As a globally operating fashion company we are aware of our responsibility for all of our stakeholder and actively promote compliance with standards of conduct as well as human and environmental rights along our entire supply chain. In the 2023/2024 business year, we worked with suppliers in 13 production countries, one of which is Myanmar. When placing production orders in Myanmar, all EU sanctions against the military junta are of course complied with. To the extent permitted, our suppliers place production orders with textile manufacturers in Myanmar who are independent of the military.
We deeply condemn the military violence against the people of Myanmar since the military coup in 2021. The violence must end and the liberal order in Myanmar must be restored.
After extensive examination, we are convinced that we can continue our cooperation with suppliers in Myanmar responsibly and in accordance with the ILO conventions, the UN Guiding Principles and the OECD Guidelines despite the military junta and the resulting human rights and labor law risks through increased due diligence measures as well as membership in EuroCham Myanmar and the MADE project (Multi-stakeholder Alliance for Decent Employment in the Myanmar Apparel Industry). Below we list measures and activities to fulfill our human rights due diligence in Myanmar and thus continue to contribute to the preservation of jobs for many workers and improved working conditions in the textile industry.
The production factories we work with in Myanmar are located in the Yangon region, which is classified by the EXERA Vanguard Risk Score as one of the safer regions with a low conflict rate (last update from 26.8.2024 - 02.09.2024). The situation there currently allows us to continue to fulfill our due diligence obligations to maintain safe working conditions in the factories. However, we are monitoring developments in Myanmar closely and regularly evaluate whether we can fully comply with our due diligence obligations towards workers in Myanmar.
We receive regular updates on the situation on the ground from our local team of four employees in Yangon. We have also joined EuroCham Myanmar (European Chamber of Commerce). The chamber focuses on representing the interests of its members to organizations in Myanmar, ASEAN and the EU as well as supporting European companies in their cooperation with business partners in Myanmar. Via EuroCham Myanmar we receive daily live updates from Myanmar.
We have been working with production facilities in Myanmar since 2014. At present, nine factories produce clothing for Takko Fashion. Our local team in Yangon is in close contact with the factory management and regularly checks the working conditions in the factories in Myanmar. Our CSR Procurement Compliance Team in Germany is in regular direct contact with our local employees and receives regular updates on the situation in the factories.
As part of our stricter HRDD measures to monitor working conditions in the production facilities in Myanmar, we have also increased the frequency of officially documented factory visits by our own team in Yangon to every three months. A separate questionnaire was created for this purpose in order to specifically address the situation in Myanmar. In this context, we ensure a stronger exchange with the employee representatives and employees in the factories. In addition to the factory visits, we carry out own social audits by our own employees as well as third-party audits by TÜV at all production sites. The audits are announced as well as unannounced audits. In this financial year, 12 audits have already taken place, 11 of which were conducted by us and one externally conducted audit. The next audit wave from TÜV Rheinland (announced and unannounced) will take place in September.
In the past financial year (01.02.2023 to 31.01.2024), all production facilities were audited in a total of 38 audits. In addition, 20 factory visits took place last year. From October 2024, we will carry out previous factory visits as follow-up audits to further strengthen our HRDD in Myanmar. This will allow us to collect important information from the production facilities and about working conditions on site in even greater detail and ensure even better transparency. Factory visits will also continue to be carried out on an ad hoc basis. In addition to our CSR teams, also our QC teams are often in the factories. We have already carried out 690 inspections in the period from February to mid-August alone.
In addition to the Fair Wear Foundation's complaints hotline for workers in the factories in Myanmar, we also offer a whistleblower system in Burmese language via our website, which employees can use to provide anonymous information about possible grievances. We have not yet received any reports or complaints from Myanmar via the whistleblower system. Two reports were received via the Fair Wear Foundation's complaints system in the past financial year. The corrective measures taken as a result have now been successfully completed and reviewed in audits. If deficits are identified during a factory visit, an audit or the Complaints Hotlines, these are discussed with the business partners, corrective measures are developed and recorded in the corrective action plan. Our employees not only monitor progress, but also support the factory management in implementing the necessary measures to improve working conditions.
An additional check will also be carried out at our production facilities in 2024 via the MADE project and ULULA Research. As part of the MADE project, of which we are a member and EuroCham Myanmar is a partner, production facilities are examined for compliance with social standards, working conditions, chemical management, energy and water consumption and waste management, among other things. Together, opportunities for improvement are identified and corrective measures are supported in order to meet international standards. MADE employees are in direct contact with all our production facilities in Myanmar. Through MADE, seven assessments in the production facilities have already taken place and further assessments are planned. The MADE project is supported by the European Union with three million euros and will run until 2026.
In addition, we have joined forces with other member brands of the Fair Wear Foundation and ULULA Research for a project in which we organize surveys with workers from production sites outside the factory premises. In this way, we want to gain a transparent insight into the situation of workers in Myanmar and jointly derive appropriate measures to ensure human rights due diligence and safe working conditions. To date, employees in eight out of nine factories have taken part in the first wave of the ULULA survey. The surveys will be evaluated subsequently. A second part of the surveys is planned for end of 2024.
We are also in regular contact with the MGMA (Myanmar Garment Manufacturers Association), an independent trade association for the garment sector in Myanmar, so that we can closely monitor the situation on the ground and take action if necessary.
Our Chief Product Officer Sebastian Weber last visited Myanmar himself in November 2023 to visit the production facilities and talk to the local people. The visit and the discussions with the factory management and the workers on site confirmed that staying in the country is the right thing to do for the workers to secure their jobs and financial livelihoods. This has also been confirmed by a study from Labor Solutions that asked 100,000 employees in the Myanmar Textile Industry who stated that job security and the ability to continue supporting their families is most important to them (Labour Solutions, https://www.laborsolutions.tech/post/myanmar-garment-workers-want-to-be-heard).
The next factory visits of our CSR Team from Germany as well as Chief Product Officer in Myanmar are planned for mid-September 2024.
As a member of the Fair Wear Foundation, we report to the FWF every four months in the Myanmar Progress Report on the current situation in our suppliers' production facilities as well as measures and progress to ensure our human rights due diligence.
Takko Fashion will continue its business with suppliers and partners in Bangladesh unchanged.
As a globally operating fashion company we are aware of our responsibility for all of our stakeholder and actively promote compliance with standards of conduct as well as…
