KINGDOM OF CAMBODIA INTERNATIONAL LABOUR ORGANIZATION

BETTER FACTORIES CAMBODIA

TWENTY NINTH SYNTHESIS REPORT ON WORKING

CONDITIONS IN CAMBODIA’S GARMENT SECTOR

Publication date : 11 April 2013 Report period : 1 May 2012 – 31 Oct 2012

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Better Factories Cambodia: Twenty ninth synthesis report on working conditions in Cambodia’s garment sector /

International Labour Office ; International Finance Corporation. - Geneva: ILO, 2013

1 v.

Better Work Synthesis Reports: ISSN 2227-958X (web pdf)

International Labour Office; International Finance Corporation

clothing industry / textile industry / working conditions / workers rights / labour legislation / ILO Convention /

international labour standards / comment / application / Cambodia

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Page 1 (of 20)

Synthesis Report 01/05/2012 – 31/10/2012

136 Factories Monitored

1. About Better Factories Cambodia

Better Factories Cambodia (BFC) aims to improve working conditions in Cambodia’s export garment

factories through independent assessments, training and advisory services provided to factory

management. Since 2001, BFC staff has conducted assessments that include management interviews,

union and worker interviews, document reviews and factory observation.

Assessment information is entered into BFC’s Information Management System (IMS), which makes it

possible to produce reports in Khmer, English and Chinese. Because the system is web-based, accessing

information is quick and easy for factories and their buyers.

2. Executive Summary

This report covers the period from 1 May 2012 – 31 October 2012. BFC assessed 130 garment

factories and six footwear factories during this period.

The continued growth of the Cambodian garment and footwear industries has likely affected many of

this report’s findings as industry expansion -- 11 percent growth in the garment sector and 12% in footwear

during the first nine months of 20121 -- puts pressure on workers and factory managers in a variety of ways.

For example, this report notes a worrisome decline in compliance in some key areas of occupational safety

and health, or OSH. One example is the compliance issue that declined the most during the period:

maintaining access paths free of obstructions. BFC noted an unprecedented 30% drop to 57% compliance

on this measure. It is possible that attention to workplace safety and health standards and other legal

standards have waned as factories are challenged to fill the increased volume of orders. However, recent

deadly fires in the garment sector in other Asian countries reminds us that vigilance is required on such

measures.

Growth in the industry may also be reflected in overtime levels. These remain high with 88% of

factories exceeding the limit of two hours of overtime per day (60 total working hours per week).

Compounding the overtime challenge is a19% decline in the percentage of regular workers being given the

mandatory 2,000 riel ($0.50) meal allowance when working overtime.2 Furthermore, medical personnel may

not be available during all working hours, as the report finds that in 66% of the factories assessed, infirmary

staff is not working the required number of hours.

As mentioned in previous reports, group fainting continues to occur in garment and footwear factories.

The Ministry of Labour reported that 1,686 workers fainted in 2012 in 22incidents. The data below reveal

further deterioration in some workplace conditions that have been deemed to be possible contributors to the

fainting incidents.

Assessment results for this Synthesis Report period demonstrate the following:

1“Estimated Cambodian Export under GSP/MFN Scheme, First Nine Months, 2012 with 2011,” Royal Government of Cambodia, Ministry of Commerce,

General Directorate of International Trade. 2 The steep drop in this measure may be attributable to factories not paying the meal allowance during Sunday overtime.

Page 2 (of 20)

- As with past reports, the vast majority of factories pay minimum wage and overtime wages correctly.

97% of factories assessed during the period paid the correct minimum wage and overtime wage for

regular workers. In addition, in 89% of factories, overtime work was deemed to be voluntary. However,

at the same time, there was a 6% deterioration in the requirement to keep only one payroll ledger that

accurately reflects the wages paid to workers, reducing this measure to 55% compliance. The low

compliance suggests that while factories pay regular and overtime wages correctly, management may

attempt to hide overtime work from buyers and authorities by not including all working hours in one

payroll ledger.

- There was a deterioration (58% compared to 61% previously) in compliance with the legal requirement

not to deduct the attendance bonus when workers take annual leave, meaning that in 42% of the

factories monitored, workers lost all or part of the $10 attendance bonus when availing themselves of

their legal right to paid annual leave.

- There has been no significant improvement in many of the compliance indicators thought to contribute

to fainting incidents. Only 32% of factories were found to have acceptable heat levels. This represents

a 6% decline in compliance from the last synthesis report. It is important to note that a factory is

deemed to be out of compliance on this measure when the temperature inside the factory buildings is

hotter than the ambient temperature outside of the buildings. In addition, the percentage of factories

deemed to have adequate ventilation has deteriorated by 16%, resulting in 36% noncompliance.3

- More than half of the assessed factories still do not provide sanitary means for drinking water (55%,

virtually unchanged from previous report), and after some improvement in the last reporting period, the

number of factories with sufficient soap and water available near the toilets has also declined again to

48%.

