Disclosed Project Summaries

Bangladesh

Since the organization began, Transparentem has sought the remediation of serious environmental and human rights abuses within Bangladesh’s leather tanning industry. Transparentem’s first investigation documented pollution, child labor, and hazardous conditions in Hazaribagh, then the center of Bangladesh’s tanning operations and named as one of the world’s ten most polluted places. In April 2017, just two weeks after Transparentem began widespread disclosure of this investigation, the government of Bangladesh fulfilled a years-old court order and shut down 150 tanneries in Hazaribagh. Many of these companies moved their operations to a tannery estate in Savar, where Transparentem continued to monitor ongoing labor and environmental problems in the industry. Transparentem’s 2020 survey of Savar tannery workers collected evidence of exploitative working conditions, exacerbated by the COVID-19 pandemic.

Transparentem Survey Finds Evidence of Exploitative Labor Practices in Bangladesh Tanneries (2020)

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In the summer of 2020, as the COVID-19 pandemic threw global supply chains into disarray, Transparentem commissioned a survey of tannery workers in Bangladesh, seeking to understand how the virus was affecting the lives and livelihoods of this vulnerable population. Our survey found that the pandemic was making a bad situation much worse.

As detailed in the report “Pandemic Pushes Struggling Tannery Workers to the Brink,” the survey revealed that many tannery workers said that they did not have signed employment contracts; some appear to have been earning less than the minimum wage, even before the virus struck. When COVID-19 led to shutdowns at many Bangladeshi tanneries, workers in already precarious situations found themselves struggling to support their families.

“I have no money, I cannot provide for my family, I cannot fulfill my children’s needs properly. My life is full of sorrows,” said one of the 100 survey respondents from 19 tanneries in the Savar industrial estate, the center of Bangladesh’s tanning industry.

Working without the protection of a written employment documentation can lead to exploitation; workers may have no record of their agreement with their employer, and little to support their case in the event of unfair treatment or dismissal. This kind of precarious employment, combined with low or below-minimum wages, may mean that tannery workers suffer disproportionately during a disruption like a global pandemic.

Transparentem seeks not only to increase awareness of the struggles of Bangladeshi tannery workers, but to transform their circumstances. To that end, Transparentem’s report includes specific recommendations for action by a variety of stakeholders, to ensure that all tannery workers are protected from exploitation and employed in accordance with labor law.

Click here to read our op-ed on the survey.

Investigation of Bangladeshi Leather Industry Speeds Shutdown of One of World’s Ten Most Polluted Places (2017)

Transparentem’s initial two-year investigation of leather tanneries in Hazaribagh, Bangladesh, documented widespread abuses, including gross environmental degradation, child labor, and hazardous working conditions. Those abuses directly affected some 30,000 workers and indirectly affected hundreds of thousands more people in surrounding areas.

Transparentem scrutinized the links between Hazaribagh tanneries, or their apparently affiliated manufacturers, and eleven US and European companies. Beginning in October 2016, we presented individualized Primary Intelligence Notes (PINs) to those brands and retailers. We carefully described what we did and did not know about how much, if any, leather from Hazaribagh may have wound up in their footwear or handbags. Most of these brands and retailers took swift action, starting in the grace period. We began to disclose the consolidated reports, noting brand and retailer response, in late March 2017.

For forty years, this cluster of more than 150 tanneries harbored grave human rights abuses, and was known as one of the world’s ten most polluted places. On April 8, 2017, the Government of Bangladesh enforced a Supreme Court order to close down Hazaribagh’s wet tanning operations and cut water, electricity and gas to the tanneries. The action was a vital step toward the industry’s relocation to a more sustainable tannery estate in Savar.

The Bangladeshi government and leather industry still must overcome significant challenges before they fully protect the people and environment in and around Hazaribagh and Savar. We will continue to monitor the remediation and restoration process as that industry settles into its new home.

More information
See also this AP News article for additional information about this project.

