Trade, monitoring, and the ILO: working to improve conditions in Cambodia's garment factories.

Author:Kolben, Kevin
Position:International Labor Organization
 
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The U.S.-Cambodia Bilateral Textile Trade Agreement, signed on January 20, 1999, was remarkable for its inclusion of a labor standards provision that created incentives for the Cambodian garment industry to bring itself into substantial compliance with international labor standards and Cambodian labor law. The labor standards provision provided the impetus for the creation of a novel program, to be operated by the International Labor Organization (ILO). This program combined trade-related incentives to enforce workers" rights with an unprecedented plan to have the ILO conduct factory-level monitoring of working conditions. This Article examines how the program was designed and implemented and evaluates the proposals and conceptions that preceded the final project document. This analysis provides a case study on how to construct and implement future programs that combine trade and factory monitoring to improve working conditions and enforce core labor rights along the global supply chain.

  1. INTRODUCTION

    With a population of ten million people, an extremely small GDP, and a fledgling export market, Cambodia is perhaps an unlikely candidate for cutting-edge experiments in linking trade with labor rights. Nevertheless, on January 20, 1999 the U.S. and Cambodian governments signed the U.S./Cambodia Bilateral Textile Trade Agreement. (1) The Agreement was remarkable for its inclusion of a labor standards provision creating incentives for the Cambodian garment industry to bring itself into substantial compliance with international labor standards and Cambodian labor law. This compliance was to be facilitated through the creation of a program to improve labor standards in the garment sector. The program was eventually to be operated by the International Labor Organization (ILO). (2)

    The ILO's program in Cambodia is novel because it combines approaches to enforcing and protecting labor rights normally thought of as distinct because they target enforcement in two different realms. First, it uses trade related incentives to enforce workers' rights. Scholars and workers' rights advocates have argued that to achieve these ends trade agreements ought to include workers' rights clauses that condition trading privileges on enforcement of labor rights by signatories to the agreement. (3)

    This strategy is generally aimed at the public regulatory level: it aims to compel states to enact and apply adequate public labor regulation. The Cambodia project represents one of the first and most creative experiments in linking trade privileges to the respect of labor rights in trade agreements. (4)

    Second, the Cambodia project harnesses the power of factory level monitoring of labor rights compliance. Some have suggested that the most effective way to regulate and police global supply chains is to allow private actors--usually corporations--to implement and monitor codes of conduct along the supply chain. (5) This strategy aims to improve respect for workers' rights at the factory level, mostly outside of the public regulatory framework. Some commentators and advocates, particularly trade unions, have suggested that self-regulated codes of conduct are at best inadequate, and at worst an insidious device to replace unions and public regulation with voluntary enforcement by private actors. (6) The Cambodia program is unique within this debate because it is the ILO, an international organization, that conducts the factory monitoring--not private companies or NGOs. The program serves not only as a mechanism to report on labor conditions in factories, but as a kind of supplement to and temporary replacement for Cambodia's inadequate national regulatory system, which does not, and perhaps cannot, enforce international labor standards or its own labor law. (7)

    In what follows, I examine the way in which the Cambodia ILO monitoring program was designed and implemented, and analyze the proposals and conceptions that preceded the final project document. My purpose is three-fold. First, I describe how the Cambodia program combines trade and factory monitoring to improve working conditions and enforce core labor rights along the global supply chain. Second, I expound on the purpose of the ILO and the way it approaches labor rights issues, explaining how the ILO monitoring project in Cambodia is a novel and important experiment for the UN organization. Finally, I use the ILO program as a case study to explore how future monitoring programs ought to be constructed and implemented to best improve labor conditions.

