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Organizational Change
Protest Prompts 8 Major Fashion Retailers to Support Wage Increase for Cambodian Workers

Thousands of workers took to the streets of Phnom Penh, in Cambodia, last week to protest for a near-doubling of the minimum wage for retailer workers there to US$177 (£110) a month. It seems their calls for fairer pay have sparked a response from the fashion industry, as eight leading retailers have now pledged to pay more for clothes produced there, according to the Guardian.

The leading labels, including Britain’s Primark, Inditex (owner of Zara), and H&M (one of Cambodia’s biggest buyers) have written to the Cambodian deputy prime minister and the chairman of the local Garment Manufacturers Association to announce they were "ready to factor higher wages" into their pricing.

Being joined by other popular brands such as Next, New Look, C&A and N Brown Group, the Guardian says the retailers called for “more cooperation with trade unions in the workplace” in their letter.

The move was primarily triggered by protests by Cambodian workers in their capital last Wednesday. Thousands of clothing workers, dressed in orange t-shirts, demonstrated outside their factories during lunch hour. They are demanding a significant rise in the minimum wage, which currently stands at £62 (~$101) a month.

The resulting letter from the retailers stated: "Our purchasing practices will enable the payment of a fair living wage and increased wages will be reflected in our prices, taking also into account productivity and efficiency gains and the development of the skills of workers, carried out in cooperation with unions at workplace level."

The letter was welcomed and described as “unparalleled” by Jyrki Raina, general secretary of IndustriALL Global Union, the union federation that organized the demonstration.

"The brands state their willingness to incorporate higher wages by paying more for garments. Factory owners have no excuse not to pay their workers more,” Raina said. “What's more, the Cambodian government should raise the minimum wage significantly. The letter also shows the brands recognize that unions are key to securing better worker rights, a fair living wage and a stable market."

Social responsibility commitments, including wages and working conditions for local workers, have become a forefront issue for the fashion industry in the past year following the collapse of the Rana Plaza factory in Bangladesh last April. Many of the area’s biggest buyers, including H&M and Walmart, were subsequently linked with the factory, whose collapse killed 1,130 workers and injured many more.

Many of the big retailers in the West have been accused of hiding behind middlemen to get their goods produced in the cheapest way possible with little regard for the workers’ pay and working conditions through their supply chains. Wages for many workers in developing countries are as low as $5 a day, with the majority of the goods being exported and sold at a premium in retail chains in the West.

The clothing manufacturing sector has become an essential but challenging issue for the Cambodian government. On one hand it has been a blessing for the country’s climbing economy, providing more than half-a-million jobs and generating roughly $5bn per year. On the other hand, persistent protests from trade and workers’ unions are continuing to challenge the government’s willpower.

Ath Thorn, president of the Cambodian clothing workers union, welcomed the letter from the retailers but has called for them to follow through on their pledge with action, and engage more directly with workers on the factory floor.

"We know from past experience that just a letter isn't strong enough — the brands must take additional action immediately to ensure a higher wage for Cambodian workers. To achieve long-term stability and decent wages, we need the ones who make the biggest profits to be accountable,” he said.

This is just one of a number of recent moves by fashion giants such as H&M in an attempt to create more responsible and fairer supply chains. Earlier this month, H&M announced it was teaming up with Swedfund to improve both social and environmental standards in the Ethiopian textile chain. And last week the apparel company signed a unique agreement with ILO, under which the partners will address industrial relations, wages, capacity-building for social partners and skills development throughout its supply chain.