Exposing UNIQLO’s abuse of Chinese garment workers War on Want fights against the root causes of poverty and human rights violation, as part of the worldwide movement for global justice.

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SACOM Student and Scholars against Corporate Misbehaviour (SACOM) is a nonprofit organisation founded in Hong Kong in 2005. It originated as a students’ movement and now aims to bring front line workers, concerned students, scholars, labour activists and consumers together to fight for a workplace in which workers can work with dignity, receive fair wages for their labour, and be leaders in the workplace. SACOM is especially devoted to the investigation and advocacy of labour rights in the garment, electronics and toys industries, and has campaigned against global brands including Disney, Apple, American Eagle and UNIQLO. Preface 01

China is the biggest exporter of ready harassment. Worse of all has been the made clothes monopolising nearly 40% strategic crackdown on workers who of the global garment industry. Driving fight back. China’s $187 billion garment trade are over 10 million garment workers who Global initiatives that try to get garment toil under oppressive and exploitative corporations to take responsibility for their working conditions, mostly for high factory workers are voluntary, weak and street brands. toothless mechanisms. Garment corporations, like UNIQLO, have never been called to On paper, China has some of the most account by national governments or progressive labour laws in the region, international bodies for their abuse of providing job security, limiting overtime, garment factory workers. While concerned setting minimum wages, providing social stakeholders work to gently nudge garment security and insurance and protection of corporations to consider taking responsibility dismissed workers. Unlike most other for their factory workers, SACOM have taken garment producing countries, China’s a more direct approach in exposing the minimum wage has been rising by 13% insidious reality of these voluntary initiatives each year. that whitewash corporate rhetoric, highlighting the real impact that the culture of However, while business from foreign brands impunity has on the daily lives of workers. is booming, the fundamental human right of workers to form and join independent trade SACOM’s undercover investigations led to unions is banned in China. Driving a race to significant improvements in factory conditions the bottom on wages and working conditions, for UNIQLO’s workers, but for the pending brands expect low production prices and a cases of hundreds of dismissed workers in compliant workforce and this is guaranteed supplier factories in China and Cambodia, by governments and upheld by factory justice is still out of reach. Together with owners out of fear of losing foreign business. SACOM, War on Want is demanding supply Exploiting this arrangement is Asian retail chain transparency in the garment industry. giant, UNIQLO. Fighting back against this is a Knowing which factories brands produce in growing force of labour organisations, like allows workers to directly target the War on Want’s partner, Students and Scholars companies they are producing for providing a against Corporate Misbehaviour (SACOM). long overdue shift in the balance of power in the garment industry. War on Want is also This report presents the findings of supporting the call for binding international undercover investigations undertaken by legislation to hold corporations to account SACOM into four of the 70 factories and end the impunity with which producing for UNIQLO. These factories are corporations operate. kept secret by UNIQLO allowing it to abuse and exploit workers with impunity. In this report the disconnection between the utopia that UNIQLO presents to the public and the lived experiences of garment workers in their supplier factories is highlighted: working days of up to 20 hours, seven days a week in Steve Preston dangerous working conditions facing severe Chairperson 02 This Way to Dystopia: Exposing UNIQLO’s abuse of Chinese garment workers 1. Contents

2. 3.

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1.1 Labour rightsandworkingconditionsinChina 1.2 3.1 K 2.3 2.2 2.1 S 1.3 3.2 3.3 3.4 5.1 UNIQLO’s cultureofabuse Demands andResponses 5.2 Conclusion: T Cambodia ey findings:UNIQLO'sfactorydystopia ACOM’s investigationsin UNIQLOfactories

China’s garmentindustry la The riseofwork Excessive workinghoursandunpaidovertime S UNIQLO’s 'utopia' SACOM factories The realityofworkingconditionsinChinese Unsafe workingenvironments Punitive measures No unionsallowed The caseofArtigasClothing Be ACOM’s methodology w reform yond China:thecaseofZhingYinfactory, ake Action!

ers’ powerandChina’slabour

05 03 03 03 08 20 22 07 07 15 16 19 19 13 10 12 12 17

1 Labour rights and working conditions in China 03

producing for them. They have done this by 1.1 China’s garment industry hiding behind complex supply chains and keeping factory workers at arms’ length by China is the leader of the global not directly employing them. The garment garment export industry with an industry moves across the globe searching annual value of $187 billion, cornering for the lowest possible production costs, 38.6% of the global market.1 In 2012, driving a race to the bottom in wages and China made 43.6 billion garments with working conditions. an export value of $153.2 billion. By 2013, the export value had increased China’s garment industry has historically to $164.13 billion. In the first half of been located in the established southern 2016, China had already clocked up coastal areas close to Hong Kong. Recently, $47 billion in global garment exports.2 many factories have been relocating inland in Driving the industry are over 100,000 pursuit of cheaper labour costs. garment manufacturers employing over 10 million garment workers.3

Its garment exports to the UK amount to 1.2 The rise of workers’ power $12 billion representing 24% of Chinese and China’s labour law reform exports to the UK.4 UK high street brands such as Primark, H&M, GAP, Mango, Zara, China has long led the race to the bottom Lululemon, and online stores such as Boden on workers’ wages and working conditions and Matalan all produce garments in China.5 to create the requisite financial incentives China is part of a global garment industry for international brands. However, its labour where fashion brands have evaded laws attempt to secure rights of workers by responsibility for the rights of workers improving job security, limiting overtime, setting

