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Global Union Calls for Accountability in Supply Chains

Cambodian garment workers outside of M&V International Manufacturing factory, October 8, 2015. (Photo: Len Leng/VOA Khmer)

The International Trade Union Confederation said that 166 million workers make up a “hidden workforce” earning trillions of dollars for big companies.

Large multinational corporations should be accountable for all the workers in their supply chains, a global trade union has argued, in a new report alleging that exploitation has become the dominant business model in global trade.

The International Trade Union Confederation (ITUC) said that 166 million workers make up a “hidden workforce,” meaning that they are employed indirectly in supply chains and subject to labor abuses but earn trillions of dollars for big companies.

Some of those workers are in Cambodia, where low wages are the major attraction to businesses. Labor advocates in the country say that while working conditions have in general been improving, new legislation threatens to weakened the few safeguards that are in place.

ITUC studied 50 major companies—including Nestle, Coca-cola, General Electric and Walmart—and found that only 6 percent of workers in their supply chains were directly employed. The fifty companies had combined revenues of US$3.4 trillion. Their cash reserves alone would represent $5,000 extra in wages each year for the “hidden workforce,” the report said.

“The model of production is based on exploitation,” Sharan Burrow, the ITUC’s general secretary told VOA Khmer in a recent interview.

Transparency was lacking in the multiple layers of contractors and subcontractors employed by major companies, she said, which meant companies were escaping proper scrutiny and regulation.

“When there are no safe, secure, regulatory environments that provide fundamental rights, then companies aren’t absolved from their responsibilities,” Burrow insisted.

ITUC urged big companies to comply with the U.N.’s Guiding Principles for Business and Human Rights, and to ensure supply chain transparency, safe and secure work, a living wage and collective bargaining rights for all workers.

The situation for workers is made worse in countries like Cambodia because of domestic regulatory systems are weak thanks to an unwillingness among governments to hold large companies accountable, said Burrow.

“They don’t legislate for those protections often because they’re cowed by the demands of big businesses who want cheap labor,” she said, adding that, ideally, companies would be held to the standards of regulations in their home markets.

“If the governments where multinationals are headquartered were to legislate to mandate due diligence, then we could prosecute companies across borders.”

Cambodian workers have some hard-won rights and a minimum wage, but government action is threatening their freedom of association, said Ath Thorn, president of the Cambodian Labor Confederation.

“If you compare the working conditions of workers today to a decade ago, it’s making slow progress, but it’s better,” he said, going on to cite the poor working conditions that led more than 1,800 workers to faint in factories in 2015.

A draft Union Law is currently under discussion that could place restrictions on labor organizers, he said.

“The draft law tends to limit on the scope of our work, and also interferes with our internal work. For example, there is a requirement for unions to file financial reports to relevant institutions,” said Ath Thorn.

Factory owners argue that the law is necessary to prevent radical unions from holding strikes that are not supported by the majority of workers.

“We asked that the law ensure 20 per cent of workers in a factory have to be represented by the union, and that shall reflect fair representation of workers,” said Kaing Monika, deputy secretary general of Garment Manufacturers Association in Cambodia.

He added that factory owners and the association were not against workers’ rights to strike, as long as the decision is made democratically, and with due process.

“We want to see unions hold a democratic meeting among their members to ensure that everyone can vote for or against a public strike,” said Kaing Monika, adding that unions should also be transparent with their financial matters, as is common practice in developed countries.