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Since the February 2021 coup in Myanmar, garment factories and its workers have been put in extremely challenging circumstances, and it has brought enormous economic repercussions to the country. The coup is compounding the impact of the COVID-19 pandemic, the majority of Myanmar’s population now lives below the poverty line, and poverty is estimated to have doubled compared to March 2020, according to World Bank. Myanmar’s garment and footwear industry was highly affected by the coup as well. According to a Myanmar Garment Manufacturing Association (MGMA) snapshot in September 2021, around 134 factories closed down due to pandemic and political crises resulting in job losses for 157,000 workers. Experts expected that with this country’s political instability, apparel exports would drop to average monthly apparel export of $327.34 million with a drop of 15.00 per cent in 2022.
Many garment factories from Yangon, Mandalay, Bago and Pathein, are closed because of “economic instability”. Some fashion brands put a halt on sourcing from Myanmar as well as the Action, Collaboration, Transformation (ACT) Initiative, a global agreement between trade unions and brands to achieve living wages, withdrew from Myanmar in December 2021. On March 25th 2022, the International Labour Organization (ILO) established a Commission of Inquiry into the decline of workers’ rights in Myanmar, including freedom of association, and the right to organise and forced labour since the military coup of February 2021. More recently, inflation, high commodity prices, and low wages have made life even more difficult for garment workers.
Meanwhile, global unions have been calling on the European Union (EU) to suspend the Everything But Arms (EBA) agreement with Myanmar. Some local trade unions and the Myanmar Labour Alliance, together with global unions and the International Trade Union Confederation (ITUC), have campaigned for comprehensive economic sanctions on Myanmar. The international community also responded with sanctions imposed by the European Union (EU), US and UK since the military coup. More pressure on foreign investments to justify their presence and a more robust call by unions and rights groups that doing business in Myanmar is no longer possible for ethical business.
Since April 2022, State Administration Council (SAC) reduced COVID-19 restrictions and reopened foreign visitors to Myanmar again on tourist and business visas. Since then, there have been brand representatives visiting Myanmar factories and scheduling audits.
As for the security overview, the situation remained tense, with continued armed clashes. There are bomb blasting continues in major cities like Yangon and Mandalay, and daily robberies and kidnappings. State Administration Council (SAC) extended the state of emergency from August 2022 to January 2023 and announced stricter security checks due to the preparations for the elections in 2023.
Since the military coup on February 1st 2021, Myanmar’s garment industry has faced many serious challenges. The garment factories face high risks for violations, including low wages, long working hours, repression of union members and no more active unions, child labour, and lack of occupational safety and health measures.
The labour market remains fragile and deeply affected by heavy job losses. The ILO estimates approximately 1.6 million jobs were lost in Myanmar in 2021, and 1.1 million fewer women and men are employed compared to 2020, according to the ILO brief on August 1st 2022. But the quality of jobs is deteriorating in the garment industry as referred to in decisions of the ILO Committee on Freedom of Association, ILO Governing Body and in the International Labour Conference Resolution of 2021.
Recent reports and events evolving in Myanmar demonstrate a further deterioration of labour rights. ILO brief on August 1st pointed to an increase in child labour, daily labourer, irregular working hours, workers receiving very low pay, entitlements such as severance pay when workers’ jobs are terminated are also often not granted, reduced take-home pay, overtime and attendance bonuses, and hiring under piece-rate pay arrangements in the garment sector. BHRRC briefed on July 26th that wage theft, gender-based violence and harassment, inhumane work rates, mandatory overtime, and attacks on Freedom of Association are some of the abuses Myanmar’s garment workers face daily. Corporate Accountability Myanmar (CAM) research found that global garment brands are unable to safeguard labour rights in post-coup Myanmar.
Figures released by the Office of Textiles and Apparel (OTEXA) in March 2022 showed Myanmar was becoming a less attractive sourcing destination given the political unrest within the country.
Fair Wear has been active in Myanmar since 2016. Currently, 13 Fair Wear member brands source from 29 factories in the country.
Since there’s such a high risk of labour violations, Fair Wear has regarded Myanmar as a country that carries additional risks regarding the implementation of labour standards. We have a Fair Wear Enhanced Monitoring Framework for Myanmar in place that requires Fair Wear member brands active in the country to take additional measures. Given the deteriorating situation in Myanmar, we have called on all Fair Wear member companies to assess their presence in the country as a matter of urgency. We have also renewed advice that in their assessment, companies apply the UN Guiding Principles on Business and Human Rights (UNGPs) and OECD due diligence guidance.
Fair Wear engages in continuous stakeholder consultation, carefully monitors the developing situation and issued several statements and guidance, including Guidance for brands, statement by coalition of MSI’s and industry organisations and update on Myanmar situation (in which we urge the full and immediate restoration of democratic rights), and calls for an end to the increasingly violent crackdown against leaders of unions and labour rights organisations.
Since the coup in February 2021, the key question is whether brands can still conduct meaningful human rights due diligence or whether sourcing in Myanmar causes greater harm to the rights of workers than good. Fair Wear expects its members to reassess their presence in Myanmar and, in consultation with its stakeholders, update its guidance to the ‘heightened Human Rights Due Diligence’ to help guide this assessment. Through our brand liaison, we have frequently dialogued with members on the application of heightened Human Rights Due Diligence guidance.
For now, all Fair Wear’s activities (training, factory visits by local experts, verification audit, and virtual assessment) in Myanmar are put on hold due to the unstable political situation in Myanmar. But Fair Wear continue its complaints helpline available for workers to voice their concerns and also distributes Workers Information Cards (WIC) for workers on the existence of the complaints helpline.
Whenever brands do decide to stop, decrease or pause sourcing from a supplier, all steps of Fair Wear’s regular responsible exit strategy can be followed. We are also closely monitoring the Myanmar situation and any possible additional measures that the European Union may impose as a result.
This report looks at the case of Myanmar as part of the Social Dialogue in the 21st Century project, a collaboration between the New Conve…