UNIQLO's store front in London 04 © Tom Lebert This Way to Dystopia: Exposing UNIQLO’s abuse of Chinese garment workers Sri Lanka west relevant rateapplicable to elevant rateapplicable to 66 unskilled garmentworkers Lo unskilled garmentworkers Highest r the negotiating table. strikes andforcing employers andbrandsto working hoursandconditions by engagingin Workers have beendemanding betterwages, and theinternationalbrandsthey produce for. workers pushbackagainst Chineseproducers been ontherisefor sometimeasChinese society groups. Strike andprotest actionhas China’s labourmovement, by civil supported been driven by theriseofactivismfrom The shiftinlegislationandpolicyhaslargely 13% eachyear until2016. wage inChinahasbeenincreasing by around for dismissedworkers. As such, theminimum the minimum wageandproviding compensation in supporting the factory workers thefactory in supporting mainland Hong Kong-based groups play asignificant role the region, secondonly toMalaysia. to receive oneofthehighestminimum wagesin in China, thismeansthatthey are legally entitled Monthly minimumwagesofgarmentworkers intheregion(US$) Bangladesh 68 Pakistan 85 95 8 6 For garmentworkers Cambodia* 100 7 Viet Nam 128 90 India is worsening. pushing back, thesituationfor workers However, asmuch asworkers have been produce for globalbrands Apple andDisney. labour rightsfor workers infactoriesthat SACOM hascampaignedtosecure improved ofevidence-based advocacy,methodology and electronics brands. Byimplementingits corporate impunityofinternationalfashion between poorworking conditionsand SACOM hasbeencentralinexposingthelink workers inothercountries. between Chineseworkers andgarment Western consumersaswell asfor solidarity greater awareness ofworkers inChinaamong mainland China. This hascreated thespacefor international arena withworker strugglesin groups play astrategicrole inconnectingthe China, ofcivilsociety. withthesupport These rights groups canopenly function inmainland China. Independenttradeunionsandlabour 131 70 Indonesia 219 74 Thailand 237 China 266 156 Malaysia

244 275 Source: www.ilo.org Source: 05

to new, inland production hubs. Often 1.3 The reality of working factories are closed overnight, without conditions in Chinese factories warning to workers who arrive at work to find the gates locked, factories gutted of While the Chinese government has initiated machinery and the factory owners nowhere labour law reforms, it has omitted crucial rights to be found. Workers are left without that would result in real change for workers. compensation, with unpaid wages and unpaid The Chinese government still denies workers pensions. The increase of strikes and protest the right to form and join trade unions of their actions in the last few years has corresponded choice. Only those independent trade unions with the increase of coastal factory closures. that are affiliated to the All-China Federation Coastal provinces like Guangdong reported of Trade Unions (ACFTU), the state-run 361 strike actions in an 18-month period from trade union federation, are recognised – January 2015 to July 2016.10 any independent unions are forbidden and repressed. Workers are also denied the right Workers in the garment industry in China are to collectively bargain and the right to strike is also treated differently depending on whether severely (and often violently) limited, both in they are city born, rural migrant or women law and in practice. workers.

Despite China having the second highest Rural migrant workers, through the ‘hukou’ minimum wage in the region, this basic wage system, are denied the equivalent access to does not come close to covering living costs forcing workers to make ends meet through long hours and overtime payments. The isolated life of internal Wage setting takes place in a decentralised way – city and provincial governments have the migrant garment workers authority to set the minimum wage, resulting Most garment workers are internal migrants in substantial differences in minimum wage from rural parts of China who have moved levels across China. Workers in established to industrial cities in search of work. Their coastal hubs like Shenzhen can earn up to first languages are often not Mandarin $299 per month while workers in remote and cultural backgrounds vary vastly. With and inland cities like Yichuan can earn up to measures taken in factories to pit workers $127 per month. Cities in the interior are against each other the opportunity to build also luring manufacturers inland by promising social bonds is limited. Cramped dormitories tax breaks, better transport links and higher are shared between workers on night and productivity from a large labour pool.9 Another day shifts. A quiet space for workers to rest factor driving the move inland is that it makes must be maintained at all time thus limiting the organising of workers by Hong Kong- conversations and socialising between based labour groups more difficult, making workers. With dormitories and factories in an understanding of labour rights difficult to the same gated complex, workers’ lives are access for these workers. confined to a small radius. There have been wide reports of severe loneliness, To ensure China remains competitive, depression and suicide. factories in the established coastal production areas are facing mass closures with relocations 06 India This Way to Dystopia: Exposing UNIQLO’s abuse of Chinese garment workers Nepal 6 to work beyond theageof50 –whichis means thatwomen workers whocontinue (with menbeingabletoretire at60). This retirement agefor women issetat50years discrimination thoughChinese labourlaw. The Women workers also suffer seriousgender state ofprecariousness. rural migrantgarmentworkers remain ina isinconstantflux,As thegarmentindustry them toforfeit thewelfare benefits. but tomove insearch ofanincome–forcing ofChina,in ruralparts peoplehave nooption entitlements. However, withextreme poverty coast meansthatmigrantslosetheirwelfare village toacityorfrom aruraltown tothe a person’s place ofbirth. Moving from the pensions, housingandeducationare tiedto ensures thatwelfare entitlementssuchas urban-born counterparts. The 'hukou' system state benefitsandprotection grantedtotheir Bangladesh Bhutan Strike actioninmanufacturingindustry, China(2015-2016) China Myanmar 4 34 Laos 9 Mongolia 4 17 9 17 12 in oldage. benefits iscrucial for theirbasicsurvival pensions andbeingentitled to welfare without thecapacity tosave, receiving their working infactories, earningpoverty wages For workers whohave spenttheirlives workers, and mandatedby law. ofageing a pensioniscrucialfor thesurvival and unabletofindpermanentjobs. Receiving are leaving middle-aged workers unemployed not beingpaidby employers. closures Factory disputes isthatpensioncontributionsare in China. The reason behindmany industrial Ageing migrantworkers are agrowing group little stabilityandlow wages. to keep contracts with women ontemporary pensions. Similarly, employers are atliberty to receive employer contributionstotheir –donotcontinue commonforvery survival 14 20 48 15 361 61 15 19 34 Hong Kong 113 134 38 30 89 34 19 11 Taiwan Korea South Korea North

Japan Source: www.clb.org.hk Source: 2 SACOM's investigations in UNIQLO factories 07

In neighbouring Hong Kong, where been written in Chinese labour laws, the a free media and independent trade commitment to conditions made by fashion unions are allowed, a vibrant network brands and the reality of working conditions of labour organisations are committed in factories. Working with a close network to educating their fellow workers of researchers willing to pose as factory in mainland China, exposing their workers for weeks at a time, SACOM exploitation and raising awareness has been able to document the reality of their resistance. Central to this for workers in factories. The undercover activism and advocacy is SACOM. investigations are undertaken with great risk yet they remain committed supporters of factory workers and continue putting 2.1 SACOM themselves forward for this work.

