Last Updated: 2024.03.22
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Fast Retailing believes that respecting human rights and ensuring the health, safety, and security of all workers in our supply chain is our most important responsibility. As our business expands across the globe, Fast Retailing is building stronger partnerships with our factories, enhancing our efforts to respect human rights, and to improve working environments across our supply chain.
Fast Retailing Supply Chain Human Rights and Working Environments Policies
We respect the basic human rights of all people who work in our supply chain. One of our most important duties is to protect the physical and mental health, as well as the security and safety, of these people. We will fulfill our responsibilities in this area, aligned with the UN Guiding Principles on Business and Human Rights and other international human rights principles and declarations. Fast Retailing asks all production partners to comply with our Code of Conduct for Production Partners, which is based on the core labor standards of the International Labour Organization and other international human rights standards. Our production partners know that we will not tolerate any violation of human rights (child labor, forced labor, oppression and harassment, discrimination, physical abuse, etc.). In addition, mechanisms are in place to ensure strict compliance.
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Respect for Human Rights (Fast Retailing Group Human Rights Policy)- Code of Conduct for Production Partners
Governance
Fast Retailing established a Human Rights Committee to promote initiatives aimed at respecting human rights. We appointed an outside expert, who has experience working as the head of the Human Rights Bureau in the Ministry of Justice in Japan, to head the committee, and the committee members are made up of outside directors of the board and auditors, along with Fast Retailing full-time auditors and executive officers in charge of the Legal and Compliance Department, Human Resources Department, Production Sales Department, and Sustainability Department. The role of the committee is to provide recommendations and supervision to ensure that we fulfill our obligations to respect human rights based on the Human Rights Policy, and that business operations are conducted appropriately. Critical issues relating to salient risks are also escalated to the Sustainability Committee as required. If a zero-tolerance or serious issue was identified through workplace monitoring, the matter is escalated to the Business Ethics Committee, which determines whether to terminate or review our business relationship.
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The Supply Chain Labor Management Team from our Sustainability Department (hereinafter "Sustainability Department") leads a workplace monitoring program and other supply chain social initiatives across all Fast Retailing brands. The managers of the Sustainability Department manage the programs and work plans, and report to the Executive team, who oversees the strategic direction of the Sustainability Department as well as to the Human Rights Committee. The Supply Chain Labor Management Team members are based in Japan, where our headquarters are located, as well as in key production countries such as China, Vietnam, Indonesia and Bangladesh. This is to ensure proper communication with not only our production partners' management and workers, but also local individuals and groups in their local languages. Twice a year as part of the company's evaluation system, Group Executive Officers, managers and team members are appraised on their performance of supply chain-related social initiatives including improvements to working conditions, as part of our efforts to promote our human rights policy commitments. This evaluation is a factor used to determine remuneration of these individuals.
Objectives
In conjunction with the objective of the Ariake Project*, to make and sell only apparel that customers truly want, Fast Retailing will safeguard human rights in all processes, from manufacturing to transport and sales, building a supply chain that allows customers to purchase products with trust.
To achieve this, we work to strengthen transparency and traceability to raw material level, and identify and correct any human rights and labor environment issues across our supply chain.
*1 Ariake Project is a company-wide initiative to transform our business into a digital consumer retailing company that connects directly with our customers, using their insights to develop products and services they need. Through the use of digital technology and other means, we will change our supply chain structure and work style to achieve the goal of "only making, transporting, or selling products that are necessary". We believe this will improve our customer satisfaction levels, while generating solutions to sustainability issues, such as reducing our environmental impact.
Approach
Fast Retailing works to strengthen traceability and to confirm good working environments are maintained throughout the entire supply chain, down to the raw materials level, in accordance with international guidelines. We conduct human rights due diligence to confirm our products are manufactured ethically across the supply chain.
Pursuing Traceability
In order to make our supply chain more sustainable, we work to manage the entire supply chain, applying our own standards throughout the entire production process with respect to quality, procurement, production systems, working environments, and human rights. We are working to improve traceability by visualizing the entire supply chain from the end product back to the raw material level, consolidating business with production partners, and procuring key raw materials from our own designated farms, ranches and factories.
Ever since we made the full-scale shift to a specialty retailer of private-label apparel (SPA) model in the late 1990s, which spans the entire clothes-making process, we have striven to build long-term relationships of trust with a relatively small number of factories. UNIQLO has had business relationships with its major factories for over 20 years. We have built relationships of trust with these partners based on shared values, and based on these partnerships, we will work to further enhance traceability in the supply chain right back to the most upstream levels.
Fast Retailing will continue to be proactive in production partner disclosures as well, raising the transparency of our supply chain.
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Assessing Human Rights Risks
We conduct an annual mapping and assessment of salient country and sector risks based on information provided in social compliance audits or through grievance mechanisms, in media and other public reports, as well as dialogues with international organizations, industry associations and civil society groups. Through our risk assessment, we have defined the following as salient human rights risks in the supply chain: child labor, forced labor, unethical recruitment practices for migrant workers, coercion and harassment, discrimination, serious health and safety violations, serious violation of freedom of association, insufficient wage payment and excessive working hours. We assess the impact and likelihood of these risks to prevent them from occurring and take appropriate countermeasures if they do. Also, collaborating with relevant experts, we are taking concrete initiatives on some important human rights issues in the supply chain.
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- Human Rights Due Diligence
- Preventive Measures and Actions Taken for Addressing Salient Human Rights Issues
Monitoring Production Partner Labor Conditions
In 2004, we formulated the Code of Conduct for Production Partners, requesting all production partners comply with labor condition standards. To ensure compliance with our code of conduct, we regularly monitor supply chain labor conditions. We regularly engage in workplace monitoring in the supply chain and provide results and feedback to our production partners. We ask factory management to resolve any identified issues, also providing support for improvement. If any extremely serious issues are uncovered, such as child labor or forced labor, we take appropriate action. Such action may include reducing our business volume or ceasing our relationship with the partner in question.
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Grievance Mechanism
Fast Retailing asks factories to establish their own mechanism to address employees' grievances as part of proper business management following FLA's standards. Compliance with the requirements is confirmed through our workplace monitoring system. We also established the Fast Retailing Hotline that provides a channel for employees and organizations representing a group of individuals at core garment factories and fabric mills to contact us directly and anonymously in their local languages. These programs exist in Shanghai, Ho Chi Minh City, Dhaka, Jakarta, Tokyo, and other locations.
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Improving Labor Conditions Through Collaboration With External Organizations
Fast Retailing collaborates with external organizations, taking an active role in addressing human rights and environmental issues in the apparel industry. We are a member of the Better Work program, a labor environment improvement initiative managed jointly by the Fair Labor Association, the International Labor Organization, and the International Finance Corporation. Through this program, we seek to improve our monitoring of labor conditions and introducing more effective internal management processes through responsible procurement policies.
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Information Disclosure
We provide appropriate information about the labor conditions throughout our supply chain to our stakeholders, including customers, NGOs, media, and investors. As a company that spans the globe, Fast Retailing is committed to complying with labor and human rights laws in each country or region where we operate. We act in good faith in all our business activities.
