Southeast Asia sees factory shutdowns and massive lay-offs due to Covid-19 outbreak

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2 June 2020

Cambodia: PM says 256 factories in apparel sector and 169 companies in tourism sector suspend operations affecting over 146,000 workers due to COVID-19

Author: Xinhua

"Cambodian PM says 256 factories suspended due to COVID-19, affecting over 130,000 workers", 01 June 2020

Cambodian Prime Minister Samdech Techo Hun Sen said … that some 256 garment, footwear and travel goods factories in Cambodia had suspended their operations due to the COVID-19 pandemic, affecting more than 130,000 workers.

Besides, about 169 companies in tourism sector had also been closed temporarily, leaving roughly 16,891 people unemployed, he added.

"To help relieve the burden of the jobless, the government and the employers have decided to pay 40 U.S. dollars and 30 U.S. dollars, respectively to each of them per month, so an unemployed worker gets 70 U.S. dollars," Hun Sen said during a visit to the southwestern coastal province of Preah Sihanouk.

European countries and the United States are major market destinations for the kingdom's garment, footwear and travel goods exports, and both have been severely affected by the COVID-19 pandemic as their markets continue to close and residents tighten their purse strings.

Labor Ministry spokesman Heng Sour said … that factories had not received any orders from buyers for both May and June, as well as for the foreseeable future.

"We can conclude that exports of garments and footwear will be hit hard in the second quarter this year," he said.

The garment, footwear and travel goods industry is Cambodia's biggest export sector, employing about 750,000 people in approximately 1,100 factories and branches, according the Labor Ministry…

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25 May 2020

Cambodia: Independent unions accuse garment factories of union busting during COVID-19 pandemic

Author: Khy Sovuthy, CamboJa

"Garment factories accused of union busting under cover of Covid-19", 22 May 2020

Garment factory owners have been accused of attempting to cull union representatives and members from their workplaces under cover of widespread Covid-19 terminations, with one official even arrested after criticizing lay-offs…

But union leaders say some factory owners are targeting workers who have taken on roles organizing their colleagues …

Kong Atith, head of the Coalition of Cambodian Apparel Workers Democratic Union (CCAWDU), which is the largest independent union in the country, pointed at two factories in Kandal province he said laid off dozens of union officials.

“The Crystal Martin and QMI factories fired between 30 and 40 union leaders and activists during this Covid-19 disease,” Atith said, noting it was against the Labor Law for factories to discriminate against workers who organize.”…

Yang Sophorn, the head of the Cambodian Alliance of Trade Union (CATU), said that four of her members were also terminated from the Golden Apparel factory in Kompong Chhnang province and the Roo Hsing factory in Phnom Penh for “inciting workers to commit crimes” over their unionizing on the factory floor.

… More than 1,000 of officials and members of the Collective Union of Movement of Workers (CUMW), another independent union, had also been laid-off since the Covid-19 slowdown started, said its secretary-general, Preap Monysovann.

Monysovann pointed, in particular, to two workers: Dy Phors, who he said was CUMW’s leader at the Shuang Li factory in Svay Rieng province, and Soy Sros, who had been its leader at the Superl Holdings in Kompong Speu province…

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14 May 2020

Cambodia: Around 1,600 workers protest to demand their missing wages & compensation for furloughed workers

Author: Davin Sen, Khmer Times

"About 1,600 workers demand April’s wages", 14 May 2020

About 1,600 workers of the FMF factory staged a protest ... in front of the factory to demand last month’s missing wages in Kandal province’s Takhmao city.

Chin Mali, one of the workers, said ... the factory management failed to pay workers their last month’s wages and sacked 150 workers without advance notice.

Ms Mali stresses that the company, which produces bags and handbags, did not pay compensation to the furloughed workers.

Another worker said the company promised to pay them ... but payment was delayed...

She said the factory suspended its operation 20 days ago owing to coronavirus pandemic and will continue another 15-day suspension...

Cheav Sok Theng, administration chief of FMF factory, said the factory has faced a financial crunch amid the COVID-19 pandemic.

“We have never paid them late but this month, it has no money because our products could not be exported due to cancelled orders,” Mr Sok Theng said. “However, we are trying hard to find money to pay them.”

He said the company was forced to lay off 150 workers because of the financial crunch...

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7 May 2020

Cambodia: A garment factory suspends its operations and lays off nearly 2,000 workers due to COVID-19 pandemic as orders dry up

Author: Davin Sen, Khmer Times

"Factory furloughs nearly 2,000 workers amid coronavirus", 07 May 2020

Nearly 2,000 garment workers are now in limbo after their employer You Li International Garment Co Ltd in Svay Rieng province’s Bavet city announced a suspension of operations as clothing orders dry up amid the coronavirus pandemic.