- The number of factories lacking a functioning joint management and worker OSH committee has

increased by nearly 10%, to 65%. Workplace cleanliness has declined by 17%. The data also

demonstrates significant drops in two of the most basic contributors to workplace health and hygiene,

with 12% drops both in toilets that were properly functioning, and toilet doors working properly.

- The interpretation of Cambodian labour law on the issue of Fixed Duration Contracts (FDCs) continues

to be one of the most contentious in the sector. Data analyzed by BFC confirms that 90% of newly

registered factories assessed classify all workers as FDC workers. The use of FDCs can result in

workers receiving fewer of their legal benefits. This report finds that 37% of factories used rotating fixed

term contracts or otherwise did not include the entire period of continuous employment when

determining a worker’s entitlements to maternity leave, seniority bonus and/or annual leave.

- BFC assessed conditions in six footwear factories during the reporting period and conducted VOC air

testing in 2 factories. Results from these factories were recorded in a separate database and will be

disseminated through a comprehensive report on BFC’s pilot year footwear program that will include

results from nine factories and will be released in early 2013. A significant finding that will be reported

on in more detail is the poor chemical management (handling, storage, documentation) that was found

across the majority of footwear factories.

During the reporting period, three factories offered cash or meals to BFC monitors. Those offers were refused by monitors and recorded in a tracking system. Seven factories refused entry to BFC monitors,

3Ventilation is deemed to be inadequate when the workspace has no ventilation system such as exhaust fans or a cooling system, when workspaces have

no windows or when the ventilations systems are insufficient in number or broken.

Page 3 (of 20)

citing inability to accommodate them due to overlapping auditing by other groups, absence of administrative staff, or the assessment falling on a payday.

During the reporting period, monitors received 88 calls from union leaders, shop stewards, workers,

human resource and administrative staff. Common topics for calls included clarification on compensation after contract termination, and gender discrimination (males and females provided with different types of contracts). Many callers complained about involuntary overtime, overtime exceeding 2 hours, and frequent Sunday work. Further, workers asked for clarification on rights related to leave entitlements (annual leave, special leave and sick leave) and the proper procedures for requesting leave.

3. Institutional Context

The reporting period was marked by the continued rapid growth of the Cambodian garment sector with

BFC registering 43 new factories during the 6 month period. In total, BFC registered 65 new factories from January through October 31, representing more than 25,500 workers.

4 As mentioned above, the growth of

the industry is assumed to be a positive development, but may be resulting in a variety of problems including compliance challenges, a labour shortage and difficulties for BFC to cover an ever-increasing number of factories.

The period saw both high levels of labor unrest and, ultimately, a Memorandum of Understanding that

will likely result in a decrease in strike action. 67 strikes took place during the period – nearly a five-fold

increase compared to the same period in 2011. 70,861 workers were involved in the strikes which resulted

in 381,500 lost work days.5Several of the strikes were notable in that they lasted for a month or more –

much longer than average. A factor contributing to the increase in strikes was the expiration in late 2011 of

the Memorandum of Understanding (MOU) on industrial relations signed between GMAC and union

confederations. We note the positive development of the signing of a new MOU in early October 2012.

Notable changes in the new MOU as compared to the last include the two-year duration (as opposed to one

year previously), and quarterly monitoring of its implementation by the signatories and the Arbitration

Council.

The government’s Labor Advisory Committee (LAC) met on July 11, 2012 to discuss worker benefits.

As a result of the meeting, the LAC imposed $10 in new monthly allowances for workers: $7 for transport

and accommodations, and an additional $3 in the attendance bonus. (The total attendance bonus is $10;

$7 of which existed before the July LAC meeting.) The new allowances came into effect on September 1,

2012. With these allowances and the $5 health allowance, which took effect in January 2012, Cambodian

garment and footwear factory workers have received $15 in new allowances in 2012.

As described in previous reports, there has been little progress in the effort to hold anyone accountable

for the shooting of three workers during factory unrest in Bavet town, SvayRieng province in February 2012.

In April 2012, former Bavet City Governor ChhoukBundith was charged with causing “unintentional injuries”

and admitted that his gun had been used in the shootings. Mr. Bundith has not been detained ahead of trial.

