Cambodia Investment Review

LABS initiative officially launches in Cambodia

LABS initiative officially launches in Cambodia

Gareth Johnson

The Life and Building Safety (LABS) initiative, a plan to promote safer working conditions for factory workers in the apparel, footwear and accessories industries was officially launched aiming to increase safety standards in Cambodia’s manufacturing industry.

The event which was held at the iconic Raffles Hotel Le Royal in Phnom Penh was hosted by IDH the Sustainable Trade Initiative, was attended by H.E. Hong Choeun, Secretary of State, Ministry of Labour & Vocational Training, H.E. Dr. Chhann Sorphal, Director General, Dept of Construction, Ministry of Land Management, Urban Planning and Construction, H.E. Chan Sopha, Director General, Institute of Standards of Cambodia, Ministry of Industry, Science, Technology and Innovation, as well as numerous other key stakeholders within the garment industry.

To read our pre-event coverage click here.

What the Life and Building Safety initiative?

According to their official statement “The LABS initiate is an industry driven program in which multiple brands and retailers have joined forces with public organisations to operate a scalable program to mitigate preventable fire, electrical, and structural safety risks in key apparel and footwear producing countries in targeted locations.”

The initial ideas were conceived by global giants, which included VF Corp, known for global brands, such as Timberland and boast over $9 billion in global revenue. The idea was conceived following the devastating Rana Plaza garment factory collapse in 2013, which killed 1,134 people and was blamed on poor safety standards.

To read more about the Rana Plaza building collapse in 2013 click here.

Despite themselves not being personally involved with the factory in question, a number of leading global brands were, such as Prada and Gucci. The incident not only caused global uproar, but also increased awareness of the conditions in so called “sweat shops” with consumers.

Initially VF Corp created their own proprietary requirements, but according to Mr. Kyle Bogler (Senior Director – Safe and Sustainable Operations – Global Responsible Sourcing, VF Corp) who was speaking at the event “As a single brand we found it hard to promote and enforce the issue. It was then that we decided to come together with other brands to find a solution, which is how LABS came about. As they say work fast alone, or go far together”.

Mr. Kyle Bogler (Senior Director – Safe and Sustainable Operations – Global Responsible Sourcing, VF Corp).

The organisation now includes not only VF Corp, but household names, such as Walmart, BESTSELLER, Gap and Target, with Mr Bogler adding that they were actively reaching out to chambers to get more members into the organisation.

Cambodia will become the third country after India and Vietnam to take part in the LABS Initiative, with further expansion into the 50 or so other locations the brands currently operate in, as being part of future planned expansion.

The LABS Initiative in India and Vietnam

Successfully piloted in India and Vietnam over the last 32 months, LABS have managed to get 277 factories onboarded, conducting 268 factory assessments and 340 safety training sessions with more than 5500 individuals in implementing safety changes and creating a self-sustaining safety management system.

The full process for passing the program involves three phases with an initial assessment identifying major risks. Phase two being implementing said improvements and signing off on them, while the final phase consists of a closure visit and so called “graduation.”

Following Graduation of the program, LABS will continue to provide support with, as well as an anonymous phone number where not just safety issues can be reported, but also ones related to acts such as sexual harassment.

The scheme has been a resounding success to date, with not only incidents at LABS certified factories being much lower than non-certified ones, but most importantly their fire standards are now being incorporated into law by the Vietnamese Ministry of Commerce, something they are keen to replicate in Cambodia.

LABS Cambodia

According to Mr. Kyle Bogler, Cambodia was a natural choice for the organisation, with VF Corp employing almost 100,000 people, as well as exporting over $500 million in produce. This amounted to roughly 4 percent of all exports from the Kingdom, making them one of the biggest players within the industry.

Another factor was the current lack of clear legislation in Cambodia with regards to worker safety, thus presenting a need at least from the companies’ perspective for some kind of standardisation. On initial trips to various factories many structural, fire and electrical safety hazards were identified, which led to the organisation creating a standard tailored to Cambodia.

Thus the LABS Standard and Methodology for Cambodia draws on best practices from around the globe, such as the Euro Code and US Code, International Building Code, the national building codes of both India and Vietnam, as well as the Cambodian Law on Construction.

Mr. Emerald Am, Country Manager of LABS.

The LABS Methodology and Standard for Cambodia, at least for now is a voluntary program for non-LABS factories and in a sector without clear legislation, as things stand still would leave many workers in danger.

When answering a question from the floor about why companies would be incentivized to join LABS, the panel admitted it would be a tough sell to smaller operators stating “People in the West now care greatly about how garments are sourced and about worker’s rights. Sadly, smaller operations that make non-branded items have much less of an incentive to join as things stand.”

They also acknowledged that in the current climate worker safety was also not a top priority for many factories adding “Sadly for many, safety isn’t an immediate and paramount concern. Many factories are struggling to find workers and there are still issues with the global supply chain. This is why making this legislation is so important.”

Making new legislation in Cambodia

Again, answering a question from the floor, H.E. Dr. Chhann Sorphal stated “that legislation for worker safety in Cambodia was still of great concern and that the country had spent the last two years trying to prepare such legislation, but also hoped to work closely with LABS with regards to the matter.”

Following a direct question from Cambodia Investment Review about whether they could replicate their success in Vietnam by having their standards made law in Cambodia the panel responded positively stating “We are already in constructive talks with the government and various ministries which have been productive so far. We are confident of being able to help with the creation of worker safety-based legislation and feel we have government support on this.”

Mr. Emerald Am, Country Manager of LABS, further added “Western consumers care much more about workers safety now. Setting up a common standard and reducing accidents will not only make Cambodia a more desirable place to do business, but will also save tens of millions in damages, as well as people’s lives.”

Related Articles