Cambodia Increases Garment Industry Minimum Wage

Cambodia agreed Wednesday to raise the minimum wage in its important clothing industry by 28 percent to $128 a month, falling short of labor unions’ $140 proposal.

The Labor Advisory Committee, representing employers, workers and the government, originally agreed on a $123 minimum wage. A Labor Ministry statement said it was increased to $128 after instructions were received from long-serving Prime Minister Hun Sen to do so. The new wage level takes effect at the beginning of next year.

Two years ago, a militant union campaign to double the then-minimum wage of $80 in the textile, garment and footwear sector resulted in clashes with police and a consequent crackdown on public protests. A $100 level was set for 2014, and the unions scaled back their demand for the negotiations over the 2015 level. Employers had proposed the minimum wage be set at $110 for next year.

The clothing industry is Cambodia’s biggest export earner, employing about 500,000 people in more than 500 garment and shoe factories. In 2013, the Southeast Asian country shipped more than $5 billion worth of products to the United States and Europe.

The Coalition of Cambodian Apparel Workers’ Democratic Union has not yet accepted the 2015 wage level, said union president Ath Thorn, who took part in the negotiations.

The Labor Ministry’s statement said that when other benefits were calculated, the workers would be making an average of $147 to $156 monthly next year.

Labor Minister Ith Samheng said he believed that the wage hike would result in better living conditions for the workers.

Labor militancy is a concern for the government, especially because major unions are generally allied with the opposition Cambodia National Rescue Party, whose political strength has been growing in recent years.

Source: Yahoo News | November 12, 2014

Cambodia Not Ready For AEC

Cambodia is not ready to join the Asean Economic Community (AEC) at the end of next year, a senior official has admitted.

Given its low level of economic development, Cambodia would likely benefit less than most other Asean members from the formation of the single market, said Chuop Narath, deputy director of the department of employment and manpower at the Ministry of Labour.

Free trade within Asean is already a reality, with tariffs reduced or eliminated on 97% of goods traded, but the AEC would eliminate more barriers and also promote free movement of labour.

“If you talk about the short term: Yes, we are not ready,” Mr Narath told the Cambodia Daily on the sidelines of a forum held to discuss the AEC and labour rights.

“For the long term, we have to learn how to compete,” he added.

Asked whether Cambodia should ask Asean to defer the creation of the AEC, he said: “This is up to our leader to decide. Maybe the Ministry of Foreign Affairs or some other top leaders can see if [it can be delayed].”

According to an internal scorecard prepared by Asean bureaucrats, the implementation rate of targets that need to be achieved to create the AEC slowed to 72% in December from 79% in August last year.

The AEC originally was supposed to take effect on Jan 1, 2015 but the date was changed to Dec 31, 2015. The change was mainly intended to save face in light of years of talk about “AEC 2015”.

Big development gaps between the region’s richest and poorest countries represent hurdles to forging a single economy.

Asean’s richest country, Singapore, is third in the world in GDP per capita while Thailand ranks 92nd, Cambodia is 147th and Laos is 141st, according to the World Bank.

Ideally, allowing skilled and unskilled workers to freely move from one AEC member state to another would benefit the whole region. It would allow the exchange of experience and skills.

For Cambodia, mainly skilled youth would benefit by having the opportunity to gather work experience abroad, Mr Narath said. But he cautioned his audience, largely of students, not to rely on getting jobs abroad.

Other than that, he said, it was unlikely that Cambodia would see positive impacts in terms of labor movement.

“It’s demand and supply,” he said. “Professionals from other countries will come to Cambodia only if they get the same as in other countries.

“If you need them, you have to pay them the same … dentists, accountants, if you don’t give them the same salary as Singapore or Malaysia, you cannot get good professionals.”

The private sector has to start increasing wages, he said, adding that it was not the government’s obligation to set a minimum wage, “only to help negotiate,” between unions and companies.

Ya Navuth, executive director of Coordination of Action Research on AIDS and Mobility (CARAM), said the free flow of labour held more dangers than opportunities for Cambodia.

He predicted that Cambodia would experience a big outflow of farmers and other unskilled labourers, as well as educated professionals.

“Malaysia and Singapore have a minimum wage,” Mr Navuth said. “If the [Cambodian] private sector doesn’t increase wages, there will be a flow to countries where [wages] are better—both skilled and unskilled labour.”

About 400,000 Cambodians, mostly farmers without education, currently work in Thailand, where wages are higher, he said.

University students in the audience also expressed concern over their competitiveness and future in the job market.

“The university teaches us theory, but no skills,” one student said.

Source: Bangkok Post | March 29, 2014

Businesses Need Help Fighting Corruption: CAMFEBA

Corruption is weighing on businesses, and the avenues to address it are limited, according to Cambodia’s leading employer association.

At a joint conference with the International Labour Organization (ILO) and the Cambodian Federation of Employers (CAMFEBA) in Phnom Penh yesterday, the employer representative called on the government to provide greater protection for company whistleblowers, and to spearhead a review into corruption within the courts so companies feel they are operating on a level playing field.

“It is quite well known that there is quite a lot of corruption in the judicial system, said Matthew Rendall, a CAMFEBA board member who spoke at the conference. “One of the areas of concern is that inequitable access to the judiciary is impeding business,” he said.

Cambodia’s Anti-Corruption Unit, a government body, is the only organisation that has the mandate to complete such a review of the judiciary, Rendall added.

The ACU, responsible for cracking down on government graft, has targeted some court officials in its investigations. A spokesman declined to comment about the proposed review.

Ith Sam Heng, the Minister of Labour and Vocational Training, told reporters after the conference that the investment and business climate has to be transparent in order to ensure progress and development.

CAMFEBA called for whistleblower protection provisions to be written into anti-corruption laws and for the broader promotion of the laws, which would encourage people to come forward. In lieu of protections, CAMFEBA established its own mechanism last year for collecting confidential reports of corruption and bribery from businesses that they are then able to collate and send to the ACU.

Using their own reports, the ILO and CAMFEBA yesterday both shared similar data from a business survey the groups carried out together. The employer representative then made its policy recommendations.

The ILO estimate that 10 per cent of GDP is lost annually to corruption, an issue they say is the largest constraint for businesses. And despite improvements over the past decade, 30 per cent of businesses believe that policy is set by those with powerful government connections.

But, “it takes two to tango”, said ILO senior economist, Farid Hegazy.

While there are some in the private sector creating their own codes of conduct or training employees on how to deal with corrupt officials, when faced with graft, most companies operating in Cambodia take no action, the survey revealed.

Source: Phnom Penh Post | March 12, 2014 | By: Daniel de Carteret