2015GarmentCampaign

InvestigativeReportontheWorkingConditionsinUNIQLOsChinaSuppliers

January2015

InCoordinationwith

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InvestigativeReportontheWorkingConditionsinUNIQLOsChinaSuppliersJanuary2015

ByAlexandra Chan, Project Officer of Students & Scholars Against Corporate Misbehaviour(SACOM)

InCoordinationwithHumanRightsNow(HRN)andLabourActionChina(LAC)

Address:Students&ScholarsAgainstCorporateMisbehaviour(SACOM)P.O.BoxNo.79583MongkokPostOffice,HongKong

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Contents

ExecutiveSummary..1

Section1Introduction......41.1OverviewofGarmentIndustryinChina..41.2OverviewofUNIQLO..51.3InvestigationBackground&Methodology..6

Section2KeyFindings.82.1ExcessiveWorkingHoursandLowBasicWages82.2UnsafeandRiskyWorkingEnvironment....112.3HarshManagementStyleandPunishmentSystem.....222.4UnrepresentedWorkers...25

Section3ConclusionandDemands...27

Appendix1ContactInformationoftheFactories..28Appendix2AbouttheOrganizations.....29Appendix3FastRetailingCSRWorkplaceMonitoringFramework.30Appendix4BriefIntroductionoftheProductionProcessinGarment

andTextilesIndustry...31

Referencelist..32

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InvestigativeReportontheWorkingConditionsinUNIQLOsSuppliers

ExecutiveSummary

TheUNIQLOcampaignaimsatempoweringtheworkersbyunveilingthepoorlabourconditionsinChinaundertheglobalfastfashionsupplychain.Italsohasthestronghopeofarousingthepublicawarenessofthelabourissuesinthegarment industry.UNIQLOisaJapanesefashionbrandunderFastRetailingCo.,Ltd.whichhasbeenexpandingatanextremelyquickpaceandlargescale.Itsretailstoreskeepopeningallovertheworld,especiallyinChina.Apartfromitsgoodqualityandconsumer-friendlyprice,italsocomestoourconcernthatwhetheritscorporatesocialresponsibilityhasbeenfulfilledornot.Pacific(Panyu)TextilesLtd(hereafterPacific)andDongguanLuenthaiGarmentCo.Ltd(hereafterLuenthai)aretargetedwhicharethekeysuppliersofUNIQLOknitfabricsandapparelrespectively.TheyarelocatedinNanshaandDongguaninGuangdongprovince.

Herearethekeyissuesthatshouldbetackledassoonaspossible:

1.ExcessivelongworkinghoursandmiscalculationofovertimewagesPacificandLuenthaiofferthebasicmonthlypayasRMB1550andRMB1310fortheworkers,whichareonlypayingtheminimumwagelevelofGuangzhouandDongguangrespectively.Yet,theaveragemonthlysalarylevelofworkersinDongguangandGuangzhouareRMB2,505andRMB5,808respectivelyin20131.Workingovertimethereforeconstitutesanimportantpartoftheirtotalamountofthemonthlysalary,soastomakeendsmeet.Thenumbersofovertimeworkinghoursareshocking:134hoursinPacificand112hoursinLuenthai2.SomeworkersfromPacificareaskedtosignthevoluntaryapplicationofovertimework.Theapplicationstatesthattheovertimeworkis119.5hours.LabourLawArticle41stipulatesthattheworktimetobeprolongedshallnotexceed36hoursamonth.

Worsestill,theovertimepayinweekendismiscalculatedinPacific,whichisonly1.5timesofthebasicwageinsteadof2times.InLuenthai,theovertimeworkrecordonSundayandtheovertimeworkexceeds100hoursarerecordedmanuallyonpapersinsteadofthecomputersystem.Itcanbeseenthatfactoriescanavoidbeingcheckedbythesocialauditorsonworkersworkinghoursinthisway.

1 The figure is found at http://news.ifeng.com/a/20140713/41135455_0.shtml and http://tjj.dg.gov.cn/website/web2/art_view.jsp?articleId=7726 (only in Chinese)

2 The Chinese standard working hours per month is 174 hours (8 hours*21.75 days).The undercover investigation found that the average working hours in Pacific was 11 hours per day, excluding only 1 hour meal break for both lunch and dinner. And the workers have only 1 to 2 days off per month, resulting 308 hours (11*28) in total. In Luenthai, the average working hours is 11 hours per day and they work 26 days per months, summing the total of 286 hours (11*26).

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2.HighriskandunsafeworkingenvironmentEvenwithsuchlargescale,financialcapabilityandlongoperationhistory, theworkingconditionsinbothfactoriesarestillunsatisfactory.Workershealthandsafetyarenotat the toppriority.Extremehighshopfloortemperature,dirtysewageflowingalloverthefloor,unsafefacilities,poorventilationwithhighcottondust level intheair, irritatingsmell,highriskofelectricityleakageareposingseriousrisksonworkershealthandsafety.Forexample,occupationalasthma,respiratoryirritation,anddustexplosioncanbecausedinhighcottondustshopfloor.Thereisalsoanadverseeffectofusedchemicalsonhealthandtheriskofelectrocution.Yet,noeffectivemechanismisimplementedtotackletheseproblems.Picturesareputinsection2foraclearerunderstandingoftheproblems.

3.HarshmanagementstyleandpunishmentsystemInPacific,thereare58typesofregulationswhicharesetforpunishingworkers,41ofthemincludefines.Fines are heavily used as a way to control product quality and to manage workers. In reality, differentoperationfloorshavetheirownpunishmentsandruleswhicharenotspecificallystipulatedintheregulationsbutaresimplywrittenonthewhiteboardintheshopfloor.Forexample,intheknittingdepartmentofPacific,ifdefectedfabricsareknittedortheknittingmachinehasdirt,theworkersproductionbonusbonus3 willbededucted ,which is aroundRMB50-100. Luenthaiuses fines aswell.However, according to the LabourContract Law, it hasnot stated that the employershave any given right topunish employeesby adoptingdifferentmeanssuchasusingfines.

4.UnrepresentedworkersGeneralworkersfromthesetwoinvestigatedfactorieshavenoeffectiveplatformtovoiceouttheirconcerns.In Pacific, the chairperson of the union is the director of administrative department which violates theMeasuresfortheElectionoftheTradeUnionChairmanofanEnterprisearticle6,whichstipulatesthattheexecutivesincharge(includingdeputyexecutives)andpartnersofanenterpriseandtheircloserelatives,thepersons in charge of the human resources department shall not be the candidates for the labor unionchairman of the enterprise. Also, it violates Article 7 of the Measures of Guangzhou Municipality onImplementingtheLawof thePeoplesRepublicofChinaonTradeUnions.ForLuenthai, thereisnotradeunionatthefactorylevelbutaworkerscommitteegroupandemployeerelationdepartmentinthefactory.However,itisanineffectivemeanstofacilitateworkerstoexpresstheirconcerns.

