Garment factories run the risk of having their cargo confiscated by U.S. customs authorities if they continue using pirated computer software in their administrative operations, and may be prosecuted under a law that requires all manufacturers to use licensed digital software, according to a local technology business association.
In a statement issued Thursday, the Information and Communication Technology (ICT) Business Association—a Cambodian organization whose mission is to represent the country’s information and communication technology sector internationally—informed the country’s more than 400 exporting garment and footwear factories that the Unfair Competition Act (UCA), passed in various U.S. states in 2011, could severely impact the garment industry’s annual exports of more than $4 billion because of the country’s breach of intellectual property rules.
Pirated goods in Cambodia—which run the gamut from counterfeit medicine and fake computer software to pirated books and music—is rampant.
“Cambodia is maybe not enforcing [intellectual property rights] in the country, but U.S. authorities are definitely very active and one day or another, some factories from Cambodia will get hit,” the statement says.
In January, the State of California—which has had the law instated for nearly 80 years—brought lawsuits against India’s Pratibha Syntex Ltd. and China’s Ningbo Beyond Home Textile Co. Ltd. Both companies shipped a total of more than 330,000 kg worth of apparel to California.
Factories using pirated computer software in their administrative duties—such as Microsoft Word and Excel—could have their cargo confiscated or destroyed, and thus risk losing buyers, said Pily Wong, president of the ICT Business Association and country manager for Microsoft in Cambodia, adding that 95 percent of computer software used in Cambodia is pirated.
While critics of implementing strict World Trade Organization rules on intellectual property rights often say that Cambodia, as a least developed country, should be exempt from the rules, Mr. Wong considers the application of the UCA “fair” in the garment industry.
“The garment factories are making money, and they are taking advantage of low labor costs in the country,” Mr. Wong said. “Maybe the country might be a least-developed country, but in terms of the companies themselves, they are not smaller than the ones in India and China.”
He added that business associations in Thailand and Vietnam had begun educating their members on the risks of using pirated software to lower production costs.
Var Roth San, director of the intellectual property department at the Ministry of Commerce, said such a law could seriously affect Cambodia’s garment industry if the U.S. authorities start targeting cargo from the country.
“If exports are blocked, the intellectual property department and the government are worried because it will have a big impact. The garment factories should use licensed software,” Mr. Roth San said, adding that he would request workshops to be held to educate manufacturers.
However, secretary-general of the Garment Manufacturers Association in Cambodia Ken Loo said it was up to the individual companies to make sure they were in line with the law.
“Piracy is always something we worry about but that’s for the individual companies to pay attention to,” Mr. Loo said. “We’ve sent this notice out to our members a long time ago.”