Better factories in …….

Imagine a nation where the sewing industry is characterized by:

  • Eight hour work days
  • Seamstresses earn two to three times as much as teachers and policemen.
  • Child labor is unheard of.
  • All overtime is paid.
  • Free medical care on site.
  • Three months paid maternity leave.
  • Employers must give breast feeding mothers unimpeded access to their infants
  • Forty three paid vacation days per year (no, we’re not talking about France, although it once was a French colony).

Does this sound like Shangri la? It’s not. It’s Cambodia; the only poor country in the world to guarantee fair labor practices in the needle trades. Comparatively, their successes far outweigh the standards used in more developed nations. Yes, Cambodia, where one third of the population was killed during the civil war in the 70’s. Today, the needle trade amounts to nearly 100% of the nation’s exports and one third of GDP, thanks to a program instituted under the Clinton Administration. Then, Cambodia agreed to become an unlikely experiment in quality manufacturing and workplace standards, agreeing to random and unsceduled factory monitoring. By all accounts, the experiment was a rousing success. That is until preferential trade practices expired in 2005. Then, it seemed that all could be undone.

In a repeat of a story first run on This American Life from NPR affiliate WBEZ, Rachel Louise Snyder reported on the consequences of nation building via fair labor practices (move the cursor to 19:30, the start of the Cambodia segment). The teaser reads:

Variations on an old tale with very modern consequences. Cambodia is competing with other nations for the business of big clothing companies all over the world, buyers like the Gap, Nike, Adidas. But they’ve vowed to follow fair labor practices, which, while eliminating sweatshops for workers, also ensures their costs are higher. Other countries end up with the contracts – and the profits. So an official Cambodian committee sets out on a mission to convince the U.S. Congress to give them a special trade agreement. Also, a story as old as David and Goliath themselves: the tale of big sister vs. little sister.

Can a poor country survive if it treats it’s workers fairly? With customers pricing packages from China where labor compliance is nonexistant, Cambodia is in a double bind. Cambodia doesn’t produce the textiles, zippers, buttons and thread used in the process, everything has to be imported. Then there’s infrastructure costs rivaling industrialized nations since electrity (for example) costs the same as the prices paid in downtown Tokyo. Then is the cost of compliance and monitoring itself. Currently, 70% factories are struggling. In the works is a plan to lobby the US congress for preferential trade practices. Currently, 35 LDC s -mostly sub Saharan Africa- receive lower tariffs; Cambodia is currently paying tariffs of 17% .

Still, Cambodia has retained a few good customers. One such customer is GAP; and say what you will about the company, their commitment is unwavering with 45 factories constituting about 25% of the Cambodian industry. GAP spokespersons say they have no plans to pull their factories out of Cambodia, relying on the Cambodian reputation of fair labor practices to build their brand.

If you’re in the market to outsource, you can find out more from the Garment Manufacturers’ Association in Cambodia or Better Factories. Better Factories provides support services and training to make Cambodia’s industry more competitive — including training in lean manufacturing. From their website:

The Remediation program has been redesigned to cover 7 training modules, involving 2 groups of 7 factories over a period of 12 months. Each module lasts approximately 2 months and includes expert training, factory visits, and factory improvement plans, which help enterprises to make practical improvements at the factory level. The modules cover quality and productivity improvements, Cambodia in the global context, workplace cooperation, OSH, HR management and working conditions, and continuous Improvement.

Made in Cambodia. Finally, an outsourced label you can feel good about.

[edit, 12-1-2006]
I’d like to draw your attention to a comment submitted by visitor who wishes to remain anonymous. While anonymous, I have verified their identity and I have complete confidence in the accuracy of their statement which reads:

A couple of points to bear in mind, in re: the facts cited above:

– Cambodian police and teachers are woefully underpaid, and generally work a second (or third) job and/or resort to corrupt practices in order to make enough to live. So while it’s true that the average garment worker in Cambodia makes 2-3 times (or more) the salary of a teacher, that is more a reflection on the low salaries in the public sector than a statement about high wages in the garment sector.

– Re: paid days off, Cambodian Labour Law provides for a 6-day work week (Monday-Saturday), 18 days paid annual leave (which may increase based on seniority) and around 25 paid public holidays. Employees in the garment sector generally work 26 days a month. And many will work on holidays (which are paid at a higher rate) in order to augment their earnings.

However, it’s true: the garment sector here follows far better practices than are usually found in the garment sector in other developing countries.

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5 comments

  1. J C Sprowls says:

    43 PTO days! Wow! In France, I only had 23. And, now, in the US, I have a lowly pittance of 13.

    If you think about it, most salaried employees work 20 days per month. Having 43 days at your disposal means you only have to work 10 out of 12 months to earn your keep.

    If production were smart enough, there would be no interruption to throughput. The PTO days is a significant statement – they’re confident they work smarter, not harder.

  2. ML says:

    A couple of points to bear in mind, in re: the facts cited above:

    – Cambodian police and teachers are woefully underpaid, and generally work a second (or third) job and/or resort to corrupt practices in order to make enough to live. So while it’s true that the average garment worker in Cambodia makes 2-3 times (or more) the salary of a teacher, that is more a reflection on the low salaries in the public sector than a statement about high wages in the garment sector.

    – Re: paid days off, Cambodian Labour Law provides for a 6-day work week (Monday-Saturday), 18 days paid annual leave (which may increase based on seniority) and around 25 paid public holidays. Employees in the garment sector generally work 26 days a month. And many will work on holidays (which are paid at a higher rate) in order to augment their earnings.

    However, it’s true: the garment sector here follows far better practices than are usually found in the garment sector in other developing countries.

    – m

  3. Kathleen says:

    Following is portions of an email that I got from Rachel Louise Snyder:

    I somehow came across an old blog of yours today on a piece I did for ‘This American Life’ on the Cambodian garment industry and its attempts to create decent working conditions in factories. I just wanted to say thanks for the kind words. Thanks! That piece went on to win an Overseas Press Award which was excellent not only because of the honor, but because, well, it gave me an opportunity to buy a new dress. :) I thought I’d also let you know that it was a chapter in a book I have coming out later this year called: Fugitive Denim: A Moving Story of People and Pants in the Borderless World of Global Trade (WW Norton, Dec. ’07). Hopefully, a fun read. You might be interested.

    … an anonymous poster reminded your readers to keep in mind that Cambodian police officers and teachers make a third of what garment workers make in Cambodia, and that garment workers often work holidays, etc. S/he is absolutely right… well, sort of. First of all, police officers and teachers DO make far less, but the situation is even worse than that because the labor laws that exist ONLY cover factory workers. So all those rights to freely associate and have maternity leave and vacation time, etc…. those are only granted to garment workers. (And while garment workers do tend to work some holidays, this time is usually dictated by contracts… and believe me, holidays in Cambodia are amazingly frequent. On overage, there is an official Cambodian holiday every other week… it’s a little ridiculous). Everyone in development here hopes that the labor rights that have been created for garment workers will eventually find their way to covering ALL workers, but so far it hasn’t happened.

    What to me is worse than the fact that other workers don’t receive the same rights as garment workers in Cambodia, is that fact that the country exists with ostensibly no rule of law. That means there is no justice. It’s almost impossible to overstate how much this decapitates a society. Innocent people are jailed for heinous crimes, with no access to attorneys and no viable, transparent judicial process. It’s a much larger issue than anything in Cambodia… larger than the poverty and even larger than the good that the garment industry is trying to perpetuate. But of course that’s beyond the scope of my TAL piece or my book, and I do think that Cambodia, in general, deserves praise for the things it gets right.

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