Garment Industry in Cambodia
Saheed, H. Prospects for the textile and clothing industry in Cambodia (2013) Textile Outlook International, (161), pp. 119-158. http://www.textilesintelligence.com/tistoi/index.cfm?pageid=3&repid=TISTOI&issueid=161&artid=1873Abstract
The clothing industry in Cambodia has expanded rapidly since the mid-1990s-following the dark days of the Khmer Rouge regime under the leadership of Pol Pot and subsequent Vietnamese occupation and civil strife-to become the largest manufacturing sector in the country. Exports have risen sharply in recent years, and by 2012 combined exports of textiles and clothing reached US$4.22 bn-which represented about 60% of Cambodia's total exports. In the same year, the clothing industry provided direct employment for around 350,000 people, and it has been estimated that a further 650,000 people depend on it for their livelihoods. Almost all of the impetus behind the sector's expansion has come from foreign investment, in which the government has played a strong supporting role by implementing a market oriented economy and pursuing business friendly policies which have been especially welcoming towards foreign investors. As a result, an estimated 90% of clothing factories are under the ownership and control of nondomestic interests, including investors based in China, Hong Kong, Malaysia, Singapore, South Korea, Taiwan and the USA. On the downside, this has led to the establishment of an industry which is limited mainly to low added value cut, make and trim (CMT) operations and which lacks design and marketing skills. Also, the industry is heavily dependent on imports for its raw materials as the textile industry in Cambodia is small and underdeveloped through a lack of investment. Another weakness is growing labour unrest as workers protest over the clothing industry's low wage rates. However, clothing production is set to remain the country's principal manufacturing activity and there are hopes that new initiatives-such as the establishment of the Cambodia Garment Training Institute, announced in December 2012-will foster the development of a more highly skilled workforce as well as local manufacturing businesses with their own Cambodian identity. © Textiles Intelligence Limited 2013.
Asuyama, Yoko, Dalin Chhun, Takahiro Fukunishi, Seiha Neou, and Tatsufumi Yamagata. "Firm dynamics in the Cambodian garment industry: firm turnover, productivity growth and wage profile under trade liberalization." Journal of the Asia Pacific Economy 18, no. 1 (2013): 51-70.DOI: 10.1080/13547860.2012.742671
Abstract
The international garment trade was liberalized in 2005 following the termination of the Multifibre Arrangement (MFA) and ever since then, price competition has intensified. Employing a unique firm dataset collected by the authors, this paper examines the changes in the performance of Cambodian garment firms between 2002/03 and 2008/09. During the period concerned, frequent firm turnover led to a growth of the industry's productivity, and the study found that the average total-factor productivity (TFP) of new entrants was substantially higher than that of exiting firms. Furthermore, we observed that, thanks to productivity growth, an improvement in workers' welfare, including a rise in the relative wages of the low-skilled, was taking place. These industrial dynamics differ considerably from those indicated by the 'race to the bottom' argument as applied to labor-intensive industrialization in low-income countries. © 2013 Copyright Taylor and Francis Group, LLC.
Prota, Laura, and Melanie Beresford. "The Factory Hierarchy in the Village: Recruitment Networks and Labour Control in Kong Pisei District of Cambodia." Institutions and Economies 4 no. 3, pp. 103-122.
http://umrefjournal.um.edu.my/public/article-view.php?id=3350
Abstract
Most analyses of the garment value chain begin at the factory production line. We approach the value chain instead from the perspective of the village community from which workers are recruited. In our Cambodian case study, we show that the factory's hierarchical relationships are replicated within the village. Using network analysis we find that recruitment networks are largely controlled by factory supervisors and can become a mechanism of control over the labour force. We further show that the factory hierarchy can influence the pattern of capital accumulation and economic change within the village. Our results demonstrate that the value chain cannot be treated as if it ends at the factory floor. Moreover, corporate social responsibility policies, whether state, corporate or buyer-instigated, cannot by themselves eliminate 'sweatshop' conditions.
Lee, Joosung J., and Vathana TE Duong. "Analysis of the Cambodia's garment industry and catch‐up strategy." Asian Journal of Technology Innovation 18, no. 1 (2010): 97-123.DOI: 10.1080/19761597.2010.9668684
Abstract
This article aims to assess the capabilities of Cambodia's garment industry in the post-Safeguard Policy era, and the country's ability to upgrade its garment assembling status to Original Equipment Manufacture (OEM) status. This article analyzes and proposes a strategic positioning of Cambodia's garment industry in the next decade by utilizing the analytical framework developed by the US International Trade Commission (USITC) in 2004. Findings from the USITC framework-based assessment have been illustrated in a cobweb-shaped diagram to show an analogy of Cambodia's garment industry in comparison with that of China and Vietnam. For the improvement of the current working environment and the forthcoming upgrading process, a trajectory of the Cambodia's garment industry has been projected in three vital stages: (1) assembling, (2) OEM, and (3) original brand manufacturing. In response to the first objective, the Cambodia's garment industry is predicted to face a high risk of industrial downturn in the post-2008 era due to the internal weaknesses in the supply side. For the second objective, the shift from Cambodia's current garment assembler status to OEM status will take a long time and require training of local managers and skilled workers.
