When US retail giant Gap decided to start sourcing garments from Myanmar, it probably never thought serious compliance issues would arise. Gap was the first major US retailer to source garments from Myanmar since economic sanctions were suspended in 2012.
San Francisco-based Gap is currently sourcing finished outerwear, including jackets and vests, for its Old Navy and Banana Republic Factory brands from two South Korean-owned factories in Yangon. But these units have been found to have deplorable working conditions. Workers haven’t been trained to handle chemicals. Electrical outlets and wires have poor insulation. Ventilation or air circulation is poor. Working hours have been found to regularly exceed the permitted limit. Both factories had employed under-age workers in the past. At one factory, several workers stated they were 19 years of age but had worked at the facility for three to five years.
The factories did not consistently pay required premiums for overtime hours. Workers reported cases of verbal abuse and inappropriate behavior by supervisors. Line supervisors at one factory were found to have taken unofficial disciplinary action or collected fines from workers without a clear basis for action.
In addition to labor rights and worker safety issues, Gap highlights a number of other potential problems while doing business in Myanmar, including environmental policies and procedures, land disputes and corruption.