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The US Embassy of Burma released a report on Thursday voluntarily submitted by US retailer Gap Inc. detailing the compliance issues found in their two factories initially and the improvements made.
Gap announced its entry into Burma in June, making it the first US clothing company to source products from its garment sector since the US government eased economic sanctions.
Yangon Pan Pacific International and Myanmar Glogon are the two South Korean factories chosen in Rangoon to produce finished outerwear for Gap.
According to the report, titled “Responsible Sourcing in Myanmar”, which Gap submitted to the US State Department on August 25, the two factories had to instate improvements as they had several compliance issues.
These problems include excessive working hours and inconsistent payment of overtime, an unclear policy on the hiring of underage workers, inappropriate behaviours from supervisors towards workers, and certain safety issues regarding health and fire prevention.
Through third party audits and numerous follow-ups, Gap said in the report that the factories improved significantly before they began producing clothing orders, with one of the factories successfully resolving all the main issues by June.
“These improvements are encouraging, especially considering how new many of the practices and more rigorous standards are for these factories and the garment industry in Myanmar,” the report said.
These issues are familiar within Burma’s garment sector. The report even detailed how Gap took the extra step of ensuring that each factory’s lands were not part of any dispute, as land confiscation during the military regime is now a big cause for protests by farmers and former owners demanding the land back.
Debbie Mesloh, Gap Inc’s senior director of government and public affairs, said in an email that her company recognises the role they play as the first American retailer to begin sourcing from Burma, which is officially known as Myanmar.
“Gap Inc. is committed to Myanmar and we want to be part of building a sustainable, healthy garment industry in the country,” she said. “We have a long-standing partnership with our vendors in Myanmar and intend to continue working in the country as long as our vendors meet our Code of Vendor Conduct and the country continues its path to democratic reform as outlined by the United States government.”
Gap has previously declined to disclose their investment value into the two factories. However, Myint Soe, chairman of the Myanmar Garment Manufacturers Association, said last week that garment exports to the US will increase dramatically this year, from $1.96 million in 2013 to at least $50 million.
The company is also now part of a new initiative between the two countries, announced on Thursday by a US trade representative, Michael Froman. This programme’s aim is to promote and implement fundamental labour rights and good working conditions on the ground, while also developing a strategy for labour law reforms.
Sai Khing Myo Tun, the spokesman for the Myanmar Trade Union Federation, said that he welcomed Gap’s efforts to improve the factories.
“We welcome them if they are concerned about labour rights,” Sai Khing Myo Tun said. “We do need the investment and we need investors who take responsibility when they come into the country.”