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Uniqlo owner promises to improve working conditions in China

January 16, 2015, 5:58 PM UTC
Fast Retailing Co. Opens First German Uniqlo Store
The logo of Uniqlo, the fashion clothing retailer operated by Fast Retailing Co., sits on display as the company opens their first German store in Berlin, Germany, on Friday, April 11, 2014. Fast Retailing, Asia's biggest clothing retailer, fell the most in 10 months in Tokyo trading after lowering its annual profit forecast, citing higher costs and weak demand. Photographer: Krisztian Bocsi/Bloomberg via Getty Images
Photograph by Krisztian Bocsi — Bloomberg via Getty Images

The parent company of fast-fashion retailer Uniqlo has vowed to take steps to improve working conditions at two Chinese factories, responding to criticism levied by a Hong Kong-based nonprofit that alleged unsafe working conditions and excessive long hours.

A nonprofit called Students and Scholars Against Corporate Misbehavior (SACOM), which lobbies for workers’ rights, issued a report earlier this month that lamented the working conditions at two key Chinese suppliers of Uniqlo knit fabrics and apparel. The group raised a number of issues: workers having to log overtime hours to make a decent living, and the issue that overtime wages were at times miscalculated. Other allegations in the report included high temperatures at both facilities, as well as poor ventilation, with high cotton dust levels in the air and dirty sewage flowing on the floor.

SACOM, which provided photos of its findings in the factories in the report, said workers were also unrepresented and thus had no effective platform to voice their complaints.

“We are disappointed about the findings as the well-being of workers cannot be fully guaranteed in both factories,” SACOM said in the report. “We believe that both the factories and Uniqlo have enough capacity to provide a decent working environment to their workers.”

Japan-based Fast Retailing has issued two swift responses. First, the company issued an immediate response touting a commitment to respecting human rights and ensuring appropriate working conditions for employees of production partners.

In a more detailed response several days later, Fast Retailing, which is listed on the Tokyo Stock Exchange with a secondary listing in Hong Kong, said its own independent inspection revealed “several issues, including long working hours.”

“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,” said Yukihiro Nitta, the executive that leads corporate social responsibility for Fast Retailing. The executive promised Fast Retailing would check progress within a month.

The company instructed one of the factories to ensure working hours were recorded and reported correctly, and also requested a government agency conduct a thorough check of air quality and immediately ensure that the production floor is clean. For the second location, Fast Retailing moved to increase holidays for workers and make other improvements in working hours, as well as review the working environment at that facility.

In both cases, Fast Retailing wants to monitor the management of the facilities, investigating and moving to eliminate any fines or punishments that are levied on employees. SACOM had alleged workers faced penalties if mistakes were made, which it claims is a method used to control and maintain product quality.

Fast Retailing, with about 30,000 employees, was established in 1963 though it opened its first Uniqlo store in Japan in 1984. The apparel maker, which accounts for about 6% of the Japanese apparel market today, now relies mostly on global expansion to boost growth. The company’s Uniqlo chain sells relatively low priced apparel and first entered the U.S. market with a focus on urban locations. Fast Retailing has reported consistent annual sales growth for a decade, bolstered in part by adding more stores.