LPP S.A's response to allegations of abuses in Myanmar garment factories - Nov 2023 update
Two of the factories are not on our suppliers list:
- Jun Sheng Garment Company Limited – orders took place only in 2022
- Ten Da Garment – we don’t cooperate with this factory
Concerning the rest of the factories we are in touch with our agents to get to know if they confirm the allegations and are aware of the information from Myanmar Labour News and social media – Twitter and Facebook.
- Hengrun Myanmar
1) After receiving allegations from B&HRRC, LPP contacted agents who cooperate with factories in Myanmar and engaged them in clarifying situations. In addition, LPP conducted audit in Hengrun Myanmar factory in November 2023. Information was gathered and considered from records review, worker interviews, management interviews & visual observation. During the assessment, number of non-conformities were found in regard to LPP requirements. The factory was confronted with audit results and received scopes of improvement report and summary of the score. Further cooperation with the factory would demand that its management applies necessary corrections to guarantee LPP Code of Conduct. Please note that due to limiting its value chain in Myanmar LPP is not planning to cooperate with Hengrun Myanmar in the future.
2) In regard to the event mentioned on X on attempted kidnapping of workers who were on their way home by ferry, we inform that it has not happened at LPP’s former supplier. There are two Heng Run factories in Myanmar, LPP produced at HENG RUN ( Myanmar) Garment co., Ltd., located in No. 18/A, Mya Yadana Road, Mya Green Industrial Zone. The factory which was involved in the mentioned event is same-named but located in Shwe Lin Pan industrial zone.
- Zong Hong Garment
After receiving allegations from B&HRRC, LPP contacted agents who cooperate with factories in Myanmar and engaged them in clarifying situations. In addition, LPP conducted audit in Zong Hong Garment factory in December 2023. Audit involved factory representatives, LPP employees (managers and auditors), auditing and remediation expert affiliated with MADE in Myanmar project. The investigation was conducted by analyzing selected factory’s documents and files, through the sampled workers interviews and talks with the management.
There was a reasonable ground to verify the allegations on workers working overtime on Sundays and until 8 p.m. Overtime took place when the urgent production was required. Payment records and overtime voluntary records were found to be signed by workers. The overtime payment records were found to be correct and paid in premium rate. Extra overtime hours did not obtain permission from the regional FGLLID (factory and general labor law inspection department). When workers worked on Sundays and extra overtime hours in the other days, a safe transportation was provided. All sampled workers said that the target set for them is realistic and there was no pressure even if they did not hit target. The sampled workers were found to express a good communication status with their supervisors in workplace. No inappropriate word or language was found to be used as the workplace communication by their supervisors. None of the sampled workers was found to be forced or none of them felt threaten to work any overtime in the factory. They expressed that they can easily get their excuse approved by their supervisors to leave from working overtime or a day absence in the factory without negative consequences.
The grievance policy established by the top management in the factory allows the workers to reach their immediate supervisors for their grievances and the policy requires those grievances to record for review and tracking purposes. The WCC was found to be organized in August 2022.
None of the sampled workers were found to be aware of any allegation news posted on the social media or website. None of the issues were found to be discussed with the workers or workers’ representatives by the management through the WCC meeting records.
The factory was confronted with audit results and received scopes of improvement report and summary of the score.
- Myanmar Bestex Garment
Bestex Myanmar Garment factory went through a third party audit in September 2022 and received an average grade. After receiving allegations from BHRRC, LPP contacted agents who cooperate with factories in Myanmar and engaged them in clarifying situations. LPP visited Myanmar Bestex Garment factory in November 2023. During the audit a number of non-conformities were identified in relation to the LPP Code of Conduct therefore the allegations demand further cooperation with the supplier in completing the corrective action plan. The factory was confronted with audit results and received scopes of improvement report and summary of the score. In case of further violations or a lack of effort and cooperation in resolving violations, LPP may decide about gradual reduction of the number of orders and resign from cooperation with the supplier.
- Lucky Fortune
After receiving allegations from BHRRC, LPP contacted agents who cooperate with factories in Myanmar and engaged them in clarifying situations. In addition, in cooperation with experts affiliated with MADE in Myanmar project, the audit was conducted in Lucky Fortune factory in November 2023. The investigation was conducted by analyzing selected factory’s documents and files.