India

Investigation Uncovers Abuse of Vulnerable Workers in Tamil Nadu: Companies Initiate Corrective Actions; Broader Industry Improvement Needed

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In response to reports of endemic forced labor, child labor, and hazardous working conditions in India’s textile industry, Transparentem began in 2016 to investigate spinning mills and garment factories in Tamil Nadu that supply products to the global market. Transparentem’s investigation focused on workers’ experiences producing garments, fabric, or yarn for four manufacturing groups. At each group, Transparentem collected evidence of multiple forced labor indicators as described by the International Labour Organization (ILO).

Transparentem’s subsequent engagement with companies sourcing from these suppliers resulted in improvements to factories’ labor practices at three of four investigated manufacturing groups. Notably, buyers reported that manufacturers strengthened age-verification systems, reassigned some young workers to lighter duties, improved dormitory conditions and management, established training for managers on avoiding gender-based harassment, and eliminated a double-bookkeeping system.

This project alerted companies to abuses at spinning mills and benefited workers who often fall outside the scope of companies’ social compliance programs, which frequently only cover final-assembly “first tier” production facilities. Several companies also reported strengthening policies around oversight of facilities beyond the first tier due to this project. They also increased worker involvement in audit processes and strengthened company codes of conduct.

Transparentem identified several areas for continued improvement. For example, companies should continue to exercise due diligence and alleviate any exploitation of young workers or restrictions on workers’ movement. They should also support living wages and freedom of association in Tamil Nadu. We outline other recommendations below.

Investigative Findings

Investigators interviewed upwards of 120 workers and more than 20 of their family members; spoke with recruiters, trainers, and company managers; and reviewed extensive documentation of manufacturer procedures and workers’ ages. Investigators found that many interviewees were hired when under 18, from marginalized castes and impoverished families. Many lived far from home and could not speak Tamil, Tamil Nadu’s main language.

Investigators found evidence pointing to abuse of these workers’ vulnerability, along with other forced labor indicators: excessive overtime, abusive working and living conditions, restriction of movement, retention of identity documents, intimidation and threats, sexual violence, and isolation. Transparentem found some of these indicators at each of the four manufacturers, as summarized below. This list is not exhaustive of the investigation’s findings, and investigators did not find every indicator at each manufacturing group.

Young workers and audit deception: Investigators determined that a majority of interviewees were hired between the ages of 14 and 17. Transparentem learned that most of these laborers worked long hours and night shifts as if they were adults. At two manufacturing groups, workers told investigators they had been hired before they turned 14. Workers said staff at production facilities across the four manufacturing groups concealed young workers from compliance auditors by hiding them or coaching them to lie about their ages.

One young worker told investigators, “If [auditors] come, they don’t let us outside . . . They lock us in a room. They let us out only after they leave.”

Restricted movement: Transparentem found that factory staff at three manufacturing groups restricted workers’ movement, and gathered some evidence of restricted movement at the fourth group. Some migrant workers at two manufacturers said they could not access their identity documents because representatives from their workplace training centers held them hundreds of miles away in their home state.

“Even if we want to go to the bathroom, we must get permission,” one worker told investigators. Others said they had been locked inside their workplace, not allowed to leave their hostel at will, or restricted from taking leave or quitting.

Abusive working conditions: Interviewees across all four manufacturing groups experienced hazardous working conditions, including: cotton dust inhalation, prolonged exposure to excessive heat, injuries from machines, and the toll of long hours and night work on the physical and mental development of adolescents.

One former worker told investigators that when she complained about pain in her leg, a supervisor told her to “shut up and work.”

At another manufacturer, workers described unwanted sexual advances from supervisors, restricted communication with people outside the factory, and poor living conditions.

Buyer and Manufacturer Responses

Beginning in December 2019, Transparentem contacted 31 companies identified as customers of the four manufacturing groups, sharing reports of the labor issues found, along with recommended remedial actions, policy enhancements, and advocacy priorities that companies should pursue in response.

Of these companies, 20 agreed to collaborate with each other or work alone to follow up with three of the manufacturing groups. These companies assessed conditions themselves or contracted third-party ethical-sourcing consultants, focusing on the experiences of then-current workers. Nineteen companies developed corrective action plans to address labor issues their assessments identified.

In each of the respective manufacturing groups where companies undertook remedial action, companies broadly confirmed detecting issues within most or all of the categories of forced labor indicators that Transparentem found. However, they did not confirm all of Transparentem’s specific findings. For example, companies said they found no workers under 14, nor excessive hours for workers under 18. Yet corrective action plans at one facility included reassignment of some workers under 18 to lighter duties without overtime, and all manufacturers’ corrective action plans included strengthening age-verification procedures.