In August the SvayRieng Provincial Court charged a local police official, Bavet City penal police chief

SarChantha, with the same crime. Provincial prosecutors declined to say when or why Mr. Chantha was

charged and Mr. Chantha has vehemently denied the charge, saying that although he was stationed at the

Special Economic Zone on the day of the triple shooting, he was nowhere near the scene of the crime,

which took place in front of the Kaoway shoe factory.

4 These figures reflect more growth than the figures shown in Sections 4.5 and 4.6 below, because they include factories that have not yet been monitored.

BFC’s practice is to conduct the initial factory assessment after the factory has been registered for six months. 5 Strike data obtained from the Garment Manufacturers Association in Cambodia (GMAC).

Page 4 (of 20)

Since the previous synthesis report, there have been no new developments regarding the country’s

draft Trade Union Law. After positive comments early in 2012 from both employers and workers on the most

recent revisions, it is unclear when the law will be promulgated.

135 cases were registered with the Arbitration Council (AC)

(6) during the reporting period, of which

125 were garment factory-related. Nearly 40% of garment factory related cases were resolved through mediation before going to arbitration. The top six issues referred to the AC during this period were:

Requests for reinstatement of union leaders or union members;

Requests for pro-rated deductions of the attendance bonus;

Requests for increases in transportation and accommodation allowances;

Requests for overtime meal allowance on Sundays and holidays;

Request for pregnant workers’ rights and benefits;

Demands for dismissal of factory staff.

3.1. Factory Data Reflected in this Report

Most of the graphs and charts in this report reflect current monitoring data from factory reports

posted during the past six months. If a factory has two monitoring reports posted during that time, only

the most recent monitoring data is included. Conversely, if a factory did not have a monitoring report

posted during the past six months, no data for that factory is included in this report. The graphs and

charts that reflect this set of monitoring data are labeled ''6 Months to Date.''

Other graphs and charts display industry-wide information. They draw data from the most recent

report for every active factory (not closed or suspended) with monitoring data in the Better Factories

Cambodia Information Management System (IMS). The graphs and charts designed in this way are

labeled ''Industry-Wide.''

All percentage figures shown in this report are rounded to the nearest whole number.

4. Industry Update

4.1 Number of Active Exporting Factories and Workers (Ministry of Commerce Data)

31-Oct-2012 30-Apr-2012

Number of Active Factories 375 330

Number of Workers 372,988 338,021

Note: These figures are based on data provided by the Ministry of Commerce. The number of active

exporting factories includes all exporting factories that the ministry has indicated are effectively operating.

(6)

The Arbitration Council is an independent, national institution with quasi-judicial authority derived from the Labour Law of Cambodia. Established in

2003 with the support of the Ministry of Labour, employers and unions, the Arbitration Council is empowered to assist parties in resolving collective

labour disputes in Cambodia.http://www.arbitrationcouncil.org/

Page 5 (of 20)

4.2 Number of Visits to Factories

During the previous six months, 130 garment factories were monitored. The data from those

monitoring visits is reflected in this report. Better Factories Cambodia visits factories as they register with

the project. Some factories have been registered for a number of years and have had multiple visits. The

table below shows the number of factories grouped according to the visit number that took place in the

last 6 months.

Table 1

Factories Grouped by Visit Number

(6 Months to Date)

Visit Number Number of Factories

% of Factories

Visited

1st Visit 17 13%

2nd

Visit 15 12%

3rd

Visit 7 5%

4th Visit 2 2%

5th Visit 6 5%

6th Visit 10 8%

7th Visit 9 7%

8th Visit 7 5%

9th Visit 14 11%

10th Visit 11 8%

11st

Visit 8 6%

12nd

Visit 13 10%

13rd

Visit 7 5%

14th Visit 4 3%

Total 130 100%

The large proportion of factories visited for the first or second time may reflect the continued recent

growth in the sector.

Due to the commencement of BFC’s footwear program in 2012, all six footwear factories described

in this report have had only one assessment (not shown in the above graph).

4.3 Factory Size

Graph 1

Comparison of the percentage of Factories and Workforce by Factory size (number of employees)

(6 Months to Date)

Page 6 (of 20)

4.4 Changes in Factory Size Over Time

Graph 2

(6 Months to Date)

Although the industry has been expanding overall, there has not been a significant shift in the

distribution of factories based on their size.

4.5 Workers Employed in Factories Monitored by Better Factories Cambodia

This graph shows the number of workers employed currently, one year ago, and two years ago

in the factories monitored by Better Factories Cambodia, based on information collected during

monitoring visits. The figures may not match precisely with those reflected in previous reports due to

factory closings and re-openings that were discovered after the Synthesis Report period.

