AMSTERDAM – Clean Clothes Campaign is continuing its campaign to pressure Japanese fast fashion retailer Uniqlo to compensate 2,000 Indonesian workers who lost their jobs when the factory they worked for – a former Uniqlo supplier – went bust. The ongoing dispute has now been going on for four years, with workers fighting US$5.5m they are owed in lost wages and unpaid severance. The length of the dispute and publicity it has generated offers evidence of the potential brand damage faced by fashion retailers if they cut and run from major suppliers.
Uniqlo, owned by Fast Retailing, is Japan’s largest clothing business. In April 2015 workers at the Jaba Garmindo factory in Indomesia were told their employer had gone bankrupt and their factory was closing. Millions of dollars were still owed to the mainly women workers, many of who had been employed at Jaba Garmindo for over a decade.
Uniqlo was a major buyer at Jaba Garmindo in the three years prior to its closure, representing almost 40 per cent of production in 2014. According to Clean Clothes, workers report that the arrival of the Japanese brand led to high targets, significant overtime and increased pressure to work faster than ever before. In bankruptcy proceedings Jaba Garmindo owners cited the practices of their buyers as a significant factor in the factories’ closure.
Labour rights activists claim Uniqlo has a “moral” responsibility to the workers and, among other things, cites the UN Guiding Principles on Business and Human Rights(UNGPs) which states that it is the responsibility of international operating companies to ensure human rights are respected in their supply chains, “through active prevention and mitigation of adverse human rights impacts.”
The NGOs also cite previous examples where companies such as Nike, adidas, H&M and Walmart have agreed to contribute to the payment of severance claims in cases where a supplier went bankrupt.
However Uniqlo’ parent company Fast Retailing claims it has no obligation to compensate the workers, claiming it cut business ties with PT Jaba Garmindo in October 2014 due to quality issues and it was several months after that the company went under.
Sam Maher from Clean Clothes Campaign said: “Uniqlo is desperate to be known as an important and influential player in the fashion industry. It wants to be Japan’s answer to H&M. However, such recognition brings with it an expectation of responsibility.”