Interview with Kaing Monica, Deputy Secretary General At TAFTAC
This week, Senior Comms Officer Brian Badzmierowski interviewed Mr. Kaing Monica, Deputy Secretary General at TAFTAC. TAFTAC – Textile, Apparel, Footwear & Travel Goods Association in Cambodia is one of the most active and prominent trade associations in the country, representing, promoting and safeguarding the rights and interests of its member. This year, TAFTAC is co-organising the CSR Garment Awards (on 20th October) and CSR Manager’s Forum (on 17th October).
Brian: What are some of the main issues you’re hearing from the sector?
Monica: As a contracted manufacturing sector mainly providing CMT services, our members’ first main concern is obviously the labour cost increase. Cambodia used to be highly competitive in terms of labour costs, but it seems like this is eroding. At an average growth rate of 10.5% in the past 10 years, Cambodia’s Minimum Wage is now higher than its major competing countries like Vietnam, Myanmar, Bangladesh, India and Indonesia’s average. The second main concern involves logistics costs, which are also relatively higher than our competitors. We are really on the high side with logistics costs at 26% of GDP, while Vietnam is at 20% and the global average sits at 13%.
Brian: What can be done to relieve some of the pressure that has caused a downturn in exports this year?
Monica: It’s all about cost while social and environmental compliance has also become a necessary requirement, especially for major brands. While labour cost cannot go down, the only way forward is to improve productivity. We also hope that our buyers would consider fair prices for us as well. Implementing 5S (a Japanese workplace organization method), Kaizen, and LEAN manufacturing to reduce production wastage is also what we have been promoting through our Cambodian Garment Training Institute (CGTI).
In the area of logistics costs, we are pleased to know that it’s in the list of prioritised reform areas by our new government. We look forward to concrete decisions and actions leading to logistics cost reduction to be announced at the coming Government-Private Sector Forum in November with the Prime Minister.
On social and environmental compliance, we have worked closely with EuroCham’s Responsible Business Hub to ensure that our members have the resources they need to understand and comply with the required standards of sustainable operation, such as the Due Diligence Law as well as our national laws.
Brian: Previously, TAFTAC listed social and environmental sustainability as a key factor to the garment sector’s recovery. What efforts are you seeing on these fronts?
Monica: Concretely, over the last 3 years, we have been implementing a project called SWITCH Garment which focuses on energy efficiency in our sector. We organise audits for factories, present the findings, and make recommendations for corrective actions. The project also advised on financing and investment options where needed. And as mentioned above, we have also worked closely with EuroCham’s Responsible Business Hub to raise awareness and build capacity of our members to comply. And this is possible through the support of GIZ FABRIC.
However, it’s important to be clear that social and environmental sustainability is for sure a key factor moving forward, but this factor alone cannot ensure recovery or business sustainability, unless we are cost competitive also. Both must go hand-in-hand. While we try to increase our efforts in social and environmental sustainability, we also expect fair prices from our brands and buyers.
Brian: We are delighted that TAFTAC is co-organising the CSR Garment Awards and CSR Manager’s Forum with us this year. Could you explain what motivated TAFTAC to get involved and what do you hope is achieved with these events?
Monica: As in other businesses or sectors, CSR is actually not a new topic for many of our members who are suppliers to major western brands. Of course, some have done exceptionally well, some have made some effort, and some haven’t done anything. It’s our motivation to join hands with EuroCham to further raise awareness, build capacity, and encourage more factories to do more, especially those who haven’t embarked on any CSR activity at all. We hope with more understanding and good business cases presented, more factories will develop a more positive attitude toward CSR.
Brian: Is there anything you’d like to work with the government on to improve the sector’s sustainability?
Monica: For us, when we talk about sustainability, it has to cover both social & environmental sustainability and business’s financial sustainability. On social & environmental sustainability, the government can help by immediately looking at developing favourable policies that support textile recycling and clean energy, especially solar. These are the main issues.