Graph 3

(Industry-Wide)

The current percentage of women workers in the active factories monitored by the project is 90%.

1- 2 Years Ago

2- 1 Year Ago

3- Current

364,503 344,272

308,272

Page 7 (of 20)

4.6 Number of Active Factories Monitored by Better Factories Cambodia (Industry-Wide)

31-Oct-2012 01-May-2012

Number of Factories 337 320

Number of Workers 364503 356,782

Note: The number of factories shown above includes all active factories (not closed or suspended)

that have registered with and been monitored by Better Factories Cambodia. The employment figures

are drawn from the most recent monitoring report for every active factory with monitoring data in the IMS

on the relevant date. Newly registered factories are not reflected in these figures until after they have

been monitored and a report has been issued. Changes in factory size (number of workers) or status

(e.g., closure) that occurred after the most recent monitoring visit are not reflected in this table. The

figures may not line up precisely with those reflected in previous reports due to factory closings and re-

openings that were discovered outside of the Synthesis Report period. The figures also differ from

the Ministry of Commerce figures, primarily due to differences in the time at which information becomes

available to each, and the fact that the figures above only include active factories that have been

monitored. Better Factories Cambodia typically does not visit newly registered factories until six months

after their registration. As a result, during times of rapid growth, the figures do not fully reflect the

expansion in the sector.

A complete list of the active factories monitored by Better Factories Cambodia is available on

our website at: http://www.betterfactories.org/monitoring.aspx?z=5&c=1

The figures above do not reflect the rapid growth of the industry as mentioned in the Executive

Summary. It is expected that the increase will be reflected in the next Synthesis Report period after

BFC has monitored newly registered factories.

5. Compliance Status

5.1 Findings on Selected Working Conditions (6 Months to Date):

Compliance levels are below 50% for several requirements that are relevant to the group fainting

episodes (exceptional overtime, overtime limited to 2 hours per day, adequate hand washing facilities near

the toilets, and acceptable heat levels in the factory). The failure to keep one payroll ledger that

accurately reflects the wages actually paid to workers often reflects an effort to conceal excessive

overtime hours. Other relatively low levels of compliance (deduction of attendance bonus when workers

take annual leave) have an impact on workers’ wages and thus may also have an impact on their health

and nutrition. These findings emphasize the need for action by the industry to ensure workers’ health and

safety, to keep overtime within legal limits, and to pay workers in accordance with legal requirements.

Page 8 (of 20)

Legal Requirement

% of Factories in

Compliance

(6 Months to Date)

Payment for Maternity Leave (1)

77%

Exceptional Overtime 4%

Overtime Limited to 2 Hours per day 12%

Only one payroll ledger that accurately reflects the wages actually

paid to workers 55%

Voluntary and exceptional work on Sundays(2)

73%

Payment of attendance bonus when workers take annual leave 58%

Sufficient soap and water available near the toilets 48%

Written health and safety policy in Khmer 64%

Consultations with workers when developing the health and safety

policy 54%

Heat levels in the factory 32%

(1) This figure is the sum of two compliance questions: payment of half of wages and benefits, and

payment of only half wages during maternity leave. This figure includes both types of maternity leave

payments. Maternity leave figure has been recalculated here and re-stated in Annex 1 to correct a

technical error in previous reports that resulted in lower than actual compliance levels.

(2) 11% of the factories assessed during this period had worked on Sundays.

5.2 Non-Compliance with Fundamental Rights at Work

Child Labour 1 factory had underage workers (1%)

7 underage workers confirmed.

Forced Labour 0 factories used forced labour (0%)

Discrimination(1)

24 factories engaged in discrimination (18%)

Unions(2)

93 factories had at least one union (71%)

185 total unions were present

Unionization Rate 58%, according to Cambodia Institute of Development

Study, Tracking Study of Cambodian Garment Sector

Workers Affected by the Global Economic Crisis,

Benchmarking Survey Report (2010)

Freedom of Association 12 factories interfered with freedom of association (9%)

Anti-union Discrimination 7 factories engaged in anti-union discrimination (5%)

Strikes(3)

26 factories had strikes

33 strike(s) took place

Strikes for which workers failed to comply

with one or more legal requirements(4)

26 factories 33 strikes (100%)

Page 9 (of 20)

(1) Discrimination typically involves unfair treatment of pregnant workers (for example, dismissal or non-

renewal of contracts when they become visibly pregnant), or unfair treatment of men (for example,

failure to hire men because they are perceived as more likely to lead workers to strike). In addition,

monitors have observed some employers offering contracts of differing duration to men and women,

with men typically provided shorter duration contracts.