    The organization of the paper is as follows: Section II provides context to the ILO project by describing the Cambodian garment sector, including the working conditions and obstacles to labor law enforcement that existed in Cambodia at the time of the signing of the Agreement. In Section III, I describe the Agreement's provisions and the legal context within which it was negotiated. Section IV, which constitutes the bulk of the paper, describes and critiques the various ILO monitoring program proposals in order to develop a set of criteria that ought to guide the design of such programs in the future. Finally, I conclude that combining trade strategies with ILO monitoring is a positive development in the effort to improve factory working conditions worldwide. Accordingly, the ILO ought to engage in more factory level monitoring programs that are transparent and work to build independent and democratic trade unions.

  2. THE CAMBODIAN GARMENT SECTOR

    Cambodia's textile industry produces approximately 75% of the country's exports and is at once the largest and fastest growing segment of the Cambodian industrial sector. In 1998, textile exports to the U.S. alone were valued at $308 million--an increase of 305% over the previous year. (8) By 2001, garment exports totaled $1.1 billion, with US exports comprising $650 million. In the first nine months of 2002 these figures rose by around 12%. (9)

    Approximately 200 factories operate in Phnom Penh at any given moment, employing some 200,000 workers by official count, over 85% of whom are women. Typical of the garment sectors in many developing countries, nearly all of the factories are owned and operated by non-Cambodians, mostly hailing from Taiwan, Singapore, Thailand, and other Southeast Asian countries. (10) These factory owners have few ties to Cambodia, and a quick scan of any one owner's curriculum vitae will usually indicate stints of several years in a large number of low-wage, textile producing countries. These owners are nomads, moving from country to country, seeking low-wage employment markets and other mechanisms for producing at the lowest cost.

    1. Labor Conditions in the Garment Industry

      In order to understand the context in which the ILO program was designed and implemented, it is important to consider the factory conditions in the time period during which the program was created. Despite a relatively strong labor code passed in 1996, which provided for numerous worker protections, (11) the actual working conditions in many Cambodian garment factories were very poor. John Hall's excellent and comprehensive 1998-1999 case study of Cambodian garment factories, from which I will draw extensively in this section, identified numerous violations of Cambodian labor law and international labor standards. (12) A brief overview of his findings, combined with my own more limited observations from the summer of 1999, will present a glimpse of the challenges facing Cambodian garment workers in the workplace.

      In order to obtain a garment factory job, Hall found that workers were often required to pay fees of at least one month's wages to middlemen--in contravention of international and Cambodian law. In return for these fees, the middlemen would arrange for the job and transportation from the countryside to Phnom Penh. These fees, however, often forced the workers' rural-based families into debt, forcing workers to continue their employment in order to pay off the debt in spite of the difficulties they faced in the factories. (13)

      Long hours and forced overtime--often without overtime pay--were another typical violation of Cambodian and international law found by Hall. (14) During my own time in Cambodia, many factory workers complained of often being forced to work late into the night, and sometimes workers were locked in the factories until a particular customer order was completed. (15) In one instance, I spoke with several workers from a Phnom Penh neighborhood who reported routinely working at a nearby factory from seven a.m. to seven p.m., six days a week, and until four p.m. on Sundays. (16) However, the interview was broken up prematurely when a man, apparently from management, came over on his motorcycle and asked myself and the workers what we were doing.

      Another company, Hung Wah, hired by Nike to produce Nike apparel, was infamous among workers and labor inspectors for its horrible working conditions. One worker I spoke with complained of pervasive illness among the employees, which she and NGO workers claim was caused by the long working hours and difficult living conditions endured by workers on account of their low wages and substandard lodging. When workers complained to management about not getting time off on Sundays, the problem of long hours reportedly became worse. (17) In an interview, the head labor inspector also acknowledged severe problems at Hung Wah, including lack of rest-rooms and forced overtime. However, disputing the workers' account, he claimed that the problems were resolved after labor inspector intervention, and said that no further action was necessary. (18)

      Wage violations were also common. (19) Although the mandated minimum wage was $40 for a forty-eight hour week, the workers I interviewed often reported sub-minimum wages, late payment of wages, and illegal wage deductions.

      The right to freedom of association and the right to organize, as...

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