SACOM is a labour-rights NGO based in SACOM has campaigned against supply chain Hong Kong. It emerged in response to the exploitation of recognisable corporations like injustice of corporations benefiting from the Apple and Disney that produce in mainland exploitation of cheap labour and the culture China for sale internationally. Their work has of corporate impunity fuelling labour abuses led to significant improvements in the factory in mainland China. conditions for workers in the supply chain of these companies. In the process of holding SACOM has made rigorous research the high profile, targeted campaigns, SACOM has cornerstone of their work. They have also educated consumers of the social costs of exposed the disconnect between what has purchasing popular products made in China.

SACOM protest outside UNIQLO store in Japan © Damon Coulter 08 This Way to Dystopia: Exposing UNIQLO’s abuse of Chinese garment workers of themlocatedintheUK, includingits UNIQLO has36stores inEurope with10 and Princessetam. tam. fashion brands Theory, Helmut Lang, JBrand SACOM alsoworks closely withworkers worldwide. fashion brandintheworld with 1,797stores Co Ltd. largest UNIQLOisthefourth ofFastRetailing a wholly owned subsidiary UNIQLO isaJapanese casualwear brandand 2.2 collectively organiseinfactories. workers’ rightsisby securingtherightto SACOM seesthebestway toensure from theglobalgarmentworkers sector, committees infactories. thecall Supporting democratic electionsfor worker-led This isdonewiththeaimofsupporting training toworkers onhow toorganise. floor providing on thefactory in-factory UNIQLO's globalflagshipstores'MadeforAll'

UNIQLO’s 'utopia' 11 FastRetailingalsoowns other

world abetterplace’. brand withacommitmentto ‘making the committed topresenting itselfasanethical a focus onwell-made basics. UNIQLOis as amainstay oftheBritishhighstreet with London. The brandisdeterminedtogrow 4-storey flagshipstore inOxford Street, manufactured inChina. In contrast, 90%ofUNIQLOproducts are place across over 35different countries. in Bangladesh, with manufacturing taking 400 factoriesinChina, thesamenumber chain, for example, H&Mhaswell over having afarlargerandfragmentedsupply UNIQLO, withmostotherfashionbrands manufacturing structure isuniqueto partnerships. This long-term than justbusinessdealingsandcloserto relationship withthe70factoriesasmore responsibility seriously. They seetheir Retailing appear totake theirsocial UNIQLO anditsparent company Fast 12

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Much of their focus is on securing high quality, mass produced garments.14 Stringent UNIQLO's billionaire CEO quality control of the clothes, allowing for only a 0.2mm margin of error, is closely CEO of UNIQLO and parent monitored by the brand which has invested company Fast Retailing is in 400 expert engineers to ‘help improve Tadashi Yanai, the richest man product quality and production processes’ on in Japan, worth $16.3 billion 15 site in their contract factories. and one of the 50 richest people on the planet. In addition, as part of its Corporate Social Responsibility (CSR), Fast Retailing has Gaining inspiration from the CEO of GAP, a policy governing its responsibility to whom he calls ‘Professor’ out of respect, Yanai its employees. It has produced a Code is determined to dominate the fashion world of Conduct for its partner factories aiming to lead the biggest brand by 2020. 16 manufacturing for their brands. Projecting an ethical approach to production is important to Yanai, though cracks in the The Code of Conduct contains key guidelines veneer of ethical practice threaten to shatter such as the prohibition of child labour, sets UNIQLO’s reputation. limits on overtime work and promotes freedom of association. All Fast Retailing suppliers have In 2011, the ‘extremely harsh, slave-like to submit a written pledge to uphold the Code labour conditions’ in UNIQLO’s factories of Conduct. The CSR monitoring reports are were made public. Yanai moved swiftly to made public. Fast Retailing has also set out silence this dissenting view by instigating a its monitoring of workplace conditions in its legal challenge. He lost both the initial case CSR reports. In it Fast Retailing states that as well as the appeal in the Supreme Court.18 ‘the monitoring of working environments In the same year, Yanai transferred $5.3 by Fast Retailing and its partner factories is million of his Fast Retailing shares to an asset essential to ensuring that safe and appropriate management company he set up himself in working conditions are maintained and to the Netherlands, in what appears to be an creating a mutually beneficial cycle of raising attempt at tax evasion.19 In 2015, the total 17 productivity, quality and employee satisfaction.’ dividends from Yanai’s shares exceeded $17.7 This monitoring is done through a network of million. If he had paid tax, this would have on-site factory management teams and in-house contributed to almost $7 million in taxes for auditing systems. Japan’s public purse.

Displays of ethical commitment are not confined to conduct within UNIQLO's own Clothes for Smiles Programme worth $10 supply chain. Parent company Fast Retailing million. It includes the following projects: 20 engages in various unrelated charitable ventures. For UNIQLO, its CSR is important • The Shopping Experience Project gives to portray itself as a positive, responsible disadvantaged children the chance to company and to attract a particular kind of choose clothing they want at selected consumer for whom this is key. UNIQLO stores so they can discover the experience of shopping. Children are given Together with United Nation's Children's shopping vouchers to shop at a UNIQLO Fund (UNICEF), UNIQLO has undertaken the store to help them build interpersonal skills 10 This Way to Dystopia: Exposing UNIQLO’s abuse of Chinese garment workers • up the Factory up theFactory Worker Empowerment workers,For itsfactory UNIQLOhasset manufacturing processes. in environmentally friendly Detox Challengeasacorporateleader UNIQLO signeduptotheGreenpeace in theirmanufacturing processes. chemicals andenvironmental degradation brands implicatedintheuseoftoxic in Greenpeace’s campaignexposingbig from thosegarmentmanufacturers named UNIQLO hasalsotriedtosetitselfapart

members oftheircommunities.’ succeed atschoolandbecomevalued a senseofsocialdiscipline, sothey can aim oftheproject isto ‘help girlsdevelop in Bangladesh, Zimbabwe andGhana. The The GirlsSoccerPr their own clothes freely express theirfeelings aboutchoosing also provides spacefor refugee children to and managealimitedbudget. UNIQLO signsuptoGreenpeaceDetox Campaign oject has been set up oject hasbeensetup