(2) The number of unions reflects only unions that are active and registered at the time of the monitoring

visit.

(3) These figures represent strikes occurring only in factories assessed by BFC during the reporting period

and do not reflect all strikes in the garment sector during this period. As noted above, according to

information provided by the Garment Manufacturers Association in Cambodia, there were 67 strikes in

the sector during the reporting period.

(4) The legal requirements for commencing a strike include striking for reasons permitted by law; attempting

to settle the dispute using other peaceful methods first; union members’ approving the strike by secret

ballot; and providing 7 working days prior notice to the employer and the Labour Ministry. If workers

failed to comply with any one (or more) of these requirements, the strike is included in the figure above.

Under Cambodian law, only a court has the authority to declare a strike illegal.

Limitations in Detecting Underage Workers:

The lack of a universal birth registration system in Cambodia and falsification of age-verifying documents

significantly impede the detection of underage workers. In checking for underage workers, monitors perform a

visual check for workers in the factory who appear to be under age 15. Monitors also conduct targeted and

random checks of employment records to see whether those records indicate that the factory employs underage

workers. A similar process is undertaken to determine whether the factory employs workers under age 18,

because factories that employ workers under age 18 are subject to additional requirements (e.g., maintaining a

register of workers under age 18, getting consent from their guardians for them to work, and protecting workers

under age 18 against the worst forms of child labor, including hazardous work).

Monitors cross-check information obtained from documents and detailed worker interviews to make a

preliminary judgment on whether the worker is underage or not. If it is determined that the worker’s information

is accurate and the worker is at least 18 years of age, no further investigation is undertaken. If age-verifying

documents appear not to be reliable and/or do not match the information obtained through the worker interview,

monitors may extend their investigation to the suspected underage worker’s birthplace. BFC monitors suspected

102 cases of underage workers during the reporting period. 23 of these cases were investigated which resulted

in the confirmation of 7 cases of underage workers. It should be emphasized that the suspected underage

workers mentioned here may not represent all possible underage workers in a factory, but instead a sample that

may denote weaknesses in a factory’s recruitment processes 7 It is very difficult for Better Factories Cambodia

to detect underage workers who have obtained valid age-verifying documents through corrupt payments or to

detect underage workers who impersonate someone of legal age using their valid documents.

7 Child labor investigations and remediation are time and resource-consuming. The ability for BFC to investigate suspected cases of child labor depends

on the cooperation of factory management and the availability of BFC resources. In 2012 BFC attempted to address this issue in a sustainable way by

conducting capacity-building training for factory recruitment staff. BFC’s training unit conducted 4 courses of child labour prevention training with 311

participants from 194 factories.

Page 10 (of 20)

If an underage worker is confirmed, the Garment Manufacturers’ Association in Cambodia (GMAC) and

the ILO have agreed on a process through which the worker is removed from the workplace and referred to

vocational training. The factory continues to pay the worker’s wages and also bears the cost of the vocational

training until the worker reaches age 15. Upon reaching age 15, the worker has the option of returning to work in

the factory. If a factory does not comply with this process, the case is referred to the labour ministry’s Child

Labour Department. In all of the cases of child labour cited above, the factory agreed to support vocational

training and make minimum wage payments for the child workers.

Monitoring of Freedom of Association and Anti-Union Discrimination:

Anti-union discrimination can be difficult to detect, since workers who have been terminated as a result of

their union membership or leadership are no longer working at the factory during the monitoring visit and thus

the data collected does not always reflect their unlawful termination. Freedom of association violations and anti-

union discrimination incidents are more easily determined in high profile cases or when complaints are received

during monitoring visits. It is also important to note that data on freedom of association and anti-union

discrimination represents the number of factories involved in such incidences rather than the number of

incidences overall. Very often, multiple cases of union-related discrimination occur within individual factories.

5.3 Top Non-Compliance Issues

This graph shows ten of the twenty most common non-compliance findings in Cambodian

garment factories. These findings emphasize ongoing concerns regarding fainting in the workplace as

well as concerns associated with continued expansion in the garment sector. For the remaining top ten

non-compliance findings, please see Annex 3.

As noted in the previous synthesis report, there is no one cause for fainting. Rather, there are

several environmental, economic and social triggers that can make fainting more likely to occur. These

include but are not limited to heat stress, excessive working hours, inadequate nutrition, and lack of

ventilation. Fainting incidents are deemed also to be caused by Mass Psychogenic Illness (MPI),

whereby one worker becomes ill, and this distresses other workers, causing them to physically feel the

same symptoms and become ill.

