The US has boosted the number of garments it can import from Cambodia by 3 percent, suggesting that Cambodia has made progress in improving labor conditions and allowing unionization in its garment industry.
Ministry of Commerce Secretary of State Sok Siphana on Thursday called the export quota increase “a sign of our goodwill, and of [the US’] appreciation of our efforts” to improve labor conditions.
Roger Tan, secretary-general of the Garment Manufacturers Association of Cambodia said the increase will help the garment industry—Cambodia’s leading economic engine—to expand and will encourage more investors to build factories here.
Cambodia’s garment business boomed after the US awarded it so-called Most-Favored Nation status in 1996, slashing tariffs. But US garment makers complained that they were being flooded by Cambodian imports, leading to the 1999 agreement that imposed quotas and established the quota bonus.
The unique agreement ties quota “bonuses” to improvements in working conditions. For the last three years the quota bonus was 9 percent of a maximum 14 percent.
This year the bonus is 12 percent out of a maximum of 18 percent. The bonus is in addition to automatic annual import increases of about 6 percent.
Late last month US labor experts from Washington met here with unions, manufacturers, and labor and commerce officials. The experts found that the labor ministry has made it easier for unions to register and the collection of union dues collections had increased, a US Embassy official said on condition of anonymity.
Factory-union relations have improved and progress is being made toward collective bargaining, the official said.
But the US also found that the labor law is poorly enforced, the official said. In a recent survey by the International Labor Organization, 57 of 65 factories were found to be underpaying their workers. Forty-five factories violated rules on overtime, and in 16 factories there were “indications” of union-breaking activities.
The visit by US officials led to a flurry of activity. Two union leaders jailed for allegedly inciting a riot at Tommy Textile were released; union leaders and the US Embassy suggested the factory had manipulated the judge into jailing the men.
Also last week, Minister of Commerce Cham Prasidh sent a letter to 28 factories ordering them to explain “within 48 hours” how they ended up in a US-compiled list of factories charged with anti-union discrimination. The letter threatened to shut offending factories out of garment quota auctions, which the ministry has never done before.
Labor leaders were generally optimistic about the decision Thursday.
“It’s positive the US did increase the quota because it gives them the opportunity to encourage the industry while keeping up the pressure on individual abusers [through the ILO surveys],” said George McLeod, international liaison officer for the Free Trade Union of Workers of the Kingdom of Cambodia.
“The raise is good; it will increase jobs,” said Chhorn Sokha of the Coalition of Cambodian Apparel Workers. But she said any improvement in working conditions has come from unions and the ILO, not the labor ministry, whose inspectors she accused of corruption.
(Additional reporting by Kay Kimsong)