Concerning the WCC, candidate list was posted on the workers notice board. Based on the interview, all the workers could vote the WCC election freely. The facility elected 3 worker representatives and appoint the same number as worker representatives from the employer side. The process took place under the guidance of SMART Myanmar.
No information was obtained about the alleged military uniforms to be ordered in the factory.
According to the corrective action plan the factory management should establish social compliance team structure with clear responsibility to cover all areas of labor rights (working hour, payment, etc.,), analyze the root cause and make a plan to reduce OT, revise the protection policy which include the maternity benefits and protection measures to the pregnant workers according to the law, revise the working hour policy to include the information of overtime working hour, overtime application process and public holidays, revise and communicate the leave policy and renumeration policy to all workers not only to supervisors and leaders, communicate and explain to all workers about grievance handling procedures. Moreover, the factory should ensure all supervisors not to use abusive word during the communication with workers. The supervisors should be disciplined for using abusive words for workplace communication. The factory will be monitored in order to ensure that these issues are addressed satisfactorily.
- Kfine International Garment (Myanmar)
LPP informed its supplier about the allegations, the factory was put under heightened observation. The supplier produced there one model and cooperation with the factory ended in the beginning of August 2023. Please note that due to limiting its value chain in Myanmar LPP is not planning to cooperate with Kfine International Garment in the future.
- G&B Manufacturing Garment
1) After receiving allegations from B&HRRC, LPP contacted agents who cooperate with factories in Myanmar and engaged them in clarifying situations. G&B Manufacturing Garment factory went through a third party audit in October 2023 and received an average grade. LPP conducted audit in G&B Manufacturing Garment factory in November 2023, in the presence of factory representatives, LPP employees (managers & auditors) junior and senior experts affiliated with MADE in Myanmar project. The investigation was conducted to verify the issues through the necessary documents’ reviews and interviews.
Based on analyzing the relevant factory documents LPP discovered errors in allowing casual and sick leaves, voluntary and paid overtime, payment deductions & disciplinary sanctions. The factory was confronted with audit results and received scopes of improvement report and summary of the score.
2) Concerning the fight between three workers that took place in the factory by the time the audit took place none of them were hired in the factory any more. Through sampled workers’ interviews it was not possible to verify if allegations concerning the fight were true, as the workers did not want to comment on the allegations. According to the factory management the incident was caused by personal matters.
Please note that due to limiting its value chain in Myanmar LPP is not planning to cooperate with G&B Manufacturing Garment in the future.
- Gaotai Garments (Myanmar)
Concerning the situation that took place on the ferry going back from Gaotai Garments factory, we checked information with our agent and experts working on the ground in Myanmar. We confirm that this situation happened: workers had an argue and fight for the bus seats and stabbed each other with scissors after work. The ferry was provided by the factory. The factory filed a statement and record at the government labor department.
- Myanmar of Hua Meng
After receiving allegations from B&HRRC LPP contacted agents who cooperate with factories in Myanmar and engaged them in clarifying situations. LPP received explanation from the Hua Meng factory including pictures. LPP is going to perform audit in Myanmar of Hua Meng factory in 2024. After the audit factory management will be confronted with its results, scopes of improvement report and summary of the score. In case of confirming the allegations we will cooperate with the supplier in completing the corrective action plan.
- Honor Apparel
1) According to Myanmar Labour News in June 2023, the supervisor was illegally dismissed from the Honor Apparel factory. LPP got in touch with the agent cooperating with Honor Apparel and received the following information: “Honor Apparel factory terminated the labor contract with a sewing team leader during the probationary period in June 2023. As the employee have two serious quality accidents during the probationary period, after assessment, the person was not suitable for this position. After mutual negotiation, the labor contract was terminated, and considering the current difficulty to find a new position in Myanmar, the factory provided additional subsidy to the employee.”
2) We are glad to know that the workers exercised their right to strike. Based on the documents provided by the Honor Apparel factory in June 2023, the factory management signed the agreement with the workers: 18 out of 18 demands were met.