Workers' claims for better treatment in emerging countries reached a new climax on Jan. 3 as five demonstrators were shot dead and others injured by the military police in Phnom Penh, the capital of Cambodia, in the midst of ongoing strikes by garment workers. Coupled with the worker safety and compensation issues that have been plaguing the apparel industry in Bangladesh, this new episode of violence is leading brands and retailers to rethink their supply chain strategies.
The government has ordered the shutdown of all the apparel factories, and the conflict has led to an estimated loss in sales of $250 million so far. Seven leading companies - Adidas, Columbia, Puma, the Gap, H&M, Inditex and Levi Strauss & Co. – sent a letter to Cambodia's Prime Minister, Hun Sen, the Garment Manufacturers Association and six labor unions, calling for a peaceful end to the conflict. They stated their support for a scheduled review of workers' wages.
The Cambodian government had endorsed a plan to raise the minimum monthly wage in the country's apparel manufacturing sector from $80 to $95 and then to $100, and agreed to raise it gradually to $160 over the next five years. Local labor unions reacted by organizing a massive strike in support of demands for raising the minimum wage to $160 with immediate effect.
According to the International Labor Organization, the minimum wage in Cambodia is currently higher than in Myanmar ($57) and Bangladesh ($72), but lower than in the Philippines ($148), Thailand ($243) or parts of Malaysia ($247). Labor unions have been pressing for higher wages and better conditions also in Bangladesh and Malaysia lately.
The Cambodian garment industry endured more than 130 strikes last year. Tens of thousands of workers reportedly participated in the latest series of protests, which began on Dec. 24. They were encouraged by some of the organizers to engage in vandalism. Local reports indicate that the factories resumed their work early last week, however.
Cambodia's garment industry generates about $5 billion a year at nearly 560 factories employing about 600,000 workers.