3 Most of the factory workers in China receive production bonus if he/she can reach certain production target set by the factory. In Pacific, the average production bonus per day in knitting department is RMB 30-60.

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WedemandtheSuppliers: Toprovideatleastonerestdayeveryweekforworkersandlimitthemaximumovertimeworkto36

hoursamonth; TopayovertimeaccordingtotheChineseLabourLaw; Toreformmanagementstyletorespectworkersdignity; Toensureworkerscanhaveappropriatebreaksregularly; Toprovideadequatetrainingconcerningthehealth,safety,andprotectionoftheworkers,andensure

theworkerstotakeregularhealthcheckups; Totakeallthenecessarymeasurestoensureworkershealthtobeprotectedfromtheharmfulchemicals

usedintheproductionprocessandmakeitpubliclyavailabletheoutlinedmeasuresaswellastheimplementation

WedemandFastRetailing: Tofacilitatethesuppliersontheimprovementintheworkingconditionsbyprovidingadequate

resources;

Tocomplystrictlytotheircorporatesocialresponsibilitiespolicies; Tosupportthesetupoffullyworker-representedtradeunionintheirsupplierbydirectanddemocratic

election; Tomaintaintransparencytopublicbydisclosingfullsupplylistwheretheirproductswere

manufactured

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Section1Introduction

1.1OverviewofGarmentIndustryinChina

Sincetheopendoorpolicyin1979,thecentralgovernmenthasastrongwilltomakethetextileandgarmentindustry akey anchorof thenationseconomy.Promptedby thebusiness-friendlypoliciesandsupportiveforeign investment, theexportvolumeof the textileandgarmentproducts increasedquickly. In1980, thisindustry exported US$ 4.41 billion which was only 4.6% of the world exports and ranking at the ninthposition in theworld. In1995,Chinasexportof textilesandgarments rankednumber1 in theworldandChina has maintained its first position ever since4.The exports volume continues to increase. However in2008,duetothefinancialcrisisandtheovercapacityoftheindustry,theexportdropped11%inthefirstfivemonths of 20095. Though affected by the crisis, China garment industry is still the leader in the globalgarmentexportindustryandthemanufacturershavebeengainingshareoftheglobalexportmarketyearbyyear.According to statistics, there aremore than100,000 garmentmanufacturers inChinawhich employover10millionpeople.In2012,Chinamadealtogether43.6billionpiecesofgarmentswithanexportvalueat$153.219billionandsalesvalueat1.7trillionRMBatdomesticmarket6.TheClothingexportsofChinatookupalmost40%ofthetotalglobalclothingexportsin20107.Chinaclothingindustryisstillanexportgiantintheglobalclothingeconomyandstronglyaffectingtheliveofmillionsofworkersintheindustry.

Though the labour cost in China is keep increasing compared to the Southeast Asian neighbours such asVietnam,Cambodia,BangladeshandIndiainthisdecade.ThelowerlabourcostsinotherplacesdoattractforeigninvestmentawayfromChina,buttheChinagarmentindustrystillhasitscompetitiveness.Notonlywith thirty yearsexperience inoperation,Chinahasalsodevelopedwell-connected transport logisticsandinfrastructurethanotherAsiancountries. Itsqualitycontrol&managementandtechnicaladvancementonproductionareaheadofotherneighbors.

Meanwhile,itisalsonoticeablethatsomefactoriesarerelocatingfromthecoastalareastotheinlandregionofChinainrecentyearsbecauseofthecheaperlabourcost.Sincetheminimumwagesincoastalregionsarefarhigher than the inland regions, factories are startingmoving to inland industrial towns.Unfortunately,even though theminimumwage is increasing inChinaandhas surpassed theSoutheastAsiandevelopingneighbors in recent years, it is bynomeans a livable income.Onlyby livingwith theminimumwage isnever able to make ends meet for the general workers. Therefore, overtime work is always the key

4 China Textile and Clothing Industry, P5, 2005, Larry D. Qiu 5 Globalisation Monitor, The fallout on Chinas Textile and garment industry in the wake of the end of

Multi-FibreAgreement, February 2010. 6 An Overview of Chinas Garment Industry, National Garment Association at

http://www.cnga.org.cn/engl/about/Overview.asp 7 The Statistics is quoted from China Textile Industry Development Report edited by China National Textile

and Apparel Council (2012).

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componentofworkersmonthlysalaryintheindustry.Workershavenotyetabletosharetheeconomicfruitoftheindustry.Instead,theytoilovertoearnaliving.

1.2OverviewofUNIQLO

ChinaistheproductionsiteofmanyfastfashionbrandssuchasH&M,Zara,GapandUNIQLO.UNIQLOisthenewsuperstar in theglobal fast fashionstageand its retail stores are increasing inAsia, especially inmainlandChina.OwnedbytheFastRetailingCo.,Ltd.,thisJapanesebrandhassuccessfullysweptacrossboth the western and eastern market. Its retail stores are operated in almost every cosmopolitan citythroughouttheworld,suchasFrance,Germany,Shanghai,UK,US,Australia,Russiaetc.Ithas861storesworldwidenow8.Itsambitiontoboostastronginternationalcustomerbaseisveryexplicitthatthenumbersofretailstoresiskeepincreasingandexpandinginscale.InFebruary1999,itwaslistedonthefirstsectionofTokyoStockExchange9.Then,itpursuedthesecondarylistingofHongKongDepositaryReceipts(HDR)onthemainboardoftheStockExchangeofHongKongLimitedin2014.UNIQLOisfamousforitsfriendlyaffordablepricewithgoodproductquality.Ithasroughly70partnermanufacturersworldwide10 andaround70%ofproductsaremadeinChina11.TheexpansionofretailstoresinternationallysuchasinChina,HongKong,TaiwanandEuropehassuccessfullygeneratedsalesof125.0billionandoperatingincomeof13.5billionintheyearof2013,whichhasanincreaseof64%comparedtolastyear.ForUNIQLOJapan,itisthenation's largestapparel retailchainwitha5.5%shareof the10.7 trillionJapaneseapparelmarket,andanetworkof852storesatendofAugust2014generatingannualnetsalesofover715.6billion.12 UNIQLOisunquestionablythegrowinggiantinthecasualwearindustrywithagreatmarketvalue.Accordingtoitsintroduction,UNIQLOisproudofitsabilitytoprovidelow-priced,high-qualitybasiccasualwearwhilealsogeneratinghighprofits.Lifewearistheconceptofthebrandwhichcarriesaphilosophybehind:Clothesforabetterlife,foreveryone,everyday.Inits2014CSRreport,theCEOTadashiYanaistressesthatthemostimportantmissionistouseourbusinesstochangetheworldforthebetter,toimprovethelivesofpeoplearoundtheworldandchangesocietyforthebetter.Meanwhile,TadashiYanairankedastherichestmanintheForbesJapanRichListwithanetworthofUS$15.5billionin201313.

