Company to support the Diagnostic of informality in the Cambodian Construction Sector
The construction industry is a significant driver of growth and development in Cambodia as it contributed to about 17 per cent of Cambodia’s total GDP growth in 2015 and about 6 per cent in 2019. Cambodia’s urban centres such as the capital city of Phnom Penh, the tourist attraction site of Siem Reap, the seaside town of Sihanoukville, and the border towns of Poi Pet and Bavet, have experienced, in the last decade, a rapid construction boom.
According to the 2022 Economic Census of Cambodia, the number of establishments1 in the construction sector are 312, about half of which are not registered with the Ministry of Commerce or the General Department of Taxation. About half of the establishments are classified as engaged in construction of buildings, followed by utility projects (about one eight of the total), and the remaining ones are distributed in several construction activities such as roads and railways, other civil engineering projects, electrical installations, and others. It shall be noted that the establishments surveyed by the 2022 Census hardly supply a significative picture of the actual construction sector enterprises landscape of Cambodia. An uncountable number of small-scale contractors operate in the sector, and these escape the surveying mechanisms of the Census which exclusively looks for establishment.
According to the National Social Security Fund’s 2022 annual report, the Fund had registered a cumulative total of 327 enterprises and 16,244 workers (2,936 female workers) in the construction sector. If the registered members were assumed to be actively contributing, the social security coverage in this sector could range between 2.0 and 3.6 per cent, depending on the denominator used. Indeed, the 2019 LFS indicates that 97.2 per cent of workers in the sector are employed with informal arrangements. Legally, all persons defined by the 1997 Labour Law are mandated to be enrolled within the healthcare, employment injury, and pension schemes of the NSSF, as per the 2019 SS Law.
The ILO has been working together with the RGC for the promotion of evidence-based dialogue between the different stakeholders, capacity building activities, and the production of evidence to feed the national debate on formalization. The ILO is implementing “Advancing Social Protection in Cambodia” under financial support from the European Union aiming (among other outcomes) to increase the percentage of workers covered by social security schemes, and to support the modernization of the social protection system through ICT applications, improved business processes, data sharing, performance management and a learning & development framework. Since 2023, the ILO is also implementing the project “Promoting the transition to formalization through integrated approaches in Cambodia”. The latter project specifically aims at supporting the policymaking and implementation processes in businesses formalization through sectoral approaches.
Within this framework, ILO is will engage an experienced team of consultants to undertake a diagnostic assessment of the drivers of informality in the construction sector, with the view to identify practical and action-oriented recommendations for starting the discourse of transitioning enterprises and workers into formalization. Please refer to the attached ToR file for detailed tasks and deliverables, and strictly follow the application process.