Last week, Gap Inc. announced plans to source apparel production within factories in the country of Myanmar and the headline was the first U.S. apparel retailer to source in that country since sanctions were lifted two years ago. The apparel retailer indicated that it had engaged in a sourcing deal involving South Korean owned factories that operate in the country. According to reports, the factories will produce outwear for the retailer’s Old Navy and Banana Republic branded stores.
U.S. government sanctions regarding Myanmar were lifted in 2012, after an elected civilian government was established. According to a published report in the Wall Street Journal, the announced sourcing represents one of the largest U.S. economic commitments to Myanmar since these sanctions were lifted, could represent upwards of 4000 indirect jobs. Workers at the designated South Korean factories are paid an estimated average of $110 per month, roughly four times what the average local garment worker earns. The WSJ further noted that Western firms are facing stricter international labor standards regarding labor conditions, requiring ample due diligence before taking on new sourcing arrangements in the country. For its part, Gap engaged the services of Verite’, an agency that focuses on labor rights to conduct a due diligence study prior to the sourcing decision.
For retail and apparel supply chains, the announcement of a major respected U.S. brand beginning to source product within Myanmar could open the door for other global entrants. However, international labor rights organizations will most likely keep a keen eye out to insure that the brands adhere to declared social responsibility practices that the country does not become an alternative to such labor practices that are being reformed in countries such as Bangladesh.