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Cambodia: EU partially withdraws trade preferences over rights concerns; stakeholders respond

In February 2020, the European Commission decided to withdraw part of the tariff preferences granted to Cambodia under the European Union's Everything But Arms' (EBA) trade scheme because of serious concerns over violations of human rights and fundamental freedoms. 

Business & Human Rights Resource Centre follows this story, with updates on statements made by various stakeholders in response to the recent decision.

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14 November 2019

Cambodia: Govt. reviews the European Commission's report on 'Everything But Arms' trade preferences after EC expresses human rights concerns

Author: Dara Mech, The Phnom Penh Post

"Government studying EU’s preliminary report on EBA", 14 November 2019

The Ministry of Foreign Affairs and International Cooperation … said the government was studying the EU Commission’s preliminary report on the human rights situation in the Kingdom that could lead to a suspension of access to its “Everything But Arms” (EBA) agreement.

The EU launched the EBA withdrawal procedure …, citing “a deterioration of democracy [and] respect for human rights” in Cambodia.

The commission completed its report … after a three-month investigation … and has given the government one month to respond.

Ministry spokesman Kuy Kuong said the government would study the report before making an official response.

“The ministry received the report … and will study it first,” he said.

EU trade Commissioner Cecilia Malmstrom … said the EU would make its final decision in February.

Government spokesman Phay Siphan … said Cambodia would continue to explain to the EU the actual human rights situation in the Kingdom and the government’s efforts in promoting democracy through various reforms.

… “With regard to human rights, we have continued to address the issue through various reforms. We have a human rights commission to assess all legal aspects concerning human rights in implementing laws,” Siphan said.

… The Phnom Penh Municipal Court … reduced the bail conditions of Supreme Court-dissolved Cambodia National Rescue Party (CNRP) president Sokha more than two years after he was charged with treason.

Sokha’s new bail conditions allow him to travel anywhere within the country but forbid him from being involved in politics…

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14 November 2019

Cambodia: H&M puts an exit strategy in place and considers other options outside Cambodia if EU removes trade preferences from Cambodia

Author: Zazithorn Ruengchinda, ScandAsia

"H&M consider leaving Cambodia due to EU trade sanctions", 10 November 2019

Mr. David Savman, head of production at H&M, said the company would do less business in Cambodia if the current EU trade benefits ended and named China and Indonesia as alternative sourcing countries.

Mr. Savman was attending the Textile and Apparel SEA Summit in Phnom Penh … when quoted ... for saying that H&M, which has about 50 factories in Cambodia, had an exit strategy in place and that the firm had no further obligation to the Cambodian workers.

Cambodia benefits from the EU’s “Everything But Arms” (EBA) trade programme, which allows Cambodia to export most goods to the EU, duty-free.

The agreement is in jeopardy because the EU is accusing the Cambodian government of violating human rights.

The EU bloc is Cambodia’s largest trading partner, accounting for 45 percent of its exports in 2018. Clothing factories in the country employ 700,000 workers, and garments make up a large share of exports to the EU, worth about $5.5 billion.

Yet the value of exports to Europe fell by about $600 million in the first half of 2019 compared with the same period last year, according to Ken Loo, secretary general at the Garment Manufacturers Association of Cambodia (GMAC).

… The European Chamber of Commerce estimates that 90,000 jobs would be at risk if the EU suspended special trade preferences over Cambodia’s record on democracy and human rights.

Cambodia’s garment factories are estimated to employ one in every 25 people, most of them young women who provide for their extended families…

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13 November 2019

Cambodia: European Commission sends preliminary report on temporary suspension of trade preferences to Cambodian govt., with human rights concerns

Author: European Commission

"Cambodia: European Commission finalises preliminary report on temporary suspension of trade preferences", 12 November 2019

The European Commission sent … to the authorities of Cambodia a preliminary report outlining the findings of the investigation triggered … under the procedure for a possible temporary withdrawal of Everything But Arms (EBA) trade preferences.

The Everything But Arms arrangement is one pillar of the EU's Generalised Scheme of Preferences, which unilaterally grants duty-free and quota-free access to the European market for all products (except arms and ammunition) from the world's Least Developed Countries, as defined by the United Nations. These trade preferences may be suspended in case of "serious and systematic violation of principles" laid down in the human rights and labour rights Conventions…

Cambodia is the second-largest beneficiary of EBA trade preferences, accounting for over 18% of all imports coming into the EU market under the EBA scheme in 2018. EU imports from Cambodia totalled €5.3 billion in 2018, 95% of which entered the EU duty-free taking advantage of EBA preferences. Clothing and textiles account for around three quarters of EU imports from Cambodia (€4 billion).

In line with the rules outlined in the regulation on the EU's Generalised Scheme of Preferences (GSP), Cambodia now has one month to react to this preliminary report…

The aim of the procedure is to address human rights and labour rights concerns in Cambodia. While the European Union remains committed to working with the Cambodian authorities on this aim, real and credible improvement on the issues of concern is needed in order to avoid the withdrawal of EBA preferences.

