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EU-Funded Workers’ Program in Myanmar Faces Opposition

A group of labor campaigners in Myanmar is urging the European Commission to reconsider its support of a multimillion-dollar project designed to promote responsible business practices in the embattled Southeast Asian country’s garment industry.

Officially launched last month, Multi-Stakeholder Alliance for Decent Employment in the Myanmar Apparel Industry, or MADE in Myanmar, builds on the earlier SMART Factories program, which helped more than 300 apparel factories shore up their compliance with social and environmental standards from May 2019 to December 2022.

SMART Factories, together with the Forum on Supply Chain Conduct and the Centre for Women’s Advancement initiatives, will now fall under MADE in Myanmar, which is funded through a 3-million euro ($3.3-million) grant from the European Union and implemented by the German developmental organization Sequa in partnership with the European Chamber of Commerce in Myanmar.

Already MADE in Myanmar is running five different advisory and training teams covering topics such as social compliance, chemicals management, workplace nutrition and occupational safety and health. By the close of 2026, it plans to cover hundreds of factories under SMART, enroll 1,400 participants in its technical workshops, establish a new grievance hotline, rally international retailers to sign four commitments to “superior” practices, support up to 10 labor rights organizations and open two women’s community centers with a focus on migrant workers.

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But the program is unable to achieve its objectives of promoting bipartite workplace relations and industry-level dialogue under martial law where “legitimate rights, the elected civilian government, independent trade unions and civil society cannot exist,” according to the Myanmar Labor Alliance (MLA), a consortium that includes the Solidarity of Trade Unions Myanmar and Industry Workers’ Federation of Myanmar (IWFM).

Writing to European Council president Charles Michel, EU Commission president Ursula von der Leyen, EU ambassador Ranieri Sabatucci and others in a letter dated April 12, the organization “strongly denounced” the project for “further undermining freedom of association at the workplace under the military coup.” It noted that the junta has declared 16 unions illegal and arrested and imprisoned more than 300 union members and activists “under inhumane conditions.” At least 53 labor leaders have been killed and “many more” forced into hiding.

“As a result, workers in Myanmar could no longer be represented by the free and democratic trade unions they have chosen to defend their rights and interests,” the MLA said.

The criticism adds another kink to the growing Gordian knot that is sourcing in Myanmar.

In an assessment that the Ethical Trading Initiative published in September, the multistakeholder organization, whose roster includes Bestseller, H&M Group and Primark, concluded that it “wasn’t possible” for responsible businesses to apply normal human rights due diligence in the nation, though it stopped short of advocating whether businesses should stay or go. Aldi South, C&A, Mango, Primark, Marks & Spencer, Tesco and, more recently, Uniqlo owner Fast Retailing and Muji parent Ryohin Keikaku are on team “leave.” Others, including Bestseller, H&M Group and Zara owner Inditex, say they want to stay the course because workers would otherwise be left without jobs.

As of January, the Business & Human Rights Resource Centre has identified 198 cases of human rights abuses, including wage theft, abusive work rates and mandatory overtime, affecting at least 104,000 garment workers, most of them women. Due to fear of reprisal, the actual number is likely far higher, the London and New York-based nonprofit noted.

Ranieri, writing from Yangon, said that the EU acknowledges and is “immensely concerned” about the state of labor compliance in Myanmar but that the option of not doing anything will only cause massive unemployment and further exploitation of workers.

“As a responsible partner of Myanmar, we believe that we should all try to stop this negative trend as best as we can,” he said. “We do believe that through the MADE project, we can mitigate and hopefully improve overall labor compliance in Myanmar. The project target group is the garment workers and the project will work with all stakeholders of goodwill to address the significant challenges workers are currently facing.”

MADE in Myanmar, Ranieri said, will “engage in a number of activities aimed at improving environmental and labor compliance, including labor disputes, and it will transparently publish information independently collected in this respect.”

Karina Ufert, CEO of EuroCham Myanmar, said that she believes that MADE in Myanmar can support brands as they engage with stakeholders on the ground to undertake continuous due diligence. By working together and sharing practices, she said, brands can apply “relevant leverage” on suppliers and factories to resolve any issues.

“EuroCham believes that companies, which continue sourcing in Myanmar, need to be in a position to undertake heightened due diligence, which other stakeholders such as the Clean Clothes Campaign and Ethical Trading Initiative have highlighted,” Ufert told Sourcing Journal, noting that EuroCham provides additional resources for its members in Myanmar. “While staying engaged in the country, brands can exercise their leverage to improve working conditions for hundreds of thousands of workers. Disengagement of the responsible brands will only lead to a further deterioration in the situation for the workers’ rights and contribute to greater unemployment.”