All three manufacturers committed to management and worker training on age verification, hours-of-work restrictions, and other compliance issues, including freedom of movement, grievance reporting, gender-based violence and harassment, and health and safety procedures.

One manufacturer called its response to buyers asking for improvements based on Transparentem’s investigation an “opportunity to bring about total transformation” of its human resources procedures.

Companies’ other corrective actions included: dormitory improvements at two manufacturers, better provision of personal protective equipment (PPE) to workers at one manufacturer, and elimination of a double-bookkeeping system found at one manufacturer that had made it impossible for third parties to assess workers’ overtime hours.

Beyond direct actions with manufacturers, several companies also reported improving internal corporate policies to prevent the recurrence of issues Transparentem identified across their supply chains. Some companies described changes to their audit policies to better involve workers and increase unannounced factory visits. Others described updating their codes of conduct to strengthen prohibitions on forced labor and ensure that factories maintain adequate dormitory facilities for workers. Eight companies told Transparentem they were increasing oversight of working conditions beyond the first tier of their supply chains. And 10 companies supported two industry-level campaigns to increase Tamil Nadu’s minimum wage to better align it with ILO standards.

Conclusion

To build upon this project’s positive outcomes, Transparentem has identified further necessary actions. Companies should:

  • Support worker representation and leadership by conveying their strong support for freedom of association to their suppliers. They should insist that suppliers communicate the same to workers.
  • Combat audit deception and strengthen due diligence by implementing audit protocols, including worker-participation mechanisms that accurately document their ages and experiences.
  • Deter exploitation of young workers, clearly communicating that suppliers must adhere strictly to legal limits for young workers, and exercising strong due diligence.
  • Provide redress for past harm whenever they identify adolescents or children who work or have worked in prohibited conditions, providing adequate compensation, protection, and remedial education.
  • Protect workers’ freedom of movement, ensuring that factory management does not limit workers’ movements to certain hours or impose chaperone requirements.
  • Advocate for worker protections and a living wage to reduce workers’ vulnerability to exploitation.
  • Improve oversight beyond the first tier of production by tracing supply chains and working with suppliers to extend strong labor protections to workers at the spinning mill level and beyond.

Buyers and suppliers must establish and implement policies across their supply chains that can mitigate labor abuses including restriction of movement, child labor, exploitation of young workers, and other issues found by this investigation.

Indonesia

Transparentem Warns About Unofficial Recruitment Fees for Workers in Indonesia (2020)

Over seven months interviewing workers at apparel factories in Indonesia, investigators for Transparentem uncovered evidence of an alarming, widespread practice: workers paying middlemen substantial sums to secure jobs with suppliers of international brands. Often, these middlemen repeatedly demand extortionate fees, in a racket that harms vulnerable workers and their families.

As explained in the summary “Pay-to-Play, Pay-to-Stay: The High Cost of Indonesian Apparel Jobs,” published by Thomson Reuters Foundation, our research identified numerous unofficial actors charging workers for their jobs, including security guards, unauthorized agents, and local gang members. Some brokers approach job seekers near factory gates to offer their assistance, for a fee. We found no evidence that these payments are formally orchestrated by manufacturers, although we were sometimes told about connections to factories’ human resources staff, who reportedly get a cut.

The COVID-19 pandemic has made Indonesian apparel workers even more vulnerable. Thousands of workers in the industry have been laid off. Even with no steady income for the foreseeable future, they know they will again need to pay for their jobs once production orders increase. COVID-19-related layoffs will be a boon for black-market recruiters profiting from the desperation of unemployed workers.

However, the pandemic’s disruption to the Indonesian apparel industry presents an opportunity for brands, manufactu ers, the Indonesian government, and civil society organizations to take action to address this disturbing practice.  Our op-ed provides suggestions for how brands and suppliers could take some first steps.  The workers who are the lifeblood of the industry deserve to be protected from extortionate practices that harm their livelihoods. No one should have to pay for work.

