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Mango Retooling Ops in Military-Controlled Myanmar

Mango has been working to reduce the number of factories it uses in Myanmar in a bid to phase out production “due to the situation” in the military-controlled country, the Spanish retailer told Sourcing Journal on Friday. 

The fast-fashion chain, which ended the first six months of the year with 1.21 billion euros ($1.21 billion) in sales, didn’t provide specific numbers, but a list of Tier 1 and 2 factories on its website named 23 facilities, most of them situated in Yangon, the Southeast Asian nation’s largest city. Together, the factories make up 2.3 percent of Mango’s sourcing base. Most of its suppliers are based in China and Turkey, with India a distant third. 

The list was last updated in December, or 10 months after the military forcibly seized power from Aung San Suu Kyi’s elected civilian government, plunging the region’s second-largest country into a maelstrom of violence and chaos. Since February 2021, the junta has killed more than 2,200 civilians and arrested 15,100, according to the Assistance Association for Political Prisoners. Last month saw the execution of four political prisoners, Myanmar’s first use of the death penalty in more than three decades. Amnesty International decried the move as an “atrocious escalation in state repression.” 

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Worker rights in Myanmar have also taken a nosedive, labor campaigners say. Myanmar Labor News reported last week that one of Mango’s Burmese suppliers has been forcing its employees to meet unreasonable quotas. Many, it said, have been toiling at the Chinese-owned Sanyuan Oversea Myanmar Apparel Manufacturing for 14 hours a day without overtime pay.

“Even on Sundays, we have to work overtime without being given a day off. At night, we are called [for] overtime [work],” one worker said. “The workers do not want to work overtime because it is not safe at night, and they are helpless.” 

Those who refuse to do so are verbally abused by supervisors, the website alleged, while anyone who takes even a day’s leave risks losing their job altogether. Workers frequently sleep overnight at the factory because they’re afraid of becoming targets for security patrols, Myanmar Labor News said. 

Hangzhou-based Zhejiang Sanyuan Holding Group, which owns the facility, did not immediately respond to a request for comment.  

“At Mango, we are aware of the current situation at Sanyuan [Oversea] Myanmar Apparel Manufacturing and we are very concerned about these allegations,” a spokesperson told Sourcing Journal. “We are taking care of it through our due diligence mechanisms and through the agreement we have with Comisiones Obreras, the largest trade union in Spain. We work hard to ensure respect for the fundamental rights of workers in the factories that produce for Mango and of the union leaders, globally and locally in Myanmar.”

The factory is far from an outlier. Last month, a study by the Business & Human Rights Resource Centre (BHRRC) uncovered more than 100 cases of human-rights violations against at least 60,800 of the country’s garment workers. Over half of them (55) centered around wage theft, while others involved abusive work rates and mandatory overtime (35 cases) and attacks on freedom of association (31 cases). The organization also recorded the killing of seven garment workers by members of the military and the arbitrary arrests and detention of another 15.

The logged cases are only the “tip of the iceberg” given the restrictions on civil liberties and the fear of reprisals for those who speak out against the injustices, said Alysha Khambay, the BHRRC’s head of labor rights.

“Garment workers in Myanmar have been risking their lives to report labor rights violations in the country, only to be met with aggressive—even deadly—force to any opposition and dissent,” she said. “Brands must wake up to the harsh reality that decent working conditions no longer exist in Myanmar and continuing business as usual is no longer helping to ‘protect jobs and workers,’ as has been repeatedly claimed.”

Bestseller names a Sanyuan Myanmar Apparel Manufacturing on its most recent Tier 0 and Tier 1 supplier list, which it last updated in June, though it said this referred to a different facility, not the one mentioned by Myanmar Labour News. The BHRRC violations tracker also links the Danish retailer to a number of offending factories. Bestseller works with 27 Burmese facilities that comprise 3.4 percent of its sourcing base. Like Mango, the bulk of its suppliers hails from China and Turkey, followed by Bangladesh. 

The privately held Jack & Jones and Vero Moda owner has had an on-again, off-again relationship with Myanmar. 

When the coup first began, Besteller froze new orders, citing the “escalation of violence and the unpredictability of the situation” that made it difficult to operate safely in the country. Two months later, it resumed production, saying that it wanted to protect jobs. A third-party audit, Bestseller said, had concluded that the retailer was complying with trade regulations despite its use of factories located in an industrial zone operated by a military-owned conglomerate sanctioned by the European Union, United States and the United Kingdom. A report by the law firm of Jonas Christoffersen, a former director of the Danish Institute for Human Rights, concluded that there were no “reasonable grounds” to assume that the factories were owned, directly or indirectly, by the military or had paid administration fees, directly or indirectly, to the military.

In September, Bestseller hit pause after the Industrial Workers’ Federation of Myanmar (IWFM), an affiliate of IndustriALL Global Union, reported that two of its members have died from Covid-19 as a result of lax and nonexistent health protocols. The retailer said at the time that it would not be placing new orders until it had conducted an impact assessment and engaged in dialogue with labor experts, trade unions and other stakeholders with a “clear focus on the wellbeing on garment workers.”

By December, however, Bestseller’s stance had changed once more.  It was now in a “bridging solution,” whereby it was maintaining its current business as it awaited the results of the impact assessment by the Ethical Trading Initiative (ETI), a spokesperson previously told Sourcing Journal.

The assessment, the multi-stakeholder organization said last week, is due later this month. It will seek to answer three questions. One, to what extent can companies in the sector monitor, prevent, mitigate and provide access to remedy, where appropriate, on severe human rights impacts that they may be involved with in Myanmar? ​Two, what are the requirements of the United Nations Guiding Principles and Organisation for Economic Co-operation and Development guidelines for companies when considering whether to continue sourcing or divest from Myanmar?​ And three, what would a responsible exit look like?

ETI said that the analysis will be based on more than 100 interviews with key stakeholders, including international and local organizations, brands, manufacturers, global and national trade unions, international NGOs and experts. It will also include a workers’ survey based on a sample of more than 3,000 workers.

“ETI alongside many of its members and allies, have deliberated the best course of action,” it said. “To continue existing sourcing relationships with the country, or not? The notion of withdrawal may remove the risk of business presence underpinning military rule, but such a decision also poses huge risks to approximately 480,000 people employed in the country’s garment sector, many of whom are women.”

Other brands that have stayed in Myanmar include Adidas, H&M, Lidl, Next, Primark and Zara. Only Aldi South and Tesco have made a clean break, the BHRRC report said, though Benetton Group and C&A have also said that they are no longer placing new orders.

The results of the assessment will help inform ETI’s “next course of action,” it added. “The advice and recommendations it makes will not only be of value to the members currently sourcing from the country, but others such as trade unions and responsible business at large.”

But if brands really cared, they would collaborate with unions to support and fund workers instead of legitimizing the regime with their business, Khaing Zar Aung, IWFM’s exiled president, previously told Sourcing Journal. “But they don’t. Why? Because they see they can make a profit.” As it is, more than 1 million fewer women and men are employed in Myanmar today compared with 2020, the International Labour Organization revealed earlier this month. Brands, she said, will argue with her: “They will stay in Myanmar because they worry about the workers who are women, who are vulnerable. But do they really worry about them? I say no.”

Editor’s note: This story was updated on Aug. 22, 2023, to clarify that Bestseller works with a different factory with a similar name, not the one mentioned by Myanmar Labour News.