Itisalsoputtingthemonitoringofworkingconditionsandprocessesatproductionpartnersitesasthekey

8 Company Introduction at http://www.fastretailing.com/eng/group/strategy/japan.html (last updated on 31/10/2014)

9 The first section is for the large companies. 10 Fast Retailing CSR report 2014, p8, at

http://www.fastretailing.com/eng/csr/report/pdf/csr2014_e.pdf#page=1&pagemode=thumbs&zoom=80 11 UNIQLO Business Model, Partner Factories at

http://prd01-tky-web-main-fastretailing-62349252.ap-northeast-1.elb.amazonaws.com/eng/group/strategy/uniqlobusiness.html

12 UNIQLO Sales Revenue at http://www.fastretailing.com/eng/group/strategy/japan.html 13 Forbes: UNIQLO founder Tadashi Yanai is Japans wealthiest man, at

http://www.gmanetwork.com/news/story/302326/economy/business/forbes-uniqlo-founder-tadashi-yanai-is-japan-s-wealthiest-man

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challengeinitscorporatesocialresponsibilityproject.Pre-contractmonitoring,regularmonitoringandfactorygradingsystemare itsworkplacemonitoringframework14.FastRetailing(FR)suppliershave tosubmitawrittenpledgetoupholdtheFRCodesofConducts.FRCodesofconductshassomekeyguidelinessuchasprohibitionofchildlabour,setslimitsonovertimework,freedomofassociationetc.Theworkplacemonitoring findingsarealsoput in theCSRreportwhichshow thatchild labourand false reportingwerefoundinChinaproductionpartners15.

ItsCSRreport looks transparent to thepublicon themonitoringfindingsandgives readersan impressionthatallUNIQLOsuppliersarestrictlyselectedandcloselymonitored.ItcomestoourconcernthatwhetheranyotherUNIQLOsuppliersmisbehaviorhavenotyetbeendisclosedindetailtotheconsumers.

1.3InvestigationBackground&Methodology

Background:Students & Scholars Against Corporate Misbehaviour (SACOM) is a labour NGO based in Hong Kongaiming to monitor the operations of multinational companies in China. SACOM has been initiatingcampaignsandcreatingpublicawarenessabout theviolationsofworkersrights inChinasince2005.TheinvestigationintothetwosuppliersofUNIQLOinChinawasfirstinitiatedbySACOM.Inmidof2014,theprojecthascoordinatedwithLabourActionChina(LAC)andHumanRightsNow(HRN).LACisaHongKong based labour NGO that promotes labour rights in China and was established in 2005. HRN isTokyo-basedinternationalhumanrightsNGOwhichconductedafactfindingtriptogetherwithSACOMforverifyingthevalidityofthefactoriesfindingsinChinainlateSeptember.

UNIQLOisacasualwearbrandwhichhasbecomeaglobalbrandwithover800storesallovertheworld.Itis a member of Fast retailing which was listed on the Hong Kong stock exchange in March 2014. BothUNIQLO Japan and UNIQLO international gained rising sales in 2013. For example, UNIQLO Japansprofitexpandedto106.3billionyenandUNIQLOinternationalsprofitsroseto32.9billionyen,whichis165.1%increaseoflastyear16.Oneofthefeaturesofthisfastgrowingbrandisthat,althoughitisaJapanesebrand,itdoesnothaveanyfactoriesinsideJapan;roughly70%oftheproductsaremadeinChina17.Withsuchhighprofitsrevenueandenjoyingtheleadingpositionintheindustry,webelievethatUNIQLOshouldhave the capacity and resources to ensuredecentworkingcondition in every suppliers.TheBangladeshsRanaPlazacollapse in2013has indicated that corporations seem toputprofitsbeforeworkers. It ishigh

14 Please refer to Appendix 3 15 Fast Retailing 2014 CSR report, p14, can be downloaded at

http://www.fastretailing.com/eng/csr/report/pdf/csr2014_e.pdf#page=1&pagemode=thumbs&zoom=80 16 Fast Retailing Year End Report 2013/14, p12, can be downloaded at

http://www.hkexnews.hk/listedco/listconews/sehk/2014/1125/LTN20141125031.pdf 17 Fast Retailing CSR report 2014, p8, at

http://www.fastretailing.com/eng/csr/report/pdf/csr2014_e.pdf#page=1&pagemode=thumbs&zoom=80

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timeforustobehighlyawareofthepotentialrisksintheworkingconditionsofthegarmentmanufacturers.

Methodology:Inthebeginningof2014,SACOMhasstartedthepreliminaryresearchofChinagarmentindustryandthesupplychainsituationofUNIQLO.Afterstudyingandanalyzingtheinformation,SACOMselected2keysuppliersofUNIQLOwhicharePacificandLuenthai inGuangdongprovince.The twofactoriesarebothHongKongcapital.Established in1997,Pacificwas listedon theStockExchangeofHongKong(SEHKcode:1382)inMay2007.ThemanufacturingfacilitiesarelocatedinPanyu,SouthChina,withatotalfloorspace of approximately 294,400 square meters18. It provides an integrated service of knitting, dyeing,printing and finishing, with an annualproduction capacity around87 millionkilograms.More than6,500staffisemployedintheproductionsections19.Accordingtothenews,theorderfromUNIQLOconstitutesaverycrucialpartinPacificsbusiness.Also,PacifichasonceplannedtocooperatewithUNIQLOin2010toestablishafactoryinBangladesh,whichtheprojectwasestimatedtocostabout100millionUSDdollars20.Pacific is also a key fabric supplier for Crystal Group, which has 17-year business partnership with FastRetailing21.PacifichasalsobeenhighlightedintheexampleofOnetablemeetingsmanagementmethodinthe2014CSRreport22.

LuenthaiisanotherleadingmultinationalcorporationinthegarmentindustrywhichwasestablishedbyDr.TANSiuLin in1993.Theyproduceover131millionunitsofgoods,suchascasualandfashionapparel,shoes, and accessories annually. With annual revenue of over US$1.2 billion, Luenthai has about 45,000employeesworldwide.Theyoperatesalesanddesignoffices,manufacturingfacilities,andlogisticsstationsinHongKong,China,Philippines,Cambodia,Indonesia,Vietnam,andUSA.Someinterviewedworkerstoldresearchers that therewere someworkers strikes inprevious yearsdemandingbetterwages andworkingconditions.