Pum Sokunthy, an officer of the Collective Union of Movement of Workers, said ... the company decided to temporarily halt its operations from May 1 to June 30.

“The workers will receive compensation from the government and the company. In the meantime, they will be faced with difficulties as they try to get by day by day,” said Mr Sokunthy.

Chan San, a worker from the garment factory, said ... since early April, the company has had fewer job for the workers due to a lack of orders.

“We depend on our wages to support our daily needs. Now that the company has announced to suspend operations, we do not know what will happen to us in the next two months,” he said...

On Labour Day, union groups, representing more than 100,000 workers from eight sectors, sent a petition to Prime Minister Hun Sen to ask a guarantee in payment of compensation and other benefits for suspended workers.

The unions said the government should increase compensation for suspended workers, with 20 percent of their wages coming from the government and 40 percent from their respective employers.

... The unions also suggested the government increase the minimum wage from $190 to $250 for garment workers and enforce fixed wages to workers in the construction, tourist, services, transportation and other sectors.

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30 April 2020

Cambodia: Over 130 garment factories suspend their operation & lay off around 100,000 workers; workers raise concerns over livelihoods & lack of support from brands

Author: Sineat Yon, DW

"Coronavirus brings trouble to Cambodia's garment industry", 30 April 2020

Hundreds of garment factories in Cambodia and elsewhere in Asia are facing serious financial problems because clothing brands have either canceled their orders or stopped placing new ones over the past several weeks. The brands say they have no other option, because the demand for clothes has decreased significantly now that many stores in the West are closed due to the coronavirus pandemic.    

In Cambodia alone up to 130 factories have asked the country's Labor Ministry for permission to suspend their operations entirely or partly. With about 750,000 workers, the garment industry is the biggest employer in the Southeast Asian nation. Around 100,000 Cambodian workers have recently lost their jobs, either permanently or temporarily…

Chhouk Sarann, 26, is one of the many newly unemployed Cambodians. She got fired from her job … after she defied a travel ban that was implemented by the government to stop the spread of COVID-19. "When I got back to the factory a few days later, I was told that I should resign. When I didn't do that, they told me that I'm no longer employed at the factory," Sarann told…

Khun Tharo, a program coordinator at the Center for Alliance of Labor and Human Rights (CENTRAL), said there are "serious questions over the long-term financial viability of some factories."…

Following fierce criticism, some of these brands recently announced that they are working to find a solution for the factories and their workers. The mass cancelations of orders hit not only Cambodian factories, but also those elsewhere in Asia…

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11 April 2020

Cambodia: Factories remain open while workers struggle to repay loan; unions & employers association call for more responsibility from brands

Author: Matt Blomberg, Thomson Reuters Foundation

"Cambodia's garment factories remain open despite growing fears among workers about catching the virus", 10 April 2020

Climbing onto a crowded truck each morning, Cambodian seamstress Sim Samphor cannot help but worry about catching the coronavirus that has closed down most of the country …

Parliament passed a law … to pave the way for a state of emergency, …

… At about $3,800, Cambodia's average microloan debt per borrower is the highest in the world, and more than double the average annual salary…

"Debt is the biggest issue facing our members," said Sar Mora, vice president of the Cambodian Alliance of Trade Unions.

"All workers are scared of the coronavirus, but the banks might get them first," he added.

Potential strikes have been discussed in recent weeks, and there were partial walk-outs in factories … after the travel ban was issued, said Khun Tharo, a program coordinator at the Center for Alliance of Labor and Human Rights, a charity.

"The ongoing social and economic pressure that's on these women to provide for their families is massive," he said.

About 100 factories … have suspended work due to shortages of material and orders drying up in recent weeks, affecting more than 60,000 jobs.

Hun Sen … said suspended garment workers would receive $70 a month - just over a third of the minimum wage and less than the previously promised sum of $114 - with the government and employers paying $40 and $30 respectively.

Brands that source from Cambodia - including Adidas, H&M, PUMA and Levi Strauss - should take more responsibility, said Ken Loo, head of the nation's Garment Manufacturers Association…

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9 April 2020

Cambodia: Oxfam claims that garment workers struggle to support their livelihoods as $70 per month package is not adequate while Covid-19 pandemic interrupts factory operations

Author: Harrison White, Khmer Times

"Oxfam: $70 a month factory pay could push workers back into poverty", 9 April 2020

The announcement by Prime Minister Hun Sen ... that suspended factory workers would only be receiving a total of $70 per month could potentially push hundreds of thousands of garment workers and their families back below the poverty line, according to Oxfam..

The $70 monthly payment, which equates to $2.33 a day for a normal 30-day calendar month, is 43 cents a day above the World Bank’s 2015 definition of absolute or extreme poverty (considered to be $2.16 a day now after adjusting for inflation).

