Cambodia’s first Responsible Business Hub has launched to improve the ability of local suppliers to better adapt to and comply with new regulations emerging overseas.
On Monday, EuroCham officially unveiled its Responsible Business Hub (RBH), a free help desk offering a wide range of services on responsible business practices. It forms part of the RBH global network.
It aims to assist the business sector in preparing for new sustainability regulations, and boost competitiveness, sustainability and HREDD capabilities of Cambodian export industries, while enhancing data transparency related to sustainability progress achieved in Cambodia.
It will primarily concentrate on the garment, footwear and travel goods (GFT) sector to help them adhere to evolving environmental and social due diligence standards.
Moreover, the most urgent law is the German Supply Chain Act, requiring German companies to prevent and mitigate issues related to worker safety, human rights, and sustainability throughout their supply chains, including suppliers in Cambodia. The law will be enforced from January 2023.
Sok Siphana, a government advisor, said at the launch that since the country established Better Factories Cambodia in 2001, in partnership with the International Labour Organization with the goal of addressing these issues, the country is well-positioned to adhere to human rights and due diligence requirements.
“Now the ante is up, they’re moving towards mandatory compliance on human rights and environmental issues. It’s about time we upgrade our commitment, upgrade our efforts,” Siphana said. “It does require a conscious effort from the industry. What are the specifics of this regulation and how does it affect us as the supplier here? How can we help our suppliers to be compliant?”
Ken Loo, Secretary General of Textile Apparel Footwear and Travel Goods Association in Cambodia (TAFTAC), said that adopting new standards has a price tag, which should not be disregarded when dealing with a profit-driven business.
“It does not affect us directly yet, but our customers who are affected directly will make demands on us,” Loo said. “As responsible investors in this industry in Cambodia, we want to do the right thing, even though we are not lawfully obligated.”
Sara Monti, RBH coordinator at EuroCham, said only 20 percent of companies in Cambodia are aware of future requirements for suppliers and are planning to take some actions, according to a preliminary study conducted by EuroCham on behalf of GIZ on factories working for EU and US brands in Cambodia.
However, the RBH will provide companies with services, including a platform for knowledge and awareness, tools for training and self-assessment, a directory of qualified local service providers, basic advisory services, and recognition of responsible business.
Tep Phiyorin, Undersecretary of State of the Ministry of Economy and Finance, said that the initiative is to support the private sector in its strategic alignment with the global supply chain so that businesses will be more competitive in the future.
He said that the government has developed policy-driven strategic measures to support responsible business across all sectors and, in particular, to encourage Cambodia's export industries to adhere to social and environmental due diligence standards.