FromJulytoAugust,SACOMinvestigatorsworkedasthegeneralworkersinthetwofactoriesforcollectingprimary data regarding on the working conditions. Documents related to working conditions such asworkers contracts, salary slips, working hours records, rules & regulations, disciplinary fines etc. werecollectedduringtheinvestigationperiod.Besidesundercoverinvestigation,morethan30qualitativeworkersinterviews were also conducted by other field researchers in the nearby environment of the factoriesincludingdormitories,restaurantsandfoodstands.TheseintervieweescomefromdifferentdepartmentssuchaswarehouseanddyeingdepartmentinPacificaswellasknitting,finishing,cuttingdepartmentsinLuenthai.Throughthisopen-endedinterviews,mostworkersspokeopenlyabouttheirlowwages,longworkinghours,

18 Manufacturing Facilities, Business, Pacific Textiles Holding at http://www.pacific-textiles.com/businesses_facilities.php?id=1

19 Corporate Profile at http://www.pacific-textiles.com/aboutus.php 20 The new is found at http://www.rthk.hk/efinance/interview/20100114_2141_640318.html (only in Chinese)21 Strong Partnerships Throughout the Supply Chain, Fast Retailing 2014 CSR Report, p9 22 One table meetings is the meeting between UNIQLO, fabric manufacturers and sewing manufacturer on

exchanging technologies and expertise.

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unsatisfactoryworkingenvironmentintheirshopfloors,theperformanceofthetradeunionsandtheharshmanagement style. In late September, representatives from SACOM and HRN went to the sites for afact-findingmission. In-depthworkers interviewsweredonewithworkers from thedyeingdepartment inPacificandironingdepartment inLuenthai toverifytheinformationcollectedinearlierperiodof time. Inmid-November, SACOM investigator investigated into the factories again for getting the most updatedsituationintheshopfloors.

Section2:KeyfindingsfromPacificandLuenthai

2.1Longworkinghoursandlowbasicsalary:alongdistancetoadecentwageExtremelylongworkinghoursandalowbasicmonthlysalaryarealwaysthetwocoreissuesthatcorrelatewitheachotherinthegarmentindustry.Becauseofthewagestructure23 andthelowbasicmonthlysalary,itleadstoexhaustinganddemandingworkinghoursforthegarmentworkersfromthesetwofactories.

ThefactoriesofferthebasicmonthlypayofRMB1550andRMB1310fortheworkers,whichareonlytheminimumwageofGuangzhouandDongguang, respectively. In2013, theaveragemonthly salary levelofworkersinDongguangandGuangzhouwasRMB2,505andRMB5,808,respectively24.Thebasicmonthlysalaryofferedbythetwofactoriesisjustaroundone-thirdoftheaveragemonthlysalarylevelinthecities.Worsestill,theproblemofinflationisaddingtothefinancialburdenoftheworkingclass.Forexample,theConsumerPriceIndex(CPI)inDongguangfromJanuarytoSeptemberin2014increased2.6percent25.Tofillthisgapandtocompetewiththeinflationinmarket,theworkershavetoworkovertimehourssimplytomakeendsmeet.Forworkerswhosebonusisinpiecerate,itisimportanttoworkasmuchastheycaninordertoearnmore.ItwasfoundthattheaveragemonthlysalarylevelofworkersfromPacificandLuenthaiis around RMB 2500-4000. Working overtime constitutes an important part of their total monthlysalary.Oneof the workerswhoworks in an ironing section at Luenthai saiditwasall inpiece rate, itdependsonhowmanyshirtsIcaniron.IfIdon'tfinishenoughpiecesIwon'tearnenoughmoney.Becausethepiecerateforeachshirtissolow,Ican'tmakemuchmoney.

Thefiguresofthenumberofovertimeworkinghoursfromboththefactoriesrevealtheseriousnessofthematter.TheChinesestandardworkinghourspermonthis174hours(8hours*21.75days).TheundercoverinvestigationfoundthattheaverageworkinghoursinPacificwas11hoursperday,excludingonly1hour

23 Most of the workers salary are counted as basic monthly pay plus overtime pay. After reaching the productivity target, they could have productivity bonus based on piece rate.

24 The figure is found at http://news.ifeng.com/a/20140713/41135455_0.shtml and http://tjj.dg.gov.cn/website/web2/art_view.jsp?articleId=7726 (only in Chinese)

25 The figure is found at Dongguang Statistics Information website: http://tjj.dg.gov.cn/website/web2/art_view.jsp?articleId=8126 (only in Chinese)

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mealbreakforbothlunchanddinner.Andtheworkershaveonly1to2daysoffpermonth,resulting308hours(11*28)intotal.InLuenthai,theaverageworkinghoursis11hoursperdayandtheywork26dayspermonths,summingthetotalof286hours(11*26). Itmeans134averageovertimeworkinghours inPacificand112averagehoursinLuenthai.

Figure 1 has showed that some workers have to sign the voluntary application of overtime work. Theapplicationstatesthattheovertimeworkis119.5hoursandthereasonistheneedofthework.Itisironicthat the total overtime working hours have already exceeded 119.5 hours before signing such anapplication. Moreover, figure 2 is the notice paper that states how the overtime payment in weekends iscalculated inPacific.According to thepaper, theovertimepayonweekend inPacific iscalculatedat1.5times the basic wage instead of following Labour Law Article 44 which states that overtime pay on theweekendshouldbe2timesofthebasicwage2627.WorkersfromLuenthaiirondepartmentworkdailyfrom7:30am until 10:00pm. They sometimes work on Sunday too28. Moreover, investigators noticed that theovertime work record for Sundays and when overtime hours exceed 100 are recorded manually on paperrather thanby thecomputersystem.Figure3 is theevidence thatovertimehoursare recorded inseparatepaper.Itisseeminglytoavoidbeingcheckedbysocialauditorsontherealworkinghoursforworkers.

Testimony1:I work from the early morning until late 10pm. I sometimes even work until11:00pm.Ihavetoiron600-700piecesofshirtsperday,buteachoftheshirtsfromUNIQLOisonly0.29RMB. In thepeakseason,Icaniron900piecesofshirtsinoneday.IsometimesworkonSundaytoo!Thepiecerateisreallytoolowforus.Butitisveryhardtoincrease.-IronworkerfromLuenthai.

