GMAC paid for gov’t officials' perks

Garment workers protest at Canadia Park in Veng Sreng in September. Hong Menea

GMAC paid for gov’t officials' perks

Phnom Penh Post | 18 October 2014

The Garment Manufacturers Association in Cambodia is funding perks for senior government officials and has donated thousands of dollars to government ministries, financial records reveal. 

Documents obtained by Post Weekend have raised questions over how close a relationship the factory representative, which is in the process of negotiating a minimum wage for garment workers, has with the government. 

Those benefiting from the factory representatives’ contributions - and GMAC itself - have brushed off any wrongdoing, with one saying he believed his perks were part of corporate social responsibility duties. 

GMAC’s August financial statements detail a $350 renewal payment at the Cambodian Country Club for Sok Sopheak, director-general for International Trade at the Ministry of Commerce. 

The exclusive club, owned by GMAC chairman Van Sou Ieng, boasts a resort hotel, two restaurants and a range of sporting activities – from tennis to fencing and even an equestrian centre. 

Sopheak said yesterday that GMAC had approached him about a membership and had told him it was not a bribe as he was not asked to give anything in return. 

“GMAC just told me it was the corporate social responsibility fund, the sport activity fund,” he said.

“If I join, it is a social event, nothing related to economics or this or that. If you have friends you invite for a coffee, you talk – people have the right to talk,” he said.

Concerned that his paid-up membership could be perceived as a conflict of interest, Sopheak said that since being contacted by Post Weekend he had told GMAC to strike him from their list.

The director-general said that there were many other government officials also signed up to the country club by GMAC, and factory representatives themselves acknowledge that there are at least five. 

The financial statement also shows a cash payment $5,000 to the Ministry of Commerce.

GMAC secretary-general Ken Loo told the Post the money went to help troops stationed in Preah Vihear province along the Thai border.

The donation was made in response to a July 29 letter from Ouk Prachea, Secretary of State at the Ministry of Commerce, sent to okhnas, or powerful businessmen, that are presidents of companies, factories and enterprises.

“It was an official letter soliciting donations, and we do that pretty often – when it is an official request and it is not ‘x’ amount for the ministry,” Loo told Post Weekend.

According to Loo, requests from various government ministries occur regularly and GMAC will often oblige, as long as they are official and it is not a direct contribution to the Ministry. 

This is evidenced by GMAC’s $1,000 donation of T-shirts, highlighted in their August financials, to the Council for the Development of Cambodia, which Loo says was also made upon request. 

“We have never supported a request for any particular political party, because we are not supporting any particular political party per se, but if it comes from the ministry as part of their activities and it shouldn’t be partisan, it might end up being partisan so to speak, but it is not for us to interfere,” he said.

Last year GMAC accompanied the Ministry of Labour and Hun Sen’s Bodyguard Unit on two separate trips to Preah Vihear with a donation that included noodles and uniforms to government soldiers, which is evidence Loo said that his organisation is not favouring any particular ministry. 

Loo said just like GMAC’s contributions to charities including the Red Cross and CARE, the organisation’s contributions were made to a government in need. 

He denied that GMAC donations created an unfair advantage over those who didn’t donate, or that his organisation was swept up in Cambodia’s patronage system.

“A donation is a donation; someone who doesn’t give money, is there going to be punishment? How can they punish?” he asked.

The request for donations “happens all the time from all ministries - bar none,” he said.

Pech Pisey, director of programs for Transparency International, said it was common practice in Cambodia for ministries to request donations from the private sector to pass on to the public in the guise of a gift to the ministry.

It was not likely that the ministry donations or the gift given to ministers were illegal, Pisey said, but there were moral obligations that needed to be met and greater transparency would ensure greater trust.

“Any kind of doubt that the public concern, any kind of money exchanged between the private sector and the government, the relevant authorities should look into that,” he said.

Those working closer to the current minimum wage negotiations were more critical of GMAC’s close government ties. 

A worker rides a bike outside a garment factory. Will Baxter

The Labour Advisory Committee, which is made up of seven factory representatives, seven government representatives and seven union representatives, is tasked with defining the next raise, with an announcement due next month. Each collective body is to remain independent of one another.

Donations and gift giving to the government is an open secret, said Joel Preston, a consultant for the Community Legal Education Center, whose organisation runs labour support programs, but serve as evidence of a lopsided process.

“It’s very well known that the tripartite process [in the wage negotiations] really only has two sides, and these documents indicate what one of those two sides is,” he said. “The scales are tipped hugely in that side’s favour.”

GMAC secretary-general Loo said that wage negotiations were not influenced by GMAC donations, particularly as those highlighted were for the Ministry of Commerce and not the Ministry of Labour. 

“It was not part of our considerations because there are other donations that come in all the time,” he said.

“The [MoC] donation is not linked to anything; I really don’t see anything wrong with that.”

As for the gym membership, it was part of a payment plan that makes it cheaper for people to join GMAC chairman Van Sou Ieng’s country club, Loo explained, without going into detail. “We just renew it and it is cheaper,” he said.

The news came as a surprise yesterday to Minister of Commerce Sun Chanthol. 

“I’m not aware of the request to GMAC or the payment of membership to the staff of MoC,” Chanthol said via email. 

The Minister directed Post Weekend to his cabinet director who was unavailable for comment.