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Industry, Mine and Energy Program

As SIDO is a NGO with its nature of social enterprise and social program, both are running well corporate and the idea to be created in 2007 after the several Oil Shock, shortage and high prices. Today, our program staff works on innovative and sustainable integrated development projects which is also related to environmental conservation, climate change mitigation and adaptation, reducing energy poverty, and improving livelihood of the poor are the main focus areas for SIDO in Cambodia. The program team is particularly involved in the implementation of engineering solutions for development and providing specific technical expertise.

Activities include conducting energy efficiency programs, providing decentralized energy services for local economic development, supporting and developing renewable energies and promoting waste management. These activities are implemented in partnership with our Local NGOs, local stakeholders and communities on the basis of collaborative experience sharing within its target 24 towns and provinces.

SIDO programs deal with the following areas:

  • Improving conditions for agricultural production and processing to enhance family farms/small-scale agriculture systems and to promote food security in the South – example : SIDO and its partners implement projects in mountainous areas as our first preference target which focus on greenhouse gardens and preserving and stocking agricultural products such as potatoes and fruits.
  • Optimizing energy use in forest areas to preserve natural resources – example: In Cambodia, with the support of SIDO, some families are now using economic cooking appliances.
  • Promoting the development of renewable energy to intensify local production of clean energy linked with the environment – example : In some areas, SIDO is facilitating to find way the implementation of micro-hydro-electric projects in partnership with actors involved in protecting wetland areas.
  • Promoting waste management good practices to reduce the environmental impact of waste disposal – example : SIDO supports awareness campaigns on domestic composting managed by communes in partnership with community gardens.
  • Fostering energy efficiency and solar energy for sustainable development in mountainous areas – example: SIDO is implementing a passive-solar construction program for domestic housing, schools, and hospitals the most remote areas.
  • Developing local bio-fuel solutions to meet energy needs of rural populations – example: In some areas SIDO and its working partners assist pilot projects for the local production and use of bio-fuels.
  • Promotion of energy-saving to limit consumption, decrease vulnerability, and mitigate climate change –example: SIDO advises and provides information for the public on alleviating energy poverty and fostering the use of renewable energies in Cambodia.
  • Developing new energy and technical services to improve rural living conditions – example: SIDO coordinates a regional-level program in Indochina for the preparation of how the installation of multi-functional platforms (MFP) and related services.
  • Facilitating the integration of climate change into project development with our partners LNGOs and CBOs and especially the government partners. example: SIDO provides training for NGOs in Cambodia to assist them to gain access to carbon financing for their operations in the province.

Cambodia: Cashew market crumbling
The dearth of domestic cashew processing plants means many farmers are abandoning the nut and growing more profitable crops: rubber and cassava. Faced with a stagnant market for local cashews, farmers of the high-end nut are switching to other crops, according to local agriculture experts. Without domestic processing plants to purchase cashews, farmers are forced to sell to the nearest buyer, Vietnam, which is one of the world's biggest cashew processors and exporters, according to Yang Saing Koma, president of the Cambodian Center for Study and Development in Agriculture.

Cashews in Cambodia are harvested mainly in the provinces of Kampong Cham, Kampong Thom and Ratanakkiri, which are near Vietnam. "Currently, the cashew nut market in Cambodia is very small, and what we export to Vietnam is just raw product so Cambodian farmers get a bad price," said Yang Saing Koma.

Vietnam imported about 150,000 tonnes of cashews from Cambodia and South Africa in the first half of 2008. The country has exported about US$850 million worth of cashews this year, according to a Vietnamese news report. Yang Saing Koma said that in Cambodia the industry would continue to decline unless local processing infrastructure was developed to provide Cambodian farmers a deeper pool of buyers.

Cambodia's only cashew processing plant, the now- defunct CAMAG in Kampong Cham, used to purchase a minuscule 150 tonnes per year, according to Tim Purcell, an agriculture specialist based in Phnom Penh with the NGO Agriculture Development International. A June 2007 report from the Economic Institute forecasted a decline in the domestic cashew industry.

