial Times Limited

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