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Article

1 Sep 2021

Author:
Jasmin Malik Chua, Sourcing Journal

Myanmar: Bestseller pause orders following calls to end investment and 'isolate the regime'

"Bestseller Puts Freeze on Myanmar Garment Sourcing", 1 September 2021

The Danish retailer revealed...that it will not be placing orders in the troubled Southeast Asian nation until it has conducted an impact assessment and engaged in dialogue with labor experts, trade unions and other stakeholders with a “clear focus on the wellbeing on garment workers.”

The decision arrived shortly after the Industrial Workers’ Federation of Myanmar (IWFM), an affiliate of IndustriALL Global Union, reported that two of its members have died from Covid-19 as a result of lax and nonexistent health protocols. More than 100 factory-level union leaders, it added, have also been infected by the virus, worsening a humanitarian crisis in a country already reeling from the military’s brutal seizure of power seven months ago...

The nation’s labor movement has been more unequivocal, urging companies, including fashion brands, to divest from Myanmar.

“There is no concrete action to remedy the worsening situation, and we have raised this with employers and brands several times. Some employers have even collaborated with the military to identify and persecute local union leaders,” said Khaing Zar Aung, president of the IWFM. “There are no workers’ rights, no justice and no remedy. That’s why we are calling all investors to isolate the regime, cut off their resources and drive them out.”

Bestseller...had placed a moratorium on new orders from Myanmar in March...At the time, the retailer said that the “escalation of violence and the unpredictability of the situation” made it difficult to operate safely in the country. Of the 36 factories that produced clothing for Besteller, only seven remained operational and even then at reduced capacity. Both inbound and outbound shipments were also “highly unstable” and the security situation was deteriorating “in a way and at a speed” that made it difficult to continue, the Jack & Jones and Vero Moda owner added.

Two months later, Besteller...resumed their sourcing, citing a desire to protect jobs and prevent Myanmar’s economy from imploding. A third-party audit, commissioned by Bestseller and published by independent lawyer Jonas Christoffersen...concluded that the retailer had complied with sanctions and not cooperated with the junta. This was despite its use of three factories in the Ngwe Pinlae Industrial Zone, which is operated by Myanmar Economic Holdings Limited, a military-owned conglomerate that is the target of sanctions from the European Union, United States and the United Kingdom. A report by Christofferson’s law firm, said there were no “reasonable grounds” to assume that the factories were owned, directly or indirectly, by the military or had paid administration fees, directly or indirectly, to the military...

News from the IWFM, however, appears to have swung Bestseller in the other direction once more. “We take this announcement from IndustriALL and IWFM very seriously,” the retailer said. “Local and international unions are one of our key partners in responsible sourcing, and we recognize the difficulties they have faced in Myanmar since February. We have a responsibility to assess the impact our business decisions may have on human rights, and this is a process we will now go through.”

Bestseller said it remains committed to all previously paid orders and will enable the “crucial payment” of wages to workers in the factories it has contracted. The duration of the impact assessment, it said, has yet to be determined, but it will not exceed the production time of the orders that have already been placed...

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