Several of the top non-compliance issues relate to these causes, such as excessive overtime (I,

II), unacceptable heat levels (III), inadequate access to drinking water (due to lack of cups) (VII),

inadequate soap and water near the toilets (X),and failure to form joint worker/management OSH

committees (V).

Other top twenty non-compliance issues shown in Annex 3 also are relevant to the issue of

fainting, including the lack of chairs for standing workers to rest on and failure to provide masks.

Page 11 (of 20)

52%

54%

54%

55%

57%

65%

66%

68%

88%

96%

0% 50% 100%

(X)

(XI)

(VIII)

(VII)

(VI)

(V)

(IV)

(III)

(II)

(I)

Graph 4

% of factories not in compliance (6 Months to Date)

Assessment findings:

(I) Exceptional overtime

(II) Overtime limited to 2 hours per day

(III) Heat levels in the factory

(IV) Medical staff working the required number of hours (including overtime)

(V) Forming a functioning joint management/worker OSH committee

(VI) Unobstructed access paths

(VII) Providing cups or other sanitary means for drinking water

(VIII) Paying workers severance pay equal to at least 5% of the total wages paid under the contract

when workers' contracts expire or are terminated

(IX) Workers understanding the calculation of wages

(X) Sufficient soap and water available near the toilets

6. Progress

6.1 Top Areas of Improvement

This graph shows the top ten areas of improvement in Cambodian garment factories. The graph

compares current data (6 months to date) with data from six months ago (6 months to date). The level of

improvement is measured by comparing the current level of compliance (%) with the level of compliance 6

months ago for each individual issue. The ten issues that saw the greatest positive change in percentage

compliance are reflected in the graph.

There are encouraging improvements to be seen in some areas. The current climate of labor

shortages presents challenges for factories in employing sufficient numbers of workers to meet production

needs. The last report saw a significant decline in compliance related to the use of reliable age verifying

documents. This report shows improvement related to documentation of workers under age 18 (VII.

Keeping a register of workers under age 18). Medical facilities have improved in terms of capacity and

Page 12 (of 20)

7%

7%

8%

8%

9%

9%

9%

9%

12%

14%

0% 25% 50% 75% 100%

(X)

(XI)

(VIII)

(VII)

(VI)

(V)

(IV)

(III)

(II)

(I)

staffing, although compliance with staffing requirements is still quite low (34% compliance). Three issues

related to shop stewards also saw improvements.

Graph 5

(6 Months to Date)

Top 10 areas of improvement:

(I) Medical staff on duty during the required number of hours (including overtime)

(II) Hospitalization capacity of the infirmary

(III) Electing the correct number of assistant shop stewards

(IV) Electing the correct number of shop stewards

(V) Employment contracts complying with law

(VI) Consent from the guardians of workers who are less than 18 years of age

(VII) Keeping a register of workers under age 18

(VIII) Providing shop stewards with an office

(IX) Not employing underage workers

(X) Workplace lighting

6.2 Top Areas of Least Improvement or Negative Change

This graph shows ten of the top least improved issues in Cambodian garment factories. The

graph compares current data (6 months to date) with data from six months ago (6 months to date). The

level of improvement (or negative change) is measured by comparing the current level of compliance

(%) with the level of compliance 6 months ago for each individual issue. Many of these issues are

deemed to have a bearing on the fainting phenomenon. For the remaining ten areas of least

improvement, please see Annex 4.

It is critical that the negative trends evidenced in Graph 6 are reversed, particularly those that

directly impact on workers’ health and safety, including obstructed access paths, workplace cleanliness,

and workers being paid a meal allowance when required, especially when working on Sundays.

Page 13 (of 20)

-9%

-10%

-10%

-12%

-12%

-12%

-16%

-17%

-19%

-30%

-100% -50% 0% 50% 100%

(X)

(XI)

(VIII)

(VII)

(VI)

(V)

(IV)

(III)

(II)

(I)

Graph 6

(6 Months to Date)

Assessment findings:

(I) Unobstructed access paths

(II) Regular workers being paid 2,000 Riels for a meal

(III) Workplace cleanliness

(IV) Adequate ventilation and air circulation

(V) Workers understanding the terms and conditions of employment

(VI) Toilets working properly

(VII) Toilets doors working properly

(VIII) Forming a functioning joint management/worker OSH committee

(IX) Safety data sheets for chemicals used at the workplace

(X) Chemical containers labeled in Khmer

7. Conclusion and Next Steps

The data compiled for the purposes of this Synthesis Report provides an overview of working conditions

in Cambodia’s garment sector. One purpose of the report is to enable stakeholders to use the information to

improve compliance.

