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Improving working conditions in garments in the Mekong A roundtable – Phnom Penh, Thursday March 26, 2015 Asia’s vast pool of workers has helped the region become a hub for global value chains, reliant on labour intensive production. Garments illustrate the type of low-‐skilled labour production that traditionally emerges in the early stages of an export-‐oriented strategy. Asian garment factories have become magnets for the agricultural labour force leaving rural areas and offering jobs to millions of workers. The trend has moved from East Asia westwards tapping into new labour markets such as Bangladesh and the Mekong, where garments have provided job opportunities for many, especially women. In Bangladesh, five million people—85% of them are women-‐-‐work in the ready-‐made garment sector, representing 13% of the country’s Gross Domestic Product (GDP) and more than 75% of the country’s total exports. In the Mekong, the majority of the two million garment Vietnamese workers are women under 25 years old, from rural areas of the Mekong Delta, Red River Delta, and north-‐central Vietnam. In Cambodia, the garment industry represents approximately 84% of total export value, and employs about half a million workers in more than 300 factories. Burma represents a new addition to the region’s value chain: Burmese garment exports earned more than $1.1 billion last year (and will reach $1.5 billion in 2014) due to the restoration of the Generalized System of Preferences trading privileges by the European Union, as Burma continues its opening to a democratic transition. This increase in activity in garments has also witnessed a growing concern over labour rights and working conditions. This concern has ignited the interest on labour regulations across the region. Labour regulations remain central to the policy discourse. However, there are diametrically opposite perspectives on how to deal with labour. On the one hand are those who reject regulations because they introduce distortions of incentives to enterprises (affecting efficiency) and create a divide between insiders, protected by the regulations, and outsiders, part of the informal labour force. On the other hand, are those who support regulations because they can correct market failure (for example, when there is high degree of employer power) and enhance equity through better working conditions. The discourse traverses the whole of gamut of labor regulations, and minimum wage laws in particular as a very sensitive area of debate. Both views in effect assume full enforcement of the regulation, which is indeed far from empirical reality. Policy decisions on enforcement thus become an indispensable part of the agenda. But focusing solely on government enforcement remains a one-‐sided solution. At the same time and away from governments, the international private sector is directly trying to improve labour conditions for workers in factories. The private sector has become more aware of the social agenda. For instance, the international private sector, represented by the large international brands in garments, has started to support improvements in working conditions that would also improve productivity. A plethora of programs, usually run by international non-‐government organizations, aim at improving safety standards, providing training to workers, and even adding new services for workers (such as health or microfinance). Some argue that the focus of these programs still neglect addressing workers’ core concerns about wages or overall satisfaction at work. As the private sector continues engaged in promotion a social agenda, it is timely to take stock of the research on labour regulations and value chains, and to bring the perspectives from multiple stakeholders on working conditions. The proposed exercise will assess the efforts up to now and map future lines of action-‐oriented research. The main objective of the activity is to promote the debate on the impact of labour standards (minimum wage, working conditions, safety, health or environmental) compliance in global supply chains on businesses and workers, looking at the “business case” as well as at the “development case” for compliance. The activities build on existing Asian experiences, relevant to the Mekong economies (Burma, Cambodia and Vietnam), and goes a step further than mere consolidation or dissemination of knowledge. Specifically, the roundtable will bring together researchers, policymakers, private sector and civil society representatives to: -‐ discuss analysis of labour regulation compliance in global supply chains to draw lessons for success to help bridge divided views about the use of regulations in the region (synthesis); -‐ engage in debate concerning labour standards compliance and broader social, human and economic development objectives, bringing into the conversation the private sector, workers and NGOs (multi-‐stakeholder approach); and -‐ identify areas of future research on labour standards/regulations through regional exchange among existing and new institutions, especially think tanks or NGOs interested in this type of applied research and collaboration with the private sector, seeking to embed research into current or future activities (research niche) Proposed agenda -‐ Thursday 26 March 2015 /Venue: Intercontinental Hotel, Phnom Penh 8:30-‐
9am 9am 9:15am 10:30am 10:45-‐
12:30 12:30 1:30-‐
4:30 3:30-‐
3:45 3:45-‐
5pm Registration / Coffee Welcome remarks by CDRI executive director (Chhem Rethy) and IDRC-‐CRDI (Anindya Chatterjee) Panel “What we know on wages and other working conditions for garments”—This panel takes stock of what we know about wages and regulations Moderator: Srinivas Madhur, Research Director, CDRI Presentation 1: “What do we know about designing labour market regulations in the Mekong? Lessons from developing countries” (Prof. Gordon Betcherman, University of Ottawa, Canada and Institute for the Study of Labour-‐IZA, Germany). Presentation 2: “Global Wage Trends for Apparel Workers” (Greg Randolph, JustJobs Network, Washington, D.C. / Delhi) Presentation 3: “Better Working Conditions” (Arianna Rossi, ILO, Geneva) Open discussion Break Panel : “Success examples on how to improve working conditions” – The panel will examine three different angles for improvement of working conditions in garments. Moderator: Edgard Rodriguez, IDRC (Ottawa) Presentation 1: “Better factories, better work: Lessons for working conditions in Cambodia” (Camila Roman, Phnom Penh, BFC/ILO) Presentation 2: “Asian Floor wage” (Ashim Roy, Asian Floor Wage/Clean Clothes Campaign, India) Presentation 3: “Garment value chains after Rana Plaza: Lessons from Bangladesh” (Dr. Khondakher Golam, Centre for Policy Dialogue-‐CPD Dhaka) Presentation 4: “Ending Sweatshops: Examples of making global value chains accountable” (Dr. Dev Nathan, Institute for Human Development and Duke University) Lunch break Panel – Future ideas “What is next” – Short research ideas about improving workers’ conditions • “Laos: Garment Skills Development Centre” (Association of the Lao Garment Industry) • “Mekong: Small enterprise development” (Mekong Institute) • “Myanmar: Responsible sourcing working group” (BSR, Hong Kong) • “Mekong: A research initiative on youth and working conditions“ (CDRI, Cambodia) Break Open discussion on future ideas: “What is next?”