Major Fashion Brands may no longer source from Myanmar after UN report published.

Clothing brand Esprit says it will no longer source from a garment factory located in an industrial park linked to Myanmar’s military in a recent United Nations report, while other brands — including H&M and Bestseller — say they will look into the situation.

Supplier lists disclosed by clothing companies and reviewed by the Nikkei Asian Review revealed several well-known brands sourcing from factories inside two industrial zones that, according to the U.N, are owned by military conglomerate Myanmar Economic Holdings Ltd. (MEHL).

The U.N.’s International Fact-Finding Mission on Myanmar, which released the report, also identified Myanmar Wise-Pacific Apparel Yangon Co. as a joint venture between MEHL and South Korea’s Pan-Pacific Co., a link visible in business records available online.

The FFM report, released earlier this month, detailed an extensive business empire controlled by Myanmar’s military, known as the Tatmadaw, which has carried out a brutal crackdown against the country’s Rohingya Muslims.

Thousands of new Rohingya refugee arrivals cross the border near Anzuman Para village, Palong Khali, Bangladesh. ; As an estimated 500,000 Rohingya sought safety in Bangladesh between late-August and October 2017, UNHCR worked with the authorities to create a transit centre to prepare for a further influx, as some 11,000 people crossed the border on 9th October. They crossed by land into south-eastern Bangladesh through several points. Many came from the Buthidaung area in Myanmar’s northern Rakhine state. Some said they fled torching and killings. Others said they left in fear ahead of anticipated violence. To reach Bangladesh, they walked for days, many carrying children. They waded through marshland before swimming across the Naf river that divides the two countries. UNHCR worked swiftly to accommodate as many as possible in the camps and settlements in Kutupalong and Balukhali, and provided emergency relief items.

Revenue from the vast empire — which spans from construction, gem extraction and insurance to tourism, banking and manufacturing — enabled the military to avoid accountability and provided financial support for operations linked to human rights violations, the report’s authors wrote.

The U.N. has urged international companies to cut ties with military-linked businesses. Among those sourcing from factories within MEHL-owned industrial zones in Yangon — specifically the Ngwe Pinlae Industrial Zone and Pyinmabin Industrial Zone — were Next, Bestseller, H&M, Marks & Spencer, C&A and Esprit.

Hong Kong-listed Esprit told Nikkei it has investigated its supply chain and will sever ties with the factory inside Ngwe Pinlae from which it sources, Perfect Gains Garment Manufacturing.

“Esprit will be taking immediate action by stopping all future orders made to the Perfect Gains factory in Myanmar,” the company wrote in an email, saying it was previously unaware of the military link. “Esprit will continue to closely monitor this concerning situation.”

Marzuki Darusman, chairperson of the Independent International Fact-finding Mission (IFFM) on Myanmar, gestures during a news conference at the United Nation office

H&M said it would investigate the report’s findings. In an email, they also said the company had held recurrent meetings with the Myanmar government during the past two years to stress the “importance and urgency” of following U.N. and European Union recommendations.

“H&M Group takes seriously the matters raised and we are at this moment going through every section of the report to be able to draw any conclusions and determine what actions are necessary and appropriate,” the email stated.

Myanmar’s State Counsellor and Foreign Minister Aung San Suu Kyi looks on during the 9th ASEAN UN Summit in Manila, Philippines,

“We are fully committed to using our influence beyond our formal and legal responsibilities to make sure we respect and promote human rights throughout our business.”

BestSeller also said it would look into the report to “assess if we need to take any specific actions due to the findings.” C&A and Next did not return requests for comments.

On its list of suppliers, presented in an online map, Marks & Spencer listed a factory in each of the industrial zones. It also listed Myanmar Wise-Pacific Apparel — the MEHL joint venture — as a supplier.

It has since cut ties with Wise-Pacific but declined to answer questions about why and when.

“Ethical trading is fundamental to how we make our clothes and all our suppliers must adhere to our Global Sourcing Principles,” a spokesperson said in an email response.

Military Oppression in Myanmar

“We regularly audit all of the factories we work with across the world, including those in Myanmar. We continue to monitor the market closely both through our conversations with the ETI and our on-the-ground auditing.”

Owned and influenced by senior military figures, MEHL and the Myanmar Economic Corp. (MEC) own 120 businesses and have links to at least 27 more “crony companies,” the U.N. mission found.

Courtesy: Nikkei staff writer.

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