The Role of the Government Labor Inspectorate

Labor inspections, corrective action, and accountability are critical to upholding worker rights in Cambodia’s garment factories. In 2014, the Cambodian Labor Ministry took some positive steps to revamp its monitoring, creating integrated labor inspectorate teams to inspect factories. These teams, ministry officials told Human Rights Watch, would work closely with the ILO and receive training to conduct thorough inspections. Labor Ministry officials also have responded with joint inspections with BFC of 10 low-compliance factories identified in BFC’s Transparency Database.[344]

These steps are encouraging and overdue. The creation of integrated labor inspection teams was recommended in 2004 as part of the National Strategy on Labour Dispute Prevention and Settlement in Cambodia.[345]

But the Labor Ministry’s efforts continue to be weak in several critical respects—tackling government corruption and collusion with garment factory management, lack of transparency about its inspections and outcomes, and poor accountability. 

Corruption and Collusion

Allegations of corruption and collusion between government inspectors and factory management have reduced the credibility of the labor inspectorate system and local authorities.

Perceptions of public sector corruption in Cambodia are high. Transparency International’s 2014 Corruption Perceptions Index ranked Cambodia behind North Korea, Afghanistan, and Burma in the Asia-Pacific region, at 156 of the 175 countries surveyed.[346]  It also found that Cambodia was the most corrupt among top exporters of clothing.[347] The Asian Development Bank found that corruption was one of the key problems hampering Cambodia’s governance systems.[348] Most recently, an English-language Cambodian newspaper reported that GMAC made donations to government funds and the Ministry of Commerce, raising questions about the GMAC-government nexus and lack of transparency around the extent of such donations.[349]

Human Rights Watch gathered numerous accounts showing that Cambodia’s labor inspectorate system has been seriously undermined by corruption and abuse of power. Two former labor inspectors independently told Human Rights Watch about the “envelope system” where factory managers sought favorable reports by thrusting an envelope with money to inspectors when they visited factories.[350] The two long-time inspectors said they had routinely been offered bribes. One said,

We went as a group—three or four people. Sometimes even five people went. No one in my group demanded money in front of me. But they were called out separately [by factory managers] …. The factory used to give us US$100 or 200. Whatever amount they gave us in the envelope we were expected to take it and give it to our boss [supervisor]. He would split it among us. We would consult with the boss and see what we could write in the report.[351]

Because Human Rights Watch had very limited access to labor inspection reports,[352] it was difficult to independently determine how corruption or other process-related concerns actually influenced such reports. However, the labor inspectorate report for factory 36, which Human Rights Watch was provided, did not note any labor rights violations.[353] To the contrary, workers at the factory told Human Rights Watch of repeated use of three-month fixed-duration contracts, forced and excessive overtime without the ability to take breaks, workers being forced to cut their lunch breaks short to work and meet production targets, denial of sick leave, and a disproportionate deduction of the monthly attendance bonus when workers were granted sick leave.[354]

Workers from several factories gave other examples of corruption. For example, the workers at one large factory that subcontracted work to smaller factories told us that a translator employed at the factory used her personal connections as the wife of a local district police chief to silence worker concerns from subcontractor factories.[355] A worker from a subcontractor factory with poor working conditions told Human Rights Watch that she had seen the local police come to the factory and take money from the managers: “I used to sit right in front of the owner’s table and could see that he gave the police money.”[356] Even though the police do not have a legally mandated role to monitor working conditions in factories, they remain influential at the local level.

In December 2014, Labor Ministry officials responded to a list of concerns Human Rights Watch had sent to the ministry regarding the Cambodian labor inspection system. They wrote that problems that hampered labor inspection include limited human resources and “cooperation from factory, enterprise and location owners that is not yet good,” and noted that “a clear-cut list of questions to evaluate work conditions (checklist) is not yet available for officials going down to do inspections.”[357]  Ministry officials acknowledged that “[t]he result is that the quality and effectiveness of on-the-spot work inspection and resolution of labor disputes remains limited.”[358]

With a view to improving the quality of inspections, labor officials said they created a single (integrated) inspection mechanism and also collaborated with BFC to identify questions for a consolidated checklist. However, officials did not specify how they proposed to address the problems of corruption, lack of transparency around the enforcement actions they initiate, and lack of timely Labor Law enforcement measures.

Lack of Transparency and Accountability

The labor inspectorate has damaged its credibility through lack of transparency about its functions, the remedial steps it has ordered, and the measures it has taken against factories to compel compliance. The little government data (from 2009 to 2013) that was shared with Human Rights Watch shows that the government has failed to hold errant factories accountable for labor rights violations and take enforcement actions as outlined in the Labor Law in those years.

The law empowers labor inspectors to conduct unannounced factory inspections, write reports, provide technical advice to ensure labor law compliance, give an opportunity to factories to take remedial measures within specified time periods, and impose penalties on factories that refuse to take such measures.[359] Labor Law chapter XVI on “Penalties” sets out a detailed scheme of fines, imprisonment, or both for factories that do not comply with the Labor Law.[360]

The labor inspectorate perpetuates an opaque system by insisting on blanket confidentiality without any legal basis. For example, in March 2014, BFC made public the names of 10 low-compliance factories through its Transparency Database.[361]  Each of these factories had received at least three BFC assessments before their names were published. In theory, these factories should have also been subject to multiple government labor inspections and enforcement actions. Labor Ministry officials refused to release information about the outcome of these labor inspections, however, incorrectly citing article 348 of the Labor Law, which protects sources of complaints but not the outcome of labor inspections.[362]

While unwilling to share any copies of labor inspection reports, Labor Ministry officials admitted that their inspectorate reports had found similar problems in the factories named in the BFC Transparency Database.  However, they asserted that it was wrong for the ministry to be perceived as having done little, contending that the ministry lacked a platform for disseminating information.[363] 

The government is in the process of creating a website for the Labor Ministry—but the website alone will not improve accountability and transparency. While this will permit the dissemination of more information, it is unclear how much will actually be disclosed. A senior Labor Ministry official told Human Rights Watch:

We don’t want to become BFC. If we publicize the government labor inspectorate’s reports, we will have two different sets of reports [BFC report and government labor inspector’s report] and don’t want to challenge each other’s reports.[364] 

The Labor Ministry’s own data suggests a very low number of penalties given the size of the garment industry and the types of abuses that Human Rights Watch, unions, BFC, and other civil society groups have documented. For example, between 2009and December 2013, labor authorities imposed fines on only 10 factories.[365] In 2011 the ministry collected 4,989,600 riels ($1247) in fines but did not collect any fines in 2012 and 2013.[366] In the same period, they said they had initiated court proceedings against seven factories but did not furnish additional information.[367]

Labor ministry officials also said that in 2013 labor inspectors conducted 2,214 inspections in 960 businesses and found violations in 295 of them.[368] Of these, a “majority… were garment and footwear factories.”[369] In April 2014, Labor Ministry officials were unable to provide an overview of enforcement measures taken against the 295 factories and enterprises that committed violations.[370]  In December 2014, however, Labor Ministry officials said that “in the first 11 months of 2014, a total of 1686 inspections were carried out… and that arrangements were made to fine 25 factories and enterprises found to not be in compliance with the Labor Law.”[371] In February 2015, Khmer-language media reported that in 2014 the labor inspectorate had taken action against 50 factories without specifying details. [372]