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17 July 2019

Cambodia: Garment Manufacturers Association calls for the suspension of negotiations with the Trade Union Negotiation Council due to uncertainties surrounding the EU’s EBA

Author: Chheng Niem, The Phnom Penh Post

"GMAC calls for halt to union negotiations due to uncertainty over EBA", 17 July 2019

The Garment Manufacturers Association in Cambodia (GMAC) has, for a second time, called for the suspension of negotiations with the Trade Union Negotiation Council due to uncertainties surrounding the EU’s “Everything But Arms” agreement.

The association repeated a request to suspend discussions over the garment sector’s Collective Bargaining Agreement,…

“The GMAC executive committee feels that the uncertainty surrounding EBA means we are not in any position to enter into major negotiations that will impact the industry."

“We look forward to re-engaging on the issue of a sectoral [Collective Bargaining Agreement] once we have certainty and clarity on the EBA matter."…

The Trade Union Negotiation Council said the decision to suspend all negotiations put the progress made in discussions at risk.

It said the uncertainty brought about by the ongoing EBA withdrawal process had implications for potential future agreements but believed such uncertainty could be managed through dialogue.

“We continue to believe that engagement between employers and trade unions on a collective agreement would be a positive signal to the EU of the commitment of the parties involved in practising dialogue."…

Pav Sina, the president of the Collective Union of Movement of Workers, is one of the nine members of the Trade Union Negotiation Council…

Some talks had been held this year, but they were yet to address benefits for workers, he said.

“The suspension of negotiations by employers affects the progress we have made together since late 2017."

“It also means that the discussions on labour rights, working conditions and other benefits also stall. This means that what workers receive remains the same and is not improved,” Sina said…

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16 June 2019

Cambodia: EU delegations visit Cambodia to assess the human rights and labour rights situation and urge Cambodia to show real and credible improvements

Author: European Commission

"EU sends monitoring mission to Cambodia to assess the human rights and labour rights situation", 11 June 2019

Officials from the European Commission and the European External Action Service undertook a mission to Cambodia ... The mission was part of the monitoring and evaluation under the procedure that could lead to the temporary withdrawal of Cambodia’s trade preferences under the EU’s Everything But Arms (EBA) trade scheme, following concerns over Cambodia’s record against core human rights and labour rights conventions.

… The monitoring mission met government authorities, international organisations, trade unions, business organisations, civil society, and the Embassies of EU member states and third countries.

The mission noted steps reported by Cambodia towards improving compliance with international standards on freedom of association and collective bargaining, as well as in addressing a number of land disputes in relation to economic land concessions.

The monitoring and evaluation period will end in mid-August. Following that date, the EU will produce a report of its findings and conclusions. Cambodia will have one month to reply to this report. 

The EU’s aim is to address the human rights and labour rights concerns. The EU is committed to work with the Cambodian authorities to achieve this. Cambodia must show real, credible improvement on the issues of concern in order to avoid the withdrawal of EBA preferences...

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6 June 2019

Cambodia: Workers and unions express concerns over EBA trade preferences amid EU fact-finding delegations' visit

Author: Chheng Niem, The Phnom Penh Post

"EU visit: Workers, unions and politicians express EBA fears", 6 June 2019 

Workers, union leaders … have expressed fear over the consequences of losing access to the EU’s “Everything But Arms” (EBA) agreement – something analysts have described as “manageable”.

A team from the European Commission and European External Action Service is currently in Cambodia for talks as part of the official withdrawal process… Cambodia received access to EBA in 2003. But in February, after almost 17 years, the European Commission launched the official procedure which could lead to a whole or partial withdrawal. It cited human and labour rights violations, ...

Union leaders said the loss of EBA access would not only affect workers in the garment industry, which exports its products to the EU’s single market, but also have indirect consequences.

Pav Sina, the president of the Collective Union of Movement of Workers (CUMW), said development in Cambodia was a consequence of EBA, which had attracted investors in the garment and footwear industries.

…“We all are in this industry – both investors and workers. We do not want to see Cambodia lose its EBA access. We want to see Cambodia continue to grow. We want to see diversified job opportunities for the people,” Sina said.

“Currently, there are nearly one million workers. [The loss of EBA] would not only affect them but their families too, because workers are often the main source of income for these families,” said Yang Sophorn, president of the Cambodian Alliance of Trade Unions (CATU)…

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25 March 2019

Cambodia: Adidas raises concerns over EBA while an European Commission pays a visit to Cambodia

Author: Chheng Niem, The Phnom Penh Post

"Adidas raises EBA concerns", 25 March 2019

Sportswear giant Adidas has said that the EU should balance the human rights provisions in its trade policies and the impacts of the possible withdrawal of its Everything But Arms (EBA) scheme.

The Adidas call came as the European Commission, after the two-day visit to Cambodia of an EU delegation, said it hoped to see “sustained and concrete progress” regarding the areas of concern.

