This week, the Myanmar Garment Manufacturers Association, in conjunction with the European NGO, SMART, announced the release of a code of conduct for small and medium sized enterprises in the Southeast Asian country. As manufacturers face the requirement to comply with a range of international social audit standards, this code of conduct should come as no surprise. While the details of the code have not yet been made available, the framework for this new standard addresses a range of concerns according to industry observers.
According to several reports, the new code embraces the International Labor Organization’s (ILO) Core Conventions, including the right to assemble, organize and collectively bargain, and prohibitions on forced and child labor. This is good news given that, by some estimates, Myanmar has more than 300 garment companies currently in operation and more than 150,000 workers employed, with exports in 2014 expected to exceed US $1 Billion.
The garment industry code is the latest of several efforts led by governments and civil society organizations in the EU and the US to apply human rights standards to the rapid development in Myanmar since the Thein Sein government began its economic liberalization in recent years. But there is a growing chorus of concern that all of these initiatives, along with the social reforms put forth by the Naypyidaw-based government may have limited effect in ensuring that the people of Myanmar will participate in the rising tide of economic growth.
With the hope that economic liberalization is moving apace, the Obama Administration has been exploring cooperation between the US and Myanmar militaries. This is a surprising move considering the Myanmar military’s long and troubling history of human rights abuse coupled with its ongoing conflict with a number of ethnic insurgent groups around the country. But in Washington, “lawmakers who oversee U.S. foreign policy say it’s ill-timed. Political reforms have stalled, tens of thousands of minority Muslims are still living under apartheid-like conditions in displacement camps after attacks by Buddhist extremists, and fighting is heating up between the government and ethnic rebels.” This development comes to light as Democracy activist Aung San Suu Kyi says no significant social and human rights reforms have been made in two years.
With respect to the garment industry code, European apparel companies face the possibility that despite the new code, which contains auditing standards, it may amount to window dressing. This poses potential reputational risk for those companies should the code be inadequately operationalized by the Myanmar-based garment manufacturers. This new standard, like the US State Department’s human rights and anti-corruption Reporting Requirement, may amount to little appreciable change in practice. The Reporting Requirement has no enforcement mechanism, leaving it to civil society organizations in the country and internationally to use the failure to adhere to the reporting as a means for naming and shaming companies who inadequately address their human rights obligations. Given the attacks and incarceration and killing of activists and journalists in recent months, the likelihood that advocates will serve as a brake for government-backed developments seems uncertain. This leads to the inevitable problem that in the race to enter the latest emerging market in the world, international businesses face uncertainty and a range of political risks should human rights standards not keep pace with economic reforms.