This report presents findings and observations from Better Factories Cambodia’s engagement with the garment, footwear and travel goods (GFT) sector. The Annual report 2022-23 provides a compliance overview of garment sector, which holds significant importance to the country’s economy and employment. The report primarily draws from enterprise assessment findings from unannounced compliance visits to 316 factories in 2022 and 364 factories in 2023. It presents a snapshot of non-compliance rates related to fundamental rights at work and working conditions in the garment industry.

Introduction

Better Factories Cambodia (BFC) is a partnership between the International Labour Organization (ILO) and the International Finance Corporation (IFC). The ILO flagship programme brings together stakeholders from all levels of the global garment manufacturing industry to improve working conditions, enhance respect for labour rights, and boost competitiveness. BFC was established in 2001 at the request of the Royal Government of Cambodia and the United States government and is longest running Better Work programme in a country. BFC regularly prepares public reports synthesizing industry updates and highlighting non-compliance findings and trends in Cambodia’s garment industry.

Industry Context

The garment, footwear and travel goods (GFT) sector remains at the heart of the Cambodian economy. In 2022, the Royal Government of Cambodia launched its “GFT Sector Development Strategy 2022–2027,” which underlined the sector’s vital role as a significant economic growth pillar with exports averaging over 70 per cent of Cambodia’s total merchandise exports over the past decade. The strategy emphasizes the sector’s direct and indirect contributions to support the “livelihood of at least 2.5 to 3 million Cambodian people.” It also outlines the sector’s challenges related to its competitiveness and long-term sustainability.

In 2023, a global market slowdown led to a decline in sourcing from Cambodia, resulting in temporary production suspensions and facility closures in many factories. According to a General Department of Customs and Excise report, around US$ 11.1 billion garment, footwear and travel goods products were exported from Cambodia in 2023, around a 13 per cent drop compared to US$12.8 billion in 2022.