H&M, ILO Form New Industrial Relations Initiative

In an effort to bring stability back to the country’s embattled but crucial garment industry, the Ministry of Labor has joined forces with the International Labor Organization (ILO) and Swedish clothing giant H&M in a campaign for unions and factories to sign direct agreements to improve industrial relations.

The initiative is being funded by H&M—the world’s second-largest clothing retailer by sales—the Swedish government and Swedish trade union IF Metall, and comes after a year in which the industry has been plagued by a record-setting number of strikes and a nationwide protest for higher wages, which started in late December and was lethally suppressed in early January.

“The project will provide training and awareness-raising to eliminate unlawful practices, including bribery and corruption, and promote enterprise-based approaches based on international standards, including in collective bargaining and gender equality,” the ILO said in a statement on Friday.

As part of the campaign, unions and factories will be encouraged to sign bilateral versions of the Memorandum of Understanding On lmproving Industrial Relations in the Garment Industry, which was signed by national-level factory and union representatives in 2012.

“The aim is to improve the unions’ ability to genuinely represent workers, and to encourage unions and employers to engage in collective bargaining, by educating all parties on the importance of solution-oriented, negotiations in good faith,” says the ILO’s statement.

H&M has not been immune to worker unrest.

Last year, about 2,000 workers from the M&V International Manufacturing Limited factory, which produces clothes for H&M, blocked National Road 2 in Phnom Penh’s Meanchey district, demanding that they be given food and transport allowances and that pregnant women be given leave instead of being terminated.

Later that year, H&M CEO Karl-Johan Persson personally called for Cambodia to review its minimum wage on a yearly basis.

Ath Thorn, the influential president of the Coalition of Cambodian Apparel Workers Democratic Union, noted the MoU signed in 2012 between the Garment Manufacturers Association in Cambodia and eight union confederations is due to expire in about October.

“We will renew the national MoU to ensure that some points continue,” he said.

But whether the agreement is signed on an industry-wide level or factory level, Mr. Thorn said that both sides must commit to showing good faith when industrial disagreements arise. “I think it will be almost the same—maybe some points will change—but we need to agree together,” he said. “If we don’t agree, then we cannot sign it.”

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