21 The project The 22

household management. basic nutrition, hygiene, healthcare and workers acquire knowledge andskillson garment workers. Itfocuses onhelping provides for women educationalsupport Bangladesh andIndonesia, theproject Social Responsibility. Project withBusinessfor inpartnership Dongguang CrystalKnittingandGarment Chenfeng ClothingCoLtdand included twonewfactories,Jintan reinvestigated PacificandTomwell UNIQLO inChina.In2016,SACOM Garment CoLtd, two factoriessupplying Textile LtdandDongguangTomwell floor.factory SACOM investigatedPacific workers wasthereality for workers onthe place andensuringthehumanrightsofits commitment tomakingtheworldabetter ACOM’s methodology UNIQLO toassesswhetheritsoutward In 2014,SACOMdecidedtoinvestigate 2.3

S 23 Implementedin

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Co Ltd to provide the most representative data on factory conditions. TIMELINE OF SACOM INVESTIGATION These factories were chosen based on UNIQLO’s own public classification of them September 2014 as best-performing factories with ethical SACOM conducts factory practices.24 The investigations of these investigations factories were conducted with the expectation that of the 70 factories producing January 2015 for UNIQLO, working conditions in these SACOM releases findings in report factories were likely to be among the best. Fast Retailing issues response SACOM investigators posed as general workers in the factories, collecting January 2015 primary data regarding the working Fast Retailing issues corrective plan conditions. Documents such as workers’ contracts, salary slips, working hour records, March 2015 rules and regulations and disciplinary fines Email exchange between SACOM were collected during the investigation and Fast Retailing period. Researchers also conducted interviews in the immediate vicinity of April 2015 factories such as dormitories, restaurants SACOM conducts investigation into and food stands. Some interviews were two more UNIQLO factories followed by online interviews with workers that the undercover investigators were July 2015 familiar with so that the most up to date Fast Retailing issues corrective plan information about conditions in the factories progress report could be collected. August 2015 Interviewees came from different SACOM responds to progress report departments of the factories including dyeing, quality control, knitting, cutting October 2015 and sewing, ironing and finishing SACOM conducts follow up departments. Pacific Textiles and Tomwell investigations into both factories Garment factories were investigated twice to make independent assessment to verify the findings and to follow up to of improvements see if Fast Retailing and UNIQLO had made any improvements. November 2015 SACOM releases second SACOM released two reports of their investigative report including both findings, accompanied by broad media original factories, and an additional coverage and a high profile campaign in China, two UNIQLO factories Japan and Taiwan. This advocacy was aimed at educating consumers as well as pushing January 2016 UNIQLO to respond to the findings and SACOM releases revised version improve working conditions. of report 12 This Way to Dystopia: Exposing UNIQLO’s abuse of Chinese garment workers 3 the public. toportray tobrand itwastrying UNIQLO wasfarfrom theethical environments, itbecameclearthat chemically hazardous workplace excessive andunpaidovertime to human rightsabuses. From long, witnessed andexperienced shocking SACOM’s undercover investigators Key findings:UNIQLO'sfactorydystopia days aweek. Oftenthey were notgiven leave a 17-hourday from 7:30amtomidnight, seven In somecasesthisrequired workers towork • • overtime hours: four factorieswere working thefollowing to thestandard 174hoursworkers inall provision.excess ofthestatutory Inaddition four factorieswere found tobeworking in per monthis174hours. Workers inall The Chinesestandard for working hours rolled out. factories afterUNIQLO’s corrective planwas did they findthisinChenfeng andCrystal investigations,in thefirsttwo factory nor investigations found thisnottobethecase excessively longhours. SACOM’s to ensure thatworkers are notworking closely monitored across alldepartments is theexceptionandthatworking hoursare Fast Retailing’s policystatesthatovertime and unpaidovertime 3.1 • •

full timejobsfor lessthanalivingwage. overtime —nearly theequivalentoftwo Cr hours overtime permonth In Chenf T In Pacific 112 hoursofovertime of overtime per month omwell’s workers were required towork

ystal’s workers were working 150hours Excessive workinghours eng, workers were working 80 , workers were working 134hours

the same factory said: the samefactory for two yearsof intheprinting department Another maleworker whohadbeenworking me now.’ work overtime. Hehasabadimpression of often tellthelineleaderthatIdon’t wantto swollen afterstandingfor work for solong. I ‘I don’t wanttowork overtime. Myfeet went Company said: KnittingandGarment in DongguangCrystal female worker whoworks inqualitycontrol creating ahostilework environment. A young don’t becauseoffear oflosingtheirjobsor can apply tonotwork overtime butmany fatigue, afterlonghoursofstanding. Workers their feet inhotwatertorelieve painand During thepeakseason, workers hadtosoak excessive hoursfor two monthsstraight. to take arest withworkers working these overtime stipulatethatworkers are tobe for theirovertime. provisions Statutory on found thatthey were notbeingproperly paid However, many workers inthefactories to survive. overtime work wasaway ofearningenough ranged from $196to$231permonth. Taking a livingwage. The wagesinthefactories covered theirsubsistenceletalonebeing The basicwagethey were receiving barely well below theminimum wagefor theregion. to work overtime becausetheirwagesfell It wasalsofound thatworkers were forced 7:30am.’ even midnight!Istartat 1-2 months,till11pmor ‘Sometimes Iworkfor 13

paid double their wages for working overtime its employees, in compliance with national on weekends, but wages for the workers in laws… [and it] takes special care to create these factories were being calculated at one safe workplaces and prevent employee and a half times the basic wage. The law also accidents on the job and while commuting.’26 provides that if the worker, whose wages are SACOM found that workers in Pacific and calculated by piece rate, is required to work Tomwell were subject to working conditions overtime, the employer has to pay the worker which included extremely high shop floor for his/her overtime or extra shift wages temperatures, unsafe facilities, no protective not less than 150 to 300% of the normal gear, poor ventilation with high cotton dust piece rate wage. However, it was found that levels in the air, the use of toxic chemicals workers working overtime were being paid and high risk of electricity leakages. the standard piece rate. It was found that the temperature on the knitting floor of one of the factories was 38 3.2 Unsafe working degrees Celsius. Workers had no protective environments gear and some male workers were observed working topless, whilst women workers were Fast Retailing states that it takes the ‘utmost seen working in sweat-drenched clothes. care to protect the health and safety of Workers in the dyeing department were

