More than a thousand Cambodian workers have spent the last three years trying to get their full severance pay after their apparel factory closed. Nike, the global sports giant whose goods were being produced, says the factory was an unauthorized supplier.
Today, over 50 organizations, including Human Rights Watch, have petitioned Nike to resolve the prolonged struggle of 1,280 workers from Cambodia’s Violet Apparel factory, operated by the Ramatex Group. A new report by the Worker Rights Consortium estimates that Ramatex – which closed the factory in June 2020 – owes these workers about US$1.4 million in total.
The Worker Rights Consortium also found that the Ramatex Group, a conglomerate with numerous factories in Cambodia and other countries in Southeast Asia, continues to produce for Nike, one of its main business partners.
The Ramatex Group dismissed the workers’ claims, citing a letter from Cambodia’s labor ministry. The labor ministry’s letter said that those parts of the labor law that require employers to pay “compensation in lieu of prior notice” would not have to be implemented. This argument is not only legally flawed, but if it became the norm in Cambodia, would allow foreign and domestic corporations and government ministries to pick and choose which legal provisions to abide by.
Cambodia’s Arbitration Council, the country’s labor dispute resolution body, refused to rule on the workers’ claims, saying the council lacked jurisdiction. This ruling was unsurprising. Industry associations and companies doing business in Cambodia, including Nike, have long expressed concerns about the council’s independence. Increasingly, the council appears beholden to Prime Minister Hun Sen’s ruling Cambodian People’s Party.
The Ramatex Group did not respond to Human Rights Watch’s requests for comment about the workers’ plight. Nike told us that Ramatex’s Violet Apparel factory was not authorized to produce their branded goods.
Unauthorized subcontracting is a major human rights risk in the global supply chains of global companies. Dealing with the messy problems isn’t easy. But companies should support workers affected by unauthorized subcontracting and factory closures when they produce their goods. Nike should make sure that Ramatex Group’s Violet Apparel factory workers who made their products get paid what they are owed. Companies should not expect workers of unauthorized suppliers to shoulder the burden of their risks.