26 Article 44 The employer shall pay labourers more wage remunerations than those for normal work according to the following standards in any one of the following cases:

(1) Wage payments to labourers no less than 150 per cent of their wages if the labourers are asked to work longer hours; (2) Wage payments to labourers no less than 200 per cent of their wages if no rest can be arranged afterwards for the labourers asked to work on days of rest; (3) Wage payments to labourers no less than 300 per cent of their wages if the labourers are asked to work on legal holidays.

27 Overtime pay on weekdays (mon-fri) is 1.5 times the basic wages. Overtime on weekend is 2 times the basic wage. Overtime on public holiday is 3 times the basic wages, which

stated in labour law Article 44 28 Workers do not swipe card on Sunday and the working record is recorded manually.

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Testimony2:Icanearn4000RMBpermonth.Mywifeisalsoworkinghere.ButIstillthinkthesalaryisinadequateforusbecausewehavetospendalotoneducationfeesforourkidwhoisinhighschoolnow.Also,weneedtosend2000RMBpermonthbackhome!ThelivingcostinNansha(Panyucity,Guangzhou)isgettinghigherandhigher.Ihopetoget5000RMBpermonth.-Maleworkerinthedyeingdepartmentwhohasbeenworkinginthefactoryfor12years

Testimony3:Themachinewillneverstopsoafterthedayshiftworkersfinishwork,thenightshiftworkerswillcome,andthemachinekeepsgoing.Soatleast12hoursaround12hourseveryday.-Maleworkerinfabricdepartmentworkingfor4.5years

AccordingtoLabourLawArticle36,thelimitofworkinghoursis8hoursperdayand44hoursperweek.LabourLawArticle38alsostatesthattheemployershallguaranteethatitslabourershaveatleastonedayoffaweek.Moreover,inArticle41,itstipulatesthattheworktimetobeprolongedshallnotexceed36hoursamonth.Thesefactoriesbreakeveryrulementionedabove,aswellastheCodesofconductsofFastRetailingthatworkinghoursshouldbelimited.Eventhoughworkersarenotforcedtoworkovertime,withalowbasicpaywithwhichtheycannotsupportthemselvesandtheirfamilies,theyareindirectlypushedtoworklongerandproducemore.Despitebeingsuchlarge-scalefactorieswithlongoperationhistoriesandstablefinancialsituations,PacificandLuenthaistilldonotabidebytheLabourLawofChinaandprotectworkersbyprovidingadecentlivingwageandallowingworkersahealthysociallife.

Figure1:Thevoluntaryapplicationofovertimeworkstatestheovertimeworkis119.5hours.

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Figure2:Theovertimepayonweekendis150%ofthebasicpaywhichshouldbe200%.

Figure3:OvertimehoursonSundayinLuenthaiarerecordedintheseparatepaper.

2.2HighriskandunsafeworkingenvironmentWorkersareworkinginariskyenvironmentinbothfactories.Anumberofpotentialriskswerefoundduringourinvestigationintheoperationfloors,whichcouldleadtopossiblework-relatedinjuriesoroccupationalhealthproblems.Therisksincludehightemperature,sewageflooringalloverthefloors,electricityleakage,irritatingodors,highcottondustlevelintheair,andfiresafetyissues.

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KnittingshopfloorinPacific: A.Climbingoverthestool Workersfromtheknittingdepartmenthavetostandonastool,whichisapproximately2meterstallwithonestepladder,toplacedifferentcynicalyarnsintodifferentpartsofthecircular-shapedknittingmachines.Figure4clearlyillustratedthisaction.Investigatorssawanumberofworkersfalldownfromthestoolwhileputtingtheyarnintothecorrespondingpartsofthemachines.Iteasilyoccurswhenworkersarerushingforproductivity due to high working pressure. Workers have to climb over the chair to put the yarn in thedifferentcorrectplaces.Usually, theyhave toplace around44 yarns and44nylon,eachofwhichweighsaround 2-3kg. Each worker also takes care about 4-6 knitting machines simultaneously. Under such highworkintensity,work-relatedinjuriessuchasfallingfromthestooldohappeneasily.Investigatorssawafewworkersfelldownfromthestoolduringwork.

Figure4:Workerhastostandonastoolduringtheknittingprocess.Theyeasilyfallfromthestoolsasinvestigatorsobserved.

B.Intolerablehighroomtemperature Investigatorsnoticedthatmanymaleworkersweretoplesswhileworking.Femaleworkersalsoretainedsweat spots on their uniforms. The temperature on the knitting shop floor is around 38 degrees Celsiusduringthesummertime.Therearenoair-conditioners.Inreality,workersarenotonlyrequiredtoplacethe

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yarnsbutalsotosolveallthetechnicalproblemsrelatingtothemalfunctionsoftheknittingmachinesduringtheknittingprocess.Itaddsalotofpressuretotheworkers.

Interviewedworkerstestifiedthatsomehavefaintedinsummerbecauseitstoohot.andtheconditionislikeahell.Infact,hightemperatureallowanceisprovidedtotheseworkers.However,itisaround$7perday,or$100-$150permonthwhichisactuallynothingforworkers.

Figure5:Toplessworkerissweatingwhilefixingtheproblemsduringtheknittingprocess

C.Highcottondustlevelintheair:HealthHazardsandSafetyHazards Thefabricknittingprocessesalargeamountofcottondust29 intheair.AccordingtotheHealthandSafetyExecutive in theUnitedKingdom,cottondustscancausebyssinosis,occupationalasthmaand respiratoryirritation30.Chronicexposuretocottondustcanleadtolungairwayobstructionandhasleadtodisabilityandprematuredeath.Thereisadirectcorrelationbetweenthecontactofcottondustandbyssinosis,whichmaybefatal31.Moreimportantly,finedustdispersedinairinsufficientconcentrationsandinthepresenceofanignitionsourceisadustexplosionhazard.Cottondustiscombustibleandexplosive.Forexample,in1987,themostcatastrophicdustexplosion incident ina textileplant inHarbin,Chinacaused58death and177injuries. Inthisyear,a textilefactoryinGuangdonghaddustexplosioninitsaccessoriesshopfloor too32.Therefore,thehighdustlevelintheairoftheshopfloorisbynomeansatrivialissuetobetackled.

DyeingShopfloorinPacific:

A.Highroomtemperature&nopropersafetyfacilities

29 Cotton dust is defined as dust generated into the atmosphere during processing of cotton fibers combined with any naturally occurring materials such as stems, leaves.

