Thailand
Myanmar: Garment firms focus on social responsibility
Unions are welcome, and could help garment factories improve their corporate social responsibility functions, a leading manufacturer has said. U Aung Myo Hein, central executive committee member of Myanmar Garment Manufacturers’ Association, told The Myanmar Times that many factories in Myanmar had missed out on the global shift toward increasing social compliance over the past eight years.
Speaking at a preparatory meeting for the Myanmar Garment and Textile Expo 2017, which will open in March, U Aung Myo Hein said about 180 factories had been playing catch-up on social compliance measures since 2013.
“Since then, more than 200 FDI garment and textile factories have opened,” he said. Local factories did not really start compliance measures until 2015. “Myanmar is at the infant stage,” he said. “We’re moving forward at our own pace, and change takes time.”
No Myanmar companies have yet signed up to take part in the Expo.
Myanmar is following the global trend toward social compliance, said U Aung Myo Hein. “It’s not because of international pressure,” he said.
“In the past, there was no requirement for social compliance. When sanctions were applied in 2004, it was a struggle even to survive. When the sanctions were lifted, we could not just launch social compliance measures straight away. We need
government support.”
According to data released by the Ministry of Commerce’s Special Trade Promotion Department, garment export volume for fiscal year 2016-17 as of October was US$940 million, up from $847.74 at this time the previous year.
“But Myanmar earns only 8-10 percent of those sums because of the CMP system. I think actual earnings amount to about $100 million,” said U Aung Myo Hein.
According to the MGMA, there 389 garment factories employing about 400,000 workers, up from 155 factories in 2010, with 94,700 employees. The top export market, ever since 2004, is Japan with 33pc. The EU and Korea each account for 25pc of exports, and the United States and China 2.4pc each.
MGMA predicts 2016-17 earnings will reach $2.2 billion, compared to the $1.8 billion earned in 2015-16. Exports to EU countries increased by nearly 40pc since the EU lifted sanctions, and the EU is tipped to overtake Korea this year.
MGMA CEC member U Tun Tun said Myanmar should adopt the freight-on-board (FOB) system, where local factories – in addition to producing garments – would develop their own styles, source their own fabrics and be responsible for shipping. At present most factories operate under the Cut-Make-Trim system, where they are only responsible for cutting the fabric, making the garment and packaging. But there are difficulties in shifting to FOB.
“Since the introduction of the minimum wage, it’s hard to predict where we are going to be in the future. Living expenses vary from region to region, so we advise our members to establish wages depending on the type of job and the location of the factory.”
He said his issue with the minimum wage was that the same rate is applied across the whole country, and added that any review of the minimum wage legislation could result in an increase, adding, “It’s not just about income. If the government could provide other social benefits, the minimum wage amount would be less important. Exercising control over commodity price rises could also be a solution,” he said.
U Aung Myo Hein said, “We welcome the minimum wage, and we welcome labour unions as well. But there has to be a balance. We can arrive at solutions through negotiation when a conflict of interests occurs. Companies are willing to catch up with social compliances, but I have to admit the presence of labour unions makes the factories go faster.”
The Garment and Textile Expo 2017 will open in Yangon from March 29 to 31, with more than 80 exhibitors from India, Thailand, Malaysia, Singapore, Bangladesh, Pakistan, Italy, Switzerland and Turkey, including more than 3000 professional trade visitors. However, no local companies have yet signed up to take part in the expo.
Source: http://www.mmtimes.com/index.php/business/24557-garment-firms-focus-on-social-responsibility.html