Factory operators can face legal actions unless complied with MIL

Workers sew garment at a factory in Yangon. Photo : Phoe Khwar
Workers sew garment at a factory in Yangon. Photo : Phoe Khwar

The factory operators can face legal actions under the Myanmar Investment Law (MIL) if they fail to comply with notification requirements for the closure of factories, said U Thant Sin Lwin, director-general of the Directorate of Investment and Company Administration (DICA).
At present, some CMP garment factories have shut down on the reason for the lack of raw materials due to the COVID-19 negative impacts. Even worse, some foreign entrepreneurs are also running away from their businesses.
“The factory operators can be taken legal actions under MIL if they do not officially notify the DICA of the closure. They will face such actions as a first warning, suspending and revoking their business licences though there is no prison sentence according to the MIL. Yet, the investors will be taken actions under the investment law,” said U Thant Sin Lwin.
No one faces legal actions under the MIL so far.
At present, some factories have shut down due to the lack of raw materials, resulting from the COVID-19 negative impacts. Some investors are fleeing. Those factories without official notification of closure will be inspected by a ground field inspection team”, he continued.
The news is currently spreading around 20 factories’ shutdown. However, only one factory has officially notified the DICA of its closure.
“Hua Meng Myanmar Company Limited in Kangyidauk Township, Pathein District had notified the DICA that the company would close down from 29 February as they were lack of raw materials for operations due to COVID-19. The news of factory closure is coming from different sources. The entrepreneurs claimed the closure of 20 factories while the labour unions mentioned 14 and Yangon Region government stated 16. We are now collecting information properly. Surely, factory closure is happening. Tracking the numbers of factory shutdown varies depending on the data collected by the relevant departments”, U Thant Sin Lwin pointed out.
In the wake of COVID-19, many types of businesses rather than the garment enterprises attract foreign direct investments during the meantime, according to the DICA.  (Translated by Ei Myat Mon)

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