Stay or Go? In Myanmar, Fashion Faces More Questions Than Answers.

Khaing Zar Aung, president of the Industrial Workers Federation of Myanmar, fears daily for her life.

Currently in self-exile, the former garment worker is unable to return home. The ruling military, which seized power in a violent coup two years ago, has declared her union and others like it illegal. Dozens of her colleagues have been arrested as part of a crackdown on pro-democracy figures, and a number have been killed for participating in anti-junta protests. So Khaing Zar Aung fled overseas, where she continues to advocate for her members as one of the few public faces of the civil disobedience movement. Stripped of her relative anonymity, her words carry more weight. But they also make her a bigger target.

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“I don’t want to spend time in jail,” she said. “I need to work and fight for democracy.”

Imprisonment might even be the least of her worries. Khaing Zar Aung’s organization, an affiliate of IndustriALL Global Union, has helped apparel factory workers claw back hundreds of thousands of dollars in unpaid wages and severance. Disgruntled employers could take out a hit on her for a fraction of that.

At the same time, Khaing Zar Aung despairs at the fashion companies that continue to source from Myanmar, a tacit signal of support, she said, for a regime whose brutal suppression of any opposition has resulted in the arrests of more than 17,500 people and the deaths of nearly 3,000, according to the nongovernmental Assistance Association for Political Prisoners. On Tuesday, pro-democracy activists held a “silent strike” indoors to mark the coup’s anniversary because they can no longer safely demonstrate in public areas. Images shared on social media showed eerily empty streets, even in the usually bustling commercial center of Yangon.

Some of the world’s biggest brands, including Adidas, Bestseller, H&M Group, Uniqlo parent Fast Retailing and Zara owner Inditex, have stayed put in the Southeast Asian nation despite escalating human rights violations, including forced overtime, reduced wages and wage theft, unfair dismissal, gender-based violence and attacks on freedom of association. Several them had frozen orders from Myanmar, citing a concern over the chaos and bloodshed, only to resume a short time later.

Khaing Zar Aung says that this makes no sense. How can these companies say they’re respecting labor rights and yet allow the same abuses to happen? Or work with suppliers in industrial zones linked to the military? “They are pretending that they are protecting worker rights,” she said. “They are pretending to do due diligence.”

Since 2021, the Business & Human Rights Resource Centre (BHRRC) has identified 198 cases of human rights malfeasance affecting at least 104,000 garment workers, a significant proportion of the 700,000 individuals, the vast majority women, who toil in the industry. It has also recorded the deaths of seven workers by armed security forces and the arrests and arbitrary detention of 15. The actual numbers are likely worse given the fear of reprisals for whistleblowers, the London and New York-based nonprofit noted.

The “hollowing” of the ability for workers to unionize has allowed far more abuses to enter the sector, said Natalie Swan, labor rights program manager at the BHRRC. What the numbers show, she said, is that the repression of workers’ rights has a knock-on effect on everything else, from wages to inhumane production targets to health and safety. The level of collusion between the military and business owners has also allowed abuses to proliferate unchecked while compromising any “meaningful” audits of conditions on the factory floors.

“Brands can no longer perform meaningful due diligence,” Swan said. “And the stock answers, saying, ‘we have a human rights policy and a responsible sourcing policy and we feel that that covers us’…[are] not adapting to the realities on the ground.”

Indeed, the coup has resulted in an “almost total absence of infrastructure to promote and support human rights,” the Ethical Trading Initiative (ETI), a multistakeholder organization of companies, trade unions and non-governmental organizations, wrote in its sectoral due-diligence assessment of Myanmar in September. The conflict has made effective due diligence on severe human rights impacts very difficult, and impossible for freedom of association, it said. Buyers, it added, do not hold any sway with the military to reduce these security threats to trade unions and workers’ representatives or anyone else working to support these efforts. And any human rights risks are compounded by the “severe” lack of access to remedy for workers.

The ETI stopped short of telling its brand roster, which includes Bestseller, H&M and Inditex, to stay or go. There isn’t an easy answer, said Peter McAllister, its executive director, because doing either could cause harm, whether by pushing workers to the unemployment line or contributing to their exploitation. The report’s aim is to “add evidence” to the debate in a “non-judgemental way” by using the United Nations Guiding Principles as a framework, he said.

