Myanmars garment industry Code will be implemented in a staged process

Myanmar's garment industry Code will be implemented in a staged process

The Myanmar Garment Manufacturers Association (MGMA) today (2 February) published the country's first ever Code of Conduct, in a move that aims to set out responsible and ethical business practices for its burgeoning apparel industry.

The document comes from extensive workshops with the European Union's SMART Myanmar project, in addition to several meetings with international brands and partners, just-style learnt in advance of its launch. It is designed as a benchmark for responsible business practices in Myanmar’s rapidly growing garment sector.

The SMART Myanmar project was launched last year with European assistance, and seeks to build capacity and increase skills with training initiatives, including a study tour to Europe for stakeholders, and the identification of showcase companies and benchmarking for best-in-class companies.

Garment industry values
A first for Myanmar's apparel producers, the Code embraces International Labour Organization (ILO) Core Conventions and the strictures of Myanmar’s national laws. Taking part in the process prior to completion, the ILO trained MGMA member companies on the importance of labour remediation programmes and industrial relations.

Myanmar’s garment sector is growing rapidly and currently consists of around 300 companies with some 150,000 workers. Garment exports exceeded the US$1bn mark in 2013/2014, accounting for about 10% of the country's overall exports.

For Europe in particular exports to the EU doubled in 2014, with shipments having the added benefit of GSP+ duty-free trade preferences. However, nearly all of these orders went to producers able to pass international social compliance audits such as: BSCI, WRAP, SEDEX, SA8000 and the Ethical Trading Initiative, among others.

Factories now adhering to the full Code of Conduct hope to open themselves up to the “massive influx” of international orders coming from Europe and the US, where retailers and brands demand socially responsible manufacturing practices from their producers, the MGMA says.

“Garment manufacturers in Myanmar are eager to create an industry which can be known by international brands for safety and responsible business practices,” said Simone Lehmann, SMART Myanmar project director. “Of course, there is so much more to be done. This Code establishes clearly the values of the domestic garment industry, and SMART Myanmar will be there to support MGMA in the coming months as they work to implement and realise the bold vision laid out in their Code.”

Indeed, Myanmar has been keen to capitalise on the interest generated by overseas buyers seeking to diversify their sourcing base into a country with low labour costs and good future prospects, even if the situation, pre-Code, presented infrastructure impediments and non-negligible risk.

The MGMA is inviting European brands and retailers to join a trade mission to Myanmar in March to learn more about importing garments from the country and making contact with potential suppliers.

The visit, which is part of the SMART Myanmar project, will also provide an opportunity for Myanmar's manufacturers to learn more about the requirements of doing business with European brands.

Gradual process
Full implementation of the Code will be a step-by-step process, the MGMA acknowledges, with member companies nevertheless expected to “uphold the values of responsible business conduct” expressed within the document until full implementation. More still, the companies will be expected to demand the same standards of conduct from their direct suppliers and subcontractors.

While the voluntary Code comes into effect immediately, the MGMA will launch its first implementation activities in February and March, a spokesperson for the garment association told just-style.

“There will be posters for factories to place on their walls and the option to publicly sign-up for the Code, as well as public workshops on topics included in the Code. SMART Myanmar has actually been doing social compliance workshops for a couple months already, which of course cover many topics relevant for the Code,” the spokesperson explained.

The document will be reviewed annually by the MGMA and amended as needed.

“We expect that in the first year many companies will see the value in signing up, as they're interested in reaching the EU market. Companies which are non-compliant with this Code generally cannot export to the EU or US. International brands and consumers these days demand a higher standard of social compliance from their producers, and this Code of Conduct will help them ensure that their factory producers are meeting certain minimum requirements.”

MGMA member Win Ei Khine, executive director of Maple Trading Co, believes that while his factory has always operated in what he believes to be a “responsible manner”, he acknowledges that “there are some shortcomings that need to be addressed.”