Garment worker working in high temperatures, Pacific 14 This Way to Dystopia: Exposing UNIQLO’s abuse of Chinese garment workers They becomemore commonasworkers are workers toloadthemachineswithyarn. try height are commoninthefactories as working withrolls ofyarn. Falls from this stand on2-metre highstepladders while thatworkerswas alsoobserved hadto During theundercover investigations it explosions intextileplantsChina. combustible andhasbeenthecauseofdust irritation. Furthermore, cottondustis serious occupationalasthmaandrespiratory the airwithariskofcausingbyssinosis –a there wasahighdensityofcottonfibre in duration oftheinvestigation. They found that ventilation wasswitched offfor theentire had poorventilation andinonecasethe Investigators found thatsomeofthefactories gear, riskingburnsorchemicalexposure. 600kg inhightemperatures withnoprotective expected towork withfabricloadsofupto Chemical wasteflowingonthefactoryfloor, Pacific processes. Itisnowonder that in2015, the in environmentally friendly manufacturing public statementsofbeingacorporateleader This isindirect contradictionto UNIQLO’s leakages’. to ‘electric exposed tohighrisksofelectrocution due was widespread andmany workers were floors. Unregulated exposure tochemicals was regularly seenflooding thefactories’ As aresult harmful, toxic wastewater chemicals intheirproduction processes. Tomwell factorieswere usingharmful Investigators alsofound thatPacificand stores stilloccur. accidents andfallingfrom stepladders in does acknowledge thatsewing machine In eachofitsCSRreportsFastRetailing high pressure. rushing tomeetproductivity targetsunder Police inside the Artigas factory

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Newsweek Green Ranking – one of the world’s Workers’ wages were being deducted if the most recognised and respected assessments of quality of their work was not up to standard corporate environmental performance – ranked or if they were found resting outside of their UNIQLO very poorly, giving only a 29% rating 30-minute lunch and dinner breaks. Fines were which put them behind most large companies, also used as a way to control product quality scoring 362 out of 500 companies.27 and manage minor mistakes.

At Tomwell factory a worker had his entire 3.3 Punitive measures wage for the day deducted when he was caught attempting to iron two sleeves at the UNIQLO and Fast Retailing purportedly same time instead of one sleeve at a time. In prioritises the physical and emotional wellbeing Crystal factory, workers were encouraged by of its retail employees over the employees on management to report the mistakes made by the factory floor. As part of its CSR initiatives colleagues. Money was deducted from the salary for retail employees, Fast Retailing has invested of the worker who made the mistake, and in wellness centres as well as having in-house transferred to the salary of the worker who had mental health counsellors. It has put in place reported the mistake – thus turning workers mechanisms for reporting workplace stress against each other and creating a culture of and a system for rectifying any stressful mistrust. This was found after UNIQLO had set situations. There is also a prohibition on out its corrective action plan. corporal punishment, physical, sexual, mental and verbal harassment including withholding or Managers regularly used the factory deducting money as a form of disciplinary broadcasting system to name and shame action. However SACOM found that these workers who weren’t hitting their production measures to ensure physical and emotional targets. Chenfeng regularly set the daily wellbeing were not implemented in factories productivity target at 8am and 3pm. If workers producing for UNIQLO. In Pacific Textiles could not reach the target, other workers there were 58 types of regulations set for would have to take on the extra work, adding punishing workers – 41 of them included fines. to the stress of being bullied over the 16 This Way to Dystopia: Exposing UNIQLO’s abuse of Chinese garment workers workers have broadly stressful. citedasvery contributed toahostilework environment that yesterday!’ All ofthesepunitive measures have Your productivity today islower than happened, can’t you even concentrateatwork! name], whathappened toyou! What has broadcasting system, for example, ‘[Worker was found thatworkers have noplatform to However, through SACOM’s investigations it uphold humanrightsatalllevels ofitsoperations. the Laws.’ This isinkeeping withitspromise to interference, orcoercion, andinaccordance to a legalandpeacefulmannerwithoutpenalty, associate, organize andbargaincollectively in partners ‘shall respect therightofworkers to Fast Retailingpublicly statesthatitsproduction 3.4 SACOM’s pressconference,Japan

No unionsallowed were dismissed. high temperatures ontheshop floor, they the caseofworkers leading astrike against into factoriestosquashstrike actionand, in strike. Inotherincidents, policewere called assault theworkers’ leaders andsuppress the management hired gangstersto physically in2009,at thePacificfactory the organised astrike againstthelow wages Investigators alsoheard thatwhenworkers welfare benefitsinstead. to organiseleisure activitiesanddistribute or advocating for workers’ rights, choosing ineffective indealingwithlabourdisputes labour laws. The unioninPacificiscompletely manager atthefactory, violatingChina’s own the chairpersonofthe factory ‘union’ isalsoa negotiations withmanagement. InthePacific democratic bodyrepresenting workers in voice theirconcerns. There isnocollective, 4 Demands and responses 17