But the MLA remains skeptical. Since the ousting of Aung San Suu Kyi’s government in February 2021, SMART Factories has “shifted” to provide management-worker training for the creation of Workplace Coordination Committees, or WCCs, meant to “replace” legitimate trade unions and labor organizations, it claimed.

“The program has no interest to address our complaints about this or workers’ complaints about their rights and working conditions,” the letter said. “Nor has it any mandate and authority to address the military and employers’ interventions and establishment of the WCCs and yellow trade unions at the workplace. The project has become a tool for protecting the employer’s interests and a propaganda project that legitimizes the military‐controlled business environment under the [regime]…and greenwashes exploitative business investments under the coup.”

Both Sequa and SMART Factories declined to respond, deferring to the European Commission.

The MLA is demanding that the European Commission cease funding projects that lend the junta “legitimacy and means,” including MADE in Myanmar. It should also suspend the country’s Everything But Arms trade benefits, regularly review and enforce economic sanctions to ensure their effectiveness, and “steer” its programs toward supporting efforts by trade unions, civil society organizations and the National Unity Government to restore democracy, it said.

It’s a call that ETI executive director Peter McAllister agrees with. The EU, he said, should examine the support it provides, whether in terms of trade preferences or project support, to ensure that it does not inadvertently prop up the junta. Certainly, the issue has multiple angles.

“There is the argument that if brands were to pull out of Myanmar this will leave thousands of workers in a worse-off condition, which is probably the case, but that does not resolve the fact even in the status quo rights are severely constrained and access to grievance and meaningful representation is very limited,” he said.

“As our assessment indicated and that the letter points to, there are very serious concerns about the rights of workers in the garment sector in Myanmar, our conclusion was this it is not possible, for example, for proper freedom of association to exist and any factory that continues to operate does so in an environment where normal responsible business is severely constrained,” McAllister said. “The ability of companies sourcing from Myanmar to undertake meaningful human rights due diligence is very constrained.”

The MLA is right but only to a certain extent, said Vicky Bowman, director of the Myanmar Centre for Responsible Business and a former U.K. ambassador to Myanmar.

“Although I share MLA’s view that workers’ rights will be better protected under a legitimate and democratically elected government which fully protects the right to freedom of association—something which sadly is not currently in prospect in Myanmar—I do not share their view that apparel buyers that are willing to put the effort into sourcing responsibly should quit Myanmar,” said Bowman, who is on MADE’s steering committee. “That would only negatively impact workers. It would also not bring democracy or freedom of association any closer.”

She said when organizations such as those involved in MADE actively support labor groups in drawing attention to reports in Myanmar-language media and bringing labor violations to the attention of brands, this helps “accelerate resolution and prevent future recurrences.”

“That’s why it is now one of the elements of the EU’s MADE project, which includes a greater element of outreach to worker organizations than the earlier SMART program,” Bowman said. “MADE will also expect stronger commitment from buyers to be transparent, audit suppliers closely, build relationships with labor groups and engage constructively on complaints.”

Even among Myanmar’s workers’ representatives, there is little consensus.

For Khaing Zar Aung, the exiled president of the IWFM, an IndustriALL Global Union affiliate, MADE in Myanmar is a fig leaf for brands to continue operating in Myanmar even though there are “no legitimate and democratic trade unions working with MADE.”

“The EU should not give legitimacy to the military junta by pretending there is a right to freedom of association and social dialogue taking place to protect workers’ rights while trade unionists and workers’ rights defenders are killed or arrested or in hiding,” she told Sourcing Journal. IndustriALL, for its part, is encouraging brands to follow the responsible exit framework it has developed.

Thurein Aung, founder of Action Labor Rights, a workers’ union not included in the MLA, disagrees, however. Helping workers and improving working conditions does not equal supporting the regime, he said. In fact, responsible companies that uplift workers are supporting “one of the forces struggling to restore democracy.” He said that the ETI’s report is only accurate if brands sourcing from Myanmar don’t meaningfully engage with unions about their presence there.

Bowman said that it’s still too soon to determine how MADE in Myanmar will shake out.

“Since MADE is barely launched, it is too early to judge how successful it can be in the present challenging environment,” she said. “But I would like to encourage critics of the MADE project, most of whom are based outside of Myanmar, to engage with it on substantive issues related to improving working conditions, rather than trying to prevent it from happening.”