23. March 2020

COVID-19 supply chain disruptions put Southeast Asian garment workers at risk

COVID-19 raw material shortages from China and retail closures in the European market affects at least 42,000 workers in Cambodia, Myanmar, and Vietnam. Labor groups call on brands to minimize the impact of the pandemic on garment workers’ health and livelihoods.

Mass layoffs due to COVID-19 have affected garment workers. Those who aren't laid off continue to work in enclosed spaces in close quarters.

COVID-19 has thrown the garment industry supply chain into disarray, and Southeast Asian garment workers are feeling its ripple effects. As the world’s largest textile exporter, China accounted for about 38% of the global total in 2018 according to the World Bank. Chinese factory closures due to COVID-19 have created raw material shortages and heavily disrupted the garment industry in Cambodia, Myanmar, and Vietnam. Since the beginning of the year, 20 factories in Myanmar and 15 factories in Cambodia have shut down, suspended operations, or heavily reduced their workforce. 

While exact numbers are not available, at least 42,000 workers are affected by factory suspensions or closures. A number of the affected factories produced apparel for the Danish clothing company Bestseller and UK supermarket chains Tesco and Sainsbury.

Thousands of workers affected

Though the economic downturn affects everyone, including brands and factory management, the ones hit hardest are usually those who can least afford it, Bent Gehrt of Workers Rights Consortium notes.

“Right now if you look at the economic situation, brands are not posting record profits this year. But, they’ve had a great decade with these workers working for them  and now they’re just being discarded and left with nothing.”

Gehrt said Cambodian factory closures have affected 10,000 workers and estimates an additional 15,000 were affected through workforce reductions. However, Gehrt cautions that the actual number may be much higher. About 200,000 workers are employed through Cambodian subcontracting factories, and if the main factories are reducing their workforces, subcontractors may not be receiving work orders at all, Gehrt said. 

Unemployment benefits vary

Vietnamese workers who are properly enrolled in social security will receive unemployment benefits based on the amount of time they’ve been employed. In Myanmar, unemployed workers will continue to receive healthcare benefits but not unemployment benefits because there had been no request for unemployment benefit from the Social Security Board, Thein Swe, Myanmar’s Minister of Labour Immigration and Population, said. Cambodian Labour Ministry spokesperson Heng Sour said the ministry requires factories with suspended operations to pay workers 40% of the minimum wage for a total of USD 76 per month.

Yet not all laid off workers will receive proper compensation. After closing or suspending operations, a number of factory owners have simply run off, according to Cambodian and Burmese officials.

Retail store closures further reduce demand

Though China has recently resumed production, garment workers’ employment situations are unlikely to improve. Just this past week, Denmark and several other EU nations opted to close retail shops as part of their COVID-19 containment strategies. These retail closures produce lower demand, resulting in fewer orders for garment factories.

Brands called on to mitigate COVID-19 effects

As the COVID-19 pandemic continues to affect garment workers, labor groups including Clean Clothes Campaign, Worker Rights Consortium, International Labor Rights Forum, and Maquila Solidarity Network have called on brands to minimize the pandemic’s impact on workers’ health and livelihoods.

“Brands must stand by the workers who make their clothes and take active steps to ensure they continue to receive their wages during factory closures or sick leave. We are calling on brands to publicly commit to proper due diligence with regards to the unfolding events resulting from COVID-19,” the labor groups wrote in an open letter.

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