He explains: “For instance, employee contracts are important but they're not always a part of Burmese business culture. Some factories need to improve this, just like some still need to make sure there is always an adequate fire safety plan and that working hours don't exceed the maximum allowed by law. MGMA has developed this Code of Conduct as a guide for our industry to help us all reach to international standards."

In summary, here are some of the main elements of the Myanmar Code of Conduct:

  • Compliance with national laws and regulations

Companies shall observe all applicable national laws, rules and regulations in force. In areas not, or only weakly, regulated by national law, they shall strive to act according to the values and principles laid down in the Code.

  • Basic understanding of responsible corporate behaviour

Through their business activities, companies shall contribute to their community’s well-being, promotion and development. This, through the promotion of the principles of responsible management, such as transparency, accountability, sincerity and integrity. No form of bribery or corruption practised by management or workers shall be tolerated.

  • Respect for human rights

It is the responsibility of private enterprise to take all possible and economically feasible measures within their sphere of influence to assume their responsibility to respect human rights. In the case of infringements directly related to a company's business activities, companies should use their influence to encourage the responsible actors to mitigate risks or remedy rights violations in the supply chain.

  • Labour rights and working conditions

Companies shall uphold the eight core labour standards of the International Labour Organization (ILO) and should commit to create a safe and humane working environment.

  • Effective remediation of child labour

Companies shall commit to work towards the effective remediation of child labour by agreeing upon a minimum acceptable working age of not less than 15 years. A worker's age must be determined before employment.

  • Protection of young workers and skills development

Young workers shall not carry out work in dangerous, unsafe or hazardous conditions or work which is harmful to their safety and health. They also may not work during night hours and shall avoid working with potentially harmful machines or substances, including (but not limited to) fabric cutting machines or toxic chemicals. Workplace training shall be welcomed and encouraged.

  • No forced labour

Companies do not tolerate any form of forced or compulsory labour. Workers shall have sought work on their own free will. All work or service which is demanded under the threat of penalty, violence or intimidation and for which the said person has not offered him or herself voluntarily shall be objected.

  • Freedom of association and right to collective bargaining

The workers’ rights to establish and to join work organisations of their own choosing without previous authorisation shall be respected and the right to collective bargaining shall be observed. Companies shall adopt an open and collaborative attitude towards the activities of trade unions.

  • Humane treatment of workers

Management at all levels treat their workers with respect and dignity and shall not engage in abusive or inappropriate behaviour towards workers. Disciplinary measures may not involve physical punishment or psychological harassment.

  • Wages and benefits

The wage level for regular working hours shall not fall below contractual or legal minimum wage rates. Illegal and unjustified wage deductions, in particular for disciplinary measures, shall not be tolerated.

  • Working hours and overtime

The maximum number of regular weekly working hours for the garment industry shall not exceed 44 hours (8 hours per weekday, 4 hours on Saturday), such as defined by national law. Overtime hours are allowed only with permission granted by the Companies and General Labour Law Inspection Department, and as standard practice limited to a maximum of 3 hours per day on weekdays and 5 hours per day on Saturday.

  • Occupational health and safety

Companies shall commit to provide their workers a safe and healthy working environment. In cases where companies provide dormitories, the same health and safety obligations should apply to those facilities.

  • Environmental impact and wastewater management

Companies are committed to protect the environment and to preserve natural resources. They take all reasonable measures to keep their impact on the environment and the climate as low as possible. This may include the promotion of environmentally friendly and energy-efficient production and the implementation of a waste management system.

  • Subcontracting policy

Assuming their responsibility to influence a transparent supply chain, the companies refrain from unauthorised subcontracting to third parties. Whenever subcontracting workloads, the companies appeal to these third parties to respect the values and requirements outlined in this Code of Conduct.

  • Disputes, grievances and complaints

Every worker shall have the opportunity to raise concerns and to complain about factory policies, practices or working conditions. A suggestion box shall be made available within each factory in order to receive anonymous comments. Complaints about violations of this Code and requests for information may be addressed to MGMA at any time and anonymously, via telephone or in person.