BETTER FACTORIES CAMBODIA

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1 BETTER FACTORIES CAMBODIA Better Factories Cambodia #9, Street 322 Boeung Keng Kang I, Phnom Penh, Cambodia, PO Box 2642 Tel (+855) , (+855) , Fax (+855) Website: The Better Factories Cambodia program is part of Better Work, a partnership between the International Labour Organization and the International Finance Corporation. #9, Street 322 Boeung Keng Kang I, Phnom Penh, Cambodia, PO Box 2642 Tel (+855) , (+855) , Fax (+855)

2 ABOUT BETTER FACTORIES CAMBODIA Millions of workers across the developing world rely on the garment industry for employment. While the sector is a key provider of jobs and can help improve livelihoods of workers and their families, poor working conditions remain a pressing issue across global garment supply chains. Industry challenges are complex and far-reaching. They include workers limited awareness of their rights and entitlements, poor law enforcement and a lack of accountability and ownership in improving compliance with the labour law and core labour standards. The Better Factories Cambodia (BFC) program aims at improving the lives of workers of the garment and footwear sectors while strengthening the industry s capacity as a competitive and responsible manufacturing hub. BFC is part of the Better Work Program, a collaboration between the International Labour Organization and the International Finance Corporation, which is operating across three continents to catalyse change along global supply chains in the apparel industry. Currently covering over 500 factories and 530,000 workers, since its establishment, the BFC program has helped to spur improvements in factory working conditions and workplace environment across Cambodia s garment and footwear industry. BFC delivers three core services: 1. Assessment and reporting on factory compliance with national labour law and core international labour standards; 2. Strengthening factory-level social dialogue and systems through advisory services to drive continuous improvement in working conditions and environment; and 3. Training for managers, supervisors and workers to increase their understanding of the labour law and their capacity to make factories better places to work. Building a responsible and competitive industry requires patience, commitment, and the involvement of a variety of stakeholders working together to tackle challenges and formulate solutions at the factory level, across the sector and throughout supply chains. Workers, employers and governments are critical pillars for driving change, and buyers can serve as a fourth pillar, helping to foster lasting improvements. BFC facilitates multi-stakeholder dialogue and contributes to policies that foster a conducive environment for a sustainable garment industry in Cambodia. BFC collaborates with the Ministry of Labour and Vocational Training and the Ministry of Commerce of the Royal Government of Cambodia (RGC), the Garment Manufacturers Association in Cambodia (GMAC), and national trade unions. BFC engages with over 37 international brands in an effort to disseminate good practices and support improved application of labour standards and better working conditions among their suppliers.

3 HELPING FACTORIES TO FIND SOLUTIONS THROUGH ADVISORY SERVICES Factory management, together with worker representatives, play an important role in addressing issues around workplace challenges. BFC advisory services are a factory-specific coaching programme that supports enterprises to find sustainable solutions for their workplace issues through worker-management collaboration. Stronger enterprise systems, higher compliance levels, and more productive worker-management relations are the expected outcomes of joining advisory services. ASSESSING LABOUR LAW COMPLIANCE The Better Factories Cambodia (BFC) program started operating in Cambodia in Its main task was to assess exporting garment factories through the application of international labour standards and national labour law. The RGC made BFC s assessments compulsory, and since then BFC s assessments remain mandatory for all exporting garment factories based on a governmental regulation or Prakas. Compliance assessment and reporting are an essential component of the BFC program: They help to drive factory-level improvement and to strengthen confidence of international brands in Cambodia s industry. Areas covered in BFC assessment include child labour, discrimination, forced labour, freedom of association, collective bargaining and national labour law regulations on compensation, contract and workplace relations, occupational safety and health, working hours and more. BFC s factory assessment visits are unannounced and carried out by a team of two staff over two consecutive days. In order to assess and document compliance, BFC staff utilizes several methods to collect information and cross-check findings: they conduct interviews with management, union representatives, shop stewards and workers, they review documents and observe the workplace by carrying out a walkthrough of the factory premises. Assessment reports are prepared based on the evidence collected and they include detailed findings and recommendations. They are made available to factory representatives who then can allow buyers sourcing from the factory to access the reports. Well-functioning worker-management committees are at the heart of BFC s advisory services. As a first step in the advisory process, BFC s advisors help factories to set up a Performance Improvement Consultative Committee (PICC), which is made of an equal number of representatives of management and workers. The PICC meets regularly to identify points for improvement and develop solutions with the assistance of their BFC advisor. A key aim of advisory services is to build the capacity of the PICC, so that, over time, the committee is equipped with the knowledge and tools to drive the improvement process forward. A focus on increasing factory ownership of the process of change is there right at the start. PICC members are invited to identify workplace challenges and points for improvement through self-diagnosis tools, and report to their buyers. The outcome of the self-diagnosis and the findings from the BFC assessment, which takes place approximately 100 days after the start of the advisory cycle, are the basis of a factory improvement plan that the PICC develops and implements. The focus of advisory services is tailored to each factory s specific situation. In general, strong emphasis is placed on supporting enterprises in building their internal capacity for identifying points of improvement, addressing root-causes of problems, ensuring lasting changes through better management systems and by building stronger workplace communication. Over the course of a year-long cycle and with up to nine on-site visits, BFC advisors provide support to factories through in-person meetings, coaching sessions and on-going remote assistance. Both the PICC and BFC produce reports with updates on the improvement process. The reports are shared with buyers to keep them informed of progress made at the factory level and ongoing commitments. BFC advisory services cover 80 factories and demand is increasing rapidly. In the past, when buyers came to audit our factory, we had some problems. But after we joined BFC s advisory services, we noted that there are many significant improvements. We have achieved a lot: a clean workplace, fresh air, and good working condition. This makes our workers happier. Mr. Bun Vannak, HR Manager, Spendid Chance International Ltd.

