From Bangladesh to Myanmar: Level-Set Responsible Sourcing

Authors

• Jeremy Prepscius

  Former Vice President, Asia-Pacific, BSR

• Chris Nolan

  Former Associate Director, BSR

• Rosa Kusbiantoro

  Former Director, Transformation, BSR

Jeremy Prepscius, Vice President, Asia-Pacific; Chris Nolan, Associate Director, Advisory Services; Rosa Kusbiantoro, Associate, Advisory Services, BSR

Note: This is part of a series of BSR articles on the tragedy in Bangladesh that will look at root causes, challenges, and how to prevent it from happening again.

At a recent meeting with some BSR members in Hong Kong, we discussed opportunities for responsible sourcing in Myanmar: As companies consider entering the country, many familiar issues are coming to the surface, such as child labor, hours and wages, land acquisition, environmental discharges, health, and living conditions.

In the course of our conversation, two key questions arose: How can buyers, in collaboration with international and local stakeholders, support the development of a sustainable manufacturing sector in the country? And how can buyers looking to move into Myanmar learn from experiences in Cambodia, China, Vietnam, and, most recently, Bangladesh?

The tragedies of Bangladesh are still reverberating and should force companies to take a critical look at their approach to sourcing from high-risk countries. Fire safety, construction safety, and the basic risk to life and limb are (appropriately) at the top of the agenda. Sadly, though, these issues are not new and are certainly not the only challenges facing companies that are seeking to build sustainable supply chains.

BSR members have worked on many issues, from freedom of association and collective bargaining to wages, hours and overtime, health and safety, environmental pollution, child labor, harassment, and more. Clearly, these things are intertwined with economic development and thus bound up in globalization and global supply chains.

With this context as the backdrop to our discussion, we came away with a clear consensus on how companies can level-set responsible sourcing in Myanmar:

• Responsible sourcing is not only possible, it must be pursued.
• Even if your supply chain isn’t in Myanmar now, your suppliers are probably already considering moving there. Buyers must engage early and invest in due diligence to help their future supply base avoid tomorrow’s problems.
• No individual company can or should address these challenges alone. Buyer collaboration is essential and smart, early investments in building understanding, collaboration, and outcome-based local engagement can go a long way.

Our discussion highlighted areas where buyer engagement and collaboration can add muscle, brains, and heart into responsible investment in Myanmar:

1. Support the development of the regulatory framework: Although improvements have been made in the regulatory framework, some very important gaps in both laws and enforcement remain.
2. Advocate for systemic improvements: The government has identified garment and apparel as a key sector for investment, given its potential to create jobs. This provides the opportunity for companies to engage with the government to support the goals of responsible sourcing.
3. Invest in social dialogue to support union/management’s understanding and the foundations of freedom of association: With the reintroduction of collective bargaining and freedom of association, there has been a marked increase in union organizing and labor strikes since 2011.
4. Seek opportunities for meaningful collaboration: A host of local stakeholders, including the ILO and civil society, can support a responsible sourcing framework. In this environment, the choices, policies, and investments of global buyers can have an important impact on the development of supply chains in Myanmar.
5. Exceed expectations for enhanced transparency: The U.S. government’s “Responsible Investment Reporting Requirements” (PDF) will require not only enhanced transparency of business operations in Myanmar, but will also increase expectations for such transparency.

A responsible sourcing approach is built on understanding local risks; engaging with factories, industry associations, government, international donors, and community stakeholders; aligning purchasing policies and resources to support the development of responsible supply chains; and investing in local capacities required to develop and maintain the necessary legal, human, and social infrastructure.

Based on our recent work in the country with consumer products, information and communications technology, manufacturing, forestry, and oil and gas companies, BSR is now building a responsible sourcing dialogue among international buyers considering investment in Myanmar. Multistakeholder approaches are needed to define responsible investment, and move beyond the rhetoric. Now is the time for us to begin thinking collectively, and acting together, to ensure that responsible sourcing plays a strong role in the growth and development of Myanmar.

To learn more about our work in Myanmar, please contact jprepscius@bsr.org.