ILO to Publicly Disclose Identity of Non-Compliant Factories

The International Labor Organization’s (ILO) Better Factories Cambodia (BFC) program will start to publicly disclose the identity of factories that persist in operating outside of Cambodian labor law and international standards starting in January.

The decision came after researchers from Stanford Law School in February released findings that concluded the BFC program had failed to improve wages and standards for workers in the garment sector. The researchers charged that the lack of transparency in the BFC program had actually set back garment industry standards for Cambodian workers, compared to their counterparts in China, Indonesia and Vietnam.

They also said that the ILO’s “confidential reporting practice” reduces incentives for factory owners and international brands to improve working conditions in Cambodian factories.

In a statement released on Monday, ILO said the initiative to name factories is aimed at forcing factory owners to improve conditions for workers. But opponents of the plan say it could lead to an exodus of garment factories and many jobs lost.

“The International Labor Organization’s Better Factories Cambodia (BFC) program today announces its return to a practice of publicly disclosing individual factory information collected in its assessment reports. BFC’s disclosure initiative makes it the only program in Southeast Asia to use greater transparency to accelerate improvements across the garment sector,” the statement says.

“Starting in January 2014, BFC will publicly release information from its assessment reports about factories’ compliance with Cambodian labor law and international labor standards. BFC will also for the first time disclose details about strikes and labor unions, noting unions’ compliance with legal strike requirements,” it adds.

Jill Tucker, BFC’s chief technical adviser, said that because ILO has no power to order factories to improve standards, naming below-par firms would apply the necessary pressure to bring about better working conditions.

“[BFC has] no authoritative power so we need to find a way to encourage buyers and consumers to force change for factory workers,” Ms. Tucker said.

“In 2013, for the first time, we are going to see less than 50 percent of Cambodia’s garment exports going to the U.S.

“This means a rise in buyers from other parts of the world and these buyers are becoming more sensitive to being linked to factories that are not performing well [in terms of working conditions],” she said.

Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia (GMAC), said the BFC plan could be counterproductive and force factories out of the country and workers out of jobs.

“GMAC is not against public disclosure,” he said, “but we have to ask the question: How does public disclosure help the factory workers? How do they benefit?”

“If companies are able to monitor the state of factories in Cambodia and they see that the factory they work with is not in compliance with [the BFC’s] standards, will they try and put pressure on the factory to change? It’s more likely that they will simply take the easy way out and stop doing business with that factory.”

“Then what happens to the factory? This could possibly lead to workers having no job at all,” Mr. Loo said.

The BFC’s online database will include details of 450 registered factories on 21 “Critical Issues,” including basic health and safety, wages and discrimination. For factories that have twice been found to be non-compliant and have ignored calls to reform, details of their problems will be explained next to their names.

Factories found to be in breach for the first time will have one year to rectify problems.

BFC will begin compiling its list of non-compliant factories in October, and expects that as many as 120 factories will be in the database by January 1, with about 120 to be assessed and published each quarter beyond that.

Sat Samoth, undersecretary of state at the Ministry of Labor, said that BFC had announced the plan despite pleas from GMAC and the government for further discussion.

“Now I must find a way to solve this problem as GMAC and [BFC] cannot agree,” he said.

Mr. Samoth also expressed concerns that factories would leave the country due to public disclosure.

“If buyers have this information and they decide to cancel an order or put a sanction on a factory in Cambodia, it will have many drawbacks: The factory loses, the worker loses, Cambodia loses,” he said.

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