Brands Distance Themselves From Price Pledge

A number of the most influential brands in the country’s garment industry—including U.S. clothing giants Gap and Levi’s—distanced themselves this week from a pledge by eight of their competitors to pay more for garments sourced from Cambodia.

After a global day of action last week, brands including H&M, New Look, Next, Primark, Zara and C&A wrote in a letter to the government and the Garment Manufacturers Association in Cambodia (GMAC) that their “purchasing practices will enable the payment of a fair living wage” in Cambodia.

The unprecedented commitment came amid final negotiations between factories and unions over a new minimum wage, set to take effect in January. Eight Cambodian unions, backed by labor activists around the world, have been campaigning this month to pressure major buyers to back a new monthly minimum wage of $177, up from the current wage of $100.

Despite the commitment of some brands to pay more for goods coming from Cambodia, Wal-Mart, Gap, Levi’s and M&S made no such promise when contacted this week, instead offering vague commitments in support of the ongoing minimum wage talks and the principle of fair wages.

A spokeswoman for the German athletics brand Puma, which has previously met with Cambodian government officials to express concern over labor rights, said the company was “not currently commenting on the situation.”

U.S. jeans maker Levi’s said the company “encourage[s] governments to establish inclusive and transparent processes for regular minimum wage setting” so that workers in developing countries receive fairer salaries.

“This is the appropriate role for buyers in wage setting and we will not independently set wage levels for our contract suppliers and their employees in Cambodia or anywhere else,” a spokesperson said in an email.

Laura Wilkinson, a spokeswoman for Gap, said in an email that the corporation had already made its desire for better labor conditions known to the government.

“We’ve urged the Cambodian government to address worker unrest and wage concerns, as well as the establishment of a regular dialogue between garment workers, factory owners and the Cambodian government to resolve future wage disputes,” Ms. Wilkinson said.

Jo Newbould, senior director of communications at Wal-Mart, said the retail giant was working with unions and the International Labor Organization to improve working conditions in the country.

“[U]ltimately, however, the responsibility for establishing the minimum wage and a regular review mechanism lies with [the] Cambodian government,” she said via email.

Katja Schreiber, director of corporate communications for Adidas, went further, saying that the minimum wage “must recognize the needs of the workers and the inflationary pressures in the country.”

Ms. Schreiber claimed the average take-home pay for workers in factories Adidas sources from was already $187, including overtime.

Joel Preston, a legal consultant at the Community Legal Education Center, said brands have the power to bring about real change in the garment industry but often choose instead to spout empty rhetoric.

“Words don’t mean anything to Cambodian workers; they need more money in their pockets so they can make ends meet today,” he said.

Mr. Preston also slammed Adidas for including overtime payments in their estimation of workers’ wages.

“If we want to talk about the law, that just doesn’t cut it,” he said. “Workers’ incomes mean they depend on overtime for their survival and the law says they shouldn’t be dependent on it.”

Ken Loo, the secretary-general of GMAC, which represents about 500 export-licensed factories in the country, said the brands’ noncommittal attitude was “to be expected.”

“The underlying message is that the original letter doesn’t change the landscape of the minimum wage negotiations at all,” he said. “It will only have an effect if all the buyers raise the price that they are providing to the factories.”

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