(Reuters) -Zara owner Inditex (BME:ITX) is in the process of stopping purchases from Myanmar, the company told Reuters on Thursday, as a result of a campaign by global workers’ union IndustriALL to convince companies to divest from the country.
“Inditex is in the process of a phased and responsible exit from Myanmar, following IndustriALL’s call,” a company spokesperson wrote in an email. “As a result, we continue to reduce the number of active manufacturers in the country.”
Inditex did not give a timeline for its exit. It does not publish a list of suppliers, so it was not immediately clear how many factories in Myanmar are supplying the fast-fashion giant.
Myanmar, a major producer of garments for Western brands and retailers, has been run by a military junta since a February 2021 coup. IndustriALL argues that labour rights have been eroded since then.
Brands and retailers have been under pressure to disengage, but their exit could cause job losses and further economic pain for workers. Spanish fast-fashion retailer Mango told Reuters it has stopped sourcing from Myanmar.
Inditex has an agreement with IndustriALL since 2007, which it renewed in 2022, according to its annual report. The agreement commits the company to maintain dialogue with trade unions and to address the needs of workers throughout the supply chain.
The European Union funds a project in Myanmar called MADE, a successor to the Smart Factories project that worked to improve conditions in the country’s garment factories. Seventeen retails, including H&M, Adidas (OTC:ADDYY), Bestseller and other brands, are members of MADE.
“The EU and MADE partners believe that the interests of workers are best served by ongoing sourcing from the country, provided that this is pursued responsibly,” Mario Ronconi, head of unit at the European Commission’s Directorate-General for International Partnerships, wrote in a June 28 letter to the president of the Industrial Workers’ Federation of Myanmar, shared with Reuters by IndustriALL.
News site Sourcing Journal reported last month that Inditex planned to exit Myanmar.
