H&M is hitting pause on sourcing from Myanmar.
The Swedish retailer, the world’s second-largest apparel company after Inditex, told Sourcing Journal Monday that while it’s not taking any immediate action regarding its long-term presence in the embattled Southeast Asian nation, it won’t be placing new garment orders “at this point.”
More than 60 people have been killed in a series of deadly crackdowns against protestors since a Feb. 1 coup unseated Myanmar’s civilian leaders and returned the country to full military control. The escalating violence has drawn sanctions by the United States and others in a bid to stem the bloodshed and restore democratic rule.
H&M, which works 56 supplier factories in the country, according to its website, says its ability to conduct business in Myanmar has been stymied by practical difficulties arising from an unpredictable situation, including challenges related to manufacturing and infrastructure, raw material imports and the transportation of finished goods.
Indeed, the chaos has had a knock-on effect. Telecommunications disruptions that have shut down banks have stopped freight payments and led to delays in the processing of customs documents. Thousands of striking truck drivers have slowed the delivery of imports, causing cargo containers to pile up at Yangon’s ports and prompting shipping firm Hapag-Lloyd to temporarily suspend any import bookings into Myanmar. Following a weekend of hospital and college-campus occupations, nighttime raids and arrests, a coalition of labor unions, including the Federation of Garment Workers Myanmar, is calling for a total strike, casting greater uncertainty on the stability of sourcing in the country still reeling from the economic fallout of the pandemic.
“The labor organizations of Myanmar stand united in support of an extended nationwide work stoppage against the military coup and for the future of Myanmar democracy,” a joint statement read. “No one can force any Myanmar citizen to work; we are not slaves to the military junta now and we never shall be.”
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H&M is “of course extremely concerned about the escalating situation in Myanmar and shocked by the use of deadly force used against protestors,” said Serkan Tanka, H&M group country manager, Myanmar. “Having been present in the country for the last seven years, the latest developments deeply sadden us.”
Tanka says that H&M will continue to take full delivery of and pay for all already placed orders. The company is also in consultation with United Nations agencies, diplomatic representatives, human rights experts, trade unions and other multinational companies to help shape any future decisions it makes as to “how we as a company can best contribute to positive developments in accordance with the will of the people in Myanmar.”
“While we value any guidance on this matter, we fully recognize the complexities for the international community, trade unions and other stakeholders in balancing different aspects to ensure that the people in Myanmar are not negatively affected,” he added. “We have always sought to operate in Myanmar in line with core ILO Conventions and the UN Guiding Principles on Business and Human Rights. Our fundamental standpoint is that our business should have a positive influence in communities in the countries where we operate.”
Last week, nearly a dozen fashion trade and labor organizations, including the American Apparel & Footwear Association, the Ethical Trading Initiative, the Fair Labor Association and Social Accountability International, urged military leaders to stop brutalizing citizens, release those who have been detained, restore internet service and reject proposed legal restrictions on internet activity as damaging to freedom of expression and assembly.
“This coup, and the military’s growing violence in support of it, threatens to reverse the progress and the thawing of relations between Myanmar and the international community ongoing since 2011,” the organizations wrote in a joint letter said. “If democracy is not restored, the hard-fought social and economic progress of the country and the well-being of its people will be significantly put at risk.”
Clothing and textiles, Myanmar’s top export earner after oil and gas, generated more than $4.8 billion in exports last year, according to the Ministry of Commerce. The sector’s roughly 600 factories provided jobs for 700,000 workers in 2020.