The agency warned that by exporting 95 percent of its raw product to Vietnam, Cambodia was forgoing too much of the value-added chain for its cashew industry to remain profitable. According to the EIC report, the main barrier to investment in processing plants in Cambodia is staggering energy costs, which remain significantly higher than in Thailand and Vietnam. Farmers who once dedicated their fields to cashews are now growing rubber and cassava.

"Cashew nuts are only exported to Vietnam, there's really no local market. But with cassava and rubber, they are purchased by local companies at competitive prices," said Suon Dy, head of the Department of Industry, Mines and Energy in Kampong Cham. He said that at current market prices, one hectare of cashews yields around US$1,000 worth of product per year, compared with nearly $2,500 for rubber and cassava.

Global demand for rubber and cassava has climbed in recent years.
Cassava is used to produce ethanol, one of the main alternative fuels promoted by the global campaign against climate change. Natural rubber has also been increasingly prized, by China especially, following dramatic hikes in the price of oil, as it is used to make its synthetic alternative. Local processing conditions also favour the prospects for both crops: Cambodia processes about half the cassava it grows, and by law refines all of its locally harvested rubber.

Meas Sothearvy, head of the agriculture ministry's statistics office, said that while it was too early to tally nationwide yields for this year's harvest, inspections suggest there are significant declines in cashews. For 37-year-old Prum Chorn and others in the former cashew growing district of Memot in Kampong Cham province, the benefits of switching to rubber crops were overwhelming. "Cashew nut yields once a year and is bought at low prices from middlemen to go to Vietnam," he said.

"Rubber yields daily and is purchased at high prices from rubber factories within the province." Similarly, Ing Taingleng, 73, from Kampong Thom's Baray district, said he's following the lead of other farmers in the province and this year would replace half of his 20-hectare cashew farm with rubber crops. "The price of cashew nuts has not changed for several years now; it's still $500 to $700 a ton depending on the quality," he said.

 
"And we can only export to Vietnam. With rubber, the price is going up a lot and there is a strong market in Cambodia."
 

Cambodia unveils rural electrification master plan

Due to the interest and the benefit, SIDO with its best, will be in the way of coordination in this master plan on rural electrification by renewable energy in Cambodia has been handed over to the Ministry of Industry, Mines and Energy, aiming to help the country reduce its dependence on particular type of fuel, local media reported recently.

The plan, given to the ministry, was made with the help of Japan’s International Cooperation Agency (JICA), according to The Cambodia Press Review.
Sat Samy, undersecretary of state at the Ministry of Industry and director of the study, said that the master plan will be used to identify potential energy sources and resources in Cambodia, allowing the country to consider energy production without depending on any particular type of fuel.
The plan also defines the vast rural market, the demands for electricity and investment opportunities in the sector. It also defines various strategic plans for 100 percent rural electrification in all villages by 2020 with a cost of nearly 800 million U.S. dollars in capital investment, the newspaper said.

JICA and officials from the ministry conducted studies in 140, 000 villages in 20 provinces. According to the research, in 2020 people will enjoy access to electricity secured from an expansion of the existing network initiated by the Cambodian government, while rural area communities will generate small-scale, renewable electricity supplies from hydroelectric and solar energy schemes.

Minister of Industry Suy Sem said that the master plan really responds to the government's policy of reducing rural poverty, which determines that by 2020 all villages will have access to mains electricity, and 70 percent of all residents will have access to electricity by 2030.
Inequity of power access, high prices for fuel and environmental pollution are the three main themes that motivated the Cambodian government to propose the study, said Sat Samy.
As of 2006, only 10 percent of people in the entire country have access to the public electricity supply while another 10 percent use electricity supplied by the private sector. A further 40 percent light their homes with batteries.

 

Cambodia's hydropower development study

SIDO is not in this position very much deal but with strong support to this work either technical or materials. The below is their activity message:

 

In Cambodia, after the peace process since 1992, mainly in Phnom Penh, Japan and several governments and institution in Japan had cooperated in the reconstruction of power. Eventually, it has been said that it is necessary to expand the country-wide studies. However, because of security and land mines, it did not happen. In today's report, after long awaited, JIVA, Japan finally decided to expand the study and the power of the investigation report on the development is completed.

