Skip to main content

2,200 Workers High and Dry in Myanmar Primark Supplier Shutdowns

Primark says it’s investigating reports that two of its former garment suppliers in Myanmar have abruptly shuttered, leaving 2,200 workers adrift.

GTIG Huasheng and the GY Sen-operated Primseng Guo, both located in Shwepyitha Township’s Wartayar Industrial Zone in the city of Yangon, did not inform their employees of their closure plans in advance, according to the Solidarity Trade Union Of Myanmar, which posted about the closures on Facebook last week. Not all workers received severance either, Myo Myo Aye, the union’s director, told Sourcing Journal. Neither garment manufacturer could be reached for comment.

“These allegations are extremely concerning and our local team on the ground in Yangon is currently investigating,” a Primark spokesperson said. “As we work to exit Myanmar responsibly, we expect our suppliers to comply with our code of conduct, which includes protecting the safety and rights of workers. While both of these factories have been suspended for some time, we still take our responsibilities to these workers very seriously.”

The Ireland-headquartered retailer announced in September that it would be phasing out its business in Myanmar following the Ethical Trading Initiative’s conclusion that it “wasn’t possible” for responsible businesses to apply normal human rights due diligence in the troubled Southeast Asian nation, which has spiraled into chaos and bloodshed since the military seized power in 2021.

Related Stories

Primark said that as it works through its “responsible exit,” it has enhanced its due diligence on the ground by doubling the size of its local ethical trade team.

“This enables us to visit the approved supplier factories we work with more regularly, giving us greater visibility to working conditions and allowing us to engage with the workers and stakeholders more frequently,” the spokesperson said.

According to its public sourcing map, Primark contracted 18 factories in the country, including GTIG Huasheng and Primseng Guo, though the two were suspended last year for breaching its code of conduct. The retailer declined to specify the issues, though allegations against both factories appear in the public domain. Workers at GTIG Huasheng, for instance, have accused the supplier of suppressing their freedom of association by forming a management-controlled “yellow” union and subjecting them to forced overtime without compensation. In March 2021, GY Sen employees claimed supervisors locked 1,000 of them inside the factory to prevent them from taking part in civil disobedience protests. Roughly 20 were later fired for missing shifts to demonstrate, they added.

Myo Myo Aye expects more closures to continue. Unlike many of her fellow activists, who have been urging brands to quit sourcing in the country, citing fears that staying will legitimize the junta’s oppression, she sees few bright spots in the matter.

“If it’s good to close, what’s the good?” she said. “No good. The workers will be unemployed.”

But others say that escalating human rights violations, including forced overtime, reduced wages and wage theft, unfair dismissal, gender-based violence and attacks on freedom of association, make it untenable for brands to uphold their own codes of conduct. The ETI’s report noted that Myanmar’s economy is already on a “significant downward trend” caused by multiple systemic issues unrelated to the garment sector. Whether buyers and their suppliers stay or leave, its economic outlook will be “dire.”

“The military coup in Myanmar has caused a humanitarian crisis, with many pro-democracy activists killed, imprisoned or made refugees. This has created an ethical dilemma for brands sourcing from the country,” Christina Hajagos-Clausen, director, textile and garment industry, at IndustriALL Global Union, told Sourcing Journal. “The Myanmar labor movement has consistently called for brands to stop sourcing from Myanmar, despite the job losses this will lead to, because of the nature of work under a military dictatorship, with forced labor and other serious workers’ rights violations.”

Last month, the global union federation published a framework for responsible business disengagement from Myanmar, which it developed with several brands with operations in the country. In it, the authors lay out a business exit, as negotiated with workers’ representatives, that protects workers’ rights, ensures the adequate payment of severance to those affected and remedies any pending labor rights lapses.

“Due to the impossibility of doing due diligence in a country without freedom of association, more and more brands are concluding their business in the country,” Hajagos-Clausen said. “We call on brands who still have a presence in the country to use this framework to disengage responsibly. In the case of this closure, the responsibility of Primark is, among other things, to ensure that workers receive adequate severance pay, and that any outstanding cases of workers’ rights violations are resolved.”

There’s a danger in brands pulling out, whether from a single factory or an entire country, without ensuring that worker rights are safeguarded, said Khaing Zar Aung, the exiled president of the Industrial Workers Federation of Myanmar. When Guotai Huasheng Glory terminated its workers’ contracts soon after the coup, her union negotiated an agreement with the support of Lidl, one of the factory’s main buyers, to rehire 62 of them within a year.

While Guotai brought back 30 of the workers that the union was still in contact with, two are still waiting. When Khaing Zar Aung reached out to the German retailer, she was told that since it was no longer doing business with the manufacturer, it could not do anything about the situation. Meanwhile, the rehired workers are facing discrimination, she said.

Guo Tai did not respond to a request for comment. A spokesperson for Lidl confirmed that that factory has not been a supplier since 2021, though it continues to source from Myanmar through “strengthened and increased” due diligence.

“Since we no longer have a business relationship with this factory, we are unfortunately no longer able to influence this process,” the representative said. “Lidl takes its responsibility towards workers in Myanmar and other countries where our suppliers produce very seriously and is committed to ensuring that core social standards are complied with throughout the supply chain.”