4 BUILDING CAPACITY OF MANAGERS AND WORKERS THROUGH TRAINING A key factor for enterprise and industry level improvement is management and workers possessing the appropriate knowledge and skills to drive sustainable change. BFC provides practical training to managers, supervisors and workers that helps them to create safer and better working environments, constructive workplace relations, and effective systems. BFC offers a range of training courses which cover subjects such as the Cambodian Labour Law, Human Resources Management Systems, Supervisory Skills Training, Occupational Safety and Health, Workplace Communication and Collaboration, Methods to Prevent Child Labour, Fire Safety, Compensation and Benefits. BFC s training menu continues to evolve to respond to changing industry needs and to address national and international developments in the sector. Over the years, BFC has helped thousands of garment and footwear managers and workers to strengthen their knowledge and skills and apply them to improve their workplaces. In 2014, BFC provided 44 training courses to 896 participants. BFC s training program has brought a lot of positive impacts to my factory such as clean and hygienic workplace, good occupational safety and health, a decrease in sick leave and higher quality and productivity. Mr. Alex Chan, Manager, Camwell garment factory. COLLABORATION WITH THE GOVERNMENT, EMPLOYERS AND WORKERS ORGANIZATIONS National tripartite organizations have a central role in the governance of BFC. The RGC, GMAC and national unions are part of the Project Advisory Committee (PAC). The PAC reviews progress and provides strategic advice on the direction of the program, as well as being a forum to discuss specific issues arising in the program s implementation. BFC also has several operational collaborations. These include a Memorandum of Understanding with GMAC on child labour investigation and remediation, mechanisms for information-sharing with the government on critical compliance issues, and joint capacity-building and awareness-raising initiatives in areas such as occupational health and safety. ENGAGING BUYERS FOR MORE IMPACT Buyers can play a very important role in contributing to better working conditions in the garment and footwear industry by promoting improvements in their supply chains. BFC works with international buyers that engage with the program as either Partners or Participants. Buyer-partners commit to coordinate efforts with BFC in order to maximize impact, for example by reducing duplicate audits and by supporting improvement efforts of suppliers in a manner that is complementary and reinforces BFC s assistance to factories. In addition to having access to BFC assessment reports, buyer-partners have regular interactions with BFC and Better Work Global to discuss industry developments and factory-level issues. Buyer-participants purchase BFC factory reports and have access to a more limited range of information exchanges. Buyers Forums are key events that take place at the country, regional and international level. The forums are an opportunity for brands to network with each other and with national and international stakeholders including unions, government, employers organisations and NGOs. Buyers Forums provide a platform for buyers to directly hear insights from factory management and workers and discuss ways to transform the industry for the better.

5 DRIVING CHANGE THROUGH INCREASED TRANSPARENCY Following consultation and agreement with national stakeholders, in 2014 BFC returned to its practice of publicly reporting factory-level compliance information. The program seeks to accelerate industry progress by reporting factory performance on compliance in a transparent manner. In this way good practices are highlighted while creating a stronger incentive for improvement among low performers. Public reporting also facilitates follow-up actions by government and strengthens Cambodia s reputation as an ethical sourcing destination. There is growing evidence that public reporting has created the intended dynamic: factories are making changes and, in the aggregate, improvements are being made in key areas of non-compliance. Following factory participation in public reporting, there are substantive improvements on several issues, ranging from occupational health and safety and emergency preparedness, to discrimination, to payment. Currently, the online Transparency Database covers 70% of Cambodia s export garment factories, and it is steadily growing. For more details information about this online transparency database, please visit

6 RESEARCH BFC is committed to ensuring that its work bring about positive change in the industry. This is the reason why BFC conducts rigorous research to measure the impact of the program on workers and their communities, but also on firms business performance. The research is also aimed at detecting industry trends, at gaining a better understanding of emerging challenges or promising initiatives, and at informing program strategy development. The program publishes an annual Synthesis Report that offers an overview of compliance trends based on BFC assessment data, as well as updates on industry developments. The program has embarked on an Impact Assessment Research to measure the impact of program interventions using both compliance data as well as primary data collection methods. In close collaboration with Agence Française de Développement, BFC has carried out a study on the Impact of Food Distribution in factories aimed at analysing the implications of food distribution for workers health and productivity. DONORS SOCIAL CHANGE INITIATIVES BFC s factory-level work is funded through private sector revenues (income from buyers, factories and GMAC) and contributions from the Cambodian Government as well as funding from international donors. Additional policy level work and outreach activities are funded by international donors as well as private sector foundations. Current donors to the programme are: An important factor behind some persistent challenges in the industry is the often limited understanding of the labour law and labour rights by workers and managers. In order to address this problem, BFC has undertaken several outreach initiatives which rely on peer education mechanisms and harness the latest technology. - Garment Workers Radio Competition on the Labour Law: The competition utilises the most widespread media channels accessed by garment workers to create awareness on the Cambodian Labour Law and show its relevance to workers day-to-day lives. - GMAC - The Royal Government of Cambodia - The US Department of Labour - The German Government The Better Work global program is funded by the governments of Switzerland, Denmark and the Netherlands. - Experts by Experience (EbE): The EbE program helps to build the skills and knowledge of a network of workers so that they are able to share information with their peers on workers rights and responsibilities, as well as a variety of issues pertaining to occupational health and safety. - Cambodian Labour Law Application: This is a user-friendly reference for managers, trade unions, workers and other stakeholders to enhance learning on key provisions of the Cambodian Labour Law.

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