Today's report came from China's Xinhua. It means that the Cambodian Ministry of Industry, Mine and Energy (MIME) is surrounded by many Chinese technical teams. During the JICA study on the development of the southwestern Cambodia, Cardamon Mountains, China's hydropower projects are moving.

Cambodia, as a means of emergency in the 1990s, many diesel generators were mounted. For the diesel generators, power had to set a higher rate. To this end, Cambodia's electricity rates, along with Japan and the Philippines, in Asia, have a higher rate. In order to solve this effort for many, but for large-scale development was difficult because of the demand for electricity; today came up with a high rate.

They also temporary, southwestern Cambodia, near the border with Thailand, to build a large-scale coal-fired sent to Thailand, some thought the plan to consumers in Cambodia. Japan's Chugoku Electric Power was hit in the survey, sponsored that did not last. The proposed coal-fired, was handed over to Thai companies, have survived; we are listening. On the other hand, at the same time momentum, the Chinese team's technology is running for development of hydropower in southwestern.

In any large-scale projects in recent years is difficult to realize upon the Cambodian government, and the expectations of the people responsible for the goal. By 2020, from any means, the nation shall send electricity to all villages. In 2030, 70 percent of households shall be connected to the usage.

 
Cambodia's Garment Factories
 
Based on the situation analysis made through our own researches and external sources both are detailed as the message, SIDO in Cambodia are in the planning process in doing its own social business enterprise in this field by linking with our social development programs in cutting down these issues. The below description would be good for business in one hand, but in the other hand, it harms workers in some issues as said in the report.
 
Cambodia Past and Present, Part Two of a Two-Part Series
 

I sat in my chair with my cigarette in my left hand as junior reporter (Our SIDO Media team) paced back and forth in my office. She was convinced that I had not done the necessary research before my recent visit to a few Cambodian garment factories.

 
I settled my grit in my tray and assured her that a good newsman is always properly informed before taking on an assignment. She raised her voice and countered by saying that intimate knowledge of the variations in the stitch patterns between Vietnamese and Chinese hostess girls' dresses does not constitute research. I nodded, more to appease rather than to acknowledge.
She wondered if I was aware of the high working hours that Cambodian factories are known for. I pulled a copy of the Cambodia Daily out of my bag and tossed it onto my desk:
 
Garment Union Threatens to Strike for Shorter Work Week

The Free Trade Union of the Workers of the Kingdom of Cambodia, - in a letter to the Ministry of Social Affairs - asked that the week be reduced from 48 to 44 hours...

What then about the low wages? I tapped the page for emphasis:

The workers were eventually granted a raise from $40 per month to $45 per month...

It was no use as she wasn't listening. But I'd get my day in court. She then began to wave her Angkor Wat souvenir beach towel overhead. I calmly folded my hands in my lap and let my cigarette idle in my tray, waiting for her to finish.

"They cut them in this size," says Wilson Chen, manager of the Singaporean-owned Suntex garment factory, holding up the front panel of a lady's t-shirt. "This will be the back panel," he continues, selecting a different piece of fabric off the cutting table. "Now the sleeves." He grabs yet another piece. "So after being cut into the proper components, the pieces are bundled together to later be sent to sewing."

Cutting the fabric into pieces and bundling them as a set is the first step in the creation of a standard $19.50 banana republic t-shirt. This process is not unique to Wilson's 65,000 m2 factory. It is repeated tens of thousands of times daily in the dozens of garment factories that line Phnom Penh's Veng Sreng Street.
 

When Wilson refers to "them" he is talking about his workers. In his factory two shifts of 2,600 solely Cambodian workers cut, sew, wash, press, and package garments for a literal hall of fame of American clothing companies - Gap, Warner Brothers, Old Navy, and the aforementioned Banana Republic.

