Garment workers in some factories in Myanmar that supply UK high street fashion retailers are subjected to wages of as little as 13p/hour and long working days, a new report has claimed.
The Netherlands-based Centre for Research on Multinational Corporations (known as Somo) found many multinational brands have switched production to Myanmar in recent years because of the low wages and favourable trade conditions. But it has become a “race to the bottom”, the report’s authors claimed.
The Myanmar Dilemma report focuses on 12 factories located in and around Yangon, Bago and Pathein, which supplied retailers and brands including H&M, New Look, Henri Lloyd and SuitSupply, as well as Sports Direct and its brands, Karrimor and Lonsdale.
The legal minimum wage in Myanmar is 3,600 kyat/day, equivalent to £2.13. Somo found in interviews with around 400 employees that many earn less, and are sometimes obliged to work overtime to supplement their basic wage or keep their jobs. Some regularly work more than 60 hours a week.
Children as young as 14 are legally allowed to work for four hours a day in Myanmar. However, the interviewers heard workers at three factories discussing children below the age of 14 doing paid work to supplement the family income.
Somo said workers younger than 15 years old should not be working in the garment industry.
“When buyers come into the factory the child workers are being told not to come to work,” said a worker at a factory supplying Karrimor.
At nine out of 12 of the investigated factories, workers earned significantly less than the daily minimum wage, the report found. At four factories, which supplied brands including Karrimor and H&M, the lowest daily wage was 1,800 kyat/day (£1.06) for apprentices during the first three months of employment. This applied to all types of workers and functions, regardless of level of experience.
H&M said that, during a 19 December visit to the factory with which it was associated, workers reported receiving the legal minimum of 3,600 kyat/day (£2.13).
It told Somo it planned to apply its model for assessing fair wages in its supply chain in 10 factories in Myanmar and for all strategic suppliers in the country in 2018, as part of a wider global strategy.
A spokeswoman added that the report raises “industry-wide challenges” that H&M has been addressing for many years: “A collaborative approach is key to achieve long-lasting improvements and that is why we work close to other brands, organisations, trade unions and workers representatives.”.
A spokeswoman for New Look said: “We recognise the issues highlighted in this report. We are working with our suppliers and local partners in Myanmar to address the findings, and to support the development of an ethical garment industry in the area.”
SuitSupply said it planned this year to re-audit for the factory it was linked with.
A spokesman for Sports Direct said it does not condone these types of abuse and has policies in place that reflect this view, but insisted that the claims in the report are ”anecdotal and uncorroborated”.
In a statement to Drapers, Henri Lloyd said: “We are in contact with Somo and have investigated the findings of their report. We were unaware that this factory violated our policies when we placed one small order here. Following our investigations we are no longer working with this supplier or factory.”
Somo urged retailers and governments to rethink policies and practices relating to Myanmar to “head off a crisis before it escalates”. The organisation called for an “industry-wide approach”. It said companies should join forces on risk analysis, share findings on social audits and investigations, and jointly address non-compliance at suppliers, in close co-operation with local stakeholders.
Myanmar manufacturing by numbers
- Myanmar garment production worth $1.46bn in 2015
- Garment production accounted for 10% of exports in 2015
- The European Union imported clothing worth €423m from Myanmar in 2015 – up 80% year-on-year
- Garment industry employed 350,000 workers in 2016 – 90% of which were women
- This is expected to rise to 1.5 million by 2024
Source: Myanmar Garment Manufacturers Association