Garment factory owners on Tuesday urged Cambodiaâ€™s government to postpone annual negotiations on minimum wage, saying the sector needs to first recover from the devastation of the coronavirus pandemic, while unions sought to downplay the severity of its impact and demand that talks go ahead.
The Garment Manufacturers Association in Cambodia (GMAC) issued a statement calling on the Ministry of Labor to stall minimum wage negotiations in the textile, garment, and footwear sector for 2021, planned to take place between July and September, citing a dearth of orders from foreign buyers and factory shutdowns caused by the outbreak.
â€œIn the textile, garment, and footwear industry, many enterprises have temporarily suspended their production,â€ it reads.
â€œAt the same time, some enterprises have decided to shut down their operations as buyers have canceled orders and refused to accept products already produced and also failed to make payments for goods that have been produced and delivered for the reason that stores and retailers around the world have closed, and the demands have declined to the minimum.â€
The GMAC noted that Cambodiaâ€™s Labor Law and Law on Minimum Wage stipulate that minimum wage negotiations must be based on criteria that include the profitability of the sector and allow for the Ministry of Labor to suspend or change the schedule of discussions. In the case of such a suspension, the minimum wage of the previous year will remain in effect.
It said that amid the outbreak, the sector is â€œfragileâ€ and â€œuncertain in its return to its normal operation,â€ while recovery will â€œtake a long time.â€ Meanwhile, the GMAC said that supporting mechanisms are necessary to help stabilize the industry.
â€œThe Garment Manufacturers Association in Cambodia (GMAC) is of the view that the new minimum wage negotiations for 2021 should be postponed â€¦ until the situation in the sector is restored,â€ the statement said.
â€œDelaying the minimum wage negotiations will be a mechanism to support the sector to stay alive as well as maintain employment for workers.â€
Union will seek wage increase
In response to the request, Yang Sophoan, president of the Cambodian Alliance of Trade UnionsÂ told RFAâ€™s Khmer Service that the situation caused by the outbreak is not severe enough to warrant calling off the talks.
Buyers have also made commitments for future orders, she noted, adding that her union and others expect negotiations to take place.
â€œIf the government has a strong commitment to helping the garment sector survive and workers to be able to support themselves, it shouldnâ€™t accede to the GMACâ€™s request and force the unions and workers to comply with it,â€ she said. â€œWeâ€™ll never accept it.â€
The current minimum wage is U.S. $190 per month and the unions will push for an increase, Yang Sophoan said. Any changes to the minimum wage would go into effect beginning in January.
She explained that workers have been earning little more than U.S. $70 per month in addition to a small amount of assistance from the government because of the factory closures and suspensions, which she said â€œis not enough.â€
In addition to the impact of the coronavirus outbreak, Cambodiaâ€™s key garment industry faces an uncertain future over the European Unionâ€™s impending suspension of trade preferences for the Southeast Asian nation.
The EU in mid-February announced plans to suspend tariff-free access to its market under the â€œEverything But Armsâ€ (EBA) scheme for around one-fifth of Cambodiaâ€™s exports, citing rollbacks on democracy and human rightsâ€”a decision that would reinstate tariffs on garments and footwear beginning Aug. 12, unless it is overturned by the blocâ€™s governments or its parliament.
The decision will result in a loss of around U.S. $1.1 billion of the countryâ€™s annual U.S. $5.8 billion in exports to the bloc, some 75 percent of which are made up of clothing and textilesâ€”a crucial industry in Cambodia that employs one million people.
Cambodiaâ€™s Prime Minister Hun Sen has shrugged off the EUâ€™s move, but unions have warned that the reinstatement of tariffs on Cambodian exports to the EU could leave 80,000 workers from more than 1,000 garment factories in Cambodia jobless if buyers from the bloc stop placing orders because of increased costs.
Call for reopening
Amid widespread economic fallout from the coronavirus,Â businessmen and vendors in Banteay Meanchey provinceâ€™s Poipet city urged provincial authorities to press Thailand to reopen its borders so they can resume work at markets located inside the neighboring nation.
Thailand sealed off it borders to Cambodians some three months ago to stop the spread of the coronavirus outbreak.
Din Puthy, the head of the CambodiaÂ Informal EconomyÂ ReinforcedÂ Association, told RFA that since the border closure, his family had lost its only income from businesses in Thailand.
He said that he and other Cambodians living along the border who have lost their jobs are selling off their assets, including jewelry and motorbikes, to make sure they have enough food on their tables.
He urged Banteay Meancheyâ€™s provincial authorities to close Cambodiaâ€™s border to Thais in retaliation for the continued shutdown.
â€œ[Our provincial authorities] have not imposed any pressure and allowed [Thai business owners] into Cambodia,â€ he said.
â€œThai business is going well, so they donâ€™t mind and can continue to keep the border closed, even up to a year from now â€¦ The Thai side is suffocating us. The poor are starving. They are forced to borrow money, so it is making them even poorer.â€
Provincial governor Um ReatreyÂ posted a comment on his Facebook page saying that he had met with his Thai counterpart from Thailandâ€™s Sa Kaeo province via video conferenceÂ on Tuesday and was told that there are no plans to reopen the border.
However, he said Thailand will allow Cambodian businesses owners to inspect their belongings in Thai marketsâ€”permitting 50 cars with a maximum of two passengers each, who must undergo a health screening, to enter the country between 8:00 a.m. and 1:00 p.m. daily to transport goods back home.
A vendor who declined to be named said Cambodia is losing to Thailand because Thai trucks loaded with their products can still enter Cambodia.
â€œIt isnâ€™t rightâ€”Thai trucks can continue to enter Cambodia, but [Thailand] wonâ€™t allow us to do the same,â€ she said.
Banteay Meanchey provincial deputy governor KoengÂ VannakÂ recently told RFA that Thailand also allows Cambodian trucks to enter the country, but Cambodia has nothing to send across the border.
â€œAt this point, we donâ€™t have any goods for Thailand,â€ he said. â€œWe have a fair-trade agreement in place, but we donâ€™t have high demand from Thailand for our factories.â€
Sum Chankea, provincial coordinator for Cambodian rights group Adhoc, said cross border relations have left Cambodia at a serious disadvantage to Thailand.
Thousands of families have lost their jobs because of the border closure, he said, especially workers in informal sectors.
â€œThere must be a balance between the countries,â€ he said, noting that Thailand has had 3,156 cases of infection while Cambodia has only confirmed 130.
â€œ[The Thais] have more infections, but they are afraid of us.â€
Reported by RFAâ€™s Khmer Service. TranslatedÂ by Samean Yun. Written in English by Joshua Lipes.