One hundred percent of Suntex's output makes the one-month journey by boat to the United States. What products make this trek, however, varies by season. "It depends on what orders we take from them," Wilson says. "We do shorts. We do jackets. Now we are doing the spring/summer. From May we will do the winter."

Wilson's factory is not responsible for all of the clothing company's line, just selected bits. It is up to the bosses in the States to determine what is made and when. "They [the clothing company] will place the order and let us know what they need. Then we will work it out. We'll make samples and counter-samples for them to approve. When they do approve them, we start producing."

In the sewing section we stand at the front of one of his forty lines of sewing stations. Each line has two sides. The surgical masked-workers swap pieces back and forth as the machines rapidly motor along resembling a series of hummingbirds hovering above two parallel fences. "They start from the back of the line," he points out, "and when they reach the front, it is a complete garment. So everything moves from the back on forward." He grabs a fresh flower-patterned tank top off the line.

Materials come from Malaysia, Taiwan, and Singapore. Because of the intense competition in the Asia region, prices for the raw materials don't fluctuate. But, as Wilson is quick to note, "Right now we can get some real cheap yarn from China."

"The white fabric is printed," he holds up the garment to give it a quick quality check. "This is the latest in photo printing. No dye is used. One piece of paper transfers the image with the aid of heat." Quality control checks aren't only done for the end product though. It is a continual process throughout the garment's creation.

"First, we have got the QC to check the fabric to make sure the cutting is ok. Then in the sewing we have got the line QC to make sure the quality is good before being sent to finishing. In the finishing also, once the garment is complete, they will check the appearance. Then after folding, the look must be good to attract people to buy." While quality is vital to the Wilson and his management staff, speed is the worker's bread and butter.

 

"We give them [workers] a target. For one day, say the average is about 1000 pieces in 8 hours per line. If they do better than that they get a small bonus. It is an incentive, extra over the basic." The basic amounts to $50 a month at Suntex. This might not seem like much and it isn't. But it is better than the $45 minimum wage. Plus with the bonus, the average Suntex worker takes home between $70 and $80.

The garment industry's 150,000 workers account for $600 million worth of annual exports for Cambodia and 90% of the country's export earnings. This being such a large business, how is the competition for workers?

"Workers are abundant." Wilson assures. "It is no problem to get workers. Any time we put an advertisement outside we can get 100 or 200 workers for an interview."

But how can a worker stare at a $19.50 price tag affixed to a single article of clothing knowing that it represents a third of his full month's salary? The answer is blunt and simple. Poverty.

Given that the $45 minimum wage, as demanded by The Free Trade Union of Workers (Cambodia's largest garment worker union), is twice that of a school teacher or doctor in Cambodia, a garment worker job is not a mere stitch in time. Outside of a few selected government positions, prostitution and drug peddling are the only other occupations in Cambodia that pay more than assembling the pieces of a t-shirt. No experience is necessary either.

"For our site here," Wilson says, moving to the finishing section, "we have a training center. If they don't have experience, no problem. We will train them for two weeks and after that they will stand in the line for the actual work."

The work in Cambodia's factories is notorious for its excessive hours and dangerous working conditions. But, as Wilson laments (though will freely discuss), his factory adheres to worker safety and rights standards even though it is his biggest problem.

 

"The biggest problem, especially now with the Gap, is we need to comply with human rights. They don't let us work too much overtime. And Sunday must be off. We have to comply. But at times when orders are rushing, it is quite difficult to comply on our part, but we still we have to."

How about regulation?

"The Gap will send people here to make sure that the workers don't work excessive overtime. That is why we started with the two shifts. That way, one leaves and the other goes. Formerly it was just one shift."

Any other problems?

"Most days we have no problems. But after the payday, we used to have some problems with the workers returning to work. They get paid once a month. So now we usually pay them on Saturday. So Monday they come back to work."

