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Myanmar Garment Industry ‘Missing Out’ on Benefits of Sustainability

While the opening of Myanmar’s second green-certified apparel factory may be cause for celebration, it’s only “a step in the right direction,” according to a leading data-analytics firm.

GlobalData said in a note this week that the Southeast Asian country’s garment industry must continue to invest in environmental sustainability if it doesn’t want to cede business to competitor countries.

As yet, only one garment manufacturer in the nation has been certified Leadership in Energy and Environmental Design (LEED) Platinum by the U.S. Green Building Council. Two other facilities, both operated by garment manufacturer Guston Amava, comprise 34 percent recycled building materials, such as reclaimed steel, in their construction, along with rooftop solar panels, an evaporative cooling system and water-reduction features.

“It’s refreshing to see manufacturers like Guston Amava taking the bull by the horns and leading the industry in this respect,” Hannah Abdulla, apparel correspondent at GlobalData, said in a statement. “However, Myanmar still has some way to go compared with countries such as Bangladesh—and factories are missing out on the cost-saving benefits of making their operations greener and securing higher investments as buyers pay closer attention to sustainable production.”

Nearly 70 factories in Bangladesh have adopted LEED certification, which rates buildings based on eco-friendly performance measures such as carbon emissions and energy and water efficiency. Eight of those facilities have earned Platinum status, the highest achievable level above certified Silver and Gold.

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Still, Myanmar, Abdulla noted, is one of the world’s fastest-growing garment, footwear and travel-goods suppliers, with clothing exports cresting $3.86 billion in 2018. But this growth also results in increased environmental impact, which requires “best-practice solutions for improved production efficiency, energy, water and waste management,” she said.

There are signs Myanmar wants to be greener. In 2019, the European Union-co-funded SMART Myanmar initiative signed a memorandum of understanding with Yangon-based Ayeyarwady Bank to identify and pilot “bankable green projects” while boosting financing for sustainable and energy-saving efforts by small- and medium-sized enterprises.

“At a time when retailers and consumers are paying close attention to the conditions under which their garments are produced, ethical and sustainable production is a big deal,” Abdulla said. “Making their operations more environmentally friendly will help factory owners compete with other sourcing markets and give them a better chance of retaining existing orders and securing new business.”

Still, Myanmar faces sector-wide headwinds, least of all the pall cast by its violent persecution of hundreds of thousands of Rohingya Muslims in recent years. Decrying the crisis as a “te xtbook example of ethnic cleansing,” the UN has called for businesses to divest from factories linked to Myanmar’s military or be made potentially complicit in crimes against humanity.

This month, workers in Myanmar took to the streets of Yangon ahead of a wage review in May to demand an increase in the daily minimum wage from 4,800 kyat ($3.28) to 9,800 kyat ($6.69)

“The current rate set by the government is not enough for a family of four,” Ko Thwin Aung, chair of Myan Mhu garment workers union, told the Myanmar Times. “Commodity prices, as well as hostel charges, are rapidly rising up. So, we will ask for reasonable wage. For a family of four, if three do not work and depend on only one, it is impossible to cope with the current rate.”