Interview: Bent Gehrt, WRC Field Coordinator for Southeast Asia
Bent Gehrt is the Southeast Asian field director for the Workers’ Rights Consortium, an NGO that monitors factories producing apparel for 180 American, Canadian and British colleges and universities. He explains why Cambodia remains the regional ‘bad boy’ on wages and what challenges need to be urgently addressed.
By Clean Clothes Campaign
Q: You monitor garment factories in South East Asia for more than six years now. What is, in your view, the main problem in Cambodian garment sector today?
A: Wage is definitely the first issue for Cambodian workers. Some people think that wages are okay since the cost of living is ‘cheap’ in Cambodia. But that is a mistake. It’s actually cheaper to live in Thailand and Vietnam, where the wages are higher. In Cambodia, authorities have failed to catch up with inflation over the last 10 years. Since 2000, the gap between the minimum wage and the inflation rate has been growing dramatically. The minimum wage has been increased, but the actual wage decreased by more than 14%. The consequence is immense. Today, you cannot feed yourself anymore with the wages in the garment sector. I challenge you to get a breakfast, a lunch and a supper with a budget of one or two dollars. You will not succeed. It’s therefore easy to understand why 2,400 workers fainted between June 2010 and January 2012…
Q: You just said that garment wages are higher in neighboring countries. Is Cambodia an exception regarding wages?
A: There is a strange thing about Cambodia. Seven years ago, Vietnam used to have a lower wage than Cambodia. But now, Vietnamese wages are almost twice as high as in Cambodia. And Vietnamese factories provide free lunch for their workers. In Ho Chi Minh City, workers get 95 Dollars as minimum wage, a 13th month (an extra month wage) and a daily free lunch. In Cambodia, workers get 61 Dollars, a 5 Dollars health allowance and have to pay for their food. If the Cambodian industry was competitive seven years ago with same wages as Vietnam, why couldn’t it be competitive with the same wage today? That doesn’t make sense. The wage increase in Vietnam has nothing to do with a sudden booming in workers’ productivity, and Vietnamese textile and garment sector attained an export turnover of over 14 billion USD in 2011. I don’t see why wages in Cambodia couldn’t be raised as well.
The same story happened in other countries as well. Laos recently increased wages by 80%. The minimum wage is now 78 dollars – higher than in Cambodia. Thailand is planning to increase wages by 40% in the near future. The trend takes place everywhere around Cambodia, especially since China increased wages in its own garment sector. Why don’t Cambodian authorities follow this path? I don’t know. But there is a clear lack of political will. And I don’t see any chance of change in their approach. Unless something really dramatic occurs…
Q: Apart from wages, do you notice new challenging trends in Cambodian garment sector?
A: The most worrying trend is the massive increase in short-term contracts. The use of fixed-duration contracts (FDCs) perfectly illustrates the “boiling frog story”: if you throw a frog into boiling water, it will jump out immediately. But if you increase the heat of the water slowly, it will get accustomed and eventually get cooked to death. That’s what’s happening now in Cambodia.
When the trend started in 2005, employers used a very smart strategy. They stressed the fact workers could get 5% severance when their contract was terminated. Five percent, that makes only 3 dollars, but that means a lot when you have to eat for one dollar per day. Factory owners also maintained bonuses like seniority and maternity leave. Many unions didn’t notice the real danger behind these short-term contracts. But now that most factories have converted the unlimited duration contracts (UDCs) into short-term contracts, employers are in a favorable position and tend to cut all these benefits. Today, these precarious contracts are the main source of labor rights violations: termination of contracts for pregnant workers or union leaders, de facto forced overtime, etc. The ultimate aim of FDCs is to control the workers, to dismiss them without any valid reason – a condition required with UDCs – and to get rid of ‘disturbing’ elements. FDCs are extremely dangerous for unions. The water is boiling now. And even if these practices are totally illegal, factories are not alarmed because they can act in total impunity. But I predict a rise in strikes against this phenomenon.
Q: How did this massive shift happen so quickly?
A: By using persuasion, blackmail and cheating practices. The persuasive approach was based on stressing the maintenance of severance and bonuses. But financial blackmail was also widely used, especially before the two major holidays: Cambodian New Year and Pchum Ben – the ‘ancestor’s day’. These events are extremely important in the country. Workers need money to go back to their villages. This is the perfect timing to blackmail them. Sun Tex and Bright Sky factories are two striking examples. In 2008 and 2009, they converted their entire workforce into short-term contracts just by saying “we will give you extra money for the holidays, but you have to sign a 6-months contract”. Of course, many workers agreed. Some union leaders denounced the trick and were immediately dismissed. And no buyer took action.
PCCS Group, the owner of several factories in Cambodia, used another strategy. The company moved its production from one factory to another to make it look like a decrease in orders. They started early retirement programs, gave severance pay and closed one of their units. But as soon as all workers were dismissed, they reopened the factory with a brand new name, and hired all workers on 3-months contracts with minimum wage. The only thing that didn’t change was the buyers: Gap and Adidas. And I can’t believe that these brands were unaware of this trick. There must have been communication about this strategy.
