PHNOM PENH/NEW YORK, Aug 21 (Reuters) – Walmart and
Centric Brands are investigating their supply chains in Cambodia
over allegations that inmates at the country’s largest women’s
prison were illegally employed to produce garments for export,
following questions posed by Reuters and inquiries from a U.S.
industry group about labour practices there.
The American Apparel and Footwear Association (AAFA) wrote
to Cambodia’s ambassador to Washington, Keo Chhea, in November,
expressing “strong concerns regarding credible reports” that
inmates at Correctional Center 2 (CC2), near Phnom Penh, were
producing garments and other textile products for export,
including to the U.S., as part of a rehabilitation program.
Details of this and a subsequent letter from AAFA in
February pressing Cambodian officials on the matter, both
reviewed by Reuters, are being reported for the first time.
Neither letter named the companies allegedly involved.
International trade of goods made by convicts is illegal in
the U.S. and in Cambodia, which has received preferential U.S.
trade terms on billions of dollars of products over recent
years. The International Labour Organization (ILO), of which
Cambodia is a member, permits prison labour provided it is not
forced.
Cambodian Ministry of Commerce Secretary of State Sok
Sopheak, who chaired an inter-ministerial committee
investigating AAFA’s allegations, told Reuters that Cambodia had
fined three local companies $50,000 each and suspended their
export licenses for three months through July 31 for using CC2
inmates to sew hotel slippers for export to the European Union
and Japan. The value of the slippers exported last year was
about $190,000, he said.
The companies, which Sopheak confirmed were W Dexing Garment
(Cambodia), IGTM and Chia Ho (Cambodia) Garment
Industrial, did not respond to requests for comment. Reuters
could not determine which hotels ordered the slippers.
The Office of the U.N. High Commissioner for Human Rights
said it had visited CC2 and raised concerns with authorities
about forced labour. It said it learned in February that
Cambodia was investigating and that the prison workshops had
been suspended.
AAFA’s first letter was copied to Pan Sorasak, Cambodia’s
commerce minister, and Ken Loo, secretary-general of the
Textile, Apparel, Footwear and Travel Goods Association in
Cambodia. AAFA’s second letter added Aun Pornmoniroth,
Cambodia’s economy and finance minister, who is also a deputy
prime minister. None of the government officials addressed in
AAFA’s correspondence responded to questions from Reuters. Loo
said his trade group “constantly” reminds members to comply with
local law and international labour standards.
Four people familiar with the matter, including two former
CC2 inmates, said other items produced in the prison appeared to
be linked to Walmart and Centric Brands, the licensing partner
for IZOD and other labels including Calvin Klein, Tommy Hilfiger
and Under Armour. Both Walmart and Centric source goods from
Cambodia.
The people showed Reuters a reusable Walmart-branded
shopping bag and a polo shirt with IZOD branding which they said
were made in the prison factories where the inmates had worked
and which they said they brought out with them upon their
release, the most recent in January. Reuters is not disclosing
their identities, nor those of two other inmates interviewed for
this report, due to concerns about their safety.
Information printed on the items’ tags – names of importers,
style numbers and shipment codes, and codes issued by the U.S.
Federal Trade Commission – indicated they were destined for the
U.S. and Canada, trade records from data providers Panjiva and
ImportGenius show. The records do not disclose the factory of
origin, supply-chain movements or subcontracting relationships
within Cambodia, and Reuters could not independently establish
whether the items were made in the prison.
The U.S. companies, along with Walmart importer Travelway
Group International, said they were investigating their supply
chains in response to Reuters’ queries.
“We find the allegations very concerning,” a Walmart
spokesperson said in early June. “Forced labor of any kind is
abhorrent, and we believe all people should be treated with
dignity and not be exploited.” The spokesperson said the
investigation was ongoing as of mid-August.
Centric told Reuters in an email in June that it had “placed
on hold” imports from a factory in Cambodia and would
“immediately terminate” any supplier found to be using prison
labour. It said in early August that it “has not found any
evidence supporting the claim that prison labor was used” to
make the polo shirt in question but had “terminated” its
relationship with the factory, which it would not identify.
