Cloning Cambodia
I just spent an interesting week in New York, absorbing the myriad speakers, sessions, and workshops at the annual Business for Social Responsibility conference. While there were several highlights to the conference, one session in particular stands out in my mind.
The International Labor Organization (ILO) and the International Finance Corporation (IFC) spoke about their partnership in rolling out the ILO’s Better Factories program into three new countries after a successful pilot in Cambodia. The Better Factories Cambodia program was an evolution of the ILO monitoring project mandated by the labor standards provision of the US-Cambodia bilateral trade agreement. Given that, it should come as no surprise that Jordan is one of the new target countries, given its current struggle to demonstrate compliance with the labor standards clause of the US-Jordan trade agreement following a highly public expose on the maltreatment of foreign workers in the export processing zones. Lesotho and Vietnam are the other two target countries.
When asked to describe the learnings from Cambodia, Ros Harvey, head of the Geneva-based ILO Better Factories program, responded with three: (1) place a bigger focus on remediation, starting from the time of recruitment and the skill levels of the monitors, to ensure greater facilitation; (2) talk about the sustainability of the program early on; and (3) champion the link between improved working conditions and productivity. What did they get right in Cambodia? The interface between the ILO’s tripartite constituents (workers, employers, government) and the international buyers.
Interestingly, a representative from the World Bank shared a few comments about an experience with El Salvador and how that country did not want to follow the Cambodia model during an industry crisis at the end of 2004. Factories were closing every week and the World Bank was looking for a way to help sustain some of the enterprises. Perhaps El Salvador had considered what Ms. Harvey ultimately told Cambodian officials, “Labor standards alone won’t save you. You must be competitive on price, delivery times, and quality as well.” The World Bank ended up using a factory-based model that focused on productivity indicators.
The Better Factories program will not remain limited to the apparel industry, according to Ms. Harvey. While Lesotho will be the first stop in Africa, there will a continued focus on that continent in the future, to include agribusiness and the supply chains of multi-national corporations, including processing plants and plantations. Ms. Harvey also emphasized that, despite the current trend to move beyond monitoring of suppliers, “monitoring is a valuable public education exercise” and an essential part of any program.
