Strikes spur Target roll-back

Customers purchase merchandise at a Target store in Chicago. The retail giant has cut orders from Cambodia, according to the commerce minister. BLOOMBERG

Strikes spur Target roll-back

Phnom Penh Post | 26 June 2014

 

American retail giant Target is another major brand scaling back its sourcing from Cambodia in response to garment industry turmoil here, Minister of Commerce Sun Chanthol revealed during a trade mission to the US.

In a wide-ranging speech on Cambodia’s economy at the Center for Strategic and International Studies in Washington, DC, on Monday, the commerce minister said Target had joined clothing brand Levi Strauss in reducing orders following a deadly apparel worker strike in early January.

“Levi Strauss reduced their orders from Cambodia. Target also reduced their orders from Cambodia, because they are afraid of the labour unrest and so on,” said Chanthol, who attends government meetings with major brands to address industry concerns.

At the nationwide strike on January 2 and 3 calling for the rise of the garment industry’s minimum wage to $160, five people were killed when security forces opened fire on protesters with live ammunition.

“But so far, since the incident in January, it’s practically calm, safe, no issues, [though it is] regrettable that the five workers were killed during the violent demonstration,” Chanthol added.

“It [the violence], is uncalled for, from both sides.”

Chanthol said the government is working with the International Labour Organization and the World Bank to calculate the appropriate minimum wage for the sector – something which would help defuse the turmoil in the industry.

Neither Levi Strauss nor Target responded to requests for comment as of press time.

Following a meeting with government officials and brands including Puma, H&M, Gap and Levi Strauss on May 26, IndustriALL Global Union general secretary Jyrki Raina said that one of the country’s major brands had already cut orders from factories in the Kingdom by 50 per cent.

Chanthol’s comments on Monday support previous media reports suggesting that company is Levi Strauss.

Since the January protest, overtime has slowed across the industry due to buyers decreasing orders in Cambodia, according to Garment Manufacturers Association in Cambodia secretary-general Ken Loo.

“I feel that this scale-back is not a problem yet,” Loo said. “I think they [buyers] will want to continue to source from Cambodia if we can provide them with stability, so that is what we have been trying to do.”

Loo said that Target was not among the biggest buyers in Cambodia but was still a significant contributor to the industry.

Ath Thorn, president of the Coalition of Cambodian Apparel Workers’ Democratic Union, said that it is the government’s lack of response to buyers’ requests for fairer treatment of workers that is resulting in a loss of business.

“The issues have not been resolved, despite the 23 detained demonstrators being released; the other remaining issues in the industry have not been resolved, so they [factories] have started to reduce their production,” Thorn said.

“Now, they [buyers] have set a deadline for the government from now on until October. If the remaining issues have not been ironed out, they will stop their production here.”