SACOM published the results of the received training when they hadn’t investigations in Pacific and Tomwell • Not being given pay slips and instead being factories in January 2015. The report told to sign salary sheets where it stated received widespread media coverage that they were paid a basic wage when internationally. The response from they were only paid a piece rate UNIQLO was swift, with parent • Not being allowed to mention that they did company Fast Retailing immediately not receive protective equipment issuing a statement on its website. In • Protective equipment was only issued to the statement, Fast Retailing admitted workers before audits and removed once to SACOM’s findings of rights violation, auditors left. after conducting its own independent inspection of both factories: ‘We UNIQLO has made public, through its CSR confirm that, regrettably, the inspection reports, that there are significant labour found several problems including long violations within their partner factories. working hours.’ 28 These were picked up in their own factory audits which were undertaken specifically to Fast Retailing, however, disputed SACOM’s monitor working conditions. other findings stating that these were 'differences of opinion'. They did not offer After the release of the initial Pacific and to explain the different views that were held Tomwell factory findings by SACOM and on the issues. The fact that Fast Retailing felt UNIQLO’s response, the company continued that the conditions were somehow open to to monitor both factories to ensure that the interpretation was of concern to SACOM. corrective measures they had put in place were being implemented. However, when However, SACOM was not surprised that SACOM returned to the two factories for Fast Retailing was sweeping the serious rights their follow up investigation, they found that violations under the carpet. In investigations while some violations had been rectified, the conducted in Chenfeng and Crystal Group, serious violations had been left to persist. SACOM found that monitoring working conditions through factory audits was deeply UNIQLO's factory audit results show that flawed. Investigators found that workers were between 2010 and 2015, 55% of factories bribed and coached by factory managers into had at least one major or serious violation giving responses the factory wanted them to of the Code of Conduct. This included give. For example, workers were given a cash 42 factories which were found to have reward by factory management if they lied to ‘highly unethical, serious offenses subject auditors. In some cases, workers were asked to immediate review of contract.’29 With by auditors if they worked on weekends. If factories hiding their failings from auditors, they lied and said no, factory management it is quite likely that the true figures are would give the compliant worker a cash much worse. It is impossible to have a full reward amounting to a quarter of the total picture of working conditions without monthly wage. brands like UNIQLO publishing the details of their manufacturing supply chain. Hiding Other instances where workers were made these details demonstrates a lack of to cover up their own rights abuses included: transparency, inconsistent with claims of • Being forced to sign papers to say they had corporate responsibility. 18 This Way to Dystopia: Exposing UNIQLO’s abuse of Chinese garment workers httefcoisfxdWhatwasn’tfixed Overtime hourshadbeenreduced What thefactoriesfixed Pacific Waste waterdraininghadbeenimproved in installed Temperature wasreduced, air-conditioning Pacificnotproviding workers masksunless requested Ventilation wasimproved by buildingwindows Overtime premium waspaid no democraticelectionofworker representative Worker representation unfulfilledinbothfactories– legally required overtime wages Tomwell wagescalculatedby piecerate, ratherthan hours inbothfactories Illegally highovertime hours, between 80and100 than halfthelivingwage Basic wageinbothfactoriestheminimum wage, less workers deniedaccess tohousingprovident fund Unpaid housingprovident fundin Tomwell. InPacific, check-ups Both failedtogive workers theresults oftheirmedical workers reportingbeing injured by heavy machinery No healthandsafety traininginbothfactoriesdespite Pacific stillexposing workers toharmfulchemicals Pacific stillpollutingwithhazardous waste 5 UNIQLO’s culture of abuse 19

With UNIQLO’s 400 quality control their demands unmet. In June 2015, around and monitoring staff having a regular 500 workers slept in the factory for weeks, presence in partner factories, the in an attempt to ensure the factory would idea that the company was not not be closed without receiving their unpaid aware of labour abuses in factories is severance and pension payments and in the questionable. After SACOM’s release hope that factory owners would speak to of the 2016 report UNIQLO ceased them collectively. responding to investigations. The lack of response to the serious labour Management rejected the call for collective violations is not confined to the four bargaining and said they would only agree factories investigated by SACOM. to meet with workers individually. This is The two cases below demonstrate a common union-busting tactic used to that any corrective measures taken diminish the power of striking workers. With in response to SACOM’s initial report collective bargaining rejected,half of the were confined to the two investigated workers petitioned the Guangdong Provincial factories. Both cases below remain Government to resolve the dispute while unresolved at the time of publication the other half remained at the factory. This and UNIQLO has been unresponsive to resulted in violent police repression and pleas for help from workers. detention of 150 workers who attempted to peacefully engage authorities in order to resolve the dispute. 5.1 The case of Artigas Clothing

In June 2015, the Artigas Clothing and Leather The National Social Security Fund is factory in Shenzhen, China, shut down without a system that includes five elements notice and refused more than 500 workers including a pension fund for workers severance and social insurance payments. The who jointly contribute to the fund with factory was a major contract manufacturer for their employers. In order to qualify for UNIQLO and one of the 70 factories which this pension upon retirement there is the company had a close relationship with. a minimum threshold for the number of years which contributions have been Most of the workers were women close to made, usually around 15 years. This retirement age who had been working in the becomes a problem for workers who same factory for over 10 years. The factory have worked in a single factory for had not been contributing to their pension many years where the employer has and workers reported that factory conditions not contributed to their pension at all. and hours had long been intolerable. Employers are only obliged to back- pay just two years’ worth of pension In December 2014, when workers first heard – the rest is simply denied to workers. of the possibility of factory closure, 1,000 With the support of this law, which workers went on strike demanding that the guarantees a win in the courts, brands company pay their pension and overtime and their factory suppliers are enabled payments. The police and factory management to deny workers their rights to retire worked together to shut down the strike and in dignity. workers were forced to return to work with 20 This Way to Dystopia: Exposing UNIQLO’s abuse of Chinese garment workers dismissal andnotpaying thecorrect amount The workers filed a lawsuit for illegal joined thecollective actionwere dismissed. −Leverfactory Style−andworkers who were forcibly removed towork inanother not backed upby action. Instead, workers for them.most important However, thiswas respect for humanrightsofworkers was response that tothedisputeassert Fast Retailingissuedthree statementsin deny workers theirrights. signing, lengthsto going toextraordinary of 359workers whowere coerced into managementvisitedthehomes The factory resignation’ ifthey wantedhertobereleased. as away tocoerce workers tosigna ‘voluntary female worker's indefinitedetentionwasused was detainedfor atotaloffour months. The the workers arrested wasafemale leaderwho carried outby policewhilethey slept. Oneof Some workers were arrested innightraids Strike actionoutsideArtigasfactory rights incontravention ofthelaw. workers whohave beendeniedtheirbasic situation, the ithasdonenothingtosupport Despite UNIQLObeingaware ofthe Guidelines for MultinationalEnterprises. and Development (OECD)for flouting the the Organisationfor EconomicCo-operation complaint beingsubmittedaboutUNIQLOto media attentionandhastriggered aformal of compensation. The casereceived significant they produce mainly for UNIQLO. currently employs over 1,000workers and violation ofworkers’ rights. The factory and FastRetailingofignoring theserious to anentrenched culture withinUNIQLO inPhnomPenh,Yin factory Cambodiapoints manufacturers. An ongoing caseintheZhong for UNIQLOare notlimitedtotheirChinese yond China:thecaseof Labour rightsabusesinfactoriesproducing Zhong Yinfactory, Cambodia 5.2