30 Why Dust is a problem, Health and Safety Executive, at http://www.hse.gov.uk/textiles/dust.htm 31 Occupational Safety and Health guideline for Cotton Dust, US Department of Health and Human Service,

at http://www.cdc.gov/niosh/docs/81-123/pdfs/0152.pdf 32 The new is at http://big5.news.cn/gate/big5/www.js.xinhuanet.com/2014-08/08/c_1111991305.htm

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Workersworkverycloselytothedyeingtankwhichoperatesataveryhightemperature.Thetankcanreach100-135degreeCelsius,andworkershavetostandnexttothedyeingtanktopullheavyfabricsinsidethetank. Figure 6 can be referred. The weight for the fabrics can reach to 600kg. Figure 7 showed that theworkersalsoneedtopullthedyeingpigmentsintothetankwhichisalsoveryheavy.Thetemperatureoftheroomcanalsoreachtoaround38-42degreesCelsius.Also,workersmustworknexttothehotdyeingtankwithoutanyenclosureorgatesurroundingthetanktominimizetheriskofwork-relatedinjuries.

Figure6:Toplessworkerisputtingpigmentsintothetank.Therearenoprotectivemeasuressurroundingthehottank. Theworkerdoesnothaveanyprotectiveequipment,either.

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Figure7:Workerhastohandlesuchheavyfabricsonhisown.

B.WetfloorwithsewageThesewageisflowingallovertheshopfloor.Theslipperyfloorcouldleadtowork-relatedinjuriessuchasworkers fall on the slippery floor and become disabled. According to the interviewed worker, there wasworkerdiedbecauseof the electricity leakage from themachine in the finishing shop floor in July2014.Thus, the machines have the potential risk of electricity leakage which is especially dangerous when thesewageisflowingalloverthefloorasworkerscouldgettheelectricshockeasily.Yet,therearenoobviousmeasures to remedy the problem. Investigators also found that the nearby environment of the sewagetreatmentfacilitiesisfilledwithdisgustingsmell.Thiscouldaffectthelifeofworkerswhoarelivinginthenearby dormitories or rented apartments due to the smell. Figure 8, 9 and 10 showed the seriousness ofsewageproblemintheshopfloors.

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Figure8:Dangerousslipperyfloor:highriskofworkinjuries.

Figure9:Sewagealloverthefloor

Figure10:Sewageisflowingalloverthefloor

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C.Irritatingodourandthepotentialrisksofchemicals Inorder todye the fabrics,differentkindsofchemicals, solvents,dyeingmaterials,pigmentetcmustbeused.Investigatorsfoundthattheshopfloorisfilledwithveryirritatingsmell.Yet,theventilationsystemisnoteffectiveatall.Figure13showedthesolventsusedinthedyeingprocess.Also,figure14showedirritantand toxic chemicals labeled in A569 PTEG and A203 PT200 are used. PTEG is a degreasing agent forremovingoilandgreasefromthefabric.Accordingtothelabelinfigure14,itisirritanttoeyesandskin.Ifworkersbreathein,he/shecanbepoisoned.PT200isalevelingagenttocontrolexhaustionofthedyesothatitistakenupevenlybythefabric.Accordingtothelabelinfigure14,itisalsoirritanttoskinandeyes.Thefactory does provide workers protection kit such as masks, gloves, and a special suit when necessary.Whethertowearthoseornotdependsonwhichchemicalsorsubstancestobehandled.However,duetothehot temperature in thedyeing room,which couldbeup toover40degreesCelsius, it isworkerschoicesafter all whether to put the protective equipment. As a consequence, some workers do not use thoseprotectionmeasuresatall.Aninterviewedworkerstatedthatthefactorydoeshaveallkindsofpolicies,butreallywhethertheycanimplementitisanotherproblem,isanotherissue.Someworkersactuallydontweartheprotectivemeasuresbecausetheyfeellikeitsinconvenienttoworktheseworkersactuallydonothavea strong sense of awareness of the danger of the chemicals that they are actually using in the dyeingprocess.

Moreover, they have to work under such irritating smell for at least 12 hours per day, without effectiveprotectivemeasures.Workersindyeingdepartmentusuallywearrainbootsfortheslipperyfloorbuttoplessbody and work with bare hands. Worse still, the chemicals are not put in an organized manner and thesewageisevenflowingintothetheroomwherepoisonouschemicalisplaced.

Figure11:Thechemicalsdonotplaceproperlybutsimplyputtingtogetheronly.

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Figure12:Sewageisleakingintothedoorwherepoisonouschemicalisstored inside

Figure13:Thelistofsolventsusedinthedyeingprocess

Figure14:Workershavethepotentialhealthriskunderregularcontactwithchemicals

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Luenthai:A.Dustyshopfloorwithpoorventilationsystem

Incuttingandsewingdepartment,itisaverydustyenvironment.Thecottondustcomingfromthesewingandcuttingprocess are alsohighly concentratedon themachines, aswell as in the air.There is a centralconditioning system but investigators found that it is always switched off. Therefore, under such poorventilationsystem,thedustandthefabricfragmentscannotdiffusetotheotherarea.Workersreflectedthattheirnoseandhandsarefullofdustandfabricfragmentsafterwholedayofwork.Thehandsoftheworkerswhoareresponsibleforsewingthedenimshirtsareallturnblueaswell.SimilarasPacific,adustyworkingenvironment has nothing good for the workers. It leads to both health and safety hazards as mentionedpreviously.

Figure15:Centralair-conditioningsystemisclosedandfullofdust.

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Figure16:Fullofdustoverthemachines

Figure17:Dustyshopfloor

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Figure18:Dustyshopfloorincuttingdepartment.

Figure19:Bluehandsofworkerswhosewdenimfabrics

B.HighworkintensityinapoorworkingconditionIn the ironingdepartment,workers are requested to stand forkeepingup their spirit towork.Under suchlong working hours, workers feel very exhausted. Furthermore, the iron is in high temperature, which isshowninfigure21.Togetherwiththedustfromthefabrics,itisnotadecentworkingconditionforworkers.

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Theironworkersreflectedthattheyevencouldnotreceivethemaskfromthefactory.Workerscouldonlygetfromothershopfloorsuchasthecuttingdepartment.

Figure20:Workersmuststandduringironing.

Figure21:Theironisover200degree.

2.3HarshmanagementstyleandpunishmentsystemProductqualityanddeliverydatearealwaysthetopconcernsoftheinvestigatedfactories,particularlyunderthe heavy pressure from the buyers (brands). However, it leads to an extreme high pressure workingenvironmentandthefrontlinegeneralworkersaredirectlyaffectedbydifferentkindsoffineswhicharesetbythefactoriestopunishworkersonmakingdefectedproducts.

