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The bottom line

Van Sou Ieng could play a pivotal role in changing the lives of hundreds of thousands of factory workers, yet his allegiance lies with big business

By Sacha Passi
Clashes between garment workers and the local manufacturing industry came to a head in February when three women were shot while protesting for increased bonuses outside their workplace. It was almost five more months before manufacturers and governing bodies agreed to raise the earning potential of a 350,000-strong workforce who each earn a monthly wage of $61, plus bonuses.

The avid businessman holds great sway over Cambodia’s economic ventures, currently heading multiple boards in the business sector, including Golden Sorya Mall, of which he is president, with 180 shops under his authority. As chairman of GMAC, Van Sou Ieng has worked with the government since the trade association’s inception in 1995 to build garment manufacturing into a multi-billion dollar export industry.

As of September 1, the monthly pay package will be adjusted to include additional bonuses of $10 – an extra $3 for employees who complete 26 eight-hour days a month, plus $7 for transport and accommodation – raising potential earnings to $83 per month.
“Regrettably the increase is too small to make any change to the conditions that workers face,” Bent Gehrt, from Worker Rights Consortium, said. “While the industry is booming in Cambodia, workers’ livelihoods have worsened. The new bonus is less than what is already being provided at several factories, so many workers will not see an increase at all.”
As chairman of the Garment Manufacturers Association in Cambodia (GMAC), Van Sou Ieng heads negotiations for the minimum wage of the country’s textile and apparel industry on behalf of the Labour Advisory Committee, a board on which he also sits.
As one of Cambodia’s leading export sectors, Van Sou Ieng’s role in guiding the garment industry back from a loss of investor funding during the global financial crisis of 2009 has been pivotal. “Labour costs are a significant share of production costs and Cambodia’s relatively low wages in the region have played a significant role in attracting foreign investment,” said Raymond Robertson, an economist from the Centre for Global Development.
While the local garment industry grew by 33% in 2011, with exports to the US contributing more than $2 billion to the sector and accounting for more than half of the sector’s yearly takings, so too did the number of garment worker strikes. “Workers need to earn enough to survive, provide and save for the future, but policies that ignore market forces rarely work out well,” Robertson said. “Both labour and factories need to consider the potential adverse effects strife has on the investors’ point of view. Buyers may consider labour strife to increase risk, and most buyers and investors prefer to avoid risk.”
From November to April, demonstrations for better wages and worker rights doubled compared to the previous reporting period, according to the International Labour Organisation. More than 36,000 disgruntled factory workers have taken to the streets in protest. “Workers simply have no alternative but to strike,” Gehrt said. “Only when the level of strikes is reaching a crisis level for the industry [does] GMAC become willing to negotiate. This time is no different.”
As one of the most active trade associations in the country, GMAC is heavily invested in influencing the policy and legal environment to ensure it is conducive for growth and development of the industry. Over the past five years, GMAC has aggressively pursued changes to replace unlimited duration contracts with short-term contracts, making it easier to dismiss factory employees without grounds – including pregnant women – as well as mass firing workers who participate in strikes. “These concerns could destroy industry image as well as Cambodia’s national reputation in a global market,” Mouen Tola, from the Community Legal Education Centre, said.
Without the support of the international community changes to the industry will remain marginal. Yet despite human rights concerns for workers, the bottom line remains the driving force for industry change both on the ground and internationally, with Van Sou Ieng ultimately sitting in a position with little room to move when it comes to wage hikes.
“Even if GMAC wanted to provide a living wage to its workers it would not be possible alone,” Gehrt said. “Providing living wages requires buyers to adjust their prices paid to factories upward to make this sustainable and, right now, unfortunately, industry practice is the opposite.”

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