As far as the workers' conditions are concerned, cleanliness is not a problem at Suntex. While the sewing and cutting machines rattle on and various sucking sounds can often be heard going on in the network of cables overhead, the three-year old factory is relatively quiet and of a cool temperature. It's clean too. On the grounds outside, in the worker break areas, and the inside of the factory itself is spotless. Since this factory (and many of the others on Veng Sreng Street) supplies products to American companies and, as a result, is required to adhere to the standards Wilson mentioned, it doesn't resemble a sweatshop that Cambodia has a reputation for. That is not to say that sweatshops don't exist in Cambodia anymore. Nor is it to say that Suntex is even typical among those that supply products for American companies.

Tommy Textile, just down the street from Suntex, greets visitors by flying one Cambodian and two American flags at its gate. Tommy's 1,300 workers make 78,000 towels (and only towels) a day in three shifts for Walmart and K-Mart. While it too is very clean, Tommy's environment is a little harsher and much more chaotic. Bed sheet-sized towels unfurl from machines that rise to the size of grain elevators. Pneumatic dye presses hiss, whir, and clank. Rows of large cylindrical textile machines unspool hundreds of long parallel streams of yarn. Together, these create background noise akin to about a dozen live jackhammers falling into metal bathtub.

Back to the finishing section, Wilson continues, "Finishing involves pressing, folding, and packing into a bag. So after that they will check everything, pack everything and they will be put into cartons, ready for export. We have some nice floral dresses here. This is the skirt."

And unions?

"The unions have representatives loitering around outside scaring the workers and when that happens the factory stays empty. It is not the workers that start the strikes." He pauses as we check the washers and dryers necessary for the production of some garments for the Gap and Old Navy and then adds, "The workers are basically happy [without the unions]. They are able to send money to their families each month. Down the street June Textiles last year had a 10-day strike."

 

The strike he is referring to was in June of last year. An estimated 20,000 Cambodian garment workers, including workers from June Textiles, went out on strike. Several issues were in dispute at that time, but the most prominent demand was an increase to the minimum wage. This strike is what led to the raise to $45.

Wilson grabs a t-shirt out of the dryer. "First the washing and then the drying. So you get the soft feel. Not course or hard." He holds it outward.

Life in Cambodia might be course and hard. But the garments, they are indeed soft.

Junko held her Angkor Wat towel in her hands.

"So this is from Tommy Textile then?" she asked.

I retrieved a fresh smoke from my pack and set my lighter in motion. "Yep, but that's all you get," I cautioned and puffed. "Souvenirs from my subsequent trip to East Timor were few and far between."

Coming Next Week: a return to East Timor. Note: All the pictures used for this article were taken at the Tommy Textile factory. The Cambodia Daily is available for free at Cafe des Pres in Hiroo, Tokyo.

A garment factory positively made to order

Issue 16 / 07, April 6 - 19, 2007

by Chea Sotheacheath, a freelance contributor working full-time for Internews Mekong Project on media and HIV/AIDS.

Woman sewing on a machine in a factory

Photo: Pring Samrang

The Modern Garment Factory hires HIV-positive workers, according to this article by Chea Sotheacheath, a freelance journalist who works for Internews Mekong Project on media and HIV/AIDS.

THE Modern Garment Factory (MGF) does not fit the pattern of most Cambodian manufacturers. The all-female management aims to carve a niche by offering a healthy environment for its 100% HIV-positive workforce. But it faces tough competition from a grueling and sometimes abusive industry.

HIV-positive workers often resign or are dismissed from factories as a result of discrimination and rigid conditions. However the MGF seeks vulnerable, female, HIV-positive candidates for their 40-strong work force. Tailor made “to help HIV-positive people”, according to factory manager Thavy (who asked that her real name not be used), they offer a flexible alternative.

There is no official reporting of dismissals or discrimination of factory workers with HIV/AIDS according to Por Chuong, training coordinator at International Labor Organization (ILO) Phnom Penh. However the problem was serious enough to require an awareness campaign in the factories, which Chuong claims has reduced discrimination.

“I believe stigma and discrimination against HIV-positive workers still exist,” said Ly Tek Heng, manager of the Garment Manufacturers Association (GMAC) of Cambodia, “because most of the workers are from remote areas.”

