January 28, 2014 7:00 pm JST

Cambodian labor dispute drags on as more strikes threatened

Prolonged labor unrest in Cambodia's garment industry shows no sign of ending, with both trade unions and employers unwavering over their respective stances on minimum wages.

     The unions are demanding that the industry's minimum wage be doubled to $160 a month, effective immediately. Some employers, meanwhile, have threatened to end local production if the dispute drags on or the wage hike happens.

     Major international apparel brands that outsource production to garment factories in Cambodia have so far avoided direct involvement in the dispute. Unions are starting to criticize this inaction.

     The unions launched a general strike in December, forcing many garment factories to suspend operations.

     Union leaders warned at a press conference on Jan. 15 that another work stoppage could happen unless the Cambodian government agrees to negotiate over wage demands.

     The Cambodian government, hoping to end the labor dispute quickly, announced plans in December to raise the minimum wage in phases to $160 a month, in 2018. The unions rejected this proposal, saying that workers need higher wages right now.

Three sides

According to Cambodia's association of employers, that strike resulted in $90 million in lost sales. Also, around 20 companies have decided to withdraw from the country or are considering doing so, citing the rise in wages.

     Some foreign apparel companies with outsourced production in Cambodia have expressed sympathy with the unions. Swedish fashion brand Hennes & Mauritz, better known as H&M, issued a statement in October calling for the Cambodian government to review the nation's minimum wage system.

     The Garment Manufacturers Association in Cambodia (GMAC) has criticized such moves by foreign apparel companies. "They care only about the time of delivery," said Ken Loo, the GAMC's secretary general.

     Loo also said that foreign apparel makers have been reluctant to agree to pay more to Cambodian garment factories for contract manufacturing, citing tough global competition.

     The unions, too, have become critical of foreign apparel makers. They say that they will start negotiations with foreign companies on hikes in commission rates if garment factories cannot afford to raise wages.

(Nikkei)