Adidas Starts Sourcing from Myanmar

Myanmar has made its first appearance in the German sportswear retailer Adidas Group’s recently published Global Factory List, a list of all factories which manufacture products for the group.

With the lifting of international trade sanctions against Myanmar, the garment industry has seen a boom in investments. American clothing giant GAP in June last year said it will start making clothes in Myanmar.

Adidas said Myanmar’s woeful labour conditions led to a lengthy process of examining and strengthening its policies and approaches to ensure the rights and interests of local stakeholders.

It took Adidas two years of extensive stakeholder engagement before it allowed any of its business partners (suppliers) to start sourcing in Myanmar, the retailer said.

“Myanmar (Burma) is a newly developing country, one which is undergoing positive political change, but also one that has a legacy of human rights abuses including the use of forced labour, child labour and the like,” Bill Anderson, social and environmental affairs Head – Asia Pacific region, Adidas Group, said in a blog post in Adidas’ website.

“If we want to do business in Myanmar, we should do more in our assurance process. We need to set the bar higher,” he added.

Adidas said it has developed specific guidance for its suppliers on land acquisition and development of industrial sites. The retailer said it is currently working with the International Labor Organisation’s (ILO) office in Yangon and the Myanmar Garment Manufacturing Association (MGMA) on ways to lift the overall standards in the garment sector.

“We need to continuously invest in resources in-country and on the ground, to engage regularly with government, to understand new laws and the rapidly developing administrative systems, as well as the numerous civil society groups and trade unions that are blossoming in the light of their new-found freedoms,” Anderson said.

Adidas noted the rising frequency of labour disputes in Myanmar as an obstacle. The group said it has called on its suppliers to employ a qualified industrial relations officer, as part of the human resource management function.

“We are running capacity-building programmes to familiarise the factories with our Employment Standards and the need to respect freedom of association. We have translated our Workplace Standards into Burmese to ensure that suppliers are incorporating them into their induction training for new employees. It is not possible for workers to exercise their rights if they are not aware of them,” Anderson added.

In the absence of an official minimum wage for Myanmar, Adidas said it will require its suppliers to set wages against the prevailing industry wage for export factories in the group’s sector. In the absence of specific environmental laws, Adidas said it will apply international best practice.

“We have called on the Myanmar government to update their regulations, to match our strict standards,” Anderson said.

Source: Myanmar Business Today

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