Japanese Fast-Fashion Chain Plans Third Myanmar Garment Factory – Sourcing Journal

Brands are under pressure to divest production from Myanmar. One Japanese retailer, on the other hand, has decided to double down.

This month, Honeys Holdings will be plowing 1.5 billion yen ($11.3 million) into a 16,000-square-meter plant in Mingaladon Industrial Park outside the city of Yangon, Nikkei Asia reported last week. Slated to open in May 2024, the facility will be the fast-fashion chain’s third in the troubled nation, which has been embroiled in chaos and bloodshed since the military seized power more than a year ago.

“We can manufacture at our factories in Myanmar cheaper than anywhere else,” president Eisuke Ejiri told the outlet. “This is our biggest strength.” Honeys, which did not respond to a request for comment, sources some 90 percent of its products from Southeast Asia, with 44 percent stemming from Myanmar alone.

Honeys, which also owns the Colza, Cinema Club and Glacier brands, said it undergoes audits by SGS Group, an international certification firm that checks factories for violations such as child and forced labor, workplace health and safety and freedom of association. “We’ve been told there are no problems,” Ejiri said.

But labor campaigners say that due diligence in Myanmar is all but impossible. The Assistance Association for Political Prisoners estimates that more than 2,170 civilians have been killed and nearly 15,100 arrested since the coup began. Crackdowns on civil disobedience protests have been swift and violent, with some reports saying that at least 55 union activists have been killed and 301 members of the labor movement put behind bars.

A study published by the Business & Human Rights Resource Centre last month found more than 100 cases of human-rights violations against at least 60,800 of the country’s garment workers. Over half of them (55) involved wage theft, while others included abusive work rates and mandatory overtime (35 cases) and attacks on freedom of association (31 cases). The nonprofit also recorded the killing of seven garment workers by armed security forces and the arbitrary arrests and detention of another 15.

“It is outrageous to hear that while persecuted trade unions on the ground in Myanmar are calling for brands to put workers’ lives above maximizing profits and offer humanitarian aid rather than take advantage of a country’s misery, brands like Honeys are completely ignoring these calls and continuing to invest,” Jay Kerr, campaigner at No Sweat and coordinator of the grassroots group’s Myanmar Military: Never in Fashion initiative, told Sourcing Journal.

“While many brands make a big show of their ethical credentials and the codes of conduct that are meant to protect freedom of association, it is becoming increasingly clear that the opportunity for increased profit margins far outweighs any commitments to workers’ rights,” Kerr said.

Honeys’ two existing factories, which are also housed in Mingaladon Industrial Park, faced allegations of worker abuse even before the military takeover. A 2019 Worker Rights Consortium (WRC) investigation identified a litany of violations under Burmese law and international labor conventions such as excessive overtime, sub-minimum wages, illegal wage deductions, underage employment, verbal abuse and profanity, inappropriate surveillance of workers and hazardous workplace conditions.

To punish workers for a June 2017 strike, the company fired nearly 450 union leaders and members en masse, a “severe violation of workers’ fundamental labor rights” and a clear act of retaliation, the WRC said.

“Honeys is the only factory in Myanmar that massively dismissed without paying any grievance compensation at all,” Myo Myo Aye, the leader of the Solidarity Trade Union of Myanmar, told Sourcing Journal.

Myo Myo Aye helped organize the workers at Honeys, which later filed a civil and then a criminal case accusing her of defamation. Before she was arrested by the junta last April, she appeared in court on more than 40 occasions to respond to Honeys’s charges. From September until her release in October, Myo Myo Aye was locked up in solitary confinement without cause. She was summoned back to court in November, when the case was dismissed because a Honeys representative failed to show up.

Honeys doesn’t “respect the labor rights and labor laws,” she said. “If they operate a new factory, they will just keep on violating the labor rights and laws. The targets are beyond what a [person] can actually produce. This is an act of forced labor. They are squeezing one’s labor out excessively. And they are contravening the freedom of association and freedom of expression.”

Though Honeys told Nikkei Asia that the firm has “no relationship” with the military, Myo Myo Aye said that the company will continue to oppress workers “in favor of the regime.” Honeys’s leadership knows it can “enslave the workers here in Myanmar and they can do whatever they want regardless,” she said. “Therefore, we don’t want to see the emergence of another Honeys factory in Myanmar.”

Brands such as Besteller, H&M and Primark say they choose to remain in Myanmar because they fear pulling out will crater the Burmese economy, leaving workers in a worse condition than they already are. Several of them are waiting for the results of an assessment by the Ethical Trading Initiative, due this month, before deciding their next steps.

But the coup and Covid-19 have already taken their toll on the country, the International Labour Organization (ILO) said earlier this month. More than 1 million fewer women and men are employed in Myanmar today compared with 2020. The quality of jobs is also deteriorating with what it described as “serious violations of labor rights.” Evidence from the garment sector, in particular, suggests an increase in casual or daily labor, irregular working hours and piece-rate wages.

“Eighteen months on from the military takeover, the employment situation in Myanmar remains very difficult. While there are limited signs of job growth, the ongoing erosion of labor conditions and the decrease in job quality is deeply concerning,” said Donglin Li, the ILO’s Myanmar liaison officer.

Kerr is disheartened by the number of brands that continue to operate in Myanmar, or, in the case of Honeys, expand their investments, despite warnings by federal agencies of the regime’s attacks on the rule of law, facilitation of corruption, illicit financial activity and serious human-rights abuses. The Ethical Trading Initiative, too, has asked its members to reassess their presence in Myanmar as a “matter of urgency.”

“We are even seeing brands that have positive ratings in transparency, such as the Italian brand, OVS, which received the highest score in the 2022 Fashion Transparency Index, sourcing from a country moving towards a civil war; where pro-democracy activists are being executed; and where at least 55 trade unionists have been killed,” he said.

OVS said that its Myanmar suppliers represent no more than 1 percent of its base and that after the coup, it decided to more frequently audit those firms ”in order not to support the army and at the same time not to leave the workers without a job.”

“We periodically evaluate our permanence in the country [based] on our suppliers’ capability to meet our minimum requirements,” a spokesperson told Sourcing Journal. “However, since we know the situation is uncertain we are ready to move our production elsewhere in case the country conditions further deteriorate. We are in touch with some NGOs, observatories and the Italian Embassy to be ready to promptly identify the right steps.”

Fashion Revolution, the advocacy group that publishes the index every year, said that it will be also speaking with OVS to better understand what is happening. Not everyone is convinced, however.

“It is impossible for brands to adhere to their own ethical commitments while sourcing from Myanmar, and we call on them to put people before profit and put their enormous economic power in service of restoring democracy,” Kerr said.