Social Protection For The Apparel Industry in Cambodia: Gaps and Opportunities

Social protection for the apparel industry in Cambodia: Gaps and opportunities
Paper publication date: 
Monday, May 16, 2022

Executive summary

In recent years, Cambodia has seen significant positive progress in the development of its social protection agenda, which aims to be more inclusive and better address the needs of the most vulnerable. As the country’s largest formal sector employer, the garment and footwear sector has been at the forefront of Cambodia’s push to extend contributory social insurance mechanisms through the establishment and expansion of the National Social Security Fund (NSSF).

Contributory social mechanisms, such as the NSSF, which rely on contributions from individuals and/or employers are particularly important instruments in low-income contexts, such as Cambodia, are they are more financially sustainable than tax-financed alternatives.

The Cambodian apparel industry employs more than 800,000 workers, 90 percent of whom are women. The incomes of these workers indirectly support hundreds of thousands of family members, as well as a wide range of informal sector workers in industrial zones, including food vendors, clothes sellers, and transport operators. Employees in the sector are now entitled to a range of social security protections via the NSSF, including Employment Injury Insurance (EII) and Social Health Insurance (SHI).

The COVID-19 pandemic has highlighted the limitations and challenges of the current national social protection system. The garment and footwear sector workforce is among the most adversely impacted by the pandemic. The collapse in retail demand in consumer markets has resulted in the cancellation of orders throughout the garment supply chain. In Cambodia, suppliers have suspended production or closed factories, putting hundreds of thousands of employees out of work on a temporary or permanent basis.

In response to the urgent challenges posed by COVID-19, this report assesses the status of contributory social security protections for workers in the garment sector. It intends to serve as a resource for those working on improving social protection provision in pursuit of a just and sustainable recovery.

Check out the full report here.