Amidst ongoing negotiations to boost the minimum wage for garment workers in Cambodia, H&M, the world’s second-largest fashion retailer, has rolled out a program aimed at improving pay in the Kingdom’s factories, arguing that higher wages improve industrial relations and productivity.

The introduction of the “fair wage method” in 68 factories in China, Bangladesh and Cambodia will focus on ensuring workers receive wage improvements “regularly and fairly”, although no exact wage level is being set, an H&M representative said yesterday.

The new program comes at a time when the government’s Labour Advisory Committee is supervising sensitive discussions over raising the minimum wage, which is to be decided in October.

“I want the negotiation for the minimum wage this year to go smoothly, so it can be accepted by everybody,” said Labour Minister Ith Samheng at a workshop on the issue in Phnom Penh yesterday.

“We want the two parties [labour and management] to be in harmony.”

Trade unions are demanding a raise to $177 per month from the current $128, which they say will cover rising living costs in the Kingdom.

But a majority of the members in Cambodia’s garment manufacturers association voted in August that they could not afford to pay a single dollar more.

Van Sou Ieng, chairman of the Garment Manufacturers Association in Cambodia (GMAC), praised the negotiations, saying they were a better alternative to what he considered politically driven protests.

“This time, I want to appeal to everyone at this workshop that the minimum wage must be in accordance with economic reality, which is about harmonising workers’ living standards so employers can pay them better than through the political way,” he said.

Unions said they would hold back from demonstrating about the issue during negotiations, but wouldn’t hesitate to take to the streets if the final deal was not in their favour.

“We don’t know if we will get our demands or not during the discussion,” said Ath Thorn, president of the Coalition of Cambodian Apparel Workers’ Democratic Union (C.CAWDU).

In a bid to underline the necessity of a $177 per month wage, Thorn said a report would be released on Friday conveying the true cost of living for garment workers.

But GMAC has already responded with research of its own, saying in a statement released on Monday that wage negotiations and an upcoming trade union law are “rocking garment buyers’ confidence in Cambodian factories”.

According to GMAC’s report, only 7 per cent of 167 member factories surveyed said a raise above $5 would be sustainable, while 86 per cent expected garment exports to drop in the second half of this year as prices stagnated.

Ken Loo, secretary-general of GMAC, said that since the minimum wage increased to $128 in January, higher wages had not caused labour relations or productivity to improve, pointing to increased factory closures and union protests at the Ministry of Labour “every day”.