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Last Updated: 2015.01.15

Fast Retailing Takes Action to Improve Working Conditions at its Production Partners in China

UNIQLO CO., LTD.
FAST RETAILING CO., LTD.
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In addition to the initial Fast Retailing reply to the January 11 report released by SACOM (Students & Scholars Against Misbehaviour), a Hong Kong-based nongovernmental organization, regarding issues with working conditions at a factory of Dongguan Tomwell Garment Co., Ltd. and a factory of Pacific (Pan Yu) Textiles Limited, Fast Retailing today reconfirms that its own independent inspection revealed several issues, including long working hours.

"Respecting human rights and ensuring appropriate working conditions for the workers of our production partners are top priorities for Fast Retailing, and in this we are completely aligned with SACOM," said Yukihiro Nitta, Fast Retailing Group Executive Officer responsible for CSR. "Fast Retailing has urged swift action against the factories on the issues identified in the SACOM report, and we will cooperate fully with them to ensure that improvements are made. Together with third parties, including auditors and NGOs, we will check progress within one month," he added.

Fast Retailing has instructed Dongguan Tomwell Garment Co., Ltd. to take the following steps:

1.) Working Hours
a.Immediately ensure all working hours are recorded and reported correctly, and reduce working hours to comply with the Fast Retailing Code of Conduct for Production Partners
b.Immediately review production capacity and production plans, to be able to comply with working hour limits from February
2.) Working Environment
a.Request a government authority to immediately conduct a thorough check of air quality and, based on results, put in place a concrete plan to improve the working environment
b.Based on results, require workers to use necessary protective equipment, to improve workers' welfare
c.Immediately ensure that the production floor is clean and tidy
3.) Management Style
Thoroughly investigate fines and punishments and if found, eliminate
4.) Unrepresented Workers
Establish a workers' union, hold elections and organize a first assembly in March

Fast Retailing has instructed Pacific (Pan Yu) Textiles Limited to take the following steps:

1.) Working Hours
Immediately increase holidays for workers and ensure workers will take one mandatory day off per week effective July, and make other improvements in working hours
2.) Working Environment
a.Review the working environment, including temperature and humidity, and improve as required
b.Require workers to wear protective clothing and use protective equipment
3.) Management Style
Ensure that no fines or punishments are imposed

The result of Fast Retailing's own independent inspection revealed a number of points regarding Pacific (Pan Yu) Textiles Limited which contradict elements of the SACOM report. Regarding these points, mentioned here below, Fast Retailing will continue with its own independent inspection and plans to engage in dialogue with SACOM to seek further clarification.

1.Regarding overtime payments, the current procedure is legal, and the factory received permission from the local labor department to apply the Comprehensive Working Hour Calculation System. Under this system, overtime payment during the weekend is calculated at 1.5 times, not 2.0 times. Therefore, the factory did not commit any violation.
2.Regarding unrepresented workers, the chairman of the union is someone who is in charge of administration and therefore is legally qualified to serve as chairman.
3.Regarding accidents occurring from falling down from stools, in June 2014 safety training was conducted and a hand rail was added to the machinery. No further accidents have occurred since then.
4.The cause of death of the worker mentioned in the report was not electrocution.

In addition to the above action points, Fast Retailing will put in place the following measures to improve its own monitoring system for its production partners.

In addition, Fast Retailing will introduce working environment monitoring to textile factories who do not have contracts with Fast Retailing, including Pacific (Pan Yu) Textiles Limited.

1.) From January:
In collaboration with the Production Department,
a.Strengthen measures to monitor overtime hours, to ensure all overtime hours will be officially recorded through the Production Department's factory visits, while verifying that production schedules can be implemented to meet working hour requirements
b. Ensure all information including worker accidents, strikes, etc., will be tracked and communicated to the CSR Department immediately
2.) From February:
a.Begin to introduce a working environment monitoring system for textile factories who supply textiles to garment factories
b.Work with third parties including auditors and NGOs to improve its current working environment monitoring system, and continue to improve it regularly, by:

*Increasing the number of unannounced audits, as well as the number of off-site interviews with workers

*Supporting workers to execute their right of collective bargaining, to elect representatives democratically and to engage in discussion with management on a regular basis, as well as to participate in training programs for themselves and management

3.) From March:
Begin to introduce a Hotline, as well as a system to protect workers in cases of emergencies, in collaboration with NGOs and other organizations

"I once again confirm Fast Retailing's commitment toward ensuring the respect for human rights and continuously improving the working conditions for the workers of our production partners, while at the same time protecting their employment. We look forward to opening a dialogue with SACOM and their partner organizations, so that we may be able to share our action plans directly with them," said Nitta.

NOTES:
Dongguan Tomwell Garment Co., Ltd. manufactures garments for UNIQLO, a member company of the Fast Retailing Group, in the Guangdong Province. Pacific (Pan Yu) Textiles Limited supplies textiles to garment factories.

Fast Retailing first learned of the SACOM report at the end of last year, and the company moved quickly in view of the serious nature of its claims by conducting its own independent inspection of both facilities.

JANUARY 11 FR Statement

 

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