Malaysia

The vulnerability of foreign migrant workers to forced labor is endemic to Malaysia’s textile and garment industries. Transparentem has documented the plight of these workers through two separate investigations and ongoing field monitoring since 2016. The findings have been used to urge manufacturers and buyers to remediate exploitive working conditions experienced by this vulnerable population. Transparentem has found that migrants from across Asia pay recruitment fees in their home and destination countries to secure low-paying jobs. These fees oftentimes lead to paralyzing amounts of debt for the workers. This, in addition to other abusive conditions as documented by Transparentem—including deceptive recruitment, poor living conditions, excessive overtime, and unlawful deductions—can potentially amount to indicators of forced labor, as defined by the International Labour Organization.

BUYER/SUPPLIER COLLABORATION LEADS TO PARTIAL RECRUITMENT FEE REIMBURSEMENTS FOR MIGRANT WORKERS IN MALAYSIA (2020)

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In 2019, Transparentem initiated an investigation into hardships faced by workers at two Malaysian garment factories, both owned by a Hong Kong-based manufacturer. Of the 35 then-current Bangladeshi, Nepali, and Indonesian workers whom Transparentem investigators interviewed, all Bangladeshi workers reported paying substantial recruitment fees in their home country to secure their jobs in Malaysia; some Nepali and Indonesian workers also paid home-country recruitment costs. Workers also said the factories deducted additional money from their paychecks to cover their recruitment costs and fees. Some interviewed workers also reported deception, intimidation and threats by recruitment agents and factory staff, poor living conditions in factory-provided dorms, and problems with employment contracts.

After learning both factories would close imminently in 2020, Transparentem provided the findings of its investigation to 13 apparel brands which appeared to sell products produced at the factories. Six of these brands, as well as the manufacturer, agreed to a $1.1 million collective repayment fund to partially reimburse workers for recruitment fees paid in their home country and to the factory. In total, 11 companies engaged in collaborative discussions around remediation.

Investigative Findings

Recruitment Fees Paid in Home Countries and in Malaysia: Most interviewed workers said that they paid recruitment fees in their home countries to secure jobs in Malaysia. Many workers, but in particular Bangladeshis, took extraordinary measures to pay their recruitment fees and related costs, including using savings and/or selling assets, such as land and cattle. The majority of interviewed Bangladeshi workers said they took on interest-bearing debts. These debts compelled many workers to continue working in Malaysia despite poor living and working conditions.

Additionally, all interviewed workers said both factories required them to repay recruitment fees through wage deductions once they arrived in Malaysia. These payments were in line with the manufacturer’s policy to cover the cost of a worker’s recruitment fees upfront and then require workers to reimburse the company for these “loans” through wage deductions. Bangladeshi workers paid the most in these recruitment-related wage deductions, which equated to more than 10 months of minimum-wage pay in 2019 in Malaysia for some.

In its 2017-2018 Sustainability Report, the manufacturer explained that its practice of fronting the cost of recruitment was meant “to reduce the risk of [recruitment] agents over-charging recruitment fees.”

Deception: Most Bangladeshi interviewees at both factories said they were deceived by recruitment agents in Bangladesh and learned that they had to pay additional recruitment-related fees, financed through debt to the factories, only after they already paid steep recruitment fees to those same agents. Workers also told Transparentem that they were deceived about their expected wages, salary deductions, and working hours. For instance, many workers were led to believe they would earn higher wages based on promises from recruitment agents, with some Bangladeshi workers expecting to earn almost double their eventual wages.

Intimidation and Threats: All Bangladeshi interviewees at both factories said they were compelled by recruitment agents to participate in an apparent cover-up scheme to hide the fact that they paid fees in Bangladesh to secure their jobs in Malaysia. Nearly all interviewed workers said they were coerced to lie on camera, stating they paid no recruitment fees, under the threat of not being able to migrate to Malaysia and losing the fees they had already paid. Once in the factories, some workers also described intimidation by factory managers, who threatened workers with deportation if they voiced complaints.

Abusive Living Conditions: Many workers complained of overcrowded living conditions in their factory-provided dormitories. Some workers complained that their dormitories had too few bathrooms and some said their agents had misrepresented the condition of the dorms. Some workers, however, had no complaints about their living conditions.

