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Why Myanmar Garment Workers Want to ‘Stop the Economy’

Unrest and violence continued to roil Myanmar Wednesday as security forces opened fire at pro-democracy protestors, killing at least 15 people and injuring dozens, and a Chinese-owned factory burst into flames, local media has reported.

More than 600 civilians have been killed by the ruling Burmese junta since a Feb. 1 military coup unseated the quasi-democratic government led by Aung San Suu Kyi, according to the Assistance Association for Political Prisoners, a non-profit human-rights group.

The fire at JOC Galaxy (Myanmar) Apparel Co. in Hlaing Thar Yar township in the city of Yangon, which broke out on the first floor, was likely the work of arsonists since tools were found on-site, Luo Muzhen, secretary general of China Textile and Garment Association in Myanmar told Global Times, an English-language Chinese newspaper. The conflagration lasted an hour before it was doused by firefighters. No casualties were reported.

Luo said the factory is still assessing the damage, which he described as severe. He also estimated that 40 Chinese-invested factories have been smashed, torched and vandalized amid escalating chaos in the Southeast Asian nation.

Though it’s still unclear who the perpetrators are, anti-Chinese sentiment is on the rise among the civil disobedience movement. Beijing’s response to the coup has been lukewarm, with Chinese state media referring to the detention of civilian leaders as a “cabinet reshuffle” and an “adjustment to the country’s dysfunctional power structure.” Protestors have called for a boycott of Chinese products, citing a belief that China supports the military takeover. Huawei Technologies and ZTE, which have provided technology to the military, have become key targets.

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Chinese nationals underwrite roughly one-third of Myanmar’s 600 garment factories, according to the Myanmar Garment Manufacturers Association. Further violence could see them withdrawing their investments and shuttering facilities.

China’s “‘laissez-faire’ attitude so far puts them under threat, as some Chinese factories have been burned down and protestors have threatened to blow up pipelines,” Gareth Price, senior research fellow of the Asia-Pacific Programme at Chatham House, a British think tank, wrote in a March note.

The trend could have equally large implications for fashion businesses that source from Myanmar, said Renaud Anjoran, CEO of Sofeast, a supply-chain management firm based in Hong Kong. “Retailers and brands are hit where it really hurts: continuity of supply,” he told Sourcing Journal. “They might have empty shelves.”

Already, several brands, including Benetton Group, C&A, H&M, Next and Primark have suspended new orders from the country, striking another blow to a sector still reeling from the economic fallout of the pandemic. Apparel exports, which account for one-third of Myanmar’s total exports, fell 11.75 percent to $4.6 billion in 2020, compared to a year earlier, according to market intelligence provider Texpro. Orders may dry up and business divert elsewhere if uncertainty and instability continue to frustrate supply-chain arteries.

“The banking system is hardly functioning, transport and logistics are crippled, and ports paralyzed, sending the country spiraling into economic crisis,” the International Conflict Group, a conflict think tank, wrote in a recent note.

Some garment unions have called on the international community to issue tougher sanctions against the military, however, even if it causes the industry—and its workers—further pain.

“We all think that if we can stop the economy, that it will really hit the military government, and we think it is the solution to solve the problem we face,” Ko Aung from the Federation of General Workers Myanmar said at a press conference organized by grassroots advocacy group Remake in March.

Labor advocates are urging brands, retailers and manufacturers operating in Myanmar to “take immediate steps” to protect garment workers.

“It is their responsibility that workers receive their full wages or, in cases of job loss or factory closure, the full severance owed to them,” the Clean Clothes Campaign, the garment industry’s largest consortium of labor unions, said Thursday. “Brands must also work with their suppliers to ensure that workers do not face punitive measures for missing work, regardless of whether that is because they have joined the protests, are unable to get to work or have returned to their villages over concerns for their safety.”

The organization said that brands that have not responded publicly to the crisis include Aldi North, Lindex and Marks & Spencer.

“It is shameful that they do not prioritize protecting human rights and lives, especially given the urgency of the situation,” it said. But brands that have made statements have a responsibility, too, the Clean Clothes Campaign added.

“Brands such as H&M, Next, C&A, Primark and Benetton must take active steps to ensure workers are paid and thus support the livelihoods of the people making their clothes in this time of crisis,” it said. “It is key that brands maintain pressure on the military through public declarations, stating that their withdrawal of orders is a direct result of the military coup and the attack on democracy and human rights, and not due to logistical issues.”

A spokesperson for Lindex told Sourcing Journal that the Swedish retailer is “deeply concerned” about the situation in Myanmar and is following it closely, “both in terms of the safety of our own employees, as well as the situation for our suppliers and their textile workers.” Lindex is also a member of the Ethical Trading Initiative, the spokesperson said, and it “fully stands” behind the organization’s statement, published in early March, calling on the Burmese military to respect the results of the November elections and peacefully restore the civilian government.

Aldi and Marks & Spencer did not immediately respond to a request for comment.

The United States, which has imposed targeted sanctions on Myanmar’s military, suspended trade engagement with the nation late last month. The Trade Representative also said it’s reviewing Myanmar’s eligibility for its Generalized System of Preferences scheme, which grants tariff-free access to the U.S. market for certain developing countries.

The State Department blacklisted another state-run company Thursday, this time a gems enterprise, in an effort to cut off another of the military junta’s financial sources.

“By imposing targeted sanctions on this entity, we are sending a clear signal to the military that the United States will keep increasing pressure on the regime’s revenue streams until it ceases its violence, releases all those unjustly detained, lifts martial law and the nationwide state of emergency, removes telecommunications restrictions, and restores Burma to the path of democracy,” Secretary of State Antony Blinken said in a statement.

“The United States, in close coordination with our allies and partners throughout the region and the world, remains steadfast in our commitment to press the Burmese military and security forces to cease all violence against peaceful protestors and others, to support the restoration of democracy, and to promote accountability for the coup and the violence that followed,” he added.

Editor’s note: This story was updated on April 9, 2021, with a statement from Lindex.