Better Factories Cambodia

Cambodia’s garment industry could rightfully be credited with pulling the country out of its post-war economic catastrophe. Investors from China, Malaysia and Singapore first opened factories here in 1994, just on the heels of two decades of war.

Buoyed by the favourable trade conditions granted by the United States – conditions that mandated Cambodia’s garment sector adhere to international labour standards – the industry grew an estimated 40 per cent each year between 1995 and 2006.

The International Labor Organization played an instrumental role in overseeing the endeavor through its Better Factories Cambodia (BFC) programme, established in 2001, which effectively promotes application of labour law and labour standards in the export sector.

But Cambodia’s heavy reliance on western buyers and largely external Asian investors is precisely what made it especially vulnerable when the 2008 financial crisis hit. Many workers suddenly found themselves without a job or with reduced wages because there was less work to be had.

Despite the creation of some 37,000 new jobs in 2010, and a general assessment that Cambodia’s garment sector has more or less survived the financial crisis, existing jobs still fall 30,000 short of pre-crisis numbers, and ironically, many factory managers now complain that they are unable to recruit workers.

Although the minimum wage was raised in 2010 from USD 50 to USD 61 per month, the food and fuel price crisis has made making ends meet a serious challenge for Cambodia’s garment workers, the vast majority of whom are also sending money home to support their families in the provinces.