Cambodia’s garment manufacturers gained two important concessions—on night shift wages and export fees—while the World Bank received an angry rebuke from Prime Minister Hun Sen at the 11th Government-Private Sector Forum on Wednesday.
Hun Sen told the forum that garment factory workers would no longer be paid double their salary for working a night shift, and ordered the Labor Ministry to draft an amendment to the Labor Law stating that night-shift workers be paid an additional 30 percent for night work.
“You can get $50 during the day, and $65 dollars at night,” Hun Sen said, referring to monthly wages. “Thousands of workers need jobs,” he told the forum at Government Palace, which was broadcast live on television.
Garment Manufacturers Association Secretary-General Ken Loo said that Hun Sen’s decision was very important for manufacturers, who hope to compete with Vietnamese garment factories who now enjoy freer global access following the country’s entry into the World Trade Organization.
“It is not a done deal yet, but the prime minister has given his verbal approval,” Ken Loo added.
At the forum, GMAC Chairman Van Sou Ieng denounced unions, claiming that illegal strikes had cost 11,510 jobs in 2006 and caused 12 factories to close.
Van Sou Ieng also asked the government to reduce the cost of export management fees by 25 percent since exports to the US jumped 25 percent last year. Hun Sen later said that to reward garment factory owners for approving a new $50 minimum wage for workers, he would order the management fees reduced by 10 percent.
The tax break will help factories to be more competitive, as export management fees can be as high as 7 percent of total costs, Ken Loo said.
Contacted after the forum, Free Trade Union President Chea Mony said his members want 50 percent more for night-shift work and said that many strikes were caused by the illegal behavior of factory owners.
The forum, he added, was “no benefit to the workers.”
Undoubtedly the most dramatic point of the forum was Hun Sen’s tirade against the World Bank, which he accused of “attacking” Cambodia’s sovereignty by proposing to partially privatize the country’s much-criticized customs operations.
Hun Sen said that the World Bank had threatened to cancel $62 million in grants for Cambodia if the government did not accept its “single window plan” for customs clearance.
“I warn all government officials, you must not negotiate to sell our sovereignty,” Hun Sen said. “If you do so, I will fire you from the government.”
World Bank spokesman Bou Sa-roeun said in an e-mail that the Bank had proposed a public-private partnership to develop an electronic customs system through which traders could submit documents and make electronic fee payments.
“On ownership structure, the World Bank has never advocated privatization of [Customs and Excise],” he wrote, adding that countries such as South Korea, Singapore and Tunisia have already successfully implemented privately administered electronic systems.
When the government rejected the idea of a “public-private partnership” in March, the World Bank accepted 100 percent public ownership, as long as the Customs Department did not run it, Bou Saroeun wrote. However, the government rejected the idea, he added.
“Since then, the World Bank has moved on,” he wrote, adding that the $3.6 million available for the customs project is now being used for other projects.
“We are not sure what the $62 million figure is referring to,” the Bank said of the figure referenced by Hun Sen at the forum.
During his nearly three-hour speech, Hun Sen also called on the International Labor Organization to root out any bad employees that may be incorrectly reporting on factory working conditions. He made the comment after businessman Nang Sothy told the forum that manufacturers are upset by the ILO’s assessments.
ILO Better Factories Cambodia project manager Tuomo Poutiainen said ILO’s internal reports to buyers have recently put more emphasis on individual factories, but he has not seen a recent rise in problems with the factory monitoring system.
“This is the first time we have heard these allegations of misconduct and of course we are looking into it,” he said.