Cambodia’s largest Special Economic Zone (SEZ) on Thursday became the first entity of its kind in the world to sign onto a new U.N. investment initiative aimed at environmental and social improvements such as gender equality and waste reduction in the workplace, according to officials.
The U.N. Development Program Social Impact Fund (Unsif) will serve as a liaison between potential investors and workplace improvement projects within the Phnom Penh SEZ, according to Unsif chief David Galipeau.
“It is an opportunity to explore and demonstrate…waste recycling, affordable housing for workers in Cambodia [and] energy efficiency,” among other things, said U.N. Development Program senior policy adviser Napoleon Navarro. “Decent jobs seem to come from the factories that [this] SEZ has attracted. It makes sense to begin there.”
Unsif has made similar agreements elsewhere, but not with an SEZ.
While Mr. Galipeau said there were currently no investors to Unsif nor any funds set aside for projects, the SEZ would now be able to pitch workplace projects to the U.N. body that potential investors can sponsor with grants, loans, equity, guarantees or knowledge support, according to the program’s website.
The projects would be conducted by the Phnom Penh SEZ with the “support of our customers,” said the private company’s senior manager, Michelle Zhao, referring to the 83 establishments within the zone. The SEZ currently has $36 million in capital and hosts an estimated 17,000 workers daily, she said.
The SEZ was launched in 2006 by business tycoon Lim Chhiv Ho, who also owns Attwood Import Export, one of the biggest import and export companies in the country with licenses to various international brands.
“We will look for domestic investors as the priority target, but a fraction of it will also target international investors,” Mr. Galipeau said. “If the partnership with the Phnom Penh SEZ works, we will also work with the major 12 SEZs across the country.”
Chou Ngeth, a senior consultant at Phnom Penh-based Emerging Markets Consulting, welcomed the agreement as an opportunity for Cambodia’s working conditions to improve.
“Before, investment only focused on financial return,” he said. “Later, it developed as a double bottom line—financial return and societal benefits. And now it will evolve to a triple bottom line to include skill development as well, which is what social impact investors look for.”