In the report’s aftermath, Primark and Marks & Spencer, both ETI members, said they would be following the lead of Aldi South, C&A, Mango and Tesco before them and making a responsible exit from Myanmar. Both described the findings as a wake-up call. Others, on the other hand, dug in. H&M and Inditex both declined to provide a statement. Bestseller, which had been waiting on the ETI report to make a decision, said it remains committed to ensuring responsible production in Myanmar “at the moment.” A spokesperson from Adidas said that it continues to monitor the situation and is “fully engaged” with suppliers to ensure that the rights of workers in the supply chain are upheld, enforcing compliance with its standards through due-diligence activities. Fast Retailing did not respond to a request for comment.

McAllister said he has been pleased with the response of brands that the ETI engages with, not because they have made one decision or another, but because they have taken the report very seriously.

“And if they’re leaving, like Primark, like M&S, then they’re doing that engaging with trade unions in terms of what would [a] responsible exit look like and not just rushing out the door,” he said. “And those that, for the moment, have decided to stay seem to be looking at what can we do, who can we engage with, what can we put in place to protect rights and to make sure that if we are staying and deriving commercial benefit, that it’s not just back to the old audits and closing your eyes and blocking your ears and hoping it’s all fine. So in that sense, the report has galvanized engagement from business on both sides.”

While the “jury’s still out” on whether it’s possible to stay and protect workers, brands, if they’re planning to stay, need to be honest with themselves about their reasons for doing so, McAllister said.

“Is it cheap prices? And if there is a genuine reason, and it could even be that they believe that they’re able to support a significant population, then what are they doing to make sure that they are genuinely protecting rights to the extent possible in that context?” he said. “Is that enough? And on balance, are they doing good by staying or harm by staying?”

IndustriALL Global Union, which has been calling on brands to divest from the country, has been working with several companies to draft what it calls the framework principles of a brand’s responsible business disengagement from Myanmar. It’s not finished but it’s close. With it, the trade federation is urging brands to place no new orders in Myanmar, to wrap up unfulfilled orders and ensure that workers receive all outstanding wages and legal entitlements, plus an additional payment to support their transition.

“Too many brands maintained production in Myanmar, some possibly out of a genuine conviction that it was the right thing to do,” said IndustriALL general secretary Atle Høie. “However, the ETI report was unequivocal: it is not possible to do business ethically and responsibly in Myanmar. We welcome the fact that the discussion has moved to exiting from the country, while meeting responsibilities to suppliers and workers.”

Worldwide Responsible Accredited Production, the social compliance monitoring firm better known as WRAP, still maintains a presence in Myanmar. And it will continue to do so, said Avedis Seferian, its president and CEO, as long as it has the ability to access factories, freely interview workers and otherwise credibly validate conditions.

“It’s one of those tough decisions, right?” Seferian said. “We’ve always preferred to engage where possible we feel we can help more by being there and doing something better than saying, ‘I’m sorry, can’t help at all.’”

The pool of apparel factories that have commissioned it for certification, however, is shrinking. Last year it audited 12 facilities; this year isn’t likely to see any growth. Seferian thinks that the ETI is being more cautious than necessary under the circumstances. Unlike China’s Xinjiang Uyghur Autonomous Region, which WRAP exited in 2020, it’s still possible to conduct due diligence at the factory-specific level in Myanmar without government interference, he said.

“And if we encounter a factory where we are not able to do that, we don’t have access or we’re not allowed to talk to the people that we want to talk to, then we will not certify that factory,” Seferian said. The fact that WRAP is a voluntary program, however, means that it’s left with “the best ones.”

The factories that are “spiraling down to those kinds of practices are probably the ones that have not come back to us because they know they’re not going to meet the standards,” he said. “The handful that we have left are still meeting our standard, perhaps after some minor corrective actions. [But it’s] accurate to say that there is an increase in challenges. The number of good factories is diminishing.”

Swan agrees that Myanmar is a no-win situation, which is why the BHRRC doesn’t recommend that brands stay or leave. It’s also a difficult one for workers themselves to answer; there is no consensus on what they think clothing purveyors should do. Even campaigners themselves are divided on the matter.

“At the Resource Center, we currently feel that we’re hearing too much from actors on the ground in terms of stay and leave to make a commitment either way, and rather, it’s about a continued listening exercise and adapting as and when the situation on the ground changes, for better or for worse,” Swan said.

One problem is that brands are relying on human rights policies and supplier codes of conduct that can apply to “literally every single bit of their supply chain, regardless of the context,” she said. “And we need to see more concrete responses from brands in terms of the risks and how they’re trying to mitigate them within Myanmar.”

