In Burma, garment industry booms – and labour unions pay the price
Discrimination against workers standing up for their rights in Burma’s garment industry was highlighted this month after a union leader was fired and employees’ overtime pay went neglected for more than a year at a factory supplying global fashion brand H&M.
At Hangzhou Hundred-Tex Garment Company, a factory on the outskirts of Rangoon, workers first staged a demonstration calling for their overtime work to be paid in December last year. The workers hadn’t been paid overtime for 15 months.
Although Sweden-based H&M — which raked in more than $25 billion worth of sales last year globally — has an in-country monitoring system, labour activists say it is concerning that the major fashion brand failed to detect a factory in its supply chain that wasn’t paying overtime work. Garment workers in Burma are paid a daily minimum wage of 3,600 kyats ($2.65) or an average monthly wage of 67 dollars, ranking the country second-lowest in the region, ahead of only Bangladesh. With help from the local township arbitration conciliation body, workers at the Hangzhou Hundred-Tex factory were eventually back-paid for just six months’ overtime, the maximum they could claim under the law.
In January, another demonstration was staged when the factory’s union leader Thet Paing Oo was fired. Management at the factory told the Confederation of Trade Unions Myanmar (CTUM) that Thet Paing Oo was fired because he took leave without permission. However, workers felt he was unfairly targeted because he was a union leader.
When the demonstration began, CTUM notified H&M. Confederation President Maung Maung says H&M representatives responded and tried to resolve the case with the factory owners in Shanghai, but were unsuccessful.
On 9 February, the workers “saw that nothing was happening — it wasn’t going anywhere — so they exploded,” says Maung Maung.
There are conflicting reports of what exactly happened that day, but photos have surfaced showing a truck’s window smashed and chairs broken. Chinese media say workers beat the Chinese factory manager and also broke machinery, but workers at the facility deny this.
H&M declined DVB’s interview request, but a statement was provided that said the brand was “deeply concerned by the recent conflict and as a result our business relationship with this particular factory is currently on hold.”
Maung Maung says the case reveals the problems in Burma’s labour dispute settlement process. He adds that this trend of unfair dismissal of union leaders in the industry has become increasingly common.
Although H&M did react, it was only after they were notified by CTUM. This is an issue, says Alex Moodie, research officer for Progressive Voice, which released a report in December arguing that labor rights in Burma are not adequately protected through national legislation.
“This is particularly worrying because while H&M are not perfect, they do have procedures in place whereby trade unions, CSOs [civil society organisations], or journalists can gather information on their practices. For most brands, this does not exist and it is therefore much more difficult to monitor labour rights abuses,” Moodie said.
Based on 199 interviews with garment factory workers, Progressive Voice’s “Raising the Bottom” report found only 33 percent of workers interviewed stated that a trade union existed in their factory and only 8 percent were members. Thirteen percent of workers stated that there was a union in their factory, but that the union was in fact employer-controlled or employer-established.
Fear of being laid off by factory owners, or threatened with dismissal, due to trade union membership was the most commonly cited reason for deeming membership unsafe. It is also an issue raised in a report by the Centre for Research on Multinational Corporations (SOMO) published in February.
SOMO researchers Martje Theuws and Pauline Overeem said the dismissal of the union leader at Hangzhou Hundred-Tex is yet another example of the general hostility of employers toward labour unions, “creating an environment which makes it difficult for workers to stand up for their rights.”
Burma’s garment industry is “not perfect but it’s still at the beginning” of its development, says Jacob Clere at the European Union-funded project SMART, an initiative that works with 33 factories aimed at improving labour standards for workers and businesses. One of their current education programs is focused on improving industrial relations.
Independent trade unions were prohibited for more than 50 years under Burma’s former military regime. The garment sector was once booming, in the ’90s, but in 2003 it dramatically declined as Western economic sanctions were imposed on the country. Clere estimates that over 300 factories were forced to close and thousands of workers lost their jobs as garment exports to many Western countries were scratched.
“Myanmar missed out on increasingly stringent social compliance around 2001, when the European standard was starting. When the main factories re-entered the market that survived [the sanctions], many lacked the knowledge in terms of safety compliance and unions,” explains Clere.
The textiles, clothing and footwear industries provide almost 750,000 jobs in Burma, and in the past five years exports of these goods have nearly doubled. According to the Myanmar Garment Manufacturers Association (MGMA), garment exports totalled $1.46 billion in 2015, accounting for 10 percent of the country’s export revenues.
However, labour activists say growing investment is too focused on promoting the “Made in Myanmar” brand and attracting more foreign firms to establish factories in the country. Multinational watchdog groups such as SOMO are calling for big-name brands to invest in skills-training and improving the working conditions of their employees, and to stop the “race to the bottom” among multinationals in search of countries with the cheapest workforces and weakest regulations.
