The labor situation in the low-cost factories of Cambodia and Bangladesh is still unsettled, and it is escalating in Cambodia. The management of Sabrina Garment Manufacturing in Cambodia, which makes clothing for Nike, Lululemon Athletica and Wilson, fired 415 workers because of their participation in labor strikes, joining thousands of other workers who were demanding an increase of nearly 19 percent in their wages to help offset rising transportation and health care costs.
At Sabrina, which is controlled by Taiwanese interests, Cambodian authorities had sent over more than 1,000 officers to stem the escalation in their protests after the arrest of eight workers who belong to a local union. Ten others have been hiding for fear of being caught. According to local reports, 4,000 of the 5,300 employees at Sabrina walked out after the management refused to implement an agreement signed last Jan. 30 to increase their wages, in line with a Cambodian government directive to raise the legal minimum wage. Thirty of them were wounded by the police.
Nike said it was monitoring the situation at the factory, noting that it is one of those certified by Better Factories Cambodia, a program set up by the International Labor Organization and the International Finance Corporation.
According to Cambodia's Garment Manufacturers Association, workers at their factories staged 134 strikes in 2012 and a further 48 so far this year, affecting their production schedules. The minimum wage in their factories is the equivalent of US$74 a month.
The reports from Cambodia come mainly from IndustriAll, a global union that is also monitoring the situation in Bangladesh. The union stated last week that proposals made by the Bangladeshi government for a new labor law were found to be inadequate.
One positive point in the package proposed by government, though, was the removal of a former provision that factory owners should be given the names of workers wishing to join trade unions. The union has been campaigning for an increase in the national minimum wage, which now stands at US$34 a month.
Meanwhile, Puma has joined more than 40 other companies – mostly European - in signing the Bangladesh Fire and Safety Agreement, which calls for independent audits of the health and safety standards adopted in the country's garment factories. Six of them supply products for Puma, representing 11 percent of its apparel sourcing volume, and the agreement requires Puma to underwrite the costs and to cut off relations with any factories that refuses to make the necessary safety upgrades. The industry program is a reaction to the collapse last April of a factory building that killed more than 1,100 people and to fires at several other plants in the country.
A recent report prepared by engineers found that 60 percent of the 3,000-plus clothing factories in Bangladesh are unsafe. The report was mentioned earlier this month at a hearing of the Foreign Relations Committee of the U.S. Senate Foreign Relations Committee. Senators called on the U.S. government to suspend the Generalized System of Preferences for Bangladesh unless it introduces significant changes in labor safety and workers' conditions. European governments – notably those of Norway and the U.K. – have been more proactive than the American government recently in pledging aid for the country's workers.
