Myanmar military links raise questions for brands

YANGON – Global apparel brands have been forced to rethink their sourcing options in Myanmar after a UN Independent International Fact-Finding Mission on the country urged the international community to sever ties with Myanmar’s military and the vast web of companies it controls and relies on. The Mission’s report exposes two of Myanmar’s most opaque enterprises, Myanmar Economic Holdings Limited (MEHL) and Myanmar Economic Corporation (MEC) – both owned and influenced by senior military leaders. Supplier lists of brands show that those sourcing from factories within MEHL-owned industrial zones in Yangon include Next, Bestseller, H&M, Marks & Spencer, C&A and Esprit.

As an example, the UN’s report identified Myanmar Wise-Pacific Apparel Yangon Co. as a joint venture between MEHL and South Korea’s Pan-Pacific Co. Wise-Pacific Apparel Yangon Co is listed as a supplier on the website of Marks & Spencer. The UN claims the revenues the military earns from domestic and foreign business deals “substantially enhances its ability to carry out gross violations of human rights with impunity.”

The report, for the first time, establishes in detail the degree to which Myanmar’s military has used its own businesses, foreign companies and arms deals to support brutal operations against ethnic groups that constitute serious crimes under international law, bypassing civilian oversight and evading accountability.

The Mission said the UN Security Council and Member States should immediately impose targeted sanctions against companies run by the military, known as the Tatmadaw. It also encouraged consumers, investors and firms at home and abroad to engage with businesses unaffiliated with the military instead.

Hong Kong-listed Esprit told Nikkei Asian Review it will now sever ties with the factory inside Ngwe Pinlae from which it sources, Perfect Gains Garment Manufacturing.

Meanwhile, H&M said it would investigate the report’s findings and claimed it had held recurrent meetings with the Myanmar government during the past two years following UN and European Union recommendations.

Brands have only in recent years begun sourcing from Myanmar once again after years of economic sanctions against the military-led government. While the country has been allowed back in from the economic cold, many claim the military remains hugely influential in the country and a military coup cannot be ruled out at some time moving forwards.