Problems with Contracts: Bangladeshi interviewees described being rushed to sign employment contracts they did not understand. Most workers said they signed two contracts, one in Bangladesh given by their recruitment agent, and another in Malaysia provided by their employer. Nearly half of the workers said they did not have time to read these documents. Several workers described being unable to understand their contracts, which were in languages they could not read.

The Impact of COVID-19

Both factories paused operations in mid-March, when the Malaysian government’s Movement Control Order (MCO) came into effect to slow the spread of COVID-19. At the start of the MCO, interviewed workers were living in dorms, sometimes in crowded conditions, but no longer working.

In mid-April, the manufacturer announced the permanent closure of the two factories due to adverse business impacts of the pandemic. In the weeks after the announcement, workers were unsure when and how they would be deported and how much they would be paid during their remaining time at the factories. Different workers received conflicting information and, in general, interviewees said they were uncertain about their future.

Factory & Buyer Responses

In May 2020, Transparentem began contacting brands supplied by the two factories to provide the findings of its investigation. The manufacturer contacted Transparentem directly after learning of the investigation from its buyers.

The manufacturer quickly agreed to partially reimburse the recruitment fees paid by workers to home country agents, as well as fees paid via wage deductions at the factories after January 2020. The manufacturer also agreed to stop all upcoming recruitment fee-related wage deductions as of July 1. Following discussion between 11 buyers and the manufacturer, six companies agreed to assist with the reimbursements. These buyers contributed to a matching fund with the manufacturer, which brought the total amount of paid and pledged reimbursements to $1.1 million.

The manufacturer also hired an ethical-sourcing consultant to verify the fee reimbursements and to facilitate payments to some workers who had left the factories. As of January 2021, Transparentem confirmed that some workers received reimbursement payments, but had not independently confirmed the disbursement of the full $1.1 million.

In addition to the partial reimbursement of recruitment fees, the manufacturer and buyers told Transparentem about other actions taken to protect workers at the factories in light of the impending closures. The manufacturer engaged in a reemployment and repatriation program, helping workers secure new jobs in Malaysia or return to their home countries, depending on their preference. Several buyers and the manufacturer contracted an ethical trade consultancy to conduct an assessment of health and safety at the factories and living conditions for workers, as well as to implement corrective action with each factory prior to its closure. The manufacturer also reported strengthening its grievance channels for workers across all its factories by offering new reporting options that are free and in multiple languages.

Conclusion

Companies responding to Transparentem’s investigation helped bring about the end to all recruitment-related wage deductions at the two factories and also pledged that hundreds of vulnerable migrant workers would receive partial reimbursements to fees paid in their home countries and at the factories. The manufacturer had already instituted a partial end to wage deductions at its factories in January 2020, when it ceased deductions for new workers hired on or after January 1.

Despite these successes and promising steps by the manufacturer and the buyers, their actions fell short of meeting the standard of zero-cost recruitment for all workers. The manufacturer should fully reimburse every worker for all recruitment fees paid in both their home countries and in Malaysia. If it is unable to do so, its buyers should fill the financial gap.

Beyond the two investigated facilities, suppliers and buyers should work to root out recruitment fees across the garment sector by advancing ethical recruitment and worker protection initiatives. These stakeholders should lobby governments to enshrine “no fee” recruitment in national law and multilateral trade agreements as a step toward ethical recruitment for all migrant workers.

More information

See this July 2020 New York Times article to learn more about this project.

Forced Labor Probe in Malaysia Drives Buyers to Act (2019)

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Download 2021 Monitoring Update Summary

Beginning in the spring of 2018, Transparentem provided the results of its first investigation of five Malaysian garment manufacturers to 23 brands and retailers with apparent ties to those manufacturers. Since then, Transparentem has continued to monitor the garment factories it investigated as part of a commitment to ensuring improved working conditions are sustained.

Through its monitoring work, Transparentem found evidence of continued improvement across the four factories that had initially engaged with buyers. These improvements addressed, to varying degrees, several problems identified by the initial investigation, including the cessation of both wage deductions and discipline by fines as well as the repayment of some—but not all—recruitment fees paid by workers. Despite improvements in some areas, workers at one company reported that passport retention by the factory may be ongoing. As of December 2020, six of the sixteen companies remained actively engaged in ongoing remediation.

