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The Myanmar Dilemma Update The Myanmar Dilemma Can the garment industry deliver decent jobs for workers in Myanmar? SOMO & ALR & LRDP August 2017 – updated version Colophon The Myanmar Dilemma Can the garment industry deliver decent jobs for workers in Myanmar? August 2017 – updated version. The report was originally published in February 2017. Authors: Martje Theuws, Pauline Overeem Acknowledgments of the Centre for Research on Multinational SOMO says thanks to all workers who Corporations (SOMO), Action Labor Rights were interviewed and shared their stories. (ALR), Labour Rights Defenders and SOMO would also like to thank all civil Promoters (LRDP) society organisations in Myanmar and inter- nationally that contributed to this report. Text editing: Vicky Anning This publication is made possible with Layout: Frans Schupp financial assistance from the Dutch Ministry Cover photo: Lauren DeCicca | MAKMENDE of Foreign Affairs. The content of this publication is the sole responsibility of Photos: Lauren DeCicca | MAKMENDE SOMO and can in no way be taken to Martje Theuws The pictures of Martje reflect the views of the Dutch Ministry Theuws are taken in a Myanmar garment of Foreign Affairs. factory that is not included in this report. Disclaimer ISBN: 978-94-6207-116-2 SOMO takes full responsibility for the Print: Drukkerij Raddraaier wording used in this report. ALR and LRDP have co-authored the executive summary and chapters 4 and 6. Chapters 1, 2, 3 and 5 are SOMO’s work. Stichting Onderzoek Multinationale Ondernemingen Centre for Research on Multinational Action Labor Rights Corporations www.actionlaborrights.org Sarphatistraat 30, 1018 GL Amsterdam The Netherlands T: +31 (0)20 639 12 91 F: +31 (0)20 639 13 21 [email protected] – www.somo.nl Labour Rights Defenders & Promoters lrdpmyanmar.blogspot.nl/2013/04/labour- rights-defenders-promoters.html The Myanmar Dilemma Can the garment industry deliver decent jobs for workers in Myanmar? SOMO & ALR & LRDP August 2017 – updated version Contents About the authors .................................................................................................... 6 Executive summary .................................................................................................. 7 1 Introduction ...................................................................................................... 17 1.1 Why this report? ............................................................................................. 17 1.2 Methodology ................................................................................................ 19 1.3 Outline ........................................................................................................ 23 2 Myanmar in motion ............................................................................................. 24 2.1 Bumpy road from military rule to parliamentary government ..................................... 24 2.2 Population, nationality, ethnicity, conflict .............................................................. 27 2.3 Economy and trade ......................................................................................... 29 2.3.1 Trade sanctions ..................................................................................... 31 2.3.2 European Union trade policy .................................................................... 31 2.3.3 Investment Protection Agreement ............................................................. 33 2.3.4 United States trade policy ....................................................................... 36 2.3.5 Post-sanction foreign investment ............................................................... 37 2.4 Special Economic Zones ................................................................................... 37 3 Normative framework ......................................................................................... 40 3.1 International standards .................................................................................... 40 3.1.1 ILO Conventions ................................................................................... 40 3.1.2 United Nations Guiding Principles on Business and Human Rights ..................... 40 3.1.3 Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises .................................................................... 42 3.1.4 International normative framework regarding child labour .............................. 44 3.1.5 International normative framework regarding forced labour ............................. 44 3.1.6 International normative framework regarding wages ..................................... 45 3.2 Myanmar labour laws ...................................................................................... 45 3.2.1 Child labour ......................................................................................... 46 3.2.2 Employment contracts ............................................................................ 46 3.2.3 Wages ................................................................................................ 47 3.2.4 Working hours ...................................................................................... 49 3.2.5 Freedom of association .......................................................................... 50 3.2.6 Collective bargaining ............................................................................. 51 3.2.7 Dispute settlement ................................................................................ 52 3.2.8 Social security ...................................................................................... 53 3.2.9 Occupational Health and Safety ................................................................ 53 3.2.10 Enforcement ........................................................................................ 54 3.3 Concluding remarks ........................................................................................ 54 2 4 What are things really like? Research findings ........................................................... 55 4.1 The Myanmar garment industry ......................................................................... 55 4.2 Researched factories ....................................................................................... 59 4.3 Workers’ background ..................................................................................... 62 4.4 Employment relations ...................................................................................... 65 4.5 Wages ......................................................................................................... 66 4.6 Working hours ............................................................................................... 77 4.7 Child labour .................................................................................................. 79 4.8 Health and safety on the work floor .................................................................... 83 4.9 Social security ................................................................................................ 88 4.10 Labour unions and complaint mechanisms ............................................................ 89 4.11 Concluding remarks ........................................................................................ 91 5 Buyer policies and supply chain initiatives ................................................................ 92 5.1 Buying companies’ policies and practices ............................................................. 92 5.1.1 C&A ................................................................................................... 92 5.1.2 Deuter ................................................................................................ 95 5.1.3 Gaastra ............................................................................................... 96 5.1.4 H&M .................................................................................................. 97 5.1.5 Muji ................................................................................................... 98 5.1.6 New Look ............................................................................................ 99 5.1.7 Primark .............................................................................................. 100 5.1.8 Suitsupply .......................................................................................... 102 5.1.9 Takko ................................................................................................ 103 5.2 The Myanmar labour movement ........................................................................ 104 5.2.1 Myanmar labour unions .......................................................................... 104 5.2.2 IndustriALL ........................................................................................ 105 5.2.3 Myanmar labour groups (selection) ........................................................... 105 5.3 Supply chain and other initiatives in Myanmar ...................................................... 106 5.3.1 Action, Collaboration, Transformation ....................................................... 106 5.3.2 Business for Social Responsibility .............................................................. 107 5.3.3 Ethical Trading Initiative ......................................................................... 107 5.3.4 Fair Labor Association ..........................................................................
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