Better Factories Cambodia

Better Factories Cambodia (BFC) plays an important role in monitoring working conditions in export-oriented factories in Cambodia. It produces factory reports and provides technical guidance and support for remediation of labor rights violations when factories pay for its advisory services.[373]

Workers and labor rights activists who acknowledge BFC’s contributions nonetheless have raised concerns about its factory monitoring methods, coverage of factories, and transparency. Given that BFC’s role is limited to monitoring and advisory services without enforcement powers, labor rights activists have also raised concerns about BFC’s lack of transparency about the brands whose factories it monitors, saying its failure to reveal brand names weakens pressure for brands to be accountable for labor law compliance in their supply chains.

Worker Concerns Regarding BFC Factory Monitoring

Workers we spoke with had multiple concerns about BFC’s monitoring, especially about worker ability to participate effectively in on-site monitoring. Irrespective of who was visiting—whether brand representatives, other external monitors, government officials, or BFC monitors—workers complained that they were coached by factory management and could not have a frank discussion about their working conditions.

Many workers emphasized the need for a stronger mechanism for reporting concerns about factory working conditions to BFC monitors off site, without fear of surveillance by management or retaliation. Union representatives and labor rights activists also complained that BFC’s detailed factory inspection reports were available to managers and brands but were inaccessible to workers.[374] Factory reports are behind a paywall and unions cannot even pay to access them without prior authorization by the concerned factories. However, as part of its Transparency Database, in addition to the list of low-compliance factories, BFC makes public a database of factories assessed against what BFC identified as 21 “critical issues.”[375] 

Coaching and Preparation to Receive “Visitors”

About two hours in advance we were told they were going to come. We were all told that we should not look at the visitors and should not speak to them. We were also warned that the factory would lose business if we told them what happened. And that we will lose our jobs and would also be responsible for other people losing their jobs.
— Chou Samaoun, male worker who participated in a group discussion with a BFC monitor during a monitoring visit to his factory in 2014, all identifying details withheld.

Workers from a number of factories—large and small—repeatedly told Human Rights Watch that managers strongly discouraged any interaction with visitors.[376] When interaction could not be avoided—as with BFC monitors—managers coached or threatened workers ahead of external visits.[377]

Some factory managers made announcements using the public announcement system, sent messages through team leaders, or called workers and warned them that they should not report their working conditions to visitors.[378] Teal Chakriya from factory 12 described how the managers, through group leaders, told workers to say that they work until 4 p.m. with occasional overtime until 7:30 p.m. or 10 p.m. She said,

Most workers are afraid of losing their jobs. We are all on short-term contracts. They will call and threaten group leaders. Once they said they will give $5 if we say good things about the factory. I have seen workers get $5 after they finished a meeting with visitors—I cannot be sure but I think it was BFC—they were Khmer visitors.[379]

Workers also reported the different ways factories prepared to receive “visitors.” These included: telling workers to clean their desks and remove piles of clothes from their sewing machines and hide them, receiving gloves and masks just before visitors arrived; switching on additional lights and fans that were normally switched off to save electricity; providing cups for drinking and refilling the drinking water container; and hiding children under desks with large piles of clothes in front of them or asking children to leave the factory premises.[380]

Three workers from factory 32 described a “light system” by which the factory managers warned them about visitors:

Our factory started using the lights this year. As soon as the security guard finds out there are visitors and tells the factory managers, the long light near the roof will come on….  And the group leaders will start telling all the workers to clean our desks; we have to wear our masks, put on our ID cards, and cannot talk to visitors. Everyone knows this is a signal.[381]

Pung Mom recalled what happened before inspections in her factory:

The factory already knows in advance before visitors come. All the heads of every division will be called and told that visitors will be coming so the entire factory should be organized well. So they start distributing ear plugs so we don’t suffer because of the noise. They will make us tie our hair up, and give us masks and gloves. Before visitors come they will also ask the workers to make sure there is water in the place that is assigned. Normally for every workstation we have three lights—they will only switch on one light. But when visitors come, all the lights will be switched on.[382]

Nov Vanny and Keu Sophorn from factory 18 told Human Rights Watch:

Before ILO comes to check, the factory arranges everything. They reduce the quota for us so there are fewer pieces on our desks. ILO came in the afternoon and we all found out in the morning they were coming. They told us to take all the materials and hide it in the stock room. We are told not to tell them the factory makes us do overtime work for so long. They also tell us that if [we] say anything we will lose business.[383]

Workers from some factories said that BFC’s selection of workers from different factory divisions for group discussions meant they could not speak openly.[384] For example, one union leader who had participated in BFC monitoring discussions said:

BFC invites workers from different divisions and we sit together. These workers are not always known to each other. If a worker doesn’t know another worker—then they will not trust them. So people don’t speak out in the meeting with the BFC team—everyone is scared that someone will leak what we say in the meeting to the management. What will happen to us after that? BFC won’t protect us.[385]

BFC experts told Human Rights Watch that their monitors were aware of factories’ coaching workers. They provided information on procedures aimed at mitigating the impact of coaching on BFC’s monitoring and reporting.[386] These include unannounced inspections over 2 consecutive days and a maximum waiting time of 30 minutes to enter the factory, after which BFC monitors record the delay as effective refusal to allow entry. They report this effective refusal to the Ministry of Commerce and brands sourcing from the factory.[387] Jill Tucker, BFC’s then-chief technical advisor, told Human Rights Watch that BFC was planning to expand its transparency database of 21 critical issues to include factory refusals or delays beyond 30 minutes in admitting monitors.[388] Proposed changes will reflect the indicators being developed by the global Better Work program.[389]

Other measures aimed at mitigating the impact of coaching include monitors’ power to end group discussions where they suspect workers have been coached and are afraid to share information freely, and to convene fresh groups of workers.[390] Worker reluctance to speak freely can also be recorded in the factory monitoring report.[391]

BFC monitors also supplement their onsite monitoring with discussions with workers outside factory premises during lunch hour. Because it is impossible to get accurate information on all of BFC’s indicators during a one-hour lunch break, BFC monitors typically focus on a few issues where offsite information would most help them, such as forced and excessive overtime.[392] Tucker also cited at least one recent example where workers contacted BFC monitors and reported anti-union practices, which BFC monitors followed-up through home visits and then negotiated with the factory to have the workers reinstated.[393]

Tucker said that any monitoring—not just BFC monitoring—is imperfect and should be supplemented by other mechanisms. She reiterated that compiling and following up on individual grievances from over a half a million workers is beyond the mandate and capacity of BFC.[394]  However, in order to ensure better and more systemic collection of information, BFC, consistent with the revisions being introduced by the global Better Work program, was improving its monitoring  assessment tool to examine factory-level grievance redress mechanisms not just on paper, but in practice.[395]

Because unions and workers do not have access to factory monitoring reports, they have no way of knowing whether their concerns were being accurately recorded and reflected in the reports. Combined with the coaching, this reduces worker confidence in BFC monitoring and reporting. Jason Judd, the former technical specialist with BFC, acknowledged that BFC could take more measures to improve worker confidence:

Workers want to tell their stories and BFC monitors do a very good job on the whole of capturing them in reports. The problem is that workers do not have access to the factory reports and don’t know that their stories have made it into the report. Others expect, despite caveats from monitors, that BFC has the power to force improvements in their factories. Taken together, this can undermine confidence.[396]

Human Rights Watch was unable to obtain BFC reports to independently verify whether BFC monitors accurately identified and reflected coaching in the factories where workers reported such practices to Human Rights Watch.

Monitoring Subcontractor Factories and Facilitating Supply Chain Transparency

Mandatory BFC monitoring is restricted to factories that have an export license.[397] However, subcontractors who do not have an export license may be referred to BFC for monitoring and advisory services, including through brand pressure.  According to January 2015 data, BFC monitoring extended to 536 garment factories and 12 footwear factories.[398] About 25 to 30 of these factories were subcontractors without export permits.[399]

Monitoring subcontractor factories is critical for two key reasons. Workers in subcontractor factories often experience worse working conditions than workers in the large export factories. Workers have fewer options to report violations and seek remediation.