Initial Investigation Findings (full summary available here)

Almost all workers with whom Transparentem spoke during its investigation reported paying recruitment fees, which ranged from more than $700 to nearly $4,500. Some workers sold land or borrowed money to pay these fees, going deep into debt with the expectation of earning financial security. Many workers Transparentem interviewed came to regret their decision to seek work in Malaysia.

Migrant workers from several different countries told Transparentem that recruiters had deceived them about their salaries, the nature of their new job, and fees and salary deductions. One worker referred to labor brokers as “thieves and thugs” who “victimize poor, innocent people.” Workers at four of the five factories said factory management collected and withheld their passports. Workers said they were required to pay deposits – some as much as three times the monthly minimum wage – to access their passports.

Workers at four of the five factories said that they lived in dormitories that were overcrowded, dirty, cramped, without adequate kitchens or bathrooms, or even sufficient protection from the weather. At two factories, workers said supervisors sometimes physically abused and threatened them.

Buyer Responses

Of the 23 companies Transparentem identified and contacted, 15 collaborated on remediation efforts, one worked independently, and one later joined remediation efforts after a change in ownership at the company. The remaining companies, to Transparentem’s knowledge, declined to participate in remediation.

Buyers commissioned audits or assessments at four of the five facilities, which confirmed many of Transparentem’s findings, and secured commitments for remediation, including reimbursing recruitment fees and returning passports. Two buyers chose to share the cost of recruitment-fee reimbursement with their supplying factory. Two additional buyers, who were no longer sourcing from the factories, re-engaged and assumed leadership roles in the remediation process. And four of the buyers at one factory elected to expand their remediation efforts to a related Malaysian factory that was not part of Transparentem’s investigation.

As of May 2019, the total amount of recruitment fees already paid back or scheduled to be refunded to workers was more than $1.7 million, and 1,600 passports had been returned to workers. According to one audit report a factory, five workers who recovered their passports immediately stopped working and left.

Remediation Progress and Ongoing Risks

After providing its findings to the companies, Transparentem monitored conditions at the factories in 2019 and 2020. Investigators interviewed then-current workers about their working conditions and any changes that had occurred since Transparentem’s investigation and engagement. Investigators also questioned workers about the impact of the COVID-19 pandemic on their work lives.

In addition, Transparentem gave summaries of its ongoing fieldwork to four of the factories and 22 of the companies originally approached for this project, seeking their perspectives on the sustainability of their efforts and any impacts as a result of the COVID-19 pandemic. Two factories and 16 companies responded to Transparentem.

At all four factories, worker interviews and company statements indicated progress on the implementation of corrective action plans, as well as the potential for more action. The factory appearing to have the greatest degree of continuous improvement and ongoing commitment to remediation is the one where the original four companies continue to maintain a sourcing relationship.

In a different factory, one company provided Transparentem with a case study from the ethical trade consultancy that conducted the companies’ audit of its manufacturer and coordinated remediation efforts. Workers were satisfied with the remediation efforts, according to the study. The fee-repayment methodology described in this case study aligns with worker reports to Transparentem, though there may be room for further improvement on dormitory conditions.

However, another factory and group of buyers provided conflicting information about whether all recruitment-fee reimbursement payments had been made, with workers saying they had only received a portion of what they were promised.

Most troubling was limited input from companies and unresponsiveness from a factory where worker interviews indicated that passport retention may be ongoing at the factory.

COVID-19 Pandemic

Of companies and suppliers that responded to Transparentem, several described delays in recruitment-fee reimbursements and other remedial actions due to the effects of the COVID-19 pandemic. At the same time, some companies described taking steps to mitigate the effects of the pandemic on workers, such as providing guidance to their suppliers on how to protect their workforce. One company described a custom package of self-assessment materials distributed to suppliers, including guidance from governments and expert organizations, with a requirement for suppliers to provide documentation on COVID-19 mitigation efforts to the company upon its next social assessment.

Interviewed workers across the four factories described varying factory responses to the pandemic. Some workers said factories provided personal protective equipment, training, and payment during mandatory lockdowns. Others said they did not.

