(as prepared for delivery)

• His Excellency Sovann Vannaroth, Undersecretary of State, Ministry of Labor & Vocational Training
• Samuel Hurtig, Head of Swedish International Development Agency
• Nimmith Men, Executive Director of the Arbitration Council Foundation
• Partners, ladies, and gentlemen

On behalf of USAID/Cambodia, I’d like to thank the Arbitration Council Foundation, Solidarity Center, the Ministry of Labor and Vocational Training, SIDA, and our other partners for their collaboration and support for this event. I’d also like to express my gratitude to the participants here today for their determination to improve the lives of Cambodian workers.  

Without question, labor conditions in Cambodia over the last two decades have improved. That improvement stems not only from employment opportunities and higher wages and benefits generated by Cambodia’s expanding manufacturing sector. Just as importantly the improvements in labor conditions are the hard-won results of an independent trade union sector that has exercised its rights to unionize and bargain collectively.

Gains in worker welfare are not automatic. Cambodia’s workers have demanded better wages and working conditions along with economic and material benefits that have not only impacted tens of thousands of Cambodian workers but also, and perhaps more than any other factor, reduced poverty in this country. Let me reiterate that point: the exercise of labor rights helps to alleviate poverty and increase the overall economic well-being of all Cambodians. 

The exercise of labor rights can also reinforce rights of citizenship. Cambodia’s constitution and international conventions guarantee the freedom of its citizens to form associations and unions. These are important, some would say fundamental, freedoms. They enable workers to mobilize around labor issues to protect their rights and benefits. They help workers represent themselves in negotiations with their employers and in some cases with public authorities.  

Unionization in Cambodia has flourished in the past two decades, in particular in the garment and textile industry, where workers can join any union they believe will represent their interest. However, while these workers can easily organize themselves into unions, their counterparts in industries such as construction, tourism, or food and services still find it challenging to unionize and engage in collective bargaining. They also find it difficult to resolve simmering disputes between employers and workers which can be disruptive to productivity in manufacturing and harmful to workers’ rights. 

USAID has supported labor rights in Cambodia for more than two decades. We are proud of that support. Our Labor Rights in Cambodia Project is the newest phase in our support for workers. It is a five-year project with an ambitious set of objectives, including assisting independent trade unions in their efforts to represent and provide benefits to their member workers in the garment, construction, food and services, hotel and hospitality industries, as well as workers in the informal economy, from tuk tuk drivers to entertainment workers.

One key goal of this new project is to expand labor dispute assistance and services. The worker-employer relationship is absolutely critical to promoting harmonious and productive industrial relations, and that relationship can easily become tense and adversarial. 

The United States believes it is critical to maintain a system by which collective disputes can be adjudicated and peacefully resolved by an entity that both workers and employers regard as neutral and impartial.

That is why the Arbitration Council is so important in Cambodia and why we have chosen, along with the Government of Sweden, to support the pivotal role that the Arbitration Council and the Arbitration Council Foundation play in building an environment of confidence for workers, employers and investors, a system which establishes a level playing field for all stakeholders. The ACF has been taking the lead in developing a body of practice for labor dispute resolution and establishing jurisprudence on Cambodia’s labor law. 

USAID is committed to the work and continuity of an independent ACF and so is our partner SIDA, which continues to provide critical support to the ACF. But in the long term, it is simply not sustainable for the ACF to rely on external funding from development agencies like USAID and SIDA. The ACF should be able to count on financial commitments from the users and beneficiaries of a genuinely independent arbitration system – support from employers and workers – as well as support from the Ministry of Labor, which also has a vested interest in the long term independence and sustainability of the Arbitration Council. The success of the Arbitration Council might also be an example of an impartial forum for decision making to be emulated in civil cases in the Cambodian courts. 

We are excited to continue our support to ACF under this five-year project. We are providing approximately $1.4 million to ACF for five years. In addition to this support, the project will also support public awareness campaigns on labor disputes and access to legal resources as well as facilitate dialogues between private sector companies and workers.  These activities represent key components of U.S. commitment to supporting civil society and human rights in Cambodia for the benefit of all Cambodians.       

Worker’s rights respect, good industrial relations, conducive working conditions, equitable benefit sharing and peaceful labor dispute resolution – these are necessary conditions for the stability of the supply chains in the industrial sector. They are also critical to Cambodia’s continued economic and political development. Your collaboration and support for this much needed program will help sustain and stabilize this economically important sector of Cambodia. On behalf of USAID/Cambodia, I thank the Arbitration Council Foundation for your hard work and wish you great success, both now and in the future.