Industrial Shutdown in Bavet Threatens Orders

Two special economic zones (SEZs) in Bavet City remained shuttered on Wednesday on the orders of the Svay Rieng provincial government, according to an administrator at one of the SEZs, who said that financial losses would skyrocket if the workers did not return to their stations by Monday.

Rex Lee, an administrative manager at the Manhattan SEZ —which along with nearby Tai Seng SEZ has been largely paralyzed by strikes and riots for the past week—said the industrial shutdown had the potential to cripple Cambodia’s $6 billion garment industry.

“If this action of closing the factories gets the workers back on Friday, or maybe Monday, we will see this as a good action,” Mr. Lee said.

“If not, international buyers will become afraid that this type of [industrial] action could happen again, and they will stop giving their orders to Cambodian factories.”

Home to 47 factories employing some 34,000 workers, the Manhattan and Tai Seng SEZs have been the scene of sporadic protests that have seen at least four workers arrested since December 16. According to Mr. Lee, the factories will remain closed today, against the wishes of factory owners.

“The order came from the provincial government. They want to see everyone calm down,” he said. Factory managers, he added, “are very angry. They could lose everything.”

Mr. Lee said that with an average monthly profit of $50 million, factories inside the Manhattan SEZ stood to lose a combined $2 million a day. He said he had received no reports of canceled orders as yet, however.

Mao Kosal, operations manager at Tai Seng, declined to comment on potential losses, saying only that from his point of view, workers were welcome to carry out their jobs as normal.

“Our zones did not have any plan to let them take those days off. We always welcome them to work normally any time during operating hours,” he said.

Svay Rieng provincial authorities could not be reached on Wednesday.

Chheng Choan, head of the Independent Labor Union of Cambodia, which claims about 2,000 members in the Manhattan SEZ, also said the shutdown had come from the provincial level and said that, as such, all workers should be paid for the days off.

“This morning, the workers left their homes and went to work, but they were blocked by authorities from work,” he said. “So, the [employers] have to pay all wages and benefits for the workers.”

David Lee, a manager at the San Fong International factory in Manhattan, said on Wednesday that he had already incurred upward of $1.2 million in losses during the past week’s industrial strife—and that those losses were set to spike.

“Our major customer informed us that they will shift jobs to another factory in China,” he said, declining to name the buyer. “Old orders, they continue. New orders, they erase.”

Mr. Lee said discussions regarding whether to pay salaries for the period of disruption were ongoing.            The Garment Manufacturers Association in Cambodia (GMAC), however, was far more decisive on the topic.

“Our position is simple: Apply Article 332 of the Cambodian Labor Law—no work, no pay,” said Kaing Monika, GMAC’s deputy secretary-general.

“We are not happy with the government’s measure to shut down but it’s the best choice right now.”

Mr. Monika, whose organization represents all of the country’s 600-plus exporting garment and footwear factories, said it was irrelevant that the shutdown was ordered by the provincial government.

“Yes, but do you know who is to blame? Most workers come to work, and they want to work, but the extremists go around throwing rocks at factories,” he said, referring to groups of workers who have rampaged through the industrial compounds inciting more workers to strike.

“They should be responsible for lost wages,” he said.

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