Conclusion

Though progress has been made at all four factories, worker testimony and company responses suggest there is room for further improvement. All companies should enhance oversight of factories to support the elimination of all worker-borne recruitment fees, including the full reimbursement of any recruitment fees already paid by workers, and address forced labor risks in Malaysia and elsewhere. Companies should publicize these high standards of ethical recruitment and reward ethical suppliers by maintaining long-term partnerships. To assess the performance of these suppliers, buyers should ensure that workers have access to free, independent, and anonymous grievance hotlines where they can report misconduct and abuses. Companies that take these steps can demonstrate leadership as ethical recruitment becomes the norm in the apparel industry as a whole, and specifically in Malaysia.

More information:

See this June 2019 article in the Guardian for additional information about this project.

Myanmar

Investigation Highlights Workplace Issues and Evidence of Audit Deception in Myanmar; Prompts Apparel Company and Supplier Collaboration (2020)

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Myanmar’s garment industry experienced nearly a decade of dramatic growth prior to the outbreak of the global COVID-19 pandemic, creating billions of dollars in export revenue and generating hundreds of thousands of new jobs. However, according to reports from the International Labor Organization (ILO), the U.S. State Department, and civil society organizations, this boom may have come at the expense of worker safety and wellbeing.

Beginning in 2016, spurred by those reports, which detailed child labor and abusive labor conditions, Transparentem conducted a two-part, three-year investigation. That investigation looked closely at three garment factories, and uncovered evidence of practices that appeared to violate international human rights standards and Myanmar law.

Transparentem investigators spoke directly with dozens of workers, a majority of whom were younger than 18. These workers described the conditions faced within their workplaces, including hazardous working conditions and abuses of their vulnerability. Workers described how they relied on excessive overtime or workplace loans from their supervisors or others in order to survive, and how families relied on minors working to help sustain their families instead of going to school.  Workers also described instances of deception during social audits intended to monitor conditions for workers, raising questions about whether buyers are fully aware of their suppliers’ troubling practices.

Transparentem provided the results of the investigation to seven apparel companies identified as appearing to have products produced at one or more of the three factories. All seven companies took some form of action, with six companies pursuing factory-level improvements. These six companies conducted their own follow-up assessments of the investigated factories and provided some details of their remediation plans with Transparentem. Two companies also leveraged their partnership with SMART Myanmar to focus on industry collaboration.

Despite some resulting improvement goals on specific issues at each factory, such as enhanced age verification, stronger health and safety protections, and better wage documentation, much work remains to ensure that progress is sustainable both within facilities and across the wider industry. This is particularly true now, as the COVID-19 pandemic has brought a contraction of the Myanmar garment industry and further reports of widespread abuse.

Findings

Child Labor and 14- and 15-year-olds Employed Beyond Legal Restrictions: Some workers who said they were 14 and 15 described working in excess of four hours, the maximum shift length workers this age were permitted to work under Myanmar law at the time of the investigation. Workers also said managers did not properly verify the ages of job applicants and hired individuals with fake or borrowed identity documents. A few workers who said they were hired before turning 16 stated they did not need to show any identification when they applied. “I got hired when they were short of workers,” one of these workers said. “They didn’t even look at my ID. They hired me right there.” Transparentem also spoke with some workers in two of the factories who said they were 13 or younger at the time of their interviews. Employing children under 14 in factories is illegal in Myanmar. Companies told Transparentem that they could not confirm these findings.

Hazardous Labor: Transparentem found evidence that workers, including two children under age 14 at one factory, stuffed garments with down feathers, and that management only gave workers thin, inadequate masks. Workers said high workplace temperatures made it difficult to wear the masks without discomfort and they did not regularly use them. Exposure to fine organic dust from down feathers can cause short-term health problems and permanent lung damage, risks which are elevated for children.

Wage and Overtime Violations: Workers at all factories said managers sometimes required them to work against their will, or, at two factories, without pay. One worker noted that workers “have no options” to refuse overtime work and that the absence rate for unpaid overtime was low because “workers are afraid that they will get scolded.” Some workers said they were required to work part of or all day on Sundays—a day of rest under Myanmar law—without compensation. One worker stated: “I never got paid for working on Sundays. If I can’t finish my tasks in time, they note them down and make me work [overtime] instead. If I don’t want to work [overtime], then I get scolded and they do swear.”

