[Investigative Report] Unveiling The Labour Rights Violations – The Second Investigative Report on UNIQLO’s Suppliers in China

Executive Summary

The UNIQLO campaign aims at unveiling the poor labour conditions in China under the global fast fashion supply chain. It aspires to raise public awareness on labour issues behind UNIQLO’s trendy clothes and urges the company to correct its labour rights violations, which SACOM has uncovered in the latest investigation of UNIQLO’s supplier factories.

Owned by the Japanese company Fast Retailing Co., Ltd. (hereinafter FR), UNIQLO is an emerging star on the global fast fashion stage. Tadashi Yanai and his family, the key figures of FR, were also ranked the richest people in Japan and 41st richest people in the world in 2015. In recent years, the number of UNIQLO’s retail stores has increased drastically in Asia, especially mainland China, where the brand has generated a significantly large profit. However, apart from its good quality standards and affordable price, it has come to our concern whether FR has taken its corporate social responsibility to improve the workers’ well-being in all of its production partners.

In January 2015, Students & Scholars Against Corporate Misbehaviour (SACOM), Labour Action China (LAC), and a Tokyo-based international organization, Human Rights Now (HRN), jointly launched the first investigation into labour conditions at two of UNIQLO’s key suppliers in China: Pacific Textile Ltd (Pan Yu) (hereinafter Pacific) and Dongguan Tomwell Garment Co. Ltd, which is the subsidiary company of Dongguan Luen Thai Garment Co., Ltd (hereinafter Tomwell). After the launch of SACOM’s first investigative report, FR acknowledged the validity of some of the findings, and in response released on July 31st a CSR action report listing the corrections it has done. Following this, SACOM completed a follow-up investigation to examine whether the corrective measures FR claimed had in fact been done, and to check the current working condition in both factories. In addition, in early 2015, continuing to address its concern on the labour conditions in other UNIQLO suppliers, SACOM completed an investigation on another two key suppliers of UNIQLO: Jintan Chenfeng Clothing Co., Ltd and Dongguan Crystal Knitting & Garment Co., Ltd.

According to the follow-up investigation, after our first investigative report, FR has monitored Pacific and Tomell to conduct corrective measures including reducing the overtime working hours in two factories, paying statutory overtime premium in one factory, improving ventilation, reducing temperature of the workplace as well as increasing drain channeling to avoid the sewage flowing all over the floor and preventing the potential injuries.

We acknowledge the above corrective measures FR has conducted. However, based on the investigation, we have still found the following labour rights violations in these four factories:

1. Unsafe workplace and insufficiently trained workers
According to an examination on industrial waste conducted by the government, a UNIQLO supplier factory discharged hazardous industrial waste water into the sewage which contains a few toxic chemicals. However, the workers were not clearly informed on what kinds of chemicals they were exposed to in the workplace and what are their effects of health. It was also found that pre-service training was insufficient, and results from medical checkups were not supplied to the workers, as a result, workers’ health remains endangered.

2. Extremely long working hours
The basic wages of the workers are exceedingly low, and as a result, workers have no choice but to do extremely long overtime work to struggle for a decent wage. In peak season, the workers were required to work for a month without holidays. Furthermore, overtime working hours exceed 150 hours a month, in manifest violation of Chinese Labour Law.

3. Miscalculation of wage and lacking in statutory overtime premiums
Workers are only paid by a fixed piece rate, which means they do not have statutory overtime premiums.

4. Failure to pay the statutory Social Insurance Premiums
Employers have failed to pay the statutory Social Security Premiums, which includes pension, as well as medical, unemployment, and maternity insurance, which can ensure that workers are all able to enjoy at least a minimally decent standard of living.

5. Inauthentic Representation of Workers
Workers do not have the right to elect their own representative to express their opinions and ideas to the management through regular meetings between union committee and factory management.

6. Bullying and Punitive Management Methods
Factories have created a stressful and unfriendly working environment by illegally deducting workers’ wages as punishment for minor mistakes, and by scolding workers whose productivity are lower than the previous records via a broadcasting system.

7. Cheating in social audits
Factories provided false information in social audits through fake documents, and by using protective equipment only when an auditor is present. A factory even gathered workers before an audit and announced that they would reward workers with RMB500 if they gave a model answer set by the management.

Based on the above findings, we are disappointed that the labour standards in the supplier factories of Fast Retailing fail to meet international labour standards and violate local labour laws. We are here to strongly appeal the suppliers and Fast Retailing to take the following corrective measures:

We demand that suppliers:

  1. Stop illegal overtime hours and make all effort to raise the basic wages and piece rate in the two factories to secure a decent income.
  2. Ensure that workers’ health is not compromised by exposure to hazardous chemicals and materials, and disclose all relevant information of chemicals and materials used in two factories to the public and workers.
  3. Provide comprehensive pre-service training regarding work safety, and sufficient protective equipment to protect workers’ health.
  4. Participate in the social security system by paying the statutory social insurance premiums for workers.
  5. Ensure the union representatives are genuinely elected by workers in a fair election.

We demand Fast Retailing:

  1. Disclose the full list of suppliers and chemicals which are used in the production process.
  2. Facilitate the suppliers to carry out the improvement measures regarding working conditions and welfare of workers by providing adequate resources.
  3. Ensure that its supplier factories provide workers with education on labour rights, comprehensive training, protection, and medical check-ups on occupational health and safety.
  4. Supervise its supplier factories to pay workers the overtime pay, and social security premiums.
  5. Enable workers to select their representative in a democratic election.

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