While BFC’s work is focused primarily at the individual factory level, many of the issues that appear in

this report are systemic in nature and require intervention relating to national policies or to relationships and

pressures in the global supply chain. To this end, the program is actively engaged with a range of

stakeholders to ensure effective approaches both at the level of individual enterprises as well as in larger

debates and discussions.

This report demonstrates that improvements are not being made in many areas.This may be attributed

in part to the rapid growth of the industry. However, industry growth need not and should not result in

Page 14 (of 20)

increased non-compliance. While individual factories must take responsibility for making positive changes,

sector-wide change is unlikely without the intervention of other industry players.

Some actions that industry players can take that can complement individual factory efforts are:

The Royal Government of Cambodia can strengthen enforcement mechanisms to uphold the labour

law. This is particularly important in perennially noncompliant factories that resist change. BFC will share its

data on such factories with relevant ministries in an effort to strengthen legal enforcement.

Employers’ organizations such as GMAC can assist by fostering a culture of compliance among their

members, recognizing those with excellent working conditions, and problem solving and strategizing with

members that cannot or will not meet the required compliance standards.

Trade Unions and civil society groups continue to play a vital role in this process. These

organizations may be best placed to highlight the data in this report on a broad scale and to use the data to

lobby for improved conditions.

International buyers sourcing from Cambodia wield considerable influence over the factories in which

they source. While buyer influence helps to make changes in individual factories, more buyers can

approach challenges on an industry-wide basis and require compliance with Cambodian labour law and

Arbitration Council decisions throughout their entire supplier base.

There is more that BFC can do as well. BFC has direct relationships with 36 buyers sourcing from

Cambodia. These buyers not only subscribe to receive monitoring reports, but also encourage factories to

participate in training programs or advisory services. Buyers also provide critical support to BFC’s advocacy

activities. Still, the majority of buyers purchasing garments and footwear made in Cambodia are not

engaged with BFC and may not be exerting leverage to improve working conditions. BFC, in partnership

with other stakeholders, will soon launch an effort to engage more international buyers in the program.

In addition to the effort to enlist more buyers, in the next six months BFC plans to redouble its effort to

work with the Ministry of Labour and Vocational Training on enforcement, will continue its advocacy

efforts to combat fainting and will pilot new technology-based initiatives to improve working conditions.

Page 15 (of 20)

Annex 1

Comparative Findings on Selected Working Conditions (6 Months to Date):

Legal Requirement

% of Factories in Compliance

Current

(29th)

30/04/12

(28th)

31/10/11

(27th)

Payment for Maternity Leave (1)

77% 83% 79%

Exceptional Overtime 4% 3% 5%

Overtime Limited to 2 Hours per day 12% 14% 16%

Only one payroll ledger that accurately reflects the wages actually paid

to workers 55% 61% 58%

Voluntary and exceptional work on Sundays 73% 71% 70%

Payment of $7 attendance bonus when workers take annual leave 58% 61% 62%

Sufficient soap and water available near the toilets 48% 54 % 48%

Written health and safety policy in Khmer 64% 62% 65%

Consultations with workers when developing the health and safety

policy 54% 57% 56%

Heat levels in the factory 32% 38 % 38%

Minimum Wage for Regular Workers 97% 97% 98%

Minimum Wage for Casual Workers 92% 90% 84%

Minimum Wage for Piece-Rate Workers 95% 98% 93%

Correct OT Rate for Regular Workers 97% 100% 99%

Correct OT Rate for Casual Workers 100% 100% 100%

Correct OT Rate for Piece-Rate Workers 71% 87% 93%

18 Days of Annual Leave 95% 97% 98%

Paid Sick Leave 68% 73% 78%

Voluntary Overtime 89% 86% 87%

Provision of Personal Protective Equipment 48% 54% 51%

Installing Needle Guards on Sewing Machines 58% 66% 66%

At least 24 consecutive hours off per week 95% 100% 100%

Weekly time off on Sunday 94% 99% 98%

The factory works on Sundays 11% 20% 22%

Not unreasonably restricting workers from taking sick leave 93% 89% 88%

Health and safety policy written in Khmer 64% 62% 65%

Safety and health information in Khmer (e.g., posters and signs) posted

in the workplace 92% 95% 94%

First-aid boxes in the workplace 59% 72% 72%

No payment to get a job 98% 99% 98%

Rotating short-term contracts not used as a way to avoid providing

workers’ entitlements to maternity leave, seniority bonus, and/or annual 63% 66% 67%

Page 16 (of 20)

leave

All workers employed for longer than two years total considered to be

employed under an unspecified duration contract 75% 74% 77%

Not unreasonably restricting workers from taking annual leave 77% 76% 72%

(1) This figure is the sum of two compliance questions: payment of half of wages and benefits, and

payment of only half wages during maternity leave. This figure includes both types of maternity leave

payments. Maternity leave figures have been re-stated to correct a technical error in previous reports

that resulted in lower than actual compliance levels.