Inadequate Documentation: Workers said management did not provide them with pay slips they could understand or use to calculate their pay. Workers also identified problems with their employment contracts, or the way the factory communicated the terms of their employment. Some were not given copies of their labor contract; others were made to sign a contract without having its terms explained to them.

Workplace Loans and Debt: Workers told Transparentem they borrowed money with interest from other employees, including supervisors and security guards. Such loans, particularly from factory staff with supervisory authority, are a potential source of coercion.

Additional Findings

In addition to these findings, Transparentem’s investigation uncovered evidence of two other systemic problems that may impede companies’ ability to detect and remediate labor violations at the factories:

Inadequate Grievance Systems: Workers at two factories were either unaware of grievance mechanisms available to them or skeptical that such avenues were safe and effective. This suggests that factory managers have failed to provide appropriate grievance mechanisms or have not adequately informed workers of the existence of such mechanisms. It may also indicate that grievance hotlines planned following company-contracted audits were not effectively designed and implemented.

Audit Deception: Workers at all three factories told Transparentem that factory managers concealed underage workers and others from auditors by hiding them or sending them home during audits. One worker told Transparentem, “When the auditors come in, they can make a fuss and say these kids are too young. On the days we are audited, [managers] send them back [home].” Workers at two factories also said managers instructed workers to lie to auditors, and in some cases, coached them on how to do so.

Buyer Responses
All seven companies took some form of action. The six companies that conducted factory audits as a result of this investigation shared “factory improvement goals” resulting from those audits that align with Transparentem’s findings. Improvement goals for all factories included improving wage documentation procedures, and enhancing age verification, although companies also told Transparentem they could not verify the presence of workers under the age of 18 in the facilities.

For some factories, improvement plans included additional measures such as improved health and safety protections, better mechanisms to ensure overtime is voluntary, and improved practices around contracts and workplace loans. Some improvement plans also included remedies to issues not found in Transparentem’s initial investigation, such as ensuring freedom of movement for workers and the provision of paid leave and severance payments as required by law.

Factory Responses
When Transparentem contacted the suppliers for comment, representatives from two factories confirmed they had been working with a third-party auditor contracted by the companies to make improvements. One factory did not mention any audits, but said the facility “conduct[s] and control[s] all the working activities strictly under Myanmar law.” Another factory stated that, after taking steps recommended by the audit firm, it ceased production before the end of 2019.

Conclusion
Myanmar’s foray into the global economy after decades of isolation and military rule creates a complicated business environment, plagued by widespread reports of worker exploitation. At the same time, as this report was going public, Myanmar’s garment industry faced severe disruptions as a result of the global COVID-19 pandemic. By the end of April 2020, more than 60,000 garment workers were unemployed and 175 factories had ceased operations.

The growth of Myanmar’s garment industry, prior to the emergence of the pandemic, represented a moment of opportunity for hundreds of thousands of Burmese workers. As the COVID-19 crisis exacerbates the existing vulnerabilities among the workforce in Myanmar, much is left to be done to ensure that progress is sustainable. With appropriate human rights due diligence, pro-active systems to assess suppliers’ commitment to workers’ rights, and robust systems to detect audit deception, it is possible to do business responsibly in Myanmar.

Over the long term, buyers, working alongside the government and local civil society, must invest in building strong, dedicated, strategic partnerships with their Myanmar suppliers to develop principled international labor rights standards. Buyers and those interested in business opportunities in Myanmar should assess and address their risks prior to conducting official business, and should develop ongoing, worker-inclusive monitoring and dialogue in partnership with credible, independent, local organizations.

Ensuring human rights and good governance in the Burmese apparel industry will take a concerted effort by multiple stakeholders. Major clothing companies should reassess their role in ensuring safer worker conditions, better jobs, and fair wages. Critical labor issues, such as those outlined in our report, require that international apparel buyers practice innovative and sustained vigilance. Companies should collaborate with their suppliers, local civil society groups, worker representatives, and unions to raise standards in all garment facilities.

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See also this Just-Style article about our work in Myanmar for additional information about this project.