Monitoring for nothing

Is the ILO’s ‘Better Factories’ programme failing Cambodia’s garment workers?

Frédéric Janssens
April 9, 2013
Monitoring for nothing
Big machine: Cambodia's garment sector employs more than 300,000 women and makes up 80% of the country's foreign exchange earnings. Photo: Chor Sokunthea / Reuters

The United Nations in Cambodia has taken a beating in recent months. The UN-backed Khmer Rouge tribunal has been plagued by high-profile resignations and accusations of political interference. Elsewhere human rights activists have criticised the UN’s failure to take a firm stance against an increasingly intolerant government.

In February, the international body took another punch when academics from Stanford University attacked one of its flagship programmes in Cambodia. In conjunction with experts from the Worker Rights Consortium (WRC), the academics openly questioned Better Factories Cambodia (BFC) – a much-lauded UN monitoring and reporting initiative launched in 2001 to improve working conditions in the Kingdom’s garment industry – in a report titled Monitoring in the Dark.

The paper blasted the image of BFC as a best-practice approach and unambiguously states that its current structure makes it a powerful protective shield for factories and brands rather than a change lever for Cambodia’s approximately 400,000 garment workers.

Better factories?

“Cambodia is internationally branded as a sweatshop-free country thanks to BFC’s inspections, but the impact of the programme on workers’ well-being is far from glorious,” said Bent Gehrt, WRC’s Southeast Asia field director and co-author of the report. “While all neighbouring countries have witnessed important wage raises without any ‘Better Factories’ programme, real wages in the Cambodian garment sector have fallen by 16.6% over the past decade. Workers are poorer today than they were ten years ago, and the vast majority is now employed on short-term contracts.

Impoverishment and job insecurity pushed them to accept excessive overtime in factories where basic health and security standards are often not even met. Under such circumstances, no one should wonder why mass faintings have become daily news in Cambodian newspapers.”

Indeed the BFC’s latest available synthesis report supports these claims. Published in June 2012, the report highlights that 86% of factories monitored in a six-month period did not respect the legal daily overtime limit while 62% did not provide sufficient ventilation, leading to “unacceptable” heat levels for workers. Among many other violations – ranging from increased incidences of child labour to insufficient access to water – the report notes that one-third of factory managers obviously use rotating short-term contracts “to avoid providing workers’ entitlements to maternity leave, attendance bonus, security bonus and/or annual leave”.

“We do not see these low compliance levels as a failure of BFC’s role,” said Jill Tucker, the programme’s chief technical advisor. “At present, BFC monitors all garment export factories but has no enforcement powers to address violations. Where it is our role to identify the areas of non-compliance, the power to directly enact changes lies with buyers and factories.

BFC’s presence has assisted in many positive developments in Cambodia’s garment industry [but] we do not have any influence over issues that buyers and factories do not prioritise.”

A black-box system

Is the UN monitoring body toothless when faced with labour rights violations? “That’s the whole farce of the system as it is currently designed,” said David Welsh, Cambodia country director of the American Centre for International Labour Solidarity (ACILS), a US non-profit organisation supporting trade unions in developing countries. “BFC inspectors do a pretty good job at highlighting abuses in factories, but no one is obligated to take any action following their reports.

BFC is just a monitoring programme with zero ability to enforce any decision. That is its mandate and deception is therefore huge for those who expect it to go beyond that.”

While Cambodian workers and activists are frustrated by BFC’s lack of enforcement power, much of their criticism is targeted at another – and more controversial – weakness of the programme: BFC’s opaque reporting system.

Monitoring for Nothing
Time out: poor working conditions are believed to be behind mass faintings in Cambodia’s garment factories. Photo: Pring Samrang/Reuters

“Individual factory reports issued by BFC inspectors end up in the hands of one single set of actors: factory owners and their buyers,” said Stephan Sonnenberg, lecturer at Stanford University Law School and coordinator of the February report. “Nobody else has access to these findings, not even the workers or their unions. This ‘black box’ way of reporting is a major source of concern and confusion for them.”

Factory reports are not the only BFC tool to suffer from transparency problems. Since 2006, the names of factories that failed – or succeeded – in implementing BFC’s recommendations have not been mentioned in the programme’s public ‘synthesis reports’, a semi-annual summary of key issues in the garment sector.

In the climate of fear that followed the expiration of the Cambodian-US free trade textile agreement in 2005, according to some analysts, factory owners managed to impose a more secretive public reporting format in lieu of the former ‘naming and shaming’ system. “Obviously, removing the carrot and stick approach did not act as an incentive to improve working conditions in Cambodia,” said Sonnenberg.

Changes ahead?

Under pressure from workers and labour activists for years, and benefiting from what many see as a better managing team, BFC staff seem open to correcting this ‘black box’ system – a change that would be in line with the programme’s own research. In a 2012 working document entitled What drives compliance? UN ‘Better Work’ researchers confirmed that between 2001 and 2006, public disclosure of factory names had a positive impact on the level of compliance while the elimination of public disclosure slowed the rate of improvement for all factories, “including those with a reputation-sensitive buyer”.

“The issue of public disclosure of factory monitoring reports has been discussed for some time among BFC and its programme stakeholders,” said Jill Tucker. “For more than a year, BFC has been working to introduce some form of limited transparency. We believe that it is timely for the programme to introduce changes in order to increase our effectiveness. An independent evaluation of the programme is currently underway. We expect the report to be released publicly in April.”

Yet the scope of change will depend on the willingness of three key actors in BFC’s decision-making system: factory owners, brands and the Cambodian government. These actors currently provide the majority of the programme’s funding.

“For these actors, leaving BFC as it is now would be very convenient,” said WRC’s Bent Gehrt. “The government doesn’t have to do inspections since the UN does it, factories are not endangered by any reputational risk; and brands can heavily communicate on their corporate social responsibility, since no one knows that BFC is powerless and non-transparent. So why change it?”

Monitoring for Nothing
Photo: Tang Chhin Sothy/AFP

“The current model is a great cover for the brands,” said David Welsh. “They can hide behind a UN programme which wrongly creates a ‘clean’ image of the Cambodian garment sector among consumers. Today, brands invest in Bangladesh to make money and come to Cambodia for public relations. They can say ‘Okay, two of our sourcing factories burned down last month in Dhaka, but look, we also source from Cambodia’s monitored suppliers. Factories and officials are well aware that brands do not want a transparent BFC that would increase international pressure on them. Seeing brands fleeing the country because of an increased transparency is a very real concern.”

The coming weeks and months will be a test for BFC and its corporate partners. While major changes in the programme are hardly conceivable, maintaining the status quo would jeopardise its integrity for many observers. In a country increasingly becoming associated with strikes and labour disputes, the ability to hide behind the BFC label is decreasing.

“While the whole story of Cambodia as a garment ‘success story’ is cracking up, it is extremely urgent to bring changes to the BFC programme,” said Welsh. “BFC is on the verge of being copy-pasted in Bangladesh, a country where – believe me – factory managers make their Cambodian counterparts look like worker rights advocates. Without any immediate change in the programme, its deficiencies will be magnified a hundred times over there.”

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