Additionally, export-oriented factories may appear labor law compliant even when they are not due to the practices of their subcontractors. For example, in factory 1 where workers were not required to do overtime, the factory managers and team leaders were encouraging workers to work at nights, Sundays, and public holidays in subcontractor factories, including on products of the same design. Workers said trucks were arranged to transport them to subcontractor factories outside the gates of factory 1. Workers were paid on an hourly basis without any compensatory time off or overtime wage rates for the additional work on those days in the subcontractor factories.[400]

Currently BFC does not have the resources or a Cambodian government mandate to expand its operations.[401]

Another way in which BFC could help improve supply chain transparency and the accountability of international apparel brands is by reporting on the labels being produced in the factories it has visited. An official from GMAC told Human Rights Watch that they had urged BFC to publicly report on brands that source from factories that BFC monitors.[402] David Welsh, from the international labor rights group Solidarity Center, said that this was one of the few points on which labor advocates and GMAC agreed.[403]

Grappling with the Enforcement Problem

A key challenge for workers and labor rights advocates is that BFC lacks enforcement powers. Its effectiveness primarily depends on the government’s commitment to follow-up on BFC findings and take appropriate enforcement actions.

According to a 2005 circular issued by Prime Minister Hun Sen, the Labor Ministry should verify BFC findings and issue its own report. If the Labor Ministry corroborates what BFC finds, the Ministry of Commerce should issue a warning letter to the concerned factory, giving it a week to initiate corrective action. If the factory takes no action within a week, the ministry imposes a week-long ban on exports; this grows to a three-month ban if no corrective action is initiated within two weeks of the warning letter.  Ultimately, the Ministry of Commerce can revoke the export license if the factory continues to violate labor laws.[404]

In 2014, after BFC issued a list of low-compliance factories, Labor Ministry officials formed joint inspection teams with the BFC and warned some of the factories on the list.[405] In December 2014, Labor Ministry officials told Human Rights Watch that they had only imposed fines on low compliance factories that had not taken remedial measures.[406] Information gathered by Human Rights Watch after BFC’s launch of its Transparency Database indicated that as of December 2014 the government was yet to revoke a single factory’s export license even where the factory had failed to take remedial measures.[407]

Facilitating Brand Accountability

Another method of helping ensure compliance with labor law is engaging brands about labor rights violations in their supply chains. The Clean Clothes Campaign, the Community Legal Education Centre, and the Worker Rights Consortium have recommended that BFC report publicly on the level of brand engagement, that is, which brands have purchased factory-level reports and advisory services, and which brands are “free riders.”[408] Brand representatives from H&M and Adidas who spoke to Human Rights Watch acknowledged the “free rider” problem.

Such reporting is essential to evaluate brands’ commitment to labor rights in their supply chains. Human Rights Watch asked key international brands about their purchase and use of BFC factory monitoring reports.

Human Rights Watch did not receive any response to these questions from Joe Fresh and Armani.

Marks and Spencer wrote, “all of our factories are in the Better Factories Cambodia monitoring programme and have their audits carried out by the Better Work auditors.”[409] Because all export-oriented factories are required to undergo BFC monitoring, this response did not disclose anything new about the company’s approach to BFC engagement.

H&M representatives told Human Rights Watch that the brand conducts a “full audit” roughly every two years in every factory that produces for the brand, at which time H&M purchases relevant BFC factory monitoring reports and feeds the findings into its audits.[410]

Similarly, in September 2014, Adidas representatives told Human Rights Watch that they had purchased BFC reports for their suppliers where recent ones were available and coincided with their auditing cycles. But they did not purchase BFC reports for their licensee-factories. Adidas representatives told Human Rights Watch that they were reexamining their monitoring mechanism to extend purchase of BFC reports to licensee factories and to purchase more BFC factory monitoring reports in general.[411]

Gap told Human Rights Watch that it subscribes to BFC reports for all of its authorized factories in Cambodia.[412]

Another important way in which BFC can promote compliance is through its “Advisory Services.” Labor rights advocates argue that BFC should disclose which brands and suppliers pay for its advisory services as well as for its monitoring. The program allows factories to sign up for BFC Advisory Service at a cost.[413] BFC provides technical guidance to factories to facilitate compliance with labor laws through a remediation plan that is developed in consultation with a committee, the Performance Improvement Joint Consultative Committee, comprising factory managers and worker representatives. The program is voluntary.[414]  Only about 10 percent of the factories registered with BFC use its advisory services.[415]