Twelve garment factories, most of them Chinese-owned, have closed in Cambodia this month, leaving thousands of workers jobless, the Garment Manufacturers Association of Cambodia said Thursday.
The factories, which had each employed between 700 and 2,000 workers, were located in Phnom Penh and Kompong Speu and Kandal provinces, according to Cheat Khemara, senior labor consultant at GMAC.
Cheat Khemara said that frequent workers’ strikes have caused many factories to miss export deadlines and frightened away international buyers, thus lowering profits and leading to closures.
There were 200 union-led strikes in 2006, he said. There are currently 284 factories operating in Cambodia, employing more than 300,000 workers, he added.
Chea Mony, head of the Free Trade Union, could not be reached for comment.
GMAC Secretary-General Ken Loo warned that Vietnam’s recent entry to the World Trade Organization also bodes ill for Cambodia’s garment industry.
“They have lower infrastructure costs such as electricity costs and shipping costs and trucking costs,” he wrote in an e-mail.
Tuomo Poutiainen, chief technical adviser for the International Labor Organization, said there is no sign that companies are withdrawing from Cambodia on a large scale, and that the 12 closures should not necessarily cause alarm.
The Cambodian garment industry has a good reputation for working conditions, but it will have to make some changes, he added.
“[The industry] will have to pay more attention to production and quality in order to remain competitive,” he said.
US embassy spokesman Jeff Daigle wrote in an e-mail that the US expects garment buyers will remain loyal to Cambodia, which has a good reputation with “socially conscious American companies and consumers” for upholding international labor standards.
“We don’t expect Vietnam’s entry into the WTO to have a broad impact on Cambodian garment exports to the US,” he added.