Wednesday 14 January 2015

Uniqlo's Expansion In China Comes With A Cost

Trouble for Uniquo this week. The Japanese fast-fashion giant, making inroads in markets across the globe, is under fire following revelations of terrible working conditions in some of its factories.
Hong Kong-based activists SACOM (Students and Scholars Against Corporate Misbehaviour) have released photos and videos that show workers contracted to Uniquo working in factories with poor ventilation in 100 degree heat and sewage-drenched floors. Accusations are also rife that workers at the Southern China suppliers are desperately underpaid--in some case only a third as much as employees in other comparable facilities--and forced to work excessive amounts of overtime to make up a living wage.
In their release, SACOM said:
"Low wages, excessive working hours, unsafe working conditions, heavy fines, harsh management style and ineffective platform for expressing workers’ concerns are putting workers in a vulnerable condition."
The accusations could not have come at a worse time for Uniqlo, who are enjoying a boom in the Far Eastern market at the expense of rivals like Zara and H&M. The brand plans to open 100 stores in China alone in the next decade, and accusations of native workers being mistreated will not go down well.

In a response to SACOM, Uniqlo's parent company Fast Retailing said:
Fast Retailing first learned of the SACOM report at the end of last year, and we moved quickly in view of the serious nature of its claims, by conducting an independent inspection of both facilities. We confirm that, regrettably, the inspection found several problems including long working hours. On the other hand, while the inspection did not reveal some of the problems stated in the SACOM report, Fast Retailing and SACOM have different views on some of the issues described in the report. In view of this situation, Fast Retailing is continuing with the inspection, and we are requesting SACOM to open a dialogue with us as soon as possible.
Interestingly, SACOM notes that an employee at one factory told them a Uniqlo representative visited twice a week. If true, this points to Fast Retailing turning a blind eye to abuses up to the point where it was no longer expedient to do so without harming their image. Either way, this is a story that's worth keeping an eye on.
Read SACOM's full report here.

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