Solinn Lim, Cambodia Country Director of Oxfam said that Cambodia has lifted a lot of people out of extreme poverty. However, the country now needs to careful that during these unprecedented times people could fall back into poverty. This is especially true of the informal economy sector.

“While Cambodia has been very successful in lifting people out of extreme poverty, this virus could make those that have escaped poverty at risk of falling back into it. We also have observed serious implications on the livelihoods of the most vulnerable groups we work with across the country…amid the potential impacts on marginalised groups these informal economy workers have also lost their jobs and income,” Solinn said.

... The government had previously agreed that suspended workers would be eligible for a 20 percent subsidy from the government and a 40 percent subsidy from factory owners. From the $190 minimum wage this would have equated to $114 a month or $3.80 a day, but this was changed due to factory owners stating an inability to pay...

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8 April 2020

Cambodia: Govt. offers $70 per month for each laid-off garment worker as more factories suspend operations due to Covid-19; while workers continue to struggle

Author: Long Kimmarita, The Phnom Penh Post

"Laid-off workers to get just $70", 7 April 2020

Prime Minister Hun Sen announced changes in the allowances for laid-off garment workers from receiving 60 per cent of the minimum wage to a flat $70 because factories cannot pay, he said.

…, the government decided that factory employers would be required to pay 40 per cent of the wages, while the government would provide the other 20 per cent of the $190 minimum wage.

The workers would receive $114 but they had an obligation to attend skills training…

The prime minister said … that the government had decided that employers would pay only $30 and the government would pay $40 instead...

“Factory owners have no ability. So now the state will release $40 while factory employers pay $30. A worker obtains a benefit of $70. Earlier, they thought they would receive more than $100. But the factories are unable to do so and cannot be forced to do so,” Hun Sen said…

Mai Chan, a worker at 7NG who was suspended from work two months ago, told … that he could not get by on 60 per cent of allowances to pay for his family and the bank, so how will he survive on only $70?...

Collective Union of Movement of Workers president Pav Sina said the government’s decision had cost workers their income.

“According to the Labour Law, the employer is duty-bound to look into the problem. But instead, the government is the one taking charge. Some factories had received a lot of benefits, but are now making excuses to get away…

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7 April 2020

Cambodia: Garment factories struggle to pay workers' wages due to lack of orders as Covid-19 pandemic causes more factory closures

Author: Khy Sovuthy, CamboJa

"Garment factories flag money issues as workers go without pay", 6 April 2020

Cambodia’s garment and footwear factories say they might not be able to continue paying workers even reduced wages beyond this year’s Khmer New Year, as foreign orders for clothing dry up amid the global coronavirus crisis.

Garment Manufacturers Association in Cambodia deputy secretary general Kaing Monika said that owners of factories with suspended production had complied with Prime Minister Hun Sen’s directive to continue paying workers 40 percent of the $190 monthly minimum wage but may soon struggle to stay solvent…

Monika said some factory owners believed they would not even be able to cover those reduced costs after the … Khmer New Year, when most Cambodians typically travel back to their hometowns for mass celebrations…

Union leaders said they were sympathetic but also skeptical about the request.

Ath Thorn, president of Cambodian Labour Confederation (CLC) said he and other union leaders had heard about the concerns of the owners during two separate meetings with GMAC representatives and Labor Ministry officials…

“According to the meeting, there were six buyers — including H&M, Adidas, Inditex, VF, Mark and Spencer and Zara — that are still ordering and buying products from the garment and footwear factories in Cambodia,” Thorn said.

… Labor Ministry spokesman Heng Sour declined to comment directly on the proposal and said only that the government was doing what it could by paying 20 percent of the monthly salaries of furloughed workers — a figure of $38…

… Among those not complying, he said, were the Dignity Knitter and Eco Base factories in Takhmao City, where more than 1,000 workers are without pay…

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6 April 2020

Cambodia: Ministry of Labour reports that 91 garment factories suspend their operations due to the Covid-19 pandemic affecting 61,500 workers

Author: Chanthol Prak, Reuters

"Cambodia says 91 garment factories suspend work due to coronavirus, 61,500 workers affected", 1 April 2020

At least 91 garment factories in Cambodia have suspended work due to coronavirus, with 61,500 workers affected, a spokesman for the labour ministry said ...

The shuttered factories are almost one in six in Cambodia’s $7 billion garment and footwear industry, which supplies such global brands as H&M, Adidas, PUMA and Levi Strauss and is the country’s largest employer, with about 850,000 workers.

“There are 91 factories under suspension as of the end of today,” Ministry of Labour spokesman Heng Sour told …, saying the government would provide salary replacement of about $38 per month for “about 61,500 workers”. 

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