Gap will be the first US retailer to enter Myanmar

Gap will be the first US retailer to enter Myanmar

Retailer Gap Inc has moved to defend its position on workers' rights following reports that suggest the apparel giant's decision to begin sourcing from Burma/Myanmar is being dressed up as global philanthropy.

The clothing giant last week announced plans to begin sourcing garments from Burma/Myanmar, in a move it says makes it the first US retailer to enter the market. The company revealed it will manufacture products from two unnamed factories in Rangoon as part of a partnership with the US Agency for International Development (USAID).

Human rights advocates, however, have hit out at the move, suggesting Gap simply wants to get its clothes produced as cheaply as possible.

Scott Nova, executive director of the Worker Rights Consortium, told The Huffington Post that the attraction for Gap is "the lowest wages in the region, anaemic regulation and weak labour unions".

"This adds up to cheap garments for Gap, at the price of a lot of misery for the workers who will make those garments," Nova told the publication.

The Wall Street Journal, however, claims workers at the South Korean-owned factories supplying the Gap products - which Gap says cannot be identified for competitive reasons - are paid an estimated average of US$110 per month, with supervisors earning up to $1,000. These wages, the WSJ notes, are around four times what the average Myanmar garment worker earns.

Debbie Mesloh, senior director of public affairs for Gap, told just-style that although Myanmar has not yet set a specific amount for a country minimum wage, government officials have passed the outline of a minimum wage law.

"As Gap Inc does not own its own factories, it does not set the wages for the workers at the factories in our supply chain," Mesloh said. "However, Gap Inc believes vendors should pay a competitive rate to attract and retain skilled talent. The company's Code of Vendor Conduct requires a vendor to pay a local minimum wage or the industry standard, whichever is higher."

The retailer said the factories from which it is sourcing are being audited "by a well-respected non-governmental organisation" to ensure that internationally recognised human rights and labour standards are upheld.

"We intend to apply our industry-leading best practices to ensure that internationally recognised human rights and labour standards are upheld in Myanmar, and that the factories that make our branded apparel are managed responsibly," Mesloh added.

Gap's initial investment into Myanmar's apparel industry is expected to aid the employment of around 4,000 people, and accelerate economic growth in these communities.

The deal, however, is notable because the garment industry was one of Myanmar's largest before the US imposed an embargo against the country in 2003.

Before this, apparel accounted for around 40% of Myanmar's exports, with about half going to the US, according to an academic paper by Toshihiro Kudo at the Japan External Trade Organization's Institute of Developing Economies.

However, since the US started to relax curbs on trade with Myanmar back in 2012, foreign investors have been trickling in to the garment sector. There are, though, concerns that systems and infrastructure need to be improved and restructured before significant US-Myanmar clothing and textile commerce can begin in earnest.