Oka, Chikako. "Channels of buyer influence and labor standard compliance: the case of Cambodia's garment sector." Advances in Industrial & Labor Relations 17 (2010): 153-183.DOI: 10.1108/S0742-6186(2010)0000017008
Abstract
Given the continued growth in the globalization of production, working conditions in global supply chains have come under increased scrutiny. Although there has been much debate about corporate codes of conduct and monitoring procedures, the question of how buyers influence their suppliers' working conditions at the factory level remains poorly understood. Using a unique data set based on monitoring by the International Labour Organization (ILO) and original survey data collected in Cambodia's garment sector, this study shows that the main channel linking buyers and supplier compliance performance is the nature of their relationships. Market-based relationships mediated through sourcing agents are systematically associated with poorer compliance performance. In particular, when a reputation-conscious buyer is sourcing from a factory, it has a positive effect on compliance, and their presence appears to condition relationship variables. Deterrence and learning channels are not supported by the evidence. The findings signal the need to pay more attention to the nature of buyer-supplier relationships if we seek to improve labor standard compliance. Market-based relationships motivate neither buyers nor suppliers to invest their time and resources to tackle the root causes of poor working conditions. Rather, the results here indicate the need to develop collaborative relationships marked by open dialogue, trust, and commitment, which in turn help to foster an environment supportive of continuous improvement in working conditions. Copyright © 2010 by Emerald Group Publishing Limited.
Natsuda, Kaoru, Kenta Goto, and John Thoburn. "Challenges to the Cambodian garment industry in the global garment value chain." European journal of development research 22, no. 4 (2010): 469-493.
DOI: 10.1057/ejdr.2010.21
Abstract
This article examines the competitiveness of Cambodia's garment export industry, on which the country's recent and successful economic development has depended to an unusually heavy extent. Using primary interviews and drawing on a wide range of secondary sources, it documents how Cambodia was drawn into garment global value chains, based almost entirely on inward investment. Despite its expansion in the face of strong Chinese competition, since the end of the Agreement on Textiles and Clothing in December 2004, the industry remains vulnerable as a result of deficient infrastructure, labour unrest, official corruption and the absence of an adequate domestic textile industry, all of which serve to diminish its attractiveness to global buyers. © 2010 European Association of Development Research and Training Institutes.
Oka, Chikako. "Accounting for the gaps in labour standard compliance: The role of reputation-conscious buyers in the Cambodian garment industry." European Journal of Development Research 22, no. 1 (2009): 59-78. DOI: 10.1057/ejdr.2009.38
Abstract
Working conditions in global supply chains have come under increased public scrutiny. Faced with this growing demand for accountability, some multinational enterprises have come to play regulatory roles in developing countries where they do business. This article combines quantitative and qualitative methods to examine the effects of reputation-conscious buyers on supplier labour standard compliance in the Cambodian garment sector. Using unique factory-level panel data, this article shows that factories producing for reputation-conscious buyers are associated with better compliance levels than other factories, controlling for factory characteristics. Field-based interviews also demonstrate that reputation-conscious buyers regulate supplier compliance both reactively and proactively. The findings shed light on the opportunities and limits of buyer-driven regulation. © 2010 European Association of Development Research and Training Institutes.
Yamagata, Tatsufumi. 2006. The Garment Industry in Cambodia: Its Role in Poverty Reduction through Export-Oriented Development. IDE Discussion Paper No. 62,
http://hdl.handle.net/2344/131
Abstract
Cambodia's export-oriented garment industry has contributed greatly to poverty reduction in the country through employment of the poor. This paper provides a statistical verification of this contribution based on firm-level data from 164 sampled companies collected in 2003. Its main conclusions confirm the substantial impact that employment in the garment industry has had on poverty reduction in Cambodia. Firstly, entry-level workers receive wages far above the poverty line. Secondly, females make up the predominant share of the main category jobs in the industry. Thirdly, barriers to employment and to promotions up to certain job categories are not high in terms of education and experience. Another important finding is that a typical sample firm exhibited high profitability, although there was wide variation in profitability among firms. This average of high profitability could be a good predictor of Cambodia's viability in the intensified competition since the phase out of the Multi-Fiber Arrangement (MFA) at the beginning of 2005. A point of note is that Cambodia's pattern of industrial development led by a labor-intensive industry is similar to that of neighboring countries in East Asia which earlier went through the initial stage of industrial development, except that Cambodia has lacked a strong government industrial promotion policy which characterized the earlier group.
Labour Issues:
Arnold, Dennis, and Toh Han Shih. "A fair model of globalisation? Labour and global production in Cambodia." Journal of Contemporary Asia 40, no. 3 (2010): 401-424. DOI: 10.1080/00472331003798376
Abstract
The expansion of the global economy and the governance deficit it has generated raise questions about the possibilities for regulating the practices of participants in global production networks. This paper focuses on the regulation of industrial relations in Cambodia's textile and garment industry - a unique ensemble of state, trade union, private sector and international institutions that is promoted as a "fair model of globalisation." We track the trajectory of Cambodia's industrialisation and insertion into the global economy over three interrelated phases: first, the beginnings of export-orientated garment production in the mid- to late 1990s; secondly, the promotion of Cambodia as an "ethical producer" from 1999; and, thirdly, privileging "competitiveness" in global production networks over labour compliance for its advantage. In doing so we centre our analysis on the complex intertwining of global production, the genesis ofthe unique ensemble ofactors in Cambodia and the anomaly ofCambodia's labour movement. © 2010 Journal of Contemporary Asia.
