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Impacts of COVID-19 on Myanmar's garment sector

Background information on garment sector

Myanmar’s garment industry employs over 700,000 people and accounts for nearly 10% of all exports. Myanmar’s minimum wages are among the lowest in the region and lower than its garment producing neighbours such as China, Cambodia and Vietnam. Close to 90% of the garment workforce is made up of women. The monthly minimum wage stands at 144,000 (US$95),which falls far short of the estimated living wage of 5,16,312 Kyat (US$367) per month. Some garment workers are also eligible for bonuses, including seniority, skills, productivity and attendance bonuses, however workers’ wages are also often subject to deductions for social security fees, hostel accommodation, food and transport.

The European Union accounts for 70% of Myanmar’s garment exports, however the European Commission is considering whether to withdraw tariff preferences granted to Myanmar under the European Union's Everything But Arms' (EBA) trade scheme in response to accusations against the Myanmar military by UN officials and NGOs of persecuting the Rohingya in northern Rakhine. A monitoring mission scheduled to visit Myanmar last summer, to review the human rights situation and the government’s willingness to change course, was postponed due to the COVID-19 pandemic. The status of this mission is unclear following the coup.

On 1 February 2021, the Myanmar military seized power in a coup d’état, overthrowing the country’s democratically elected government and detaining the leaders of the National League for Democracy (NLD) Party, including its leader Aung San Suu Kyi and President U Win Myint, along with cabinet ministers, opposition parliamentarians and activists. The NLD won a landslide victory in November’s elections, securing 396 out of 476 seats, which granted it a further five years in government. The military-backed Union Solidarity and Development party won just 33 seats.

Following the coup, trade unions and labour organisers representing the country’s largely female workforce have emerged as leaders in the pro-democracy protests. Garment workers in the country have called on international fashion brands sourcing from the country to issue a declaration of solidarity with workers and to protect labour rights enshrined by international law. Workers have asked employers to refrain from taking disciplinary action against workers participating in peaceful demonstrations against the coup. The Confederation of Trade Unions Myanmar has called for comprehensive international sanctions against the junta.

The United States, Korea, China and Canada are also key destinations for Myanmar’s garment exports. Garment workers in the country have called on brands sourcing from the Myanmar to denounce the coup and protect garment workers. Following the coup, the US has suspended its trade deal with Myanmar until democratic government is restored.

Brands sourcing from Myanmar on our tracker can be viewed below. The 2020 ITUC Global Rights Index – which rates countries on a scale from 1 (best) to 5+ (worst) on the degree of respect for workers' rights – rates Myanmar as 4, indicating workers experience systematic violations of internationally recognised labour rights. However, this rating may no longer accurately reflect the situation of workers in Myanmar following the military coup.

Impacts of pandemic

Job losses

As of the end of April 2020, 175 factories had ceased operations as a result of COVID-19, leaving over 60,000 garment workers without jobs. This number of job losses to date is likely to be several times higher – the European Union estimates that 350,000 garment workers in Myanmar are at risk of either being suspended without pay or losing their jobs permanently. Further job losses are imminent as brands cease orders from the country: Benetton Group, H&M and Inditex have already done so. The combined impact of job losses job losses as a result of the pandemic and the coup on the working population is likely to be massive, particularly if there are no enforceable agreements in place regarding severance pay for workers.

Wages & social protections

Clean Clothes campaign estimates that in the months of March, April and May 2020 garment workers in Myanmar lost a total of approximately 33% of their normal wages, equivalent to US$64 million in wages as a result of the pandemic.

At a National Tripartite Dialogue Forum on 25 March 2020 between government, employers and worker representatives, union federations collectively called for the temporary shutdown of factories, with paid leave in April covered in part by the government. They also called for immediate actions to prevent the targeted termination of unionists without due process. Their recommendations were dismissed entirely.

The European Union created a €5 million emergency cash fund – called the Myan Ku Fund – to support thousands of garment workers who have lost their jobs as a result of the pandemic. The Myan Ku Fund offers cash transfers of on average $55 (75,000 Kyat) monthly for up to three months for garment workers who have lost their jobs and cash transfers of $92 (125,000 Kyat) for workers whose contracts were illegally terminated.

Labour and human rights violations

In Myanmar, we have tracked reports of the following rights violations of garment workers during the COVID-19 pandemic and following the military coup

This is not a comprehensive list of violations and cases, full coverage of the impacts of COVID-19 on Myanmar’s garment sector and related industrial disputes can be viewed here. Actions taken by fashion brands sourcing from Myanmar in response to the pandemic can be viewed below.

Demands from local unions & civil society groups: COVID-19

Asia Floor Wage Alliance, WIEGO, HomeNet South Asia and HomeNet South East Asia are calling on brands to make a one-time Supply Chain Relief Contribution equal to 60 days of wages lost for all

garment workers in their supply chains – including time-rated, piece-rated, subcontracted and home workers – during the COVID-19 crisis, as a requirement of responsible business practice.

Immediately after the European Union announced the creation of its emergency fund, an ad hoc alliance of Myanmar labour groups came out with a statement, detailing the specific needs of different categories of workers:

  • Daily labourers and workers on temporary contracts risk being forgotten when it comes to payment of wages and compensation. The same is true for workers in apprenticeship or a probation period.
  • Workers who have worked for three or more years at a factory are entitled to a certain level of compensation; this has often not been respected.
  • Workers with less than six months of service are not entitled to severance pay, according to Myanmar Labour law/ notification N0. 84/2015. Due to the high turnover rate, such workers form a large group. Missing out on severance pay is a setback that such workers cannot easily absorb.
  • Workers in informal jobs in the garment, textile and footwear sector such as home-based workers are completely missing out on any form of compensation.

The Industrial Workers Federation of Myanmar, IndustriALL and suppliers and brands sourcing from Myanmar have negotiated a joint framework ‘Myanmar during the COVID-19 Crisis: Working together to Protect the Health and Welfare of Workers and supporting the payment of Workers and Factories’.

Click below to find out more information directly from local unions and labour groups:

Industrial Workers Federation of Myanmar

Let’s Help Each Other (LHEO)

WE Generation Network

Federation of Garment Workers Myanmar (FGWM)

Solidarity Trade Union of Myanmar

You can view a list of campaigns and demands by international civil society organisations demands here.

Demands from local unions & civil society groups: Military Coup

CTUM and IWFM have asked trade unions and civil society organisations around the world to call on companies operating in Myanmar to condemn the military coup and uphold the rights of workers in their supply chains.

Clean Clothes Campaign has called on garment brands and manufacturers to condemn the military coup and protect workers in their supply chains.

ILO has published a statement calling for a return to democracy and respect for the fundamental rights of freedom of association and peaceful assembly.

More coverage on the demands from unions and civil society groups following the coup may be found here.

[This page was updated on 9 April 2021. This is a live tracker we update on an ongoing basis. If you have additional information on these issues please contact us at [email protected] with the subject line ‘COVID-19 Action Tracker’]