For Thulsi Narayanasamy, director of the Worker Rights Consortium, a think tank in Washington D.C., the guidance, provided by different quarters, including the United Nations, on how businesses should responsibly stay or responsibly exit from conflict areas is clear. To responsibly stay means to unequivocally guarantee the rights of workers in the supply chain and swiftly remediate abuses. The trouble is few brands, if any, are doing this.

“That’s the concern; it feels like they’re doing nothing,” she said. “The idea that it’s ‘oh, we don’t know what to do’ is ridiculous. You can’t have that position two years on.”

Narayanasamy concurs that there’s been a “diversity of opinion” about whether to stay or leave, but where there isn’t room for diversity is an approach to respect for rights. It’s been lacking in Adidas, which has been slow to push Myanmar Pou Chen to reinstate workers who were fired last year for protesting for better wages and conditions. And it was missing from Fast Retailing, which she said didn’t do anything when Solamoda Group left its workers in a wage-less “limbo” after a fire at Sunview 2 factory shuttered operations in 2021.

Wages are a particular sticking point. The minimum wage was established in Myanmar in 2015 and then raised to a floor of 4,800 kyat ($2.29) a day in 2017, where it has stagnated despite the rising cost of living. It’s why Myanmar Pou Chen workers protested in the first place, and it’s something brands like Adidas could use its sourcing leverage to change.

“The cost of living crisis has meant that in this time their real wages have dropped,” Narayanasamy said. “I think you can’t overstate the significance of that for a worker’s life if you’re in 2023 receiving a lower wage than you were in 2018. And I suppose that’s why it’s so disappointing that when brands continue to work there, that they are not doing what they should do, which is to take all of these changes into account.”

Doing what’s right isn’t easy, said Vicky Bowman, director of the Myanmar Centre for Responsible Business (MCRB), an initiative to encourage responsible business activities in the nation. The MCRB “fully endorses” the Clean Clothes Campaign’s strategy for heightened due diligence. The garment worker alliance lists more than a dozen action points, including prioritizing worker safety at every stage, providing safe access to remedy, and addressing the risks to freedom of association. They need to recognize that the minimum wage has not increased, in violation of the law, since the takeover, it said. Companies should also refrain from starting new business relationships in Myanmar, and those that aren’t already sourcing from the country shouldn’t start.

“It’s demanding, compared to what most brands are doing, and most brands need to step up,” said Bowman, a former U.K. ambassador to Myanmar who was sentenced to one year in prison by the military in September but pardoned two months later. “But where brands who continue to be here can achieve this, we would encourage them to stay. I believe that’s the view of the vast majority of workers, as well as labor rights organizations working here.”

Even so, the past two years have caused such a “dramatic change of landscape” that businesses operating there are “essentially set up to fail,” said Sofia Nazalya, senior human rights analyst at risk intelligence company Verisk Maplecroft.

“The conflict in Myanmar has escalated into what is now an all-out assault on civilians, with increasing evidence of crimes against humanity systematically committed by the military regime,” she said.

Because suppliers, particularly those that are in league with the military, have “effectively thrown out the rulebook” on codes of conduct, justifications for not wanting to leave garment workers hanging by exiting Myanmar are now “untenable” as companies are unable to guarantee even basic protections in the workplace, Nazalya said. This makes remaining in Myanmar a “risky hand to play.”

”Operating in an environment where no rule of law exists as such and where entanglement with the junta, direct or not, is a reality, brands have little choice but to work towards a responsible exit if they are to ensure compliance with upcoming human rights legislation,” she said in reference to mandatory due diligence regulations gaining traction in the United States, Europe and elsewhere.

Myo Myo Aye, director of the Solidarity Trade Union of Myanmar, or STUM, has experienced some of the worst of what the junta can do. For six months in 2021, she was arrested for sedition and held in Yangon’s infamously inhumane Insein Prison, where Covid-19 spread quickly due to overcrowding and a dearth of safety measures. During her last month, she was thrown into solitary confinement and barred from meeting with her lawyer.

Most of the garment workers she knows, she said through a translator, don’t have strong feelings about whether brands should quit the country or stick it out. All they want is a sustainable job. They want to be paid for their overtime hours. They want to be able to feed their children. They want to have annual leave. But so far, she’s seen no significant efforts from these “famous brands,” and she no longer approaches them for aid.

“We will no longer request help from brands because they haven’t done anything throughout this time,” Myo Myo Aye said. Workers have always been exploited, no matter who is in power, she said, and corporations have always regarded the lives of workers as dispensable.

“We will just keep on doing our activism,” she said. “We will just keep standing on the side of workers, even if we get arrested or even if we’re shot and die.”