In Pacific, there are 58 types of regulations which set for punishing workers, 41 of them include fines.Fines are heavily used as a way to control product quality and to manage workers. In reality, differentoperation floorhas itsownpunishmentsand ruleswhicharenot specifically stipulated in the regulations.Someregulationsaresimplywrittenonthewhiteboardoftheshopflooronly,figure24canbereferred.Withsuch lowtransparencyandpunitivemanagementstyle,workersareput inaveryvulnerablesituation.For

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example, in the knitting department, different heavy fines are used to control and maintain the productquality. Ifdefected fabricsareknittedor theknittingmachinehasdirt,workersproductionbonuswillbecancelled,whichisaroundRMB50-100.Ifworkersarefoundtakingrestornapoutsidethespecificmealbreak(30minuteseachforlunchanddinner),RMB100willbedeductedfromthebonus.Afinepaymentsliphastobesignedbyworkerstoo.Itstatesthreethings:themistake,theamountoffinesandthesentenceIacknowledgedbymistakes,IacceptedthepunishmentandIwillnotdoitagainwhichisshowninfigure22.Undersuchhighworkingintensity,itisreasonableforworkerstotakepauseduringwork.However,themanagementtreatsworkersasmachineswhohavetokeepfunctioningwithoutabreak.

Similar to Pacific textiles, LuenThai has a penalty to the workers in some departments. Even though theintervieweewasnotawarewhetheritwasactuallyarticulatedinaworkersregulationinthespecificwayinwhichhewaspunished,hefacedaharshpenaltyinapast:hisentirewageofthedaywasseizedwhenhewascaughtattemptingtoiron2sleevesatonetimeasopposetoirononesleeveeachtime.Thisquestionstheproportionalityandappropriatenessofthesanctionandindicatesthatdecisionsareoftendiscretionofthemanagers,whichintervieweesagreedon.

InvestigatorsweretoldbytheexperiencedworkersthatUNIQLOandotherbrandsoftenvisittheshopfloorsforproductqualitychecking.WorkerfromtheirondepartmentinLuenthaitoldthatoneveryTuesdayandThursday,representativesfromUNIQLOwouldappearintheshopfloor.Investigatorsweretoldbyasewingworker that the requirements of UNIQLO on the products are very harsh. Whenever they find any smallproblems,theywillblametheproductiondirector.Thedirectorwillimmediatelyblamethegeneralworkers.If mistakes are found, RMB50-500 is also deducted. Yet, this punitive system does not mention in theworkers handbooks. Workers are not fully informed before start working in the positions. Workers inLuenthaiarealso told that theyhave towear fullprotectivemeasuresandkeepsilentwhencustomersarehere.Workersalsohavetocleantheshopfloorswhenbuyerscome.Furthermore,ifworkersarelatefor8minutes,twohourswagesaredeductedaswell.

AccordingtotheLabourContractLaw,ithasnotstatedthattheemployershaveanygivenrighttopunishemployeesbydifferentmeanssuchasusingfines.Yet,intheArticle4ofthelabourcontractlaw,whereanemployer formulates, amends or decides rules or important events concerning the remuneration, workingtime, break, vacation, work safety and sanitation, insurance and welfare, training of employees, labordiscipline,ormanagementofproductionquota,whicharedirectlyrelatedtotheinterestsoftheemployees,suchrulesorimportanteventsshallbediscussedatthemeetingofemployees'representativesorthegeneralmeetingofallemployees,andtheemployershallalsoputforwardproposalsandopinionstotheemployeesandnegotiatewiththelaborunionortheemployees'representativesonaequalbasistoreachagreementson these rules or events. Hence, these numerous types of fines in shop floor are directly affecting themonthlysalaryofworkers,whichissurelytheinterestsoftheworkerswell-being,shallbediscussedbutnotenforcedblindly.Also,accordingtotheArticle51oftheRegulationsofGuangdongProvinceonMonitoring

24

LabourProtection,rulesandregulationshavethefinescontent,orthedeductionsfromwageswithoutanylegalbasis, thehumanresourcesandsocialsecurityadministrativedepartmentshallordercorrectionandgiveawarningtotheemployingentity.Finesareactuallyoneofthemeansofmanagementadoptedbytheemployer,butnotbasedonanylegalright.

Figure22:Thepenaltyslip:Iacknowledgedbymistakes,IacceptedthepunishmentandIwillnotdoitagain

Figure23:Anotherfineforwronglyputtingfabrics.

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Figure24:Thereisnewnoticeonthewhiteboardforfines.

2.4UnrepresentedworkersGeneralworkersfromthesetwoinvestigatedfactorieshavenoeffectiveplatformtovoiceouttheirconcernsin regards of different issues in the working environment. The above legal violations and punitivemanagement can be remedied if the general workers can be represented through democratic trade union.According to the trade union law Article 9 in China, trade union committees at various levels shall bedemocraticallyelectedatmembers'assembliesormembers'congresses.However,inPacific,thechairpersonoftheunionisthedirectorofadministrativedepartmentwhichviolatestheMeasuresfortheElectionoftheTradeUnionChairmanofanEnterprisearticle6,theexecutivesincharge(includingdeputyexecutives)andpartnersofanenterpriseandtheircloserelatives,thepersonsinchargeofthehumanresourcesdepartmentandtheforeignemployeesshallnotbethecandidatesforthelaborunionchairmanoftheenterprise.Italsoviolates Article 7 of the Measures of Guangzhou Municipality on Implementing the Law of the PeoplesRepublic of China on Trade Unions that managers of department units cannot serve as Chairperson andvice-chairpersoninthetradeunions.WorkersthereforedonothaveconfidencetothetradeunioninPacificas the representative is not truly represented the general interests of workers. The trade union is onlyperforming the function oforganizingdifferent leisure activities andwelfarebenefits, but it is inactive indealingwithlabourdisputesandadvocateworkersrights.Toldbyworkers,workersfromthefinishingshopfloor in Pacific went on small scale strike because of the low wages in 2009. They urged for the salary

26

incrementbutthemanagementhiredgangsterstosuppressthestrikebybeatinguptheworkersleaders.Fewyears ago, around 13-15 workers went on strike because of the intolerable high shop floor temperature.Factorydismissedtheleaderandactiveworkersinthestrike.Otherfollowerscouldonlyreturnbacktotheproductionline.Thoughthesestrikesarenotinabigscaleandsuppressedquicklybythefactory,theystillreflectedthatworkersmustparticipateintoademocraticandrepresentativetradeunioninordertocurbtheproblemsinwork.ForLuenthai,thesituationissimilartoPacific,thereisnotradeunionatthefactorylevel.There is a workers committee group and employee relation department in the factory. However, it is anineffectivemeanstofacilitateworkerstoexpresstheirconcerns.Investigatorsweretoldbyworkersfromtheironingshopfloor,anumberofsmallscalestrikesweretakenplacebeforewhichwereorganizedbyworkerscoming from the same hometown. However, the management suppressed the actions quickly by usingdifferent ways. The root problem of all these disputes and discontent in working condition is due tounrepresentedworkersintheworkingcondition.Generalfrontlineworkersarenotintheequalfootingwhenhandlingthelabourrightsissueswiththefactory.