GMAC’s 2007 statistics indicate that 296 garment factories are being operated with 372,050 workers, the majority of which – 339,320 – are women. Heng says, “They do not understand about HIV/AIDS. They are just simply scared when they hear the word AIDS.”

Chea Mony, president of Free Trade Union of Cambodian Worker, agrees that while there is no reporting, discrimination still exists.

Laborers with HIV/AIDS, he said, are forced to quit or are dismissed if they take too much time off for medical reasons. "In general nobody fires them because they are people with HIV/AIDS. They quit because they can not work as hard as healthy workers.” In other cases, when workers request leave, Mony says, “management takes the opportunity to dismiss them.”

HIV-positive workers also despair because of treatment by co-workers who Mony says discriminate and humiliate them “when people know they are HIV-positive."

“Before [one worker] had six friends but when they learned she was HIV-positive, only one or two remained close to her – because they fear she might transmit the virus to them.” Co-workers, he said, keep their distance, avoid using the same toilet and even refuse to eat together with HIV-positive colleagues.

If HIV-positive workers can tolerate the social pressures, many can not withstand the grueling schedule. In most garment factories, workers are paid around US$40 to work a minimum of 26 days per month. They are pressured or compelled to work additional hours  to earn overtime wages that can top US$100. If they take leave more than 2 days per month, they are docked US$5.

Healthy women can meet those conditions, explains factory manager Thavy. HIV positive workers, however, need time off work to access medical services and maintain their health. At MGF, it is not a problem if workers arrive late. "The workers at other factories might get fired if they come late."

At the MGF, conditions are different, explained Thavy. Workers receive only US$45 plus US$5 bonus per month, working 8 hours a day, and 22 days per month. They are not required to work overtime.

Workers, peering through bolts of pink and purple threads, said they are happy to work in the factory because they are not stigmatized or discriminated. One worker who asked not to be identified said, “The wage is only about $45-50 per month but it is easier and relaxed. We have special permission to go and access medical services.”

“If you work at another factory, you will never have a day off,” the worker continued. “Sometimes the owner even verbally abuses you when you ask for a day off.”

Adrain Oss, general secretary of New Island Clothing (Cambodia Limited) praised the idea of helping HIV-positive women by providing factory work. “[The] idea is very nice and very good and the right thing to do for a decent society.”

However Oss expressed concern that the factory might face bankruptcy. "You need to manufacture the goods. You need to deliver them on time. If you have a high turnover or loss of people in the work environment because of their background and illness, you do face problems," he said.

Cambodia’s garment industry has attracted global giants such as Gap, Levi Strauss, Nike, Phillips-Van Heusen, Wal-Mart, and Abercrombie & Fitch and Sears. However some of the factories they work with have been embroiled in serious labor violations – including union disputes, severe work conditions and fatal violence. MGF offers a socially responsible alternative.

Pheng Pharosin, coordinator of the Community of Cambodian Women Living with HIV/AIDS (CCW) says this socially-conscious factory was started with a US$40,000 loan to her organization from a UNDP regional income generation project for HIV-positive women.

The management acknowledges their greatest challenge is to establish a market. Thavy said they have been losing money since the factory began operation in December 2006. Overhead costs, she said, are US$2,000 per month. The factory produces an average of 150 pieces per day which cost R700 (US$0.175) per piece. After cost, the profit margin is merely US$50-200 per month.

Thavy complained few local businessmen contracted with them, despite their low cost of R700 (US$0.175) per piece. She admits that some of her 40-strong workforce came to MGF without experience, but she challenges other factory owners to scrutinize their work.

Chey Vathanack, who’s Cambodia Garment Association, provided two-week training for the 40-strong workforce said MGF needs to improve their quality and skills. However Thavy says, “Compared to other factories we have enough skills.”

From her three-story factory on Gold Street, Thavy glares at an impressive shopping mall being constructed in the emerging urban development in Tumnub Toeuk, Phnom Penh. What the Modern Garment Factory needs, she says, “is a market.”

—Chea Sotheacheath is a freelance contributor, working full-time for Internews Mekong Project on media and HIV/AIDS.

 
 
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