Be 21

According to the Coalition of Cambodian a contravention of Cambodian labour laws. Apparel Workers’ Democratic Union The worker also claimed that many workers (CCAWDU), 6,715 people were dismissed frequently fainted because the temperature due to their active participation in labour in the factory was very high and there is no unions in 2014. 60% were female workers. air conditioning. In late 2015, 50 workers were dismissed for being union members. The dismissals followed Although workers were provided with masks the union-led negotiation with the factory. to protect against the chemicals used in the In December 2015, the Arbitration Council factory, they did not use the masks because of ordered the reinstatement of all 50 CCAWDU high temperatures. Wearing the masks in high members. However, Zhong Yin factory refused temperatures makes it difficult to breathe. to respect the Council’s award. In April 2015, UNIQLO stated that it was As is their right under the Cambodian Labour undertaking an investigation in the factory Law, CCAWDU commenced a strike in after workers reached out to the brand. In February 2016 calling for the implementation August of the same year, it issued a statement of the award. The factory’s response was to stating that ‘the investigation found no terminate another 55 workers. Contract evidence of long working hours, such as 24 renewals are carried out every three months, consecutive hours of work, nor unpaid wages, and workers who were members of a union as mentioned in the report.’ were refused contract renewals. No mention was made in this statement of Other labour violations in Zhong Yin mirrored the concerns with union busting, difficult those found in the other four Chinese factories working conditions, precarious contracts, that SACOM investigated. They include and non-payment of overtime wages. In excessively long working hours, no overtime pay, March 2016, the factory issued court precarious work contracts and unsafe working proceedings against CCAWDU union leaders environments. Precarious work contracts are for inciting workers to conduct a strike. temporary and provide little stability. This criminal charge was instituted despite the Cambodian Constitution and Labour Law guaranteeing workers’ right to strike. The worker said, ‘I must A second complaint to the OECD about UNIQLO will be submitted based on the work overtime, otherwise flagrant abuse of labour rights in the Zhong Yin factory in contravention of the Guidelines my contract would not be for Multinational Enterprises. renewed. I must obey’ Workers in the Artigas factory in China, as well as the Zhong Yin factory in Cambodia, A male worker at Zhong Yin reported that he are still fighting for UNIQLO to support was forced to work overtime almost every them. The mostly female workers who have day. Sometimes he was forced to work for 24 been unfairly dismissed continue to fight for consecutive hours. reparations and are in an increasingly difficult position as they are unemployed He reported that workers were not paid any and unable to support themselves and overtime wages for hours after 6pm. This is their families. 22 This Way to Dystopia: Exposing UNIQLO’s abuse of Chinese garment workers 6 portray animage ofacaring, ethicalbrand. Its UNIQLO hasconsistently useditsCSRto openly inthefactories. toxic chemicalswithtoxic wasteflowing factories producing for UNIQLOwere using awards for this, SACOM found evidence that false. While Greenpeace hasgiven UNIQLO practices initsproduction processes isalso a manufacturer thatusessoundenvironmental UNIQLO's publicimageofportraying itselfas day's wage deductedaspunishment. ironing two sleeves atatimehadanentire falsehood ofthisguaranteeasaworker caught action.of disciplinary This reportexposesthe deductionswillbemadeasameans monetary of theseabuses. UNIQLOguaranteesthatno worse still, taken noactionwhenmadeaware action andrejected collective negotiations and physically assaultedworkers tosuppress strike thefactoriesas theyhas continued tosupport organise andbargaincollectively, UNIQLO Whilst itguaranteestherightsofworkers to of two fulltimejobsor350hours amonth. that workers were working theequivalent working hours, yet thisreporthasshown strict controls inplacetoprevent excessive code ofconduct. UNIQLOsays thatthere are Chinese labourlaw, aswell asUNIQLO’s widespread labourrightsabuses thatflouted factories investigated showed thatthere were protects workers’ rights. Yet thefour supplier fail toadhere toitscodeofconductwhich not conductbusinesswithfactoriesthat On theonehandUNIQLOsays thatitwill in reality. public image andwhatitactually does what UNIQLOputsforward asits demonstrates thedisparitybetween for brandslike UNIQLO. Italso those rightsby factoriesthatproduce protect workers andtheviolationof between thelaws thatare passedto This reporthasexposed thedisconnect Conclusion to introduce alegally bindinginstrument supply chains. However, there isamove to accountfor whathappens intheir regulation thatholdsfashioncompanies There isnointernationallaw, orindustry nothing toholdthecompaniesaccountable. produce for them. This isbecausethere is with fashionbrandsandthefactoriesthat exist toprotect workers have notraction industry. National andinternationallaws that enable theabsoluteimpunityenjoyed by the have workers for theirfactory andfurther to obscure thelackofaccountabilitybrands Voluntary commitmentsandstandards exist rights for decades. "due diligence"hasfailedinsecuringworkers' eventhe industry thoughthismethodof which are notimproving -isthenormfor own investigations show poorconditions audit systemusedby UNIQLO—whose this isduetoalackoftrying. The factory standards are met. Workers are clearthat last stitchyet cannotguarantee basiclabour can specifytheirrequirements down tothe the mercy oftheorders from brandswho system where countriesandfactories are at and sustainhumanrightsabusesthrough a exploitation. Fashionbrandsactively drive who disproportionately benefitfrom the millions whenitisclearthatthebrands the entrenched labourrightsabuses of has collectively succeededinmystifying that oftheglobalgarmentindustry is part workerswhile theirfactory suffer. UNIQLO their commitmenttoworking conditions clothes andgetaway withtalkingabout responsibility for workers makingtheir system where fashionbrandshave evaded UNIQLO isjustonebrandwithinaglobal their own workers’ rightswiththeother. charity withonehand, whileUNIQLOdenies digs deeper, theUNIQLOproject provides UNIQLO cares aboutitsworkers. Yet ifone Workers Empowerment Project declares that