Q: Who is primarily responsible for this situation?
A: It’s a difficult question. The responsibility is clearly shared by brands, Cambodian officials and manufacturers. The Cambodian Arbitration Council (AC) has stated that the continuous renewal of FDCs is illegal: after two years, you must get a UDC. Brands, officials and employers say that they all support the Arbitration Council’s decisions, but no one wants to implement that specific one on FDCs. If you claim that you support the AC, you cannot pick and choose which decisions you respect and which ones you reject. Brands have failed to respect their pledge to support the AC. Manufacturers pretend that there is a legal uncertainty. And government officials propose amendments to the labor law… aimed at legalizing the illegal practices of companies.
Q: The situation seems desperate on this issue…
A: Since no one is willing to take serious steps in the right direction, there are very few successes so far. The only positive example I know occurred in 2006, when Adidas asked one of its suppliers to give UDCs to the workers. Since then, I haven’t seen any success at all. And as far as I know, only two factories in Cambodia exclusively work with UDCs: E Garment and SL Garment. But they also have huge issues with freedom of association. In some other factories where unions are strong, the majority of workers also have UDCs. But that’s all. In general, larger companies provide 6 months or one year contracts – it would be crazy for them to manage to renew 5,000 contracts every 3 months. But smaller factories often use shorter contracts: 3 months, 2 months or even 25-days contracts. The rule is simple. If you ‘behave well’, you can get a longer contract. Otherwise, you’re out.
Q: You are a monitoring expert in the region. What do you think of the monitoring system in Cambodia?
A: As you know, Cambodia has a unique monitoring system in the world managed by the International Labour Organization: the “Better Factories Cambodia” program (BFC). When this system was set up in the country, it really made a difference. The first BFC reports clearly named the factories where labor rights violations occurred. And these were public reports. But in 2005, with the phasing out of the Multi-Fiber Agreement (MFA), the rules changed and a new agreement had to be reached on these reports. The naming of factories was then abandoned. Since then, factories are the only ones who decide who should have access to the comprehensive, detailed reports on violations. Public reports just mention the violations found in the sector, but without saying where it occurred. It’s a shame. The last BFC report mentions cases of child labor in five factories. But which are these factories? That’s a major transparency problem. People should know.
The other problem with this ILO system is that subcontracted units cannot be monitored. They operate in a completely opaque context. How many are they in the country? Two hundreds? Two thousands? Nobody knows, and this is another major weakness of the program.
A third problem is of course that controllers from the Ministry of Labor are dramatically underpaid. They get 50 or 60 Dollars a month, and even their per diems are confiscated by their supervisors. They would be crazy to refuse the bribes offered to close their eyes…
Q: So how does WRC deal with a problem that even the UN cannot address?
A: WRC controllers have the right to monitor the suppliers as far as needed. That is part of the contract we sign with the brands. Most of the time, we have full access to factories. But subcontracting practices are not always easy to identify. So far, it’s been very difficult to identify these factories and it is clearly one of our priorities for the future. One way of finding it is to push brands to disclose the volume of their orders. But they’re not always 100% transparent on that issue. That’s where international pressure can be very useful.
Q: Precisely, what is the added value of international campaigns in improving wages and working conditions in Cambodia?
A: They definitely play a big role. Of course, change cannot come only from overseas. Workers are the main actors of change and our role is not to take over their action. But campaigns play a key role in enhancing the visibility of their actions. Take the September 2010 general strike. The movement came from the workers, but its impact has been greatly amplified through other stakeholders like the Clean Clothes Campaign. Many union members were fired in retaliation of the strike, but the international pressure on brands like H&M or Inditex was decisive to reinstate them. As the saying goes, “no one is free as long as one is not free”. And in Cambodia, the majority of workers are not free. So we can’t just wait for workers to be strong and organized. It’s a question of solidarity.
Q: What is your message to those who feel bad wearing Levi’s jeans?
A: If you want to be 100% ethical, you’ll have to live naked. Everything you can find in general stores was made in a sweatshop. It’s as simple as that. But when you buy clothes, you can decide to reward the companies who are positively engaged with unions and NGOs. Is the brand you want to buy responsive to their appeals and campaigns? Does it correct its practices when there is a problem? These are important steps. That’s why I can say that I will never buy or wear Ralph Lauren shirts. Ralph Lauren never responds to any request from unions or NGOs. At least, Levi’s responds to NGOs’ requests. That’s a positive step. So keep your Levi’s. But don’t think it’s not a sweatshop product, because it is. And don’t think that expensive, luxury brands like Tommy Hilfiger or DKNY promote better working conditions in their supply chains. They don’t. I know a Hugo Boss supplier paying the minimum wage to the workers. Given the price they ask for their product, don’t you think they can afford to pay a little more?