Page 17 (of 20)

Annex 2

Comparative Key Findings on Fundamental Rights (6 Months to Date)

Current

(29th)

30/04/12

(28th)

31/10/11

(27th)

Fundamental Right # % # % # %

Child Labour (factories with underage workers) 1 1% 10 7% 5 8.5%

(underage workers confirmed) 7 - 30 - 7 -

Forced Labour (factories that used forced labour) 0 0% 0 0% 0 0%

Discrimination1

(factories that engaged in

discrimination) 24 18% 26 19% 30 18%

Unions2

(factories that had at least one union) 93 71% 100 73% 113 66%

(total unions were present) 185 - 169 - 201 -

Unionization Rate (according to CIDS Garment

Workers Survey)* - 58% - 58% - 58%

Freedom of Association3

(factories that interfered with

freedom of association) 12 9% 8 6% 8 5%

Anti-union Discrimination (factories that engaged in

anti-union discrimination) 7 5% 4 3% 6 4%

Strikes4

(factories that had strikes) 26 20% 15 11% 14 -

(strikes that took place) 33 - 16 - 14 -

Strikes for which workers failed to comply with one

or more legal requirements5

(factories) 26 - 15 - 14 100%

(strikes) 33 100% 16 100% 14 100%

(1) Discrimination typically involves unfair treatment of pregnant workers (for example, dismissal or non-

renewal of contracts when they become visibly pregnant), or unfair treatment of men (for example,

failure to hire men because they are perceived as more likely to lead workers to strike).

(2) The number of unions reflects only unions that are active and registered at the time of the monitoring

visit.

(3) These figures represent interference and discrimination occurring only in factories assessed by BFC

during the reporting period. Often factories where interference or discrimination occurs have multiple

cases of such action during the reporting period. For purposes of this report, BFC reports on the

number of factories with this finding, not the number of incidents.

(4) These figures represent strikes occurring only in factories assessed by BFC during the reporting period

and do not reflect all strikes in the garment sector during this period.

(5) The legal requirements for commencing a strike include striking for reasons permitted by law; attempting

to settle the dispute using other peaceful methods first; union members’ approving the strike by secret

Page 18 (of 20)

ballot; and providing 7 working days prior notice to the employer and the Labour Ministry. If workers

failed to comply with any one (or more) of these requirements, the strike is included in the figure above.

Under Cambodian law, only a court has the authority to declare a strike illegal.

* Previously, the unionization rate was drawn from a 2006 survey of 1000 garment factory workers

commissioned by Better Factories Cambodia and performed by CARE International in Cambodia. In this

report, the unionization rate is drawn from a 2009-2010 survey of 2000 garment workers commissioned by

BFC and performed by the Cambodia Institute of Development Study.

Page 19 (of 20)

Annex 3

Top Non-Compliance Issues (6 Months to Date)

The findings below represent the remaining ten of the top twenty non-compliance issues found in

factories during the Synthesis Report period and not cited in section 5.3.

Assessment findings % of Factories in Non-

Compliance

Adjustable chairs with backrests

92%

Workplace lighting

89%

Chairs near standing workers’ workstation to rest on

78%

Payment within 48 hours after workers stop working for the factory

62%

Payment of the childcare costs of women employees

61%

Functioning and accessible nursing room

57%

2-hour break for workers to consider the shop steward candidates

56%

Payment of the attendance bonus or other mandatory wage supplements to probationary workers

55%

Pre-employment medical examination

53%

Provisions of masks when needed

50%

Page 20 (of 20)

Annex 4

Top Areas of Least Improvement (6 Months to Date)

The findings below represent the additional ten least improved issues found in factories during the

Synthesis Report period and not cited in section 6.2.

Assessment findings % of Factories in

Compliance

Payment of the attendance bonus or other mandatory wage supplements to probationary workers

-17%

Workplace tidiness

-15%

Use of the protective clothing and equipment provided

-14%

Inventory of all chemicals stored at the workplace

-13%

Workers understanding the calculation of wages

-12%

Separate ballots for shop stewards and assistant shop stewards

-12%

Workers and supervisors understanding the health and safety policy

-10%

Appointment of a liaison officer

-10%

First aid boxes properly stocked

-10%

Awareness by women of their right to one hour of paid time off for breast-feeding

-9%