Phasing out of MFA and its Impact on Workers

1Background

3 Better Factories What is it? Anyone heard of it? 5 mins brainstorm

4 Cambodia 13 million people workers 80% of Cambodia’s exports 230 factories 70% owned by Chinese speakers 70% exports to US Per capita income is US$27 per month Average garment wage = US$72 per month Directly supporting 1 million people 30 – 50% salary sent home to family

5 Objective Increased firm level compliance with Cambodian and international labour law =better working conditions for workers =reduce poverty =win:win:win:win

6 Background 1999 US Cambodian Trade Agreement Quota access for compliance Possible 18% increase ILO executing agency to monitor and report Project January 2001 USDOL funding, GMAC, Govt Govt links export license to registration with the project

7 Discussion point Why do you think that the project was controversial when it started?

Description overview

9 Remediation cycle Monitoring Suggestions Capacity Building

10 Role of unions Members of PAC Mainstreaming social dialogue Monitoring Training Resources Direct support

Video discussion point List things you want to know or discuss

Monitoring How it works

13 Monitoring 6 teams unannounced visits Agreed checklist over 500 items interviews management, workers and unions Falsification checking

14 Discussion point Contact with auditing firms? Do they talk with union leaders? Impressions?

15 Monitoring reports 15 synthesis reports Each factory given a report Buyers can request reports Monitoring plus Factories named independent, transparent and credible

16 Key aspects of the labour law Handout – see fact sheet about the industry Discussion point – how does this compare to factories in your country?

17 Key findings Handout 1 Discussion point – how does this compare to factories in your country?

18 Supplementary research Harassment Personal security Health and OSH Breastfeeding Dispute resolution

19 World Bank Survey of Buyers on Labour Standards #1 for deciding to source from a country Cambodia #1 compared to competitors 60% - labour standards equal or more important that price, quality and lead times 86% - moderate to critical importance to consumers in the future ILO monitoring highly credible See fact sheet

20 Post quota See fact sheet Still early days Buyers consolidating Price, quality, lead times and compliance

Training approach

22 Role of unions Training reference group Joint training Offer separate support to unions Tri-partite delivery in some training Mainstream social dialogue

23 All Better Factories Cambodia training is: Usually joint management and union Adult-centered Action-based Conducted in a safe and supportive environment Multi-lingual (depending on target group)

24 Different levels Modular training Single issues Induction training Factory based training

25 Modular 20 factories 7 modules (Globalization, Workplace Cooperation, Quality, OSH, Productivity, HR and continuous improvement) PICC Factory action plans 2 plus one training Document

26 Outcomes of trial Case Study Currently tracking indicators

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32 Single issues Modules offered separately Working time Induction training skills First aid Sexual harassment

33 Kit for HR managers 15 minute video Comic books Training kit Train HR managers

34 Factory Based Training Targeted to young women with low literacy Soap opera style Supported by comic books Tri-partite delivery Show on TV

35 Discussion point Positives and negatives of joint management/union training Does training mean changed behavior? Pairs and report back

Resources Making them available

37 Guide to the labour law

38 Website

39 Good Practice Sheet

40 Newsletter

41 OSH Manual

42 Industry Post MFA Strategy Market niche of good labour standards Reduce corruption Trade facilitation Improve business environment Improve quality and productivity Improve skill levels Increase Khmer management expertise Labour standards is not enough

43 Project strategy Refocusing to providing info to international buyers to inform sourcing decisions Increased emphasis on remediation Reducing duplication of monitoring Building business case Self sufficient national organization by 2009

44 Information Management System presentation

45 Agreed Sustainability Strategy Current transition handover 2010

Lessons Learnt Engaging with CSR

47 Industry… What matters is: Price Quality Lead times Compliance with labour standards Innovation and whole service

48 Context Improving working conditions key to pro-poor development CSR and monitoring will grow Monitoring is not enough Must support freedom to organize and collectively bargain

49 Buyers Engagement of buyers is critical Not all buyers are the same Important leverage point Quality of buyer audits and engagement varies Risks involved

50 Progam design Independent, credible and transparent Strong government and buyer support Use local staff Mainstream social dialogue Incentives and enforcement National or geographical approach Tri-partite approach Reduce duplication of monitoring Engage with buyers and other stakeholders Emphasis on training and improvement Consider language

51 Challenges Claiming too much Monitor up to the factory gate Corruption Good governance and rule of law Lack of tolerance of opposition Freedom of press Union corruption and division

52 ….it is not a panacea