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to regulate the human rights impacts of the competition fostered by the garment transnational corporations at the United industry. Workers understand the part that Nations through the UN Treaty process. they play in the garment supply chain. Labour The countries which are holding back the rights abuses are no longer seen in isolation, process are unsurprisingly the states that host but as an entrenched part of a global system the headquarters of the large multinational where millions of workers are getting the companies such as the UK, the USA and short end of the stick while profits of fashion countries in Europe. But there are other brands skyrocket. Workers are not asking for countries including South Africa, Indonesia, the boycott of brands. They are demanding China, India and Ecuador, together with more their fundamental right to freely organise in than 800 organisations,that support the move factories without repression or repurcussion. towards legally-binding accountability. Public pressure can create change: just One gain made in the garment industry has weeks after the Rana Plaza factory collapse in been the commitment of some fashion brands Bangladesh, brands were forced - for the first to transparency by publishing the details of time - to acknowledge direct responsibility their supply chain. This is critical for workers for workers in their supply chain. This case of and unions as this gives them information to responding to UNIQLO’s abuse of rights is hold fashion brands accountable for labour demonstrative of the power of international rights abuses. It also provides them with the solidarity among garment workers and power to lead targeted global campaigns. campaign groups – together a force to be Fashion brands like H&M, GAP and Marks reckoned with. & Spencer have released this information. Yet there are others that proclaim having commitments to workers' rights, like UNIQLO, which have refused to make their supply chains public. Many have cited a commercial Take Action! imperative for keeping these private – again putting profit before workers’ rights. Visit www.waronwant.org to: • Join War on Want’s campaign to The most tangible improvements in factory push UNIQLO to publish its supply conditions have been fought and won by chain information workers themselves with the support of unions and labour groups. Rhetoric in support • Demand that UNIQLO commit to of garment worker rights must be followed up paying a living wage to workers and by ensuring that workers gain access to the ensure they have the right to organise tools to fight for their rights. • Ask UNIQLO #whomademyclothes Knowing the factories producing for global fashion brands provides organised garment • Demand that UNIQLO provide workers with an unprecedented capacity justice for the illegally dismissed to directly target brands and demand workers at Artigas and Zhong accountability. In the context of increasing Yin factories access to communication, international solidarity among garment workers from different parts of the world is subverting 24 This Way to Dystopia: Exposing UNIQLO’s abuse of Chinese garment workers 4 3 2 1 Notes 14 13 12 11 10 9 8 7 6 5

investigations –several were done .greenpeace.org documents/Infographic-Chinese-exports-Feb15.pdf documents/Infographic-Chinese-exports-Feb15.pdf http://www.eulerhermes.com/mediacenter/Lists/mediacenter- www.cnga.org.cn/engl/about/Overview.asp type/20MajorProductsnTop5Countriesexeng.htm http://info.hktdc.com/hktdc_offices/mi/ccs/index_static_ manufacturing.html http://www.ibisworld.com/industry/china/apparel- tightening-grip tightening-grip chinese-wages-will-only-strengthen-asias-hold-manufacturing- http://www.economist.com/news/briefing/21646180-rising- China http://www.aflcio.org/Issues/Trade/China/Labor-Rights-in- wcms_325219.pdf ro-bangkok/---sro-bangkok/documents/ publication/ http://www.ilo.org/wcmsp5/groups/public/---asia/--- subsiding-with-unemployment-rising news/articles/2016-03-22/china-s-great-wage-boom-seen- manufacturing-tightening-grip; http://www.bloomberg.com/ rising-chinese-wages-will-only-strengthen-asias-hold- http://www.economist.com/news/briefing/21646180- environmental devastation andcausing were affecting thehealthofChineseworkers use ofhazardouschemicalsintheproductionprocessthat producinginChinawithreference tothe on fashionbrands www

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orait MasuoYokota journalist ‘The glor pdf http://www.fastretailing.com/eng/csr/report/pdf/csr2015_e. http://clothesforsmiles.uniqlo.com/en/ be taxfree holding sharesofothercompanies, itsstockdividends will In theNether pdf http://www.fastretailing.com/eng/csr/report/pdf/csr2014_e. csr2016_e_08.pdf#page=1&pagemode=thumbs&zoom=80 http://www.fastretailing.com/eng/csr/report/pdf/ http://www.uniqlo.com/uk/corp/model/ pdf https://www.fastretailing.com/eng/csr/report/pdf/csr2015_e. http://www.fastretailing.com/eng/csr/news/1501112030.html companies-world-2015 http://www.newsweek.com/green-2015/top-green- csr2016_e_08.pdf#page=1&pagemode=thumbs&zoom=80 http://www.fastretailing.com/eng/csr/report/pdf/ csr2016_e_08.pdf#page=1&pagemode=thumbs&zoom=80 http://www.fastretailing.com/eng/csr/report/pdf/ pdf#page=001 http://www.fastretailing.com/eng/csr/report/pdf/csr2014_e. http://www.uniqlo.com/en/csr/businesspartners/fwep/ http://clothesforsmiles.uniqlo.com/en/project/detail3.html lands, ifacompany fulfilsrequirementssuchas

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