A report … said that while Adidas agreed with the EU’s aims of addressing perceived concerns regarding human rights and civil rights violations in Cambodia, it asked that any decision to suspend the agreement “should thoroughly consider the economic, social and human rights impacts of such a withdrawal”…

“In case of a decision to suspend trade benefits, the European Commission should consider targeting specific sectors that are closely linked to the human and civil rights abuses. The garment and footwear sectors, with their significant footprint, should be excluded,” it said…

“This cannot be absorbed by Adidas and its retailers … it automatically leads to a reallocation of further investments in sourcing,” it warned.

Adidas said a withdrawal of the EBA benefits would put Cambodia at a significant competitive disadvantage to other least-developed and developing countries who continued to enjoy them…

“The European Commission and the EEAS [EU’s diplomatic European External Action Service] hope to see sustained and concrete progress in all areas of concern under EBA engagement, and look to Cambodia to urgently take the action needed in order to keep benefiting from EBA,” it said.

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20 March 2019

Cambodia: Civil society and unions express concerns over the EBA during the EU delegation's visit and urge the govt. to address human and labour rights issues

Author: Narim Khuon, Khmer Times

"Civil society groups address possible EBA suspension", 20 March 2019

Civil society groups and trade unions are calling for concrete measures to prevent the possible withdrawal of Cambodia’s Everything-but-arms preferential trade status during various meetings with the European Union ...

Ket Sophann, spokesman for the Foreign Affairs Ministry, ... said an EU delegation from Brussels will meet government officials ..., including Foreign Affairs Minister Prak Sokhonn and Interior Minister Sar Kheng ...

“There will be a discussion tomorrow concerning NGOs and businessmen,” Mr Sophann said...

Following ... meeting, a total of 68 NGOs, associations and trade unions will express their concerns over the possible withdrawal of the EBA.

In a letter planned to be submitted after the meeting, the rights groups said that “as defenders of fundamental rights and labour rights, we fully understand the EU’s position and decision. However, we are deeply worried that the EBA suspension will directly and negatively impact Cambodian people’s welfare and livelihood.”

... “We, the undersigned Cambodian civil society organisations, associations, trade unions […] and citizens, call on the Royal Government of Cambodia to take concrete measures to restore civic space in Cambodia, and guarantee the protection and fulfilment of human rights and labour rights to ensure the people’s welfare and livelihood,” the letter said...

Soeng Sen Karuna, with rights group Adhoc, said the government should weigh in on the negative consequences of losing the EBA...

Government spokesman Phay Siphan ... said the government welcomes issues raised by NGOs concerning the suspension of EBA.

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21 February 2019

Cambodia: PM announces free legal aid for garment workers; labour rights groups urge authorities to respect labour rights and union's fundamental freedoms

Author: Savi Khorn, The Phnom Penh Post

"Prime Minister Hun Sen announces free legal aid for garment workers", 21 February 2019 

Prime Minister Hun Sen announced … that factory workers will have access to legal representation free of charge once his volunteer group of his lawyers is established, while civil society groups say the government should instead improve labour law enforcement…

“I have already officially decided. Now I have 2,000 million riel or $500,000 in my hand to finance the work of my lawyers. But I am asking Ky Tech, the head of the government’s lawyers, to help me in preparing [the group]. This is not from the state budget. It is a budget I raised to establish a group of lawyers to defend poor clients,” he said…

National Union Alliance Chamber of Cambodia president Som Aun said he supported the move, believing that poor women, especially female garment workers, would now have qualified defence lawyers to help them if they found themselves in court…

Centre for Alliance of Labour and Human Rights (Central) executive director Moeun Tola praised the positive intentions in creating the lawyers’ group but wanted the government, through the Ministry of Labour and Vocational Training, to provide unions with the freedom to operate and have other related rights as stated in the Labour Law…

Ministry’s spokesman Heng Sour could not be reached for comment.

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12 February 2019

Cambodia: EU officially starts the process of temporary suspension of trade preferences; EU needs to see real action during the process

Author: European Commission

"Cambodia: EU launches procedure to temporarily suspend trade preferences", 11 February 2019

The EU has … started the process that could lead to the temporary suspension of Cambodia's preferential access to the EU market under the Everything But Arms (EBA) trade scheme. EBA preferences can be removed if beneficiary countries fail to respect core human rights and labour rights…

High Representative for Foreign Affairs and Vice President of the European Commission Federica Mogherini said: "…, we have seen the deterioration of democracy, respect for human rights and the rule of law in Cambodia... In recent months, the Cambodian authorities have taken a number of positive steps, including the release of political figures, civil society activists and journalists and addressing some of the restrictions on civil society and trade union activities..."

EU Commissioner for Trade Cecilia Malmström said: "It should be clear that today's move is neither a final decision nor the end of the process. But the clock is now officially ticking and we need to see real action soon... Our engagement with the situation in Cambodia has led us to conclude that there are severe deficiencies when it comes to human rights and labour rights in Cambodia that the government needs to tackle if it wants to keep its country's privileged access to our market." 

Following a period of enhanced engagement,…, the Commission has concluded that there is evidence of serious and systematic violations of core human rights and labour rights in Cambodia,... as well as of the freedoms of assembly, expression and association...

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