Before sunrise, Zarchi Win rubs traditional thanaka powder on her cheeks and fills her tiffin food container with rice and vegetables. She rides her bike to the Panda Textiles factory and as soon as she arrives a crowd of workers gather around her. They exchange passionate conversation before a bell sounds, prompting a stream of workers to exit the grounds as shifts tick over and a new batch of workers files through the gate to take up their posts inside the factory. It’s a routine that is familiar to Zarchi Win, but since the start of February she hasn’t been permitted to enter the grounds with the other workers.
Zarchi Win led a protest with workers in 2016 that lasted eight months. The demonstration was sparked when the business became privatised; the workers’ contracts were renegotiated and cut to two-year contracts. After the workers signed the new contracts, the factory asked them to work six days instead of five per week, which the employees said wasn’t originally in their contracts. Some were also unfairly dismissed, according to Zarchi Win, so in response they staged a sitting protest.
“I am happy as a factory worker,” says Zarchi Win, “but because the company administrators broke our agreements, that’s why we don’t have any hope for the future.”
The Mandalay Division government eventually established a negotiating committee and after three months of discussions, the workers called off their protest.
The workers have been given their jobs back — except Zarchi Win and another union leader.
“Although I am happy that my fellow workers have been given their jobs back, I feel really sad and ashamed that I am now jobless and cannot provide for my family,” she told DVB earlier this month at her home in Mandalay’s Pale Township.
In the Action Labour Rights report “Under Pressure” released last year, which interviewed 1,200 employees at 39 factory sites, 70 percent of respondents said that trade union leaders and activists were discriminated against in terms of salary, promotion, overtime pay and termination of their contracts.
Mechanisms for labour inspections, conciliation and arbitration bodies that make recommendations for the reinstatement of employees exist in law, but one of the challenges is the relevant legislation’s enforcement power, says Rory Mungoven from the International Labour Organization (ILO).
He says a balance needs to be found that is “the right scale of penalties so that there is clearly a strong incentive for compliance.”
Zarchi Win had worked at Panda Textiles for 20 years. Facing the fact that she may not get her job back, she is worried about her future as she is the primary breadwinner for her family, earning 120,000 kyats ($90) per month.
While her case has not made headlines in the way that the Hangzhou Hundred-Tex fracas has, it is one of the longest-running industrial disputes in Burma’s garment and textiles industries.
Since 2014, a number of demonstrations were staged at Panda, where the business changed hands and older workers were no longer given the job security assurance that they could work until they were 60 years old. Two elderly workers died during the protests.
Mar Mar Oo, a workers’ affairs leader for the Ethnic People Development Partnership who supported the Panda employees during the protests, says there needs to be greater protections for workers’ rights. In her previous research with Oxfam, she found that workers were on the clock up to 11 hours a day, six days a week — and at pay below the minimum wage of 3,600 kyats.
She says while it is encouraging that there has been a growth in unions in recent years, more awareness needs to be raised: “I think unions are important for workers because in previous days they felt oppressed and they wanted to ask for rights. Without unions they protested and became angry and didn’t know how to show their [fight for] rights in the proper way.”
There are mixed views toward unions among both local and foreign factory owners. Burmese entrepreneur Winnie Khine of Maple Fabrics, who employs almost 900 workers, says she prefers to promote close communication and trust with her workers through regular meetings.
“Once every month, I talk to the company — about what is the company goal, how currently the company is going and the growth, and so they always feel part of the team and never left out,” she told DVB.
Maung Maung of the CTUM encourages the industrial sector as a whole to make urgent reforms in terms of educating workers about their rights under Burma’s labour laws. He says if the industry invests in workers, the number of labour disputes will decline. Last year, he was aware of 168 disputes in Rangoon’s Hlaing Tharyar Township alone.
“We are worried that things might go in the way that they did for Bangladesh — not with the buildings collapsing because the buildings [in Burma] are new or one-storey, but I would say the industry will collapse if the employers are not careful and if the government just listens to employers.”
Maung Maung Lay, vice president of the Union of Myanmar Federation of Chambers of Commerce and Industry, doesn’t believe that recent industrial disputes will deter foreign investment as most cases are ultimately resolved. However, he agrees that workers and employers both need to be better educated on labour laws and regulations to break the cycle of some employers exploiting an “ignorant workforce.”
He explains, “From all sides — unions, [employers and employees] — there should be a solution. The ILO are helping but what we used to say is, ‘It is like putting the sesame seeds in the mouth of an elephant.’ It is too little as very few understand [the law].”
Although Zarchi Win is now unemployed, she does not regret leading the demonstrations that led to her dismissal. She regularly visits the factory and speaks to the workers, her former colleagues. When DVB visited the factory, she was handling complaints by workers, some of whom had been reinstated in the wrong positions after the strike, while other long-serving workers were worried their pay scale would be docked. She says that while she is waiting to hear whether she will get her job back, she will continue her work as a union leader.
“I have no regrets as I worked for the true rights of the labourers, although I am sad I have lost my job. I am satisfied that my fellow workers have got their assurance for their livelihoods so I will continue to work in the future for workers’ rights. Otherwise, if no one fights, we will not get our rights.”