YANGON: Advocates urge brands to honour their agreements with cash-strapped factories as hundreds of thousands in Asia, especially in South-East Asia, face job losses.
Big brands are heaping extra hardship upon the low-paid workers who make their garments in Asia as they look to stem their losses from the Covid-19 pandemic, advocates say. And it has been real bad in Myanmar and Cambodia, two countries relying much on their garment industries.
Scores of companies have cancelled orders, even after workers finished making them, and refused to take financial responsibility, leaving cash-strapped factories unable to pay wages, according to Human Rights Watch (HRW).
Hundreds of thousands of factory workers in Cambodia, Myanmar, and even Bangladesh are facing job losses as retail stores around the world close to prevent the spread of coronavirus.
“Workers have received their March wages in many cases, but in April I think it’s going to be complete chaos,” Aruna Kashyap, senior counsel at HRW’s women’s rights division, told dpa.
Firms have taken advantage of long-standing unfair buying practices to protect themselves at the expense of workers, she added: “Most brands and retailers wield a lot of power over their suppliers.”
The German retailer C&A is among those to have cancelled orders. In a March 23 letter to a supplier in Cambodia, seen by dpa, the company said it was cancelling “all orders” due that month through to the end of June “with immediate effect.”
The letter argued there was a “consensus” that the pandemic qualified as a force majeure event, which can be invoked in certain cases to free a company from its contractual obligations.
Miriam Saage-Maass, vice legal director at the European Centre for Constitutional and Human Rights, said that under German law it is difficult to reach the legal threshold to get out of a contract this way.
“Force majeure cannot be used when contract performance is merely impractical or economically difficult rather than truly impossible,” she told dpa.
A company would also need to prove that the problem it is facing was unforeseeable, she added: “In my opinion one could argue that the risk of pandemics was not unknown in recent years and was not unforeseeable. Brands should have prepared.”
Jens Voelmicke, a C&A spokesman, told dpa the company now intends “to accept all goods that have left the factory” and “take delivery of as many orders as commercially viable to enable manufacturers to pay workers their wages.”
The letter cancelling all orders “was an immediate measure,” he said. “Since then we are entering in talks with our suppliers to find individual, flexible solutions.”
More than 110 factories employing about 96,000 workers have applied to the Cambodian government to suspend production because of the pandemic, Labour Ministry spokesman Heng Sour said.
The government was urging factories to hold off from closing entirely, he added.
Cambodian Prime Minister Hun Sen announced this week that the state would offer suspended workers US$40 per month while factories will provide 30 dollars, a smaller sum than he had promised earlier this year.
The notice came after the Garment Manufacturers Association of Cambodia said factories would soon be unable to pay suspended workers the 38 dollars Hun Sen had initially proposed.
Even at the best of times, most of Cambodia’s 800,000 garment workers – who earn a monthly minimum salary of US$190 – have to work overtime to make ends meet, said Moeun Tola, executive director of labour rights group Central.
In Myanmar, around 20,000 migrants returned home from Thailand last month after losing their jobs due to factory closures.
And 684 workers who made products for H&M, Next and others were fired last week after bosses at the Yongan garment factory in Yangon said buyers had cancelled orders.
Myint Thet Lae, one of the laid-off workers and president of the factory’s labour union, said the orders were cancelled after bosses announced production would stop from April 5 for several weeks to prevent the spread of the virus.
“They said they tried negotiating with the buyers and the buyers didn’t want to continue. That’s why they’re firing us,” she told dpa.
A spokesman for Next said the retailer last month committed to honour orders that were due on or before April 10. That gave suppliers enough notice to finish most of what was already in production, he added.
H&M told dpa in a statement that it would pay for garments already produced or in production. “We are well aware that the suppliers, and their employees, are extremely vulnerable in this situation,” it said.
The pandemic shows there is an urgent need for social safety nets and worker protections in developing countries, HRW’s Kashyap said.
For now, brands should work with governments, donors and financial institutions to help workers through the crisis, she added. “The very least they can do is abide by their original contracts.” – dpa