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Uniqlo, Muji Owners Withdrawing From Myanmar: Report

Uniqlo owner Fast Retailing and Muji parent Ryohin Keikaku are reportedly the latest in a growing number of fashion brands to abandon sourcing in Myanmar.

Both companies had outsourced the production of clothing to the Southeast Asian nation, Nikkei Asia wrote on Thursday. Fast Retailing told the outlet, however, that it will look elsewhere for its GU-branded jackets and shirts following the 2023 fall/winter season. Ryohin Keikaku, which manufactured down jackets and other items in the country, will similarly cease its business relationships by August. Fast Retailing confirmed the news to Sourcing Journal, while Ryohin Keikaku did not respond to a request for comment.

The retailers join clothing purveyors such as Aldi South, Benetton Group, C&A, Mango, Marks & Spencer, Primark and Tesco in divesting from Myanmar over human rights concerns, which escalated after the military ousted Aung San Suu Kyi’s semi-democratic government in early 2021, throwing the country into chaos and violence as the junta sought to crush any resistance.

The rule of law, experts say, has progressively deteriorated. The Business & Human Rights Resource Center, a corporate watchdog, has documented nearly 200 cases of “widespread and systemic abuse” against garment workers, including wage theft, unfair dismissal, inhumane work rates and mandatory overtime. This is likely only the “tip of the iceberg” because of restrictions on civic freedom and fears of reprisal, it said. In September, the Ethical Trading Initiative (ETI), a multistakeholder organization whose roster includes brands such as H&M Group, Marks & Spencer and Zara owner Inditex, published a damning sectoral due-diligence assessment stating that the conflict has made effective due diligence on severe human rights impacts very difficult, and impossible for freedom of association.

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The question of whether brands should stay or go isn’t an easy one. Companies such as Bestseller and H&M Group say they worry pulling out will put tens of thousands of livelihoods in further danger. This issue was thrown into relief when two former Primark suppliers abruptly shuttered last month, leaving 2,000 employees without jobs and many without severance, though the retailer said it’s working with the factories to ensure workers are paid what they’re owed. Last week, another 400 were laid off in a “mass termination” by a different facility, state media reported, deepening an economic precarity that afforded, at most, a couple of dollars a day if they were lucky.

Those who are in the pro-leave camp, however, claim that since corporations can’t guarantee the safety of the people who make their clothes, insisting on business as usual will only legitimize and enrich the military. They say that brands can contribute to a fund that protects workers from destitution instead of insisting on exploitation.

It’s unclear if Fast Retailing and Ryohin Keikaku are abiding by a responsible exit framework, such as the one recently published by IndustriALL Global Union. In it, the global union federation urges companies withdrawing from Myanmar to ensure, with the help of workers’ representatives, that due-diligence activities continue until orders are fulfilled, adequate severance is paid to those affected and that any pending workers’ rights violations are remediated and remedied. The ETI said this month that it supports the disengagement plan. It recommended that brands that continue to source from Myanmar familiarize themselves with the principles given “how dynamic” the situation is.

On Tuesday, Myanmar’s military-appointed election commission disbanded the National League for Democracy, the now-imprisoned Aung San Suu Kyi’s political party, in a move designed to keep the junta in power. While the military previously said that it would hold a general election in August, it announced in February that it would be extending the post-coup state of emergency by another six months, delaying what some have decried as a sham vote anyway. Aung San Suu Kyi, meanwhile, is staring down a 33-year prison sentence for charges ranging from corruption to using unlicensed walkie-talkies.