Cambodian Factory Closures, Burkini Ban Overturned

date:01.09.2016 by:YDLFN NewsTeam,

Cambodian Factory Closures, Burkini Ban Overturned

date: 30.08.2016 by: Diana Arhir via thebusinessoffashion.com, image credits with courtesy of the thebusinessoffashion.com

 

 

 

 

Standing guard outside the boarded-up entrance of the Chung Fai Knitwear factory, a dozen women prepared to head out for the day. The Hong Kong-owned sweater and sock manufacturer in Phnom Penh’s Meanchey district ceased operations in June, leaving more than 200 workers out of a job. With no sign of receiving their due compensation, a few members of Chung Fai’s former workforce began camping overnight on the factory grounds to protect what little hope they have left for reparation: the valuable equipment left inside. “We want the [Labor] Ministry or the court to solve the problem for us as soon as possible,” said Math Halymas, who worked at Chung Fai for about 15 years. Now, after two months of petitioning and protesting, the women have moved their base from inside the compound to a footpath outside, where they have stood guard between 7 a.m. and 5 p.m. each day. The switch came after the factory gate—emblazoned with a crudely painted message appealing to Prime Minister Hun Sen for help—was locked by court, police and government officials who inspected the premises on August 19.

After examining and documenting the assets inside, the officials secured the factory’s warehouse and posted copies of a July 26 injunction from the Phnom Penh Municipal Court to the main gate. The injunction orders the company not to remove or sell any equipment until further notice. About 70 garment factories have shut down so far this year, according to Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia (GMAC), already double the 35 that closed last year. He attributed the trend to a steadily rising minimum wage, making profit margins impossibly slim for some investors. “Wages make up between 65 to 70 percent of local costs…. If you disregard the costs of utilities, like raw materials and so on, and just look at the wages, rising wages is the main factor,” he said. “What else can be the main factor?” According to union leaders and labor activists, there is a strong incentive for factory owners to close down and skip town: to get out of financial obligations that can become an increasing burden the longer the factories stay open.

“Some factories close their doors to stop paying the money like seniority [benefits] with their workers, and then it is opened again at the same location, just with a new name,” said Pav Sina, president of the Collective Union of Movement of Workers (CUMW). Moeun Tola, executive director of the labor rights group Central, said companies often attempted to avoid the costs of dismissing staff by effectively restarting operations, enabling them to hire new workers on lower starting wages.

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