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Battling Covid and Coup, Myanmar’s Garment Industry is ‘Deteriorating’

As Myanmar buckles under the one-two punch of a violent military crackdown and a sudden surge in Covid-19 cases, workers’ rights in the embattled Southeast Asian nation’s garment industry have all but collapsed.

With many labor leaders forced into hiding or exile overseas, collective bargaining agreements between workers and factory owners have essentially evaporated, Khaing Zar Aung, president of the Industrial Workers Federation of Myanmar trade union, told Sourcing Journal. Workers are being dismissed in droves because it’s easier and cheaper to recruit new ones than pander to the demands of existing employees, she said. Wage and severance theft is also rampant, meaning that the unemployed risk starvation and destitution on top of coping with the potential loss of life from the junta’s indiscriminate attacks on pro-democracy protestors and other civilians.

Since the coup took place on Feb 1., more than 150,000 garment workers have lost their jobs, Khaing Zar Aung said. More could join them if the rumored closures of 200 apparel factories—one-third of the country’s total tally—come to pass, plunging workers into further financial straits.

The garment industry, which accounts for one-third of Myanmar’s exports, employs 700,000 people, according to United Nations data.

The sharp rise in daily Covid-19 infections has exacerbated what was already a humanitarian crisis. The regime reported 3,947 new coronavirus cases on Thursday, a record number. To date, Myanmar has logged more than 180,000 infections and 3,570 deaths, though the dearth of testing means actual numbers could be much higher. A shortage of supplies, a mistrust of the junta and striking doctors and nurses have all conspired to stymie vaccination efforts. Only 1.75 million of Myanmar’s 55 million-strong population have been fully vaccinated, according to health minister Thet Khine Win.

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“It’s a deteriorating situation,” Christina Hajagos-Clausen, director, textile and garment industry at IndustriALL Global Union, told Sourcing Journal. “There’s a lot of disruption in production with factories closing temporarily then reopening. [There are a lot of] moving pieces.”

While the military has steered clear of a country-wide lockdown, it has imposed stay-at-home orders at townships in several states in an effort to curb the spread of disease, which could put more factories at the risk of closure, Sofia Nazalya, Asia human rights analyst at Verisk Maplecroft, a risk-monitoring firm, told Sourcing Journal.

But this is a no-win situation however it shakes out.“Those still allowed to operate are likely to form new clusters of Covid-19 cases,” Nazalya said. “With no end in sight to the political crisis and continued mismanagement of the pandemic by the military junta, prospects appear dim for Myanmar’s garment industry. For its workers, hopes of a future of secure work in a safe and healthy environment are fast fading.”

Indeed, workplace occupational health and safety has by and large fallen by the wayside, Khaing Zar Aung said. “There are no masks provided at our factories, they are very crowded and there is no social distancing,” she said. “There is no arrangement to prevent Covid-19; in one of our member factories, they have already found 19 Covid-19-positive workers. It’s very worrisome.”

Other, more immediate dangers abound for garment workers. In March, nearly 60 workers were killed by security forces in Hlaingthaya Township in western Yangon, labor activists say. The same month, at least six people were killed following a wage dispute at a Chinese-owned shoe factory. In June, Khaing Zar Aung said, a bomb exploded at a Chinese-backed clothing factory in the Ayeyarwady region. “The military regime is killing many people, shooting randomly even into houses,” she said.

Security forces have killed nearly 900 civilians since the takeover, according to the Assistance Association for Political Prisoners, a local monitoring group. Another 6,580 people have been arrested and 5,140 still detained.

American brands have sought to distance themselves from the bloodshed and violence. Seaborne imports of apparel from Myanmar to the United States crashed 35.6 percent from Q1 to Q2 of this year even as overall imports fell by just 4.4 percent, according to S&P Global Market Intelligence’s Panjiva. “We may see a further reduction in Q3,” lead trade analyst Chris Rogers told Sourcing Journal.

A number of European retailers, including Bestseller, C&A, H&M, Primark and United Colors of Benetton, too, paused production in Myanmar shortly after the coup took place. Bestseller, H&M and Primark have since resumed sourcing, citing a desire to safeguard the livelihoods of the workers who produce their clothes. Labor activists say, however, that these companies are placing profits over people, especially since some of their suppliers are housed in industrial zones with ties to the military, which prospers from their business.

“There will be no easy answers for companies sourcing from Myanmar for the foreseeable future,” Nazalya said. “On one hand, they must deal with the serious implications of potentially being associated with the military regime, or seen as profiting from a spiraling humanitarian crisis. But on the other, abandoning an existing workforce is unlikely to be seen favorably either.”

Meanwhile, the ACT (Action, Collaboration, Transformation) initiative has provided brand members such as Asos, H&M, C&A and Primark with guidance on how to responsibly suspend orders or exit from factories in Myanmar if they choose to do so, including maintaining open lines of communications with factories and paying in full for all finished and in-production goods. The organization also told companies to urge suppliers to terminate employees who miss work for safety reasons only after they’ve been provided with adequate compensation. “If possible,” workers should be granted unpaid leave for a period agreed between them and their employers.

Khaing Zar Aung says she doesn’t see a point in brands continuing to source from Myanmar when worker rights are being continually violated and the country’s logistical infrastructure remains in shambles. She remembers telling brands to hold off on working with Myanmar factories for at least a year because there was no way they could maintain any semblance of control over this segment of their supply chain. Few listened, she said.

“The only benefits are for the [factory], the brands and the military regime,” Khaing Zar Aung said. “The military can make money from the business and they can rule the country. They can oppress the people; they can buy the bullets to shoot our own people. No ethical business should continue to invest in Myanmar.”