Webber, Gail, Nancy Edwards, Ian D. Graham, Carol Amaratunga, Vincent Keane, and Ros Socheat. "Life in the big city: The multiple vulnerabilities of migrant Cambodian garment factory workers to HIV." Women's Studies International Forum, 33 (3), pp. 159-169. DOI: 10.1016/j.wsif.2009.12.008
Abstract
Cambodia has one of the highest prevalence rates of HIV in Asia; an increasing number of HIV positive Cambodians are women. The purpose of this qualitative study was to assess the context of HIV prevention for rural-to-urban migrant Cambodian female garment factory workers. Interviews with migrant garment factory workers and key informants, and focus group with health care providers confirmed that poverty was the primary motivator for migration. Women and key informants reported awareness that some migrants had sexual relationships with local men or engaged in sex work to supplement their income. Factory restrictions limited women's ability to access health care services and health education programs. Key themes of the research were economic, social and occupational vulnerabilities of these migrant workers placed them in a context of increased risk of acquiring HIV. Interventions to reduce the risk of HIV infection for migrant Cambodian garment factory workers should address these themes. © 2009 Elsevier Ltd.
Shea, Anna, Mariko Nakayama, and Jody Heymann. "Improving Labour Standards in Clothing Factories Lessons from Stakeholder Views and Monitoring Results in Cambodia." Global Social Policy 10, no. 1 (2010): 85-110. DOI: 10.1177/1468018109355036
Abstract
This article studies the effects of the United States-Cambodia Textile Agreement (UCTA, 1999-2004) on labour standards in Cambodia. The authors find that the Agreement's labour initiatives have led to relative improvements in the working conditions in garment factories. The study draws on extensive fieldwork conducted in Phnom Penh in 2006: in-depth interviews with dozens of respondents from all key stakeholders (labour, management, NGOs, governments and the trade agreement's labour projects - Better Factories Cambodia and the Arbitration Council); and observations of these groups' activities. The article also presents a systematic analysis of the reports produced by the UCTA-provided monitoring. Policy implications are discussed. © The Author(s), 2010.
Berik, Günseli, and Yana Van Der Meulen Rodgers. "Options for enforcing labour standards: Lessons from Bangladesh and Cambodia." Journal of International Development 22, no. 1 (2010): 56-85. DOI: 10.1002/jid.1534
Abstract
This study examines labour standards enforcement and compliance in two Asian economies (Bangladesh and Cambodia) that have amongst the lowest labour costs in the world but are experiencing strong pressures to improve the price competitiveness of their textile and garment exports. Analysis of survey, focus group and inspection data indicate differing trajectories in compliance with basic labour standards. While extremely low wages and poor working conditions have persisted in Bangladesh, compliance has begun to improve in Cambodia following a trade agreement with the United States that linked positive trade incentives with labour standards enforcement. These contrasting experiences suggest that in less developed countries, governments consider trade-linked schemes to achieve improvements in working conditions without hindering export growth or job growth. © 2008 John Wiley & Sons, Ltd.
Shea, Anna, Mariko Nakayama, and Jody Heymann. "Improving Labour Standards in Clothing Factories Lessons from Stakeholder Views and Monitoring Results in Cambodia." Global Social Policy 10, no. 1 (2010): 85-110.
doi: 10.1177/1468018109355036
Abstract
This article studies the effects of the United States—Cambodia Textile Agreement (UCTA, 1999—2004) on labour standards in Cambodia. The authors find that the Agreement’s labour initiatives have led to relative improvements in the working conditions in garment factories. The study draws on extensive fieldwork conducted in Phnom Penh in 2006: in-depth interviews with dozens of respondents from all key stakeholders (labour, management, NGOs, governments and the trade agreement’s labour projects — Better Factories Cambodia and the Arbitration Council); and observations of these groups’ activities. The article also presents a systematic analysis of the reports produced by the UCTA-provided monitoring. Policy implications are discussed.
Sandra Polaski, Combining global and local forces: The case of labor rights in Cambodia, World Development, Volume 34, Issue 5, May 2006, Pages 919-932http://dx.doi.org/10.1016/j.worlddev.2005.04.019.
Abstract:
An innovative policy experiment in Cambodia links improvement of workers’ rights with increased orders and market access for the products of the country’s garment factories. The policy originated with the US–Cambodia Textile Agreement, which awarded Cambodia higher garment export quotas into the US market in return for improved working conditions and labor regulations. It has continued even after the expiration of the global garment quota system at the end of 2004. The agreement’s effectiveness has depended on the International Labor Organization, acting as a compliance monitor and government intervention, preventing some apparel producers from free riding on others’ improvements.
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