Speech

Remarks by Ambassador Joseph A. Mussomeli
ILO Industrial Relations Conference

Phnom Penh
January 29, 2008

Your Excellency, ladies and gentleman - good morning. I am delighted to be here today to participate in the opening of the third annual ILO National Industrial Relations Conference.  The organizers have done a terrific job planning an event addressing the critical issues facing Cambodia today – collective bargaining and representativity.

This is my third year to speak at this conference. I’m not sure if I should be flattered that you asked me to return, or if it just means that you could not find anyone qualified to speak.  By now you all should be tired of hearing me rant and preach.  In any case, I am grateful for the invitation to speak today because industrial relations, particularly in the garment sector, are very important to the future of Cambodia.  For this reason, the United States has been the primary supporter in this area for many years.  Through the U.S. Department of Labor and USAID, we have supported all sides of labor-management relations through our financial and moral support of Better Factories, the Arbitration Council, the American Center for International Labor Solidarity (ACILS), and the Garment Industry Productivity Center (GIPC).

Since the last conference, you have made some admirable, if still not sufficient, progress. There were 10% fewer strikes and 14% fewer work days lost compared to the year before.  The government has begun to strengthen its process for declaring unions most representative- a prerequisite for Collective Bargaining Agreements (CBAs).

But what is most reassuring and what suggests that the future will be far better than the present is the changing attitudes of all of you.  Many union leaders and members have begun to understand that the current situation serves neither the interests of the workers nor the industry.  As unions start to understand the benefits, they are beginning to improve respect for all aspects of the labor law and the CBA process.  Similarly, garment industry employers have begun to indicate greater willingness to engage in collective bargaining with a view to reducing strikes and increasing productivity.  Employers also recently started to talk to educators about workforce development and some began to use work study techniques and to help workers develop skills that will improve productivity and quality. This evolution has resulted in productivity gains in some factories, as well as, several high quality CBAs involving unions such as C.CAWDU (“sikadu”) and CLUF (“C L U F”).  Some CBAs include clauses that prohibit strikes in exchange for binding arbitration and prevent minority unions from creating damaging disruptions. These are crucial first steps.

The tourism sector, in particular, has continued to demonstrate outstanding labor-management maturity and deserves applause. The Cambodian Tourism Service Workers Federation has assumed responsibility for its future.  In total, the federation achieved a record 14 CBAs by the end of 2007.  T tourism industry experienced a record number of tourists and new tourism investors, in large part, as a result of these positive developments. Tourists new to Cambodia did not read about tourism-related labor unrest in the media when they planned their vacations last year.  And new investors perceived less risk when they chose to build new hotels and establish new service companies.  As a result, many Cambodians found new tourism-related jobs, the industry contributed a greater share to Cambodia’s economic growth, and the government received precious foreign investment and tax revenue to use for the roads and schools that are so desperately needed.

Now, in 2008, it is time for the garments sector unions and employers to face the seriousness of the current circumstances.  In fact, you have no choice.  There is too much at stake -- not only for the future of this industry, but also for the nation’s largest source of income and Cambodia’s first step toward industrialization.  While the specific interests of all stakeholders are different, the means to achieve them is the same.  For the government it may be peace and stability; for the unions it may be employment security and wages; and for employers it may be profitability.

All of these depend on your decisions about how you will manage this rice bowl that you are now sharing.  More importantly, for the sake of your children, the future size of the rice bowl that you will pass on to them is now at risk.  If you make the right decisions, the outcomes are more likely to be similar to that of the tourism sector.  And Cambodia would then likely follow the same path as other newly industrialized countries.  Like those countries, Cambodia would probably march forward along the typical path of development, using garments as a base from which to progress and diversify into a more sustainable and wealthy economy.  If you use good judgment, new investors will be convinced that the government, unions and employers have collaborated to create a favorable industrial relations environment and they will increasingly invest more.  Then, Cambodia’s workforce will find new opportunities in higher-paying manufacturing and information technology jobs.  As the investors come, they will bring a variety of new opportunities and your children will have employment choices that you never dreamed of.

However, if unions, employers and the government don’t embrace Most Representative Status (MRS), CBAs, and much more collaboration, the important work of increasing productivity, national competitiveness, and economic diversification will continue to be neglected, while everyone deals with short-sighted illegal strikes.  In the future, people will look back at Cambodia’s current history, and it will be a story of a lost opportunity.

Unfortunately, time is running out. While we discuss these industrial-relations issues, Cambodia faces a new global competitive paradigm, one that enables whole industries to relocate if Cambodia can no longer provide a productive environment for garment manufacturing.  Meanwhile, Vietnam has entered the WTO and has become Cambodia’s largest competitor, while the safeguards on China are expiring just 11 months from now. Cambodia has just 336 days to prove to garment buyers and factory owners that Cambodia’s labor-management relations are strong and stable.

My advice to you is to act fast; take advantage of this growing momentum to establish most representative unions within each factory, and as quickly as you can reach CBAs. These agreements will signal to buyers and foreign investors that Cambodia is serious and competitive, and wants to keep the garment jobs it has.  You have made some progress, but there are jobs at risk and the image of Cambodia as a good place to invest is at stake.  I urge you to act quickly!  Seek win-win solutions, if not for you, do it for your children and your country.

Without question, Cambodia in 2008 stands at a crossroads in its modern history that future generations will judge. Last year I quoted Eleanor Roosevelt, one of America’s biggest supporters in the labor movement.  At the risk of being repetitive, I would like to quote her again because her wisdom is even more relevant today: “In the long run, we share our lives, and we share ourselves. And the choices we make are ultimately our own responsibility.”

Thank you.