Sewing the seeds of prosperity

The ILO Executive Director of Social Dialogue discusses globalizations impact on the Cambodian garment industry.

Press release | 16 February 2005

Globalization is one of the most powerful economic and social forces of our time. But many fear that a result of increasing international competition will be a “race to the bottom”, with competition driving down production prices - benefiting rich consumers while beggaring workers in poor countries. However Sally Paxton of the International Labour Organization says there is a middle way which can benefit both ends of a global supply chain. 

Phnom Penh-- All of us in our different spheres of work are grappling with one of the most transformational processes of our lifetime: globalization. It is a powerful driving economic and social force in our daily lives, but its potential inequity is also one of its most troubling aspects.

When the voices of those directly affected are heard and acted upon, however, globalization can also be a positive agent for change – if steps are taken to ensure that this happens.

The garment industry offers one of the most publicized examples of the dramatic impact of globalization on economies and people. Global foreign trade in garments almost doubled between 1990 and 2002—from US$108 billion to almost $200 billion — during a period marked by anti-sweatshop protests. But growth in this industry has just begun. Trade in garments is projected to increase by another $50 billion this year, and expand to US$320 billion by 2010.

While an increasing share of garments in the international marketplace come fromAsia, the costs to the consumer of those garments are falling. Yet there is cause for hope that the future of the workers making them will not be characterized by the “race to the bottom” that many fear.

InCambodiain 2001, the International Labour Organization (ILO) had launched a unique partnership that would have a significant impact on the industry.Cambodia’s garment industry, which today employs more than 270,000 mostly female workers and makes up 80 per cent of all its exports, has grown rapidly as a result of US quotas on big producers such asChina. Partly due to intense lobbying from unions and anti-sweatshop campaigners, theUSgovernment gave trade privileges toCambodiain return for demonstrated improvements in factory working conditions. It was agreed that the ILO would assist the industry in making those improvements.

The ILO created a team of independent labour monitors to make unannounced visits to garment factories, checking on conditions as diverse as freedom of association, wages, working hours, sanitary facilities, machine safety and noise control. The monitors’ checklist, based on Cambodian labour law and ILO standards, covers more than 500 items.

Meanwhile, the Cambodian government decreed that factory participation in the monitoring scheme would be a pre-condition for receiving export licenses. This guaranteed that almost every garment factory in the country would become part of the scheme. The monitoring component is complemented by technical training in which the ILO helps factories continuously improve their remediation mechanisms, as well as enhancing the capacity of trade unions, employer representatives and the Government in identifying and resolving issues themselves.

The ILO monitoring arrangements are unique, providing a source of independent information that international buyers can use to make sourcing decisions. This information is becoming invaluable for companies investment decisions inCambodiaas well as helping these companies make social responsibility an essential part of their corporate mission.

Consumers and worker representatives can also access this information. The ILO publishes regular reports naming factories and tracking their progress on suggestions for improvement.  The Programme’s growing reputation for transparency, independence and credibility has become key to its success.

This unique fusion of public and private sector interests stands to benefit an extremely vulnerable group — young women workers between the ages of 18 to 25 – as well as help ensure a brighter future for the families that depend on their support.

Concern over labour standards in poor countries is well founded. Consumers are right to worry about conditions in one of the most poorly paid industries in the world—an industry producing goods that are linked intimately with appearance and individual self-image. Today, companies with multi-billion dollar brands are keenly aware that they will also be judged by the way their business partners and sub-contractors treat their employees.

Conditions are not perfect inCambodia. But the country’s improved compliance with international labour standards, monitored by an independent body, is offering a competitive advantage that it lacks in other areas. And it is offering consumers and companies a strong reason for choosing Cambodian-made garments and investing in this thriving industry.

Are the interests of consumers who seek affordable products, and the interests of buyers who want to increase profits, compatible with the interests of young rural women who need to find decent work? On the basis of our experience inCambodiaand the results of this unique project, we say yes.

Sally Paxton is the Executive Director of Social Dialogue at the International Labour Organization (ILO)