The supplier was audited by Better Factories Cambodia (BFC)
and Worldwide Responsible Accredited Production (WRAP) for each
of the past four years, and by amfori’s Business Social
Compliance Initiative since 2022, and there was no indication of
issues related to prison labour, Centric said.
“Without having the polo in-hand for closer inspection, it
is impossible to definitively confirm its authenticity,
including whether it is counterfeit or unauthorized,” Centric
said.
Authentic Brands Group, which owns the IZOD brand, and BFC
said they took forced-labour allegations seriously.
Once a year BFC conducts unannounced, two-day assessments of
all Cambodian factories that produce garments and travel goods
for export, said the ILO, which helps run the monitoring
initiative.
When asked about the IZOD-branded polo shirt and shown
photographs, the ILO said tracing a garment to a particular
factory and assessing working conditions in prisons were not
within the initiative’s mandate.
A spokesperson for amfori said members were responsible for
monitoring their suppliers and subcontractors, but that to the
best of his knowledge amfori had not encountered cases of forced
or prison labour in Cambodia and had not found a connection
between its members’ businesses and CC2.
WRAP also said it was investigating the case.
The Office of the U.S. Trade Representative did not answer
questions from Reuters about potential repercussions of such
labour at CC2.
$1.75 TO $5 PER MONTH
Reuters pieced together details of garment manufacturing in
CC2 through interviews with four women released as recently as
January after completing drug sentences of up to two years.
Reuters verified the women served time in CC2 through prison and
court records.
The former inmates said they worked standard hours and made
shirts, trousers, hotel slippers and shopping bags. Refusing to
work often meant being moved to a different cell or forced to
kneel, though some prisoners avoided the factories by paying
prison guards, they said.
“We didn’t want to work but we had to work. When we were in
the prison we were equal to zero,” said one former inmate.
Cambodia sets a minimum $200 monthly wage for garment
workers, but the women said they usually received about $1.75 to
$5 per month.
All the former inmates said they used their factory earnings
to pay for their cells to be cleaned, for electricity, fans,
water, laundry soap, sanitary pads, or additional food.
Three women said they did not have employment contracts, and
that guards simply took their names before they began working in
the prison factories.
Cambodia’s Ministry of Interior, the General Department of
Prisons and the official in charge of CC2 at the time, Klot
Dara, did not respond to requests for comment. Reuters could not
determine who owned the factories or details of their
arrangement with the prison.
An ILO spokesperson said that if a prisoner declines to
work, the government must ensure they do not face threats or
penalties.
“A good indication of whether prisoners freely consent to
work is whether the conditions of employment approximate those
of a free labour relationship,” the spokesperson said.
CAMBODIA INVESTIGATES
Prison labour at CC2 potentially puts Cambodia at odds with
the U.S. Generalized System of Preferences, which grants
duty-free benefits to eligible developing nations. The program
has lapsed and is awaiting U.S. lawmakers’ reauthorisation.
While the program excludes textiles, eligibility for its
benefits – through which Cambodia sold $2 billion worth of goods
to the U.S. in 2020 – in part depends on the beneficiary country
prohibiting forced labour.
Cambodian commerce ministry officials met with other
government, prison and trade association representatives in
February and March to discuss AAFA’s concerns about whether
international norms for producing export goods were being
followed in Cambodia, the ministry said on its official Facebook
account.
On March 17, Sopheak told AAFA president and CEO Stephen
Lamar and senior vice president of policy Nate Herman, the U.S.
embassy in Phnom Penh, Cambodia’s U.S. ambassador, and others,
that Cambodia would clarify the law to distinguish between
prison production for rehabilitation programs and commercial
subcontracting, the commerce ministry posted on Facebook the
next day.
Cambodia held an election in July. In mid-August, Sopheak
told Reuters progress on legal clarification would need to wait
for the new government to be officially announced, and would
depend on its priorities.
(Reporting by Clare Baldwin in Phnom Penh and Katherine Masters
in New York. Additional reporting by Siddharth Cavale in New
York, John Shiffman in Washington and Kristina Cooke in Los
Angeles. Editing by David Crawshaw and Kay Johnson.)
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