Old French colonial rubber plantations provided much of the firewood for garment factories in Cambodia, until recently

Cambodia has seen a dramatic rise in its garment industry, from around 25,000 workers in 2000 to over 500,000 today. The Garment industry now accounts for over 80% of Cambodia’s exports, making itself a major economic player in this small country of 14 million people within a relatively short time period. Much of that growth has been driven by the rise of living standards in China. No, China is not the prime export market for Cambodian garments, that would be the US and EU. However, the rising wages and increasingly enforced environmental protections are making Chinese garment factories unsuitable for business, as Bloomberg reports:

“Cambodia is just like China was 20 years ago. It’s on the verge of a big expansion,” says Fung, a 40-year veteran of the business who may open more factories outside Phnom Penh…“In Cambodia, people are happy to have a job,” says Fung. “But in China we keep losing workers. Whether we like it or not, we will be moving out.”… The countries [Cambodia, Vietnam, Bangladesh, Indosnesia] all have young people willing to work for less. In Cambodia, that means $76 for a 60-hour workweek. Chinese workers get from $280 in Jiangxi province to $460 in Shenzhen. That’s take-home pay in his factory for 48 hours work, including overtime, says Fung.

While in 2010, China produced 43.6 percent of rich countries’ apparel imports, that number shrank to 36.8 percent in the first half of last year, estimates Clothesource. The stronger yuan, stricter enforcement of environmental rules, and rising wages are pushing production out.

The shift of garment factories from China to southeast Asia has had a curious spillover effect on natural resources within Cambodia. As more and more garment factories are built with keeping costs as low as possible, the reliance of these factories on wood burning boilers continues to grow, as the NYT reports:

The majority of the country’s garment factories — making clothes for brand names in the U.S. and European markets — use firewood to heat old-fashioned boilers that produce hot water for dying fabrics and steam for ironing.

Some factories depend on firewood to supply all of their energy needs, according to industry experts.

Indeed, the use of firewood for energy is widely considered better for the environment than fossil fuels, as trees can be replanted to offset carbon emissions released during combustion. But replanting plans are limited here, while demand for firewood is growing.

In the 1990s, large areas of Cambodia’s rubber plantations — planted by the French in the early 20th century — had aged to the point where their yields of latex, the sap from which natural rubber is made, had dropped considerably, requiring extensive replanting. Felling old trees made large quantities of rubber wood available to the emerging garment and brick factories in the Phnom Penh region. But, according to a report released last year by the French environmental organization Geres, this source of timber is running out.

The Geres report found that 69 of the 310 garment factories then registered with the manufacturers’ association said they were using rubber wood to produce steam for ironing and dyeing clothes. In total, Geres estimated that garment factories burned around 65,000 cubic meters, or about 2.3 million cubic feet, of wood every month.

But a “critical period” started in 2009, the report said, “where rubber wood will not be available in sufficient quantity to supply the industrial sector its energy requirements.” Energy experts and environmentalists say that timber is now being obtained instead from the country’s remaining natural-growth forests.

So an economic and social shift, from lower to higher wages in China along with increased capacity and demand for environmental enforcement, now has lead to an environmental shift with a new demand on Cambodia’s forests possibly leading to increased deforestation… The NYT then went on to discuss how these wood fired boilers need to be replaced by more sustainable sources of power, but that the economic realities of the garment industry, and its reason (low costs) for being in Cambodia in the first place are holding back progress:

“The bottom line is this industry — in particular the garment sector — is the toughest sector in terms of competition,” he said. “Some people just can’t afford to make some of the changes that are being recommended.”

And according to several economic analysts and consultants here, who declined to be named because of the delicacy of the issue, it is not in the interests of manufacturers to show they can afford to install environmentally friendly technologies, because their brand-name clients may respond by putting pressure on them to lower their costs.

Another intractable trans-boundary global resource problem is uncovered: how do we provide global markets with affordable clothes while at the same time promoting sustainable development? Perhaps the uniquely dominant position of the Garment factories in Cambodia represent an opportunity for  a sector wide solution, one that a collaboration of NGOs/CSR advocates, civil society and Corporations could work together on to find the best way forward for reducing the demands of Cambodia’s garment districts on the environment… perhaps we need Collective Impact Clothing…

Or is the nature of the garment industry incompatible with environmental protections and living wages? Are we at the end of cheap clothes? What do you think?