Garment Workers Fear Potential Job Losses as EBA Decision Looms

6 min read
A garment worker checks pants in a factory in Cambodia on December 9, 2014 (ILO)

Vorn Channin’s salary has risen over the five years that she’s worked in a garment factory in Phnom Penh’s Pur Senchey district. But Channin said living expenses for her family have also increased.

A bundle of herbs doubled in price to 1,000 riel ($0.25) and pork increased by 3,000 riel ($0.75) per kilo early this year, she said.

Just as some food prices are rising at the market, Channin and other garment workers are becoming more concerned that their jobs could be on the chopping block.

The E.U. on Wednesday is expected to announce whether it will suspend Cambodia from its Everything But Arms (EBA) duty-free trade scheme over human rights concerns. 

EBA largely benefits the nation’s export-driven garment sector, and factory workers say they’re worried they could lose their jobs if companies are forced to pay tariffs to export clothes and other goods to Europe, one of Cambodia’s largest export markets.

“Workers like me and many of my brothers and sisters would be miserable [if we lose it],” Channin told VOD last week. “I would like the government to keep EBA so we have enough jobs and food.”

The scheme has been under review for a year due to “serious and systematic violations” of human and labor rights and political repression, the E.U. said in a preliminary report seen by VOD in November.

Cambodia’s detention of CNRP president Kem Sokha and the dissolution of his party eight months before the 2018 national election, among other “repressive actions,” appeared to violate international rights conventions which must be upheld to maintain EBA, the report says.

Sokha’s treason trial started last month, following calls for his full release from the E.U., U.S. and human rights organizations. The trial is expected to continue until April.

The European Commission noted in its preliminary report that Cambodia’s attempts to address “serious and systematic” rights violations were “insufficient” for the nation to be considered in compliance with E.U. requirements for duty-free market access.

In a report dated Monday on the E.U. Generalised Scheme of Preferences (GSP), of which EBA falls under, the Commission and the E.U.’s High Representative for Foreign Affairs and Security reiterated that “there has been a deterioration of democracy, respect for human rights, and the rule of law, including shrinking space for political opposition, media and civil society” in Cambodia over the last three years.

With nearly 5 billion euros ($5.4 billion) in exports to the E.U. under the EBA scheme in 2018, Cambodia is the second-largest beneficiary of EBA, after Bangladesh, by value of imports, according to the E.U.’s GSP report.

If EBA is withdrawn, Cambodia could pay about a 12 percent tariff on garments and 16 percent on footwear to export the products into Europe by later this year, according to a 2019 World Bank report.

In 2018, Cambodia exported $9.5 billion worth of garment and footwear products, with a third going to the E.U. market., the World Bank said.

It also estimated that a full suspension of the EBA could cost Cambodia up to $654 million in exports.

However, a motion for a resolution unrelated to EBA dated February 5 and filed by European parliamentarian Danilo Oscar Lancini suggests that the European Commission has already decided to “withdraw Cambodia’s EBA status on some products,” not all.

Rice is not included among the products to lose duty-free import status, according to the document, although the E.U. already put in place separate safeguard tariffs on rice last year.

The European Parliament filing did not specify other products that may see tariffs levied due to an EBA suspension.

The decision expected to be announced on Wednesday can be rescinded if the European Council or Parliament objects to the suspension within up to four months from the notice, according to E.U. regulations.

The European Commission can also revoke the decision to suspend the scheme, if the “reasons justifying temporary withdrawal no longer apply,” before it would go into effect in mid-August.

Kaing Monika, deputy secretary-general for the Garment Manufacturers Association in Cambodia (GMAC), told VOD that during the six-month grace period the industry could ask for a reevaluation if it believes the Commission’s decision is unjust. 

“What our employers in the private sector might do is express dissatisfaction and ask the E.U. to reconsider, if we see that the E.U.’s inspection, evaluation and decision-making processes are not just and fair,” Monika said. 

GMAC has said that the removal of EBA would negatively affect the approximately 750,000 workers in Cambodia’s garment and shoe industry, as well as an estimated 2 million family members, according to a statement from August. 

Despite industry concerns over EBA, Monika said he observed positive trends for the garment industry in markets outside Europe.

“According to factories’ reports, orders for E.U. destinations have not increased, but imports to other destinations such as the U.S., Japan and Asean are getting better,” he said. 

Last week during a press conference, government spokesman Phay Siphan asked Cambodians not to worry about losing EBA and said the country was prepared to handle any outcome. 

“EBA is not the foundation nor the important point of Cambodia’s economic growth,” Siphan said. “If we partly lose or lose all of EBA, it will be an opportunity for Cambodia to strengthen its abilities.”

However, some garment workers expressed concerns about how the potential loss of EBA might impact their livelihoods. 

Seng Mom, who works at a garment factory in Choam Chao commune’s Canadia Industrial Park in Phnom Penh, said she already splits a 4-meter-by-4-meter rented room with four other people, but she needs to find another tenant after the landlord increased their rent by $10 to $50 per month. 

“Our home is small but we’re being patient,” Mom said. “I have to send money back home to my mother to pay for my children’s school fees and the loan I took after my mother got sick last year.”

“I’m worried if EBA is withdrawn, and I don’t know what would happen to my job,” she added.

The monthly minimum wage for garment workers has risen annually from $100 in 2014 to $182 last year. Last month, wages increased to $190 per month.

In October, Hun Sen defended this year’s $8 minimum wage increase, saying the government could not increase wages or else risk manufacturers moving to Bangladesh, Laos or Myanmar.

“We are worried that our factories will move to those countries because their minimum wage is lower than ours,” he said.

Cambodian Labor Confederation president Ath Thorn said that even with increases in the minimum wage this year, factory workers will lose income because of lost overtime pay resulting from policy changes meant to appeal to investors, including a removal of six public holidays from the calendar and a proposal to eliminate benefits for overnight work

“These points are adding more burden to garment workers,” Thorn said. 

In their rented room in Pur Senchey district, Veng Vorn, the husband of garment worker Channin, said he’s worried that the possible loss of EBA could cost his wife’s job — and their family’s livelihood.

“If she has no job, my income alone cannot cover the children’s school and food, and we’ll need to take more loans,” said Vorn, a construction worker.

He added, “I already owe the bank more than $2,000 and I am paying back every month.”

(Translated and edited from the original article on VOD Khmer)

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