Garment code to boost buyers’ confidence

Garment industry manufacturers met with European Union company representatives on March 24 to talk over enacting an apparel industry Code of Conduct, a social compliance step that could placate international buyers.

The roundtable discussion came as part of a weeklong study mission by an EU trade delegation of 16 brands, a press release said. Members of the ministries of commerce and labour also attended the talks.

A statement based on the discussion from the Myanmar Garment Manufacturers Association (MGMA) – the group behind the industry Code of Conduct – called for the Myanmar government to conceive and carry out “a consistent policy framework on labour-related laws”, and said the MGMA would concentrate on improving systems instead of “just issues”.

MGMA’s activities and the Code of Conduct’s continuing implementation process come as the garment industry gathers speed in Myanmar. Once severely diminished by sanctions, the sector has moved toward social compliance and measures that can increase foreign buyers’ comfort in sourcing from the country.

The process behind putting the Code of Conduct into practice started with EU-backed garment industry program SMART Myanmar. The initiative, launched in 2013, sought to facilitate the creation of an apparel industry Code of Conduct with the Myanmar Garment Manufacturers Association – a group with more than 300 members, the lion’s share of them factories.

An early workshop with the association’s elected executive board produced a loose charter, but progress stalled when the group took time to think over industry issues.

The code was eventually ratified last December. MGMA’s executive board put together a subcommittee to drive the drawing-up of the document, and then voted to put the charter into practice in January. The end result: a non-binding set of guidelines for the apparel industry that MGMA project manager Jacob Clere called “a living document”.

The code touches on sensitive issues in the Myanmar market, including child labour and providing a minimum wage for workers, and compliance can go a long way with foreign buyers.

MGMA vice chair U Aung Win said international importers are very happy with the Code of Conduct.

“We have a lot of responsible EU brands that really want to get behind this kind of document,” Mr Clere said. “They want to use it as a template to establish minimum standards for Myanmar’s garment industry.”

This year, the European Union could reclaim its position as the Myanmar garment industry’s number one buyer, jumping Japan and South Korea in the process. The EU and the United States used to be the market’s top two buyers, something sanctions changed.

In 2003, the United States cut off contact with the Myanmar garment sector. Its sanctions “devastated the industry”: 100 factories closed and 80,000 people lost their jobs, Mr Clere said. Meanwhile, “the EU didn’t impose blanket sanctions, but did pull back significantly, so the Myanmar garment industry changed its production style”, he added.

Asian markets moved into the spots Western countries vacated. Japan and South Korea soon became the country’s two biggest importers.

“Japanese and Korean buyers haven’t always had the same ideas about social compliance as Europe and the US,” Mr Clere said. “Myanmar missed out on what was basically at that time a trend toward increasingly responsible manufacturing from early 2000 to the present … that’s why there needs to be so much education to bring them up to speed.”

MGMA general secretary Daw Khine Khine Nwe said creating a Code of Conduct was about helping workers and making Myanmar more competitive, rather than attracting importers.

“It is not for the buyer, it is for our workers and it is for our workplace, the factory,” she said. “Eventually, if that is good for the worker and the workplace, the buyer will come … We always said we want to be on a level playing field with the international businesses when the country opened up, and we found out this is one thing we have to do.”

The Code of Conduct’s translation into Myanmar language has been finalised, though the process was lengthy due to the sensitive nature of the document’s wording, according to Mr Clere. MGMA also hopes to get the charter translated into Korean, Japanese and Chinese later on.

Though garment industry players are not currently required to comply with the Code, that could change. However, some have expressed approval for its voluntary status.

Lars Doemer, global sustainability manager for clothing brand Lindex, called the code’s current voluntary status “a positive thing because it shows ownership”.

Meanwhile, Mr Clere said the Code didn’t have to force players to abide by the Code to have an impact.

“It’s not going to be a requirement in the near future but maybe in the medium term it would be, or even without being a requirement it could still take on a medium weight,” Mr Clere said. “If factories decide they want to go through this process of publicly endorsing the Code of Conduct, and if MGMA can develop a mechanism for checking that, which is possible, then it takes on a much greater relevance.”

“But at the moment we’re in this kind of educational stage,” he continued.


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