"Myanmar’s ‘Deteroriating’ Labor-Rights Crisis Grows More Dire", 22 December 2021

“Working conditions in Myanmar [are] getting worse day by day,” Khaing Zar Aung, the exiled president of Industrial Workers Federation of Myanmar (IWFM), a trade union, tweeted earlier this week. “Forced labor is rampant in many factories.”

Before the military violently seized power...minimum daily wage had stagnated at 4,800 kyats ($2.70), barely enough for workers to survive on. Now, Khaing Zar Aung said, they’re lucky if they receive 3,600 kyats ($2.02), pushing them to the edge of starvation and destitution...

Labor campaigners are concerned that the ongoing crisis has rolled back hard-fought gains in worker rights, including freedom of association, with some factory owners colluding with the military to hunt down union organizers...

Trade unions...have urged multinational brands and retailers to divest from Myanmar, despite future job losses. At the same time, workers remain fearful...

But according to Khaing Zar Aung, this half-life isn’t a life at all, and a return to democracy is the only path forward. Yet many international brands...continue to “exploit Myanmar workers by taking advantage [of] the political situation…without knowing what is happening to workers in the garment sector,” she said...

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...a handful of fashion companies...have stopped placing orders with their Burmese suppliers...

One notable holdout is H&M, which suspended orders at the onset of the coup only to “gradually” place new orders at its 56 supplier factories to stave off their “imminent risk” of closure. “We are of course deeply worried about the situation in Myanmar,” a spokesperson told Sourcing Journal. “At this point, we refrain from taking any immediate decision on future order placement and long-term presence in the country.”

Bestseller stopped orders, restarted them, then re-slammed the brakes following reports of Covid-19 outbreaks at some of its supplier factories. A representative...told Sourcing Journal that it’s “currently in a bridging solution,” meaning it will keep production running with the goal of not laying off workers, as it awaits the results of an impact assessment, which it said will be a “significant and valuable basis for determining the right approach.”

Primark, too, is awaiting the results of an impact assessment before making a decision on whether to stop production. “...we are conscious of the thousands of workers whose livelihoods depend on employment at our suppliers’ factories,” a spokesperson told Sourcing Journal. “In the meantime, we remain committed to all orders and our current suppliers. We continue to monitor for compliance with our code of conduct to support the safety and welfare of workers in Myanmar and have heightened our due diligence to give us confidence that none of our suppliers’ factories have links to the current regime.”

Western brands and retailers say the question of whether to stay or leave is a nuanced one. The European Chamber of Commerce warned...that Myanmar’s garment sector was “unlikely to recover for years” if brands cut and run. The same month, ACT (Action, Collaboration, Transformation)...provided guidance on how to communicate with suppliers about letting go of workers responsibly...

“The tide is turning against remaining in Myanmar,” Sofia Nazalya, senior human-rights analyst at Verisk Maplecroft, a risk-assessment firm, told Sourcing Journal. “While companies may be hesitant to leave garment workers in the lurch, recent calls by the trade unions to divest intensify pressure on companies to reexamine the role they play in the country.”...

The question for multinational companies now “goes beyond whether they can guarantee employment for workers, but how their presence may be perceived to lend support to a brutal dictatorship,” Nazalya added. “As it stands, companies are already increasingly unable to mitigate deteriorating labor conditions in Myanmar.”