2008: 73 Factories Closed and 64 Opened - 20,000 Workers Were Dismissed and 10,000 Found New Work

Posted on 11 January 2009
The Mirror, Vol. 13, No. 594

“In Cambodia 73 factories were closed in 2008, making nearly 25,000 workers unemployed. But 64 new factories opened, absorbing 10,000 new workers. The export of garments to international markets declined by 2%, which has created general concern. Difficulties will last 3 to 6 months further, but officials said that there will be no serious effects on the garment sector.

“The president of the Garment Manufacturers Association of Cambodia [GMAC - the web link has, under "Members" a detailed database with information about all GMAC members], Mr. Van Sou Ieng, said in a press conference in the evening of 7 January 2008 at the Hotel Le Royal, that more than 60 garment factories closed in 2008, causing around 25,000 workers to loose their employment. The export of garments to international markets dropped by 2%, while before, he expected that it would drop by between 5% and 7%. Therefore, the global financial crisis affected this sector very little. He added that Cambodia might face difficulties from 3 to 6 months, and in 2010, we can hope again. In every of the previous years, this sector grew by 15% to 20%.

“A secretary of state of the Ministry of Labor and Vocation Training, Mr. Oum Mean, reported to Kampuchea Thmey on 9 January 2009 that 73 factories closed and 24,397 workers had lost their work. However, in the same year, 64 new factories had opened, absorbing 13,000 workers by now. The number of workers might further increase, because newly opened companies are in the suburbs. Thus, recently unemployed workers will continue to work at new factories, and most of them have skills because of several years of experience. Some workers go to work for factories in special zones located near their home villages or towns, like in Svay Rieng and in other areas.

“There are different number given, because some of the closed factories were not among the members of the GMAC.

“Mr. Oum Mean went on to say that more than 20,000 workers will find jobs in new factories. While the world faces a financial crisis which affects big countries, such as the Untied State of America and Europe, Cambodia is also affected, because those big countries are garment importing countries from Cambodia. While citizens of those countries meet difficulties, they will cut down their expenses, and this affects the buying orders, ‘but we are not strongly affected, because the Cambodian economy depends on agriculture as the basis – even though before, the prices of fuel had increased and the prices of goods followed the market prices and general needs.’

“Coming from the ministry in charge of observing working condition, Mr. Oum Mean said, as the world faces a financial crisis causing common effects, that Cambodia, which exports garments to international markets, is also concerned, including the Royal Government, workers, and employers. ‘We have to join efforts and be patient, so that our factories remain stable and develop, because many countries recognize that the working conditions in Cambodia are acceptable according to international standards. When we export our goods with the labeled “Made in Cambodia,” both Europe and the United States of America always agree to buy them, since they know that these goods have quality, and our workers get enough benefits. We have to continue maintaining this reputation well.’

“He did not prohibit to have protests or demands by workers, but before doing something, they must be wise to avoid to act inappropriately affecting the fate of all, because when factories close, also employers loose, though they are owners, since the factory is a rice pot for all.

“Regarding the above problems, the president of the Free Trade Union of Workers of the Kingdom of Cambodia, Mr. Chea Mony, mentioned some numbers in the morning of 9 January 2009, that in 2008, there were 27,000 workers who lost their work, and 26 factories closed.
“However, in 2008, all together 37 factories closed, but it was not because they were bankrupt - but it was because they relocate their factories to new locations in the suburbs, and they just changed their factory names. Another reason was that some factories lost their money in speculation. Also, because of the global financial crisis, some factories that were affected were run by Korean owners, such as the Woosu CNS Factory, the Chantechay Factory [phonetic] which suspended their work, also the Cambohenshare Factory [phonetic - 'Cambo Hansae'?] suspended its work, and also the Tay Factory [phonetic]. Some factories suspend their work for 2 or 3 months; so workers will not wait and go to work at other factories.

“Mr. Chea Mony added that while workers face unemployment, ‘we will help them according to the law. When factories close, they have to settle final payments for their workers according to the law. … The government is also responsible to solve problems of unemployment of workers. Some workers turn to find jobs in Thailand, but we help workers, according to the law, in order to help them to stay in Cambodia.’

“Mr. Van Sou Ieng said after the end of the 26th council plenary session of the ASEAN Federation of Textile Industries on 7 January 2009, that buyer orders will be finished by February and March 2009, and there is no buying order for May and June 2009. Buyers offer only US$3 for 1 shirt while before, they offered US$4. Big companies agreed to loose US$2 or US$3, but from May to June buyers must offer US$4 again. As for small factories, they might close, because they cannot stand the loss.

“Mr. Chea Mony agreed with Mr. Van Sou Ieng, who said that big companies are less affected while small factories are more seriously affected, because they produce their garments for big factories. But he did not agreed with what Mr. Van Sou Ieng said, that the buyers from international markets are lowering their price offers; this would be impossible, because each buying contract contains clear agreements. Mr. Chea Mony asked Prime Minister Hun Sen to kindly take action with officials of relevant ministries regarding corruption which affects the garment sector. He asked also the head of the Royal Government to reduce the prices of goods at the markets, which affect the living standard of workers who earn small salaries.

“The president of the Cambodia Workers Labor Federation of Trade Union Mr. Vong Sovann, expressed his concern in the morning of 9 January, that some factories were closed for good, and buying orders dropped in 2008. Bur only small factories having 200 or 300 workers were closed. Some factories closed in the city but opened in the suburbs, and some new factories do not have enough workers.

“Mr. Vong Sovann added that his union will provide more broad educational information about the economy for workers, so that they understand the present economic situation, and what causes demonstrations and strikes. ‘We will try to explain to workers to be patient and to solve problems through negotiations. As a result, in late 2008, demonstrations and strikes declined, which showed that workers became more knowledgeable.’

“The president of the Cambodia Labor Union Federation, Mr. Som Oun, said in the morning of 9 January 2009 that 64 new factories had opened and 73 factories had closed, including factories sub-contracted by bigger factories, and some of the factories do handicraft work. There were only around 20 factories [of those closed?] exporting garments by themselves. The number from GMAC and the numbers from the Ministry of Labor and Vocational Training are not in line with each other, and GMAC did not give a number of new factories. The number of factories closed was comparable to 2007. Workers loosing their employment go to work for other factories; therefore, the number of unemployed workers was not so high. Some unemployed workers of some factories returned to their homes to help harvest paddy rice.

“Mr. Som Oun said that some factories do not have enough workers. Obviously, a shoe factory in Kandal’s Ang Snuol district asked him to help recruit up to 2,000 workers, because this factory added another big building, and now the workers have to eat their meals in the factory. Therefore, he did not worry that workers are unemployed, ‘We still have buying orders from the United States of America and from Europe, because, according to the International Labor Organization, Cambodia is the country in the region which best respects working conditions. Buyers from the United States of America wait until the new president takes his position in the middle of this month, then they will continue buying.’”

Rasmei Kampuchea, Vol.17, #4791, 10.1.2009
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Saturday, 10 January 2009