To put it in a nutshell, the factories have four key violations in the working conditions. They are: longworkinghourswithlowbasicwages,riskyworkingconditions,harshandpunitivemanagementstyle,andunrepresented workers. Among them, the occupational and safety problems are particularly obvious andshouldbetackledassoonaspossible.Sinceworkershealthareputinavulnerablepositionnow.Theyaredirectlyfacinghealthandsafetyrisksbecauseoftheinappropriateoperationofthefactories,aswellastheineffectivemonitoringsystemofthebuyers.

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Section3:ConclusionsandDemands

We are disappointed about the findings as the well-being of workers cannot be fully guaranteed in bothfactories.Lowwages,excessiveworkinghours,unsafeworkingconditions,heavyfines,harshmanagementstyleandineffectiveplatformforexpressingworkersconcernsareputtingworkersinavulnerablecondition.Also,UNIQLO,as the factorieskeybuyers, fails tocloselymonitor its suppliers inChinaand to strictlycomplywithitscodesofconducts.Withsuchscaleandgoodbusinessperformance,webelievethatboththefactoriesandUNIQLOhaveenoughcapacitytoprovideadecentworkingenvironmenttotheirworkers.AstheproductsofmanydifferentinternationalfashionbrandsarestillmadeinChina,thiscampaignwillbetheveryfirststeptodisclosethesituationintheglobalgarmentsupplychainandtoarousetheawarenessoftheglobal consumers about the workers working conditions behind all these fashionable clothes. We alsoencourage the general public to leverage their consumer power to improve the working conditions of thegarment workers in China. For example, consumers can request the brands to provide details on theirsuppliersandtheiroutsourcingsystem.

Lastbutnotleast,weareheretostronglyurgethefactoriesandthebrandonthefollowingdemands:

Wedemandthesuppliers: Toprovideatleastonerestdayeveryweekforworkersandlimitthemaximumovertimeworkto36

hoursamonth; TopayovertimeaccordingtotheChineseLabourLaw; Toreformmanagementstyletorespectworkersdignity; Toensureworkerscanhaveappropriatebreaksregularly; Toprovideadequatetrainingconcerningthehealth,safety,andprotectionoftheworkers,andensure

theworkerstotakeregularhealthcheckups; Totakeallthenecessarymeasurestoensureworkershealthtobeprotectedfromtheharmfulchemicals

usedintheproductionprocessandmakeitpubliclyavailabletheoutlinedmeasuresaswellastheimplementation

WedemandFastRetailing: Tofacilitatethesuppliersontheimprovementintheworkingconditionsbyprovidingadequate

resources;

Tomaintaintransparencytopublicbydisclosingfullsupplylistwheretheirproductsweremanufactured;

Tosupportthesetupoffullyworker-representedtradeunionintheirsupplierbydirectanddemocraticelection;

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Tocomplystrictlytotheircorporatesocialresponsibilitiespolicies

Appendix1ContactInformationofthefactories

1. Pacific(Panyu)TextilesLtdLiuChongTongXinCounty,WanQingShaTown,Nansha,GuangzhouCity,GuangdongProvince,PRCTel:(86)20-84948868Fax:(86)20-84947915Website:http://www.pacific-textiles.com/contact.php

2. DongguanLuenthaiGarmentCo.LimitedJinfenghuangIndustrialZone,Fenggang,Dongguang,GuangdongProvince,PRCTel.:(86)076986808000Website:http://www2.luenthai.com/en/contact

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Appendix2AbouttheOrganizations

Students&ScholarsAgainstCorporateMisbehaviour(SACOM)

StudentsandScholarsAgainstCorporateMisbehavior(SACOM)isanonprofitorganizationfoundedinHongKonginJune2005.SACOMoriginatedfromastudentsmovementdevotedtoimprovingthelaborconditionsofcleaningworkersandsecurityguardsundertheoutsourcingpolicy.Themovementattainedrelativesuccessandcreatedanopportunityforstudentstoengageinlocalandgloballaborissues.SACOMaimsatbringingconcernedstudents,scholars,laboractivists,andconsumerstogethertomonitorcorporatebehaviorandtoadvocateforworkersrights.

Webelievethatthemosteffectivemeansofmonitoringistocollaboratecloselywithworkersattheworkplacelevel.WeteamupwithlaborNGOstoprovidein-factorytrainingtoworkersinSouthChina.Throughdemocraticelections,wesupportworker-basedcommitteesthatcanrepresentthevoicesofthemajorityofworkers.

LabourActionChina(LAC)

LabourActionChina(LAC)islabourrightsnongovernmentalorganizationbasedinHongKong.ItengagesindoingresearchonworkingconditionsandlabourrelationsofChineseworkersandsupportinggrassrootsorganizingaswellascampaignsfortheprotectionoflabourrightsinChina.TheworkofLACismainlyfocusedonSouthernChina,aimingto:supportlabouractivismandgrassrootslabourorganizationsformedbyworkers;provideplatformforstudyandtrainingforChineseworkersonlabourrelationsandworkerrepresentation;researchonlabourconditionsandlabourrelationsandcapitalmobilityinChina;supportcampaignsfortheprotectionoflabourrightsinChinaandbuildworkersolidaritywithinChinaandwithothercountries.

HumanRightsNow(HRN)

HumanRightsNow(HRN)isaninternationalhumanrightsNGObasedinTokyo,Japananditsmemberscompriseover700individualsandorganizations,includinglawyers,scholars,journalists,lawfirms,formerUNofficial,retiredJapaneseSupremeCourtJustices,andactivists.HumanRightsNowworksforthepromotionandprotectionofhumanrightsforpeopleintheworld,withaspecialfocusinAsia.Itsmissionistotakeactionto:contributetothepromotionandprotectionofhumanrightsworldwide,withaspecialfocusonAsiancountries;contributetothedevelopmentofinternationalhumanrightsstandardsandnormsthroughtheUNandotherinternationalinstitutions;promotetheincorporationofinternationalhumanrights

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standardswithinthedomesticframeworkinJapan.

Appendix3FastRetailingWorkplaceMonitoringFrameworkTheWorkplaceMonitoringFrameworkisstatedinFastRetailing2014