Apparel brands fail to pay more to Cambodian garment factories

With the steep rise in the minimum wage of readymade garment factory workers of Cambodia, eight global brands had promised to raise the prices that they pay to Cambodian factories so that the factories could pay higher wages to their workers. The pledge was warmly welcomed by the largest federation of trade unions around the world, IndustriALL, and the Garment Manufacturers Association in Cambodia (GMAC), but IndustriALL recently expressed disappointment as the apparel brands seem to have failed in keeping their promise.

The rise in monthly minimum wage first from US $ 100 to US $ 128, and now US $ 140, to be effective from January was supported by the global apparel brands as they find it necessary, and hence had also agreed to raise the prices. These apparel brands include Swedish apparel retailer H&M, which has the highest presence in Cambodia than any other buyer, C&A, Inditex, New Look, Next, the N Brown Group, Primark and Tchibo. “Last year, that was the strongest statement they ever made, and they made it public, that says ‘We would pay more to accommodate any agreed minimum wage increase,” said IndustriALL General Secretary, Jyrki Raina at the union federation’s annual executive committee meeting in Phnom Penh. According to Raina, the pledge should’ve been made by the people responsible for paying and placing orders rather than the apparel brands’ Corporate Social Responsibility (CSR) people.

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According to a survey conducted by GMAC in September this year, 99.4 per cent of the member factories were receiving the same or lesser price as compared to last year. IndustriALL believes that there is lack of transparency in the pledge and that the apparel brands’ purchasing practices need to be linked with the rising wages. To achieve this, IndustriALL has launched a new multi-country programme – ACT (Action, Collaboration, Trans-formation) starting in Cambodia. The programme aims to work with 14 apparel brands, including the eight brands that signed the pledge last year, to create industrywide collective bargaining over factors affecting costs, including leaves and bonuses, backed by those brands’ purchasing practices.