Cambodia: Labor and the Coup

Joshua E.S. Phillips and Ian Robinson

IN THE FACE of a repressive and dangerous environment, workers are on the move in Cambodia. Though Americans heard little about it, the emergence of an independent labor movement was one of the most promising developments in Cambodia since the UN imposed democratic institutions “from above” on a society with no prior democratic experience.

Workers are challenging oppressive labor conditions by manufacturers, mostly in the garment industry. But these workers have also held several demonstrations outside the U.S. Embassy in Phnom Penh to protest against the extension of U.S. trade privileges to Cambodia offered by the Generalized System of Preferences (GSP). The urgency of worker protests stems from GSP represents and the ironic timing in which the status was granted.

On July 5th, 1997 Cambodia’s UN-sponsored experience in democratic government ended with the military coup led by Second Prime Minister Hun Sen. First Prime Minister Prince Norodom Ranaridh fled into exile.

The U.S. government condemned the coup and cut two-thirds of its aid to Cambodia as a gesture of its disapproval. But only a month after as Hun Sen was consolidating his control over Cambodian political life, Washington granted Cambodia GSP status.

GSP recipients have comparatively greater trade advantages than countries which only have the tariff reduced status offered by “Most Favored Nation” status (MFN). GSP status eliminates tariffs for roughly 1,800 raw materials and manufactured goods for some 140 countries and territories. In order to acquire GSP status, developing countries have to legitimately exhibit recognition of worker rights.

Instead of fostering domestic production, many critics charge that the main value of GSP status to the Cambodian government is that “it will attract some industries that are currently based in Malaysia and other countries in ASEAN that are likely to lose their GSP status as they become more developed.” By shifting their operations to Cambodia, manufacturers in these countries can re-acquire GSP status.

While overseas businesses reap great advantages from GSP, Cambodian workers have insisted that the United States also “be aware also of the social and human dimensions of the GSP issue. .. [and] ensure that the benefits derived from GSP be fairly distributed between employers and employees.”

The new labor movement may have been part of the catalyst for the coup, and the severe crackdown on worker rights that has followed in its wake.

Challenging Employer Abuse

Until recently there was relatively little labor organizing in Cambodia. Wages in the booming apparel factories ranged between US$10-35 per month.

In mid-December 1996, workers began aggressively challenging these conditions and gross labor rights abuses. Strikes began to accelerate. Workers—mostly in the garment industry— routinely protested their low wages and labor abuses.

Significant gains were achieved in a number of the strikes. Labor legislation was finally introduced and wages were raised in some factories. This signaled to workers throughout the economy that new possibilities for collective action were now opening up. The result was an upsurge in organizing by new, independent unions in the early months of 1997.

Some of these new unions found a valuable ally in Sam Rainsy, a former Finance Minister and opposition leader of the Khmer National Party (KNP). Rainsy helped the garment workers to form the Free Trade Union of the Workers of the Kingdom of Cambodia (FTUWKC), which soon sought to organize and assist workers from other sectors of the economy as well. With Rainsy’s assistance, garment workers conducted several successful strikes in Phnom Penh, and protested the corrupt judicial system which (among other things) accused Rainsy of conspiring to assassinate Hun Sen’s brother-in-law.

Rainsy and FTUWKC workers also held rallies opposing the granting of GSP status to Cambodia. GSP does not apply to textiles and apparels—by far one of Cambodia’s most important industries, consisting of forty percent of the countries exports, and mostly designated for U.S. markets.

Protesting FTUWKC workers hoped to pressure government officials and investors to improve labor rights for workers in all sector of the economy in exchange for the receivership of GSP.

Many had reason to fear this new alliance between the charismatic Rainsy and the emerging labor movement. Cambodian subcontractors worried about their capacity to recoup their investments if workers continued to make wage gains and to press for further improvements in labor laws.

Hun Sen had reason to fear that Rainsy was beginning to acquire a genuine political base in the emerging workers’ movement. Rainsy and FTUWKC’s strategy of opposing GSP, in order to extract further progress on workers rights, may have been the last straw.

On March 30th, 1997, little more than two weeks after the new labor laws were implemented, assailants lobbed four hand grenades into the midst of an FTUWKC rally led by Rainsy.

Twenty people were killed and another 150 were injured. The perpetrators were never apprehended but many official sources—among them, the FBI and the UN—charged that they were connected to Hun Sen.

Rainsy contends that political and economic motives for the attack should not be separated: “The grenade attack was intended to discourage or destroy opposition forces which could challenge the present regime or the present system—so they had to stop it by force,” he said.

“Any vibrant opposition will lead to the collapse of the regime. The regime represents a symbiotic relationship between the political circles and the financial circles linked by business interests and groups supporting the present regime which in turn provides protection to the illegal activities conducted by those in business circles.”

The bomb attack ended large-scale public demonstrations on workers rights and GSP status in Phnom Penh. Workers’ rights began to erode from this point. Much of this went unnoticed as press coverage quickly shifted to the escalating tensions between the forces backing Prince Ranaridh and Hun Sen.

The coup occurred only one month after GSP benefits were extended. Since then, the labor regulations which were gained remain on the books, but in practice have been gutted.

FTUWKC President Ou Mary has stated that the trend has been toward “. . . more systemic violations of the labor law and worker rights. What is most alarming is the way existing companies—especially in the industrial sector—are more and more blatantly abusing workers’ rights with total impunity.”

Unions that aren’t affiliated with Hun Sen’s party have been dissolved or denied legal recognition, the use of forced labor has increased significantly, and wages have been dramatically reduced. Labor activists have been beaten, fired with impunity, and received death threats. Many have been forced into hiding or have left the country.

Why was a military coup and large-scale labor repression insufficient to persuade the Administration to revoke GSP status? As one State Department representative put it, “The suspension of certain aid programs after the coup was used to demonstrate the Administration’s disapproval of the coup because certain aid programs go directly to the Cambodian regime. GSP is different because companies benefiting from GSP are U.S. and foreign investors.”

In a letter to the U.S. Trade Representative (USTR), U.S. Rep. Dana Rohrabacher referred to this use of GSP in stating: “The granting of GSP privileges to Cambodia in August 1997 seriously undermined both the Clinton Administration and U.S. Congressional policy to .. . restore democratic government and human rights for the long-suffering Cambodian people.”

Rohrabacher added, “If the USTR chooses to maintain GSP privileges for Cambodia, it will make a mockery of the central theme of President Clinton’s Dec. 9th 1997 speech in New York celebrating the United Nations’ Universal Declaration on Human Rights where he stated, `Human Rights is a pillar of U.S. foreign policy.’”

Indeed it would. It would also show the Clinton Administration’s lack of commitment to workers’ rights in small developing countries that receive GSP. The Administration may invoke China’s trade potential or great size when punting on its failure to link trade and worker rights in that country, but no such excuse is available for the Cambodian case.

The controversy over GSP also symbolizes the narrow model of democracy that the United States seeks to implement in developing countries—fixated on progress towards establishing elections and myopic in failing to recognize the legitimate democratic struggles that Cambodian workers have demonstrated. Unfortunately, Cambodia also illustrates the human rights abuses that are linked to these issues of trade and labor.

For further information on this issue, and ideas about how to bring pressure to bear to revoke Cambodia’s GSP status, contact the International Labor Rights Fund, 733 15th St. NW, Washington, DC 20005 Tel: (202) 347-4100; FAX: (202) 347-4885; E-mail:

ATC 75, July-August 1998