Two-hundred factories could suspend their production this month due to a lack of raw materials imported from China, a Labor Ministry spokesman said.
Speaking at the Council of Ministers in Phnom Penh last week, Heng Sour said 10 factories had already suspended their operations, affecting 3,000 workers, due to disruptions to the supply chain caused by the coronavirus in China.
“March could see nearly 200 factories face suspension due to a law of raw materials, affecting about 160,000 workers,” Sour said.
Prime Minister Hun Sen last week ordered factories to pay workers 40 percent of salaries for six months in the case of job losses, with the government providing a further 20 percent.
The Labor Ministry was coordinating with factories to try to get them to pay, Sour said.
The disruptions due to lowered Chinese production were being felt all over the world, he added.
Ath Thorn, president of the Cambodian Labor Confederation, said the ministry’s announcement was concerning, and suggested that the EU’s suspension of duty-free trade on 20 percent of goods due to labor and human rights abuses was also playing a part.
“I think that this problem is caused by both COVID-19 and the EBA issue,” Mr Thorn said, using abbreviations for the new strain of coronavirus and the EU’s “Everything But Arms” scheme.
Pav Sina, president of the Collective Union of Movement of Workers, agreed that the EBA suspension, which will kick in in August, was also a factor. He urged the government to find more raw materials either from China or elsewhere for Cambodia’s factories.
“I hope that the government will help coordinate with the Chinese government to transport the raw materials faster,” Sina said. “The government should be find raw materials from other countries beside China to supply garment and footwear factories.”
