November 06, 2016

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Where the Myanmar Garment Industry is heading

By Pyi Thit Nyunt Wai @ Maung Maung
The 2016 Oct 28 publication of the Global New Light of Myanmar reported that the CMP garment industry exported US $ 2 billion worth of goods for 2016 . It was 1.56 US $ billion in 2015 .
And, on 28 October 2016, the Commerce Ministry stated that up to 2016 September 9, the garment export reached $745.49 million, a triple growth compared to $232.81 million for August 2015 .
These figures are a result of the lifting of sanctions from the EU, granting of GSP from the EU, support from the EU funded SMART Myanmar program (2013 -2019 ), trainings of the management by GIZ, Swisscontact ect.
The Value Chain Analysis report of 2103 September done by the Government of Netherlands, the MGMA Code of Conduct and a Ten Years program aiming to employ 1 million workers are good indicators. Positive / impressive indicators for the MGMA and the member factory owners.
Why are these positive / impressive news never mentioned within the workplace, the factories, the industrial zones ?
In our trainings, workshops, discussions CTUM has found that employees never hear these kind of good news. They only hear negative news of “ loosing money” , “ Lay offs “ ect.
The MGMA and the garment factory owners must share the good news with their employees. More importantly, now that the export volume has gone up at least 50%, explain on the increase in profits and discuss to provide a fair allocation of the profits to the employees so that a loyal work force emerges. By having these gestures, the Employers will be showing there is Job Security, avoid unnecessary workplace disputes on the annual wage issue will lead to stable employment, and stopping workers look for probably better job security as a migrant or with international brands.
Inspite of the growth in the Garment export factories like Charming (103 workers out of 800 ), Sakura (361 out of 800) are laying off workers stating “ not getting contracts “.
articleAre these employers not part of the export growth ?
Is the export growth having an impact only on a certain part of the Garment Industry ?
Factories like Zulian, K World, A1, all garment factories from Hlaingtharyar Industrial zone are still violating the Minimum Wage law. Hangyo pai li / Shipcut garment ect . Closing shop in Yangon and opening in Pathein to avoid Trade Union formation or to avoid paying the Minimum Wage is not the answer.
Then we also know of factories that employ hundreds of workers, collect Social Security Funds but did not contribute to the local social welfare office .
Since 2012 there were total 3,200 disputes. The Arbitration Body solved 420 and the Arbitration Council solved 250. Then 30 cases went up to the Supreme court. Of them in 9 cases, Employers gave a penalty of 1 million kyats and refused to abide by the decision of the Arbitration Council.
Are these factories not members of the MGMA ? And, even if they are not, the MGMA as an industry representative Association should be monitoring and advising appropriate changes for all factories to follow the Rule of Law, the Code of Conduct and not to take unfair advantage over other employers.
Is it because the penalty is too low for the employers or are has the employers decided that if — “ we do not agree, we will not follow the law “ ? The National Tripartie Dialogue Forum should not be arguing whether to put in the “ jail sentence for those who do not follow the decisions of the Arbitration process”. Since there are very few factories that have refused to abide by the Arbitration Council decisions, CTUM suggests the UMFCCI and the MGMA take responsibility and discuss with their members on the fact that the rest of the employers are having a bad reputation due to them, and that
“the jail sentence” is being argued as a penalty due to their actions.
Industrial Relation trainings abound, Industrial Social Dialogue with different modules are being introduced. Yet if the garment factory owners do not have the political will, as it takes two hands to clap, the workers cannot carry on their own to develop a sustainable garment industry.
There is a big amount ( by Myanmar standards ) of funds and assistance being pushed into the Myanmar garment industry to develop the Employers for some years . And the export growth is the result.
But, as the funders and donors for the Garment Industry do not care about industrial disputes, and are not willing to invest in the both the Skills and the Knowledge of the garment workers, the sustainability of the Myanmar Garment Industry is in jeopardy.
The plan of the consortium to train only the management, without training the majority of the workers in Skills and Industrial Relations will give Myanmar only a low level labor force doing CMP. We can expect the Myanmar garment Industry / the workforce to be at the same level we are in now in 2024.
CTUM wants our workforce to be trained so that they will be ready for upscale work and be aware of their rights.
Now that the MIC Law is being changed to accommodate the Political Transition, there is also another possibility that International Brands ( who are now sourcing in Myanmar now ie H M, C A, GAP, Primark ) could be arriving with whole new setups that will involve more machines in the process, even for the CMP part.
This will not happen right now but there is a possibility before 2024.
From what we have seen over the last few years, even though there has been talks ( Bipartite, Tripartite ), the majority of the Myanmar garment manufactures do not seem to be willing to accept the needed Industrial Relations standards. Change to meet the International Labor Standards has been discussed many times but it is now getting to the point where all concerned (the majority of the NGOs, Foundations that are working and helping) have come to the undeclared agreement that the Myanmar Employers either do not want change in Industrial Relations or they do not see the need to change.
This refusal to want to change is driving the Myanmar garment industry to a scenario where the garment export will show increasing volume of money ( due to new factories) but the industry itself, including CMP will be run by the International Brands with local employees. Not a good landscape but people will be employed, will enjoy Minimum Wage have certain good Industrial Relations, which is the objective of any government.

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