Gap Apparel Production Triples During First Year in Burma

By Kyaw Hsu Mon 21 May 2015

RANGOON — American retailer Gap Inc. has nearly tripled the output of its two Rangoon factories within its first year, a company spokeswoman told reporters on Thursday.

Gap announced in June last year that it would begin sourcing garments produced in Burma, making it the first US-based clothing manufacturer to enter the country since economic sanctions were eased in 2012.

The South Korea-owned factories produce vests, jackets and pants for Gap’s Old Navy and Banana Republic Factory labels for export to the United States, the European Union and Asia.

“We’re approaching three times as much outerwear [production]… since last year,” Gap’s director of government and public affairs, Debbie Mesloh, told reporters following a US Trade Representative Labor Initiative stakeholder forum.

Mesloh said Gap is trying to “raise the bar” for labor standards at its facilities by ensuring safety and sustainability for its workers.

“We wanted to start small, but do it really well,” Mesloh said.

Last August, the company voluntarily submitted an internal audit to the US Embassy identifying a number of “compliance issues” that needed to be resolved, including excessive work hours and verbal abuse by superiors.

Both of Gap’s Rangoon factories are South Korean-owned and operated, but are expected to satisfy the company’s quality and labor standards.

Mesloh said Gap is working closely with the governments of Burma and the United States, as well as the International Labor Organization (ILO) to eliminate child labor, ensure adequate pay and implement worker education programs, but did not specifically address the issues highlighted in last year’s report.

“There are concrete steps [local stakeholders] need to take, and we feel like we’re playing our part,” Mesloh said, adding that Gap and other Western companies new to Burma’s garment industry have recommended that the government quickly implement a minimum wage.

“When we came in a year ago, the minimum wage law had been enacted but they still hadn’t set a figure, but we were hopeful that it would happen soon,” Mesloh said, adding that Gap is working with partners in a seven-member Business for Social Responsibility stakeholder group, which includes European retailer H&M, to set the wage as soon as possible.

A minimum wage law was passed in March 2013, but setting a wage has been deferred because the Ministry of Labor has yet to conclude a study on workforce size, living standards and household expenses, which begin in late January after a two-year delay.

The Myanmar Trade Union Federation (MTUF), an influential local labor alliance, independently conducted a similar survey in July 2013, recommending that the national minimum wage be set at 7,000 kyats (US$6.30) per day for a household of three people.

A company fact sheet said Gap’s sourcing agreement in Burma has created nearly 700 new jobs, and supports the employment of more than 4,000 people.

Ninety percent of those employees are women, earning roughly $120 per month for 60 hour workweeks, according to the deputy general manager of one of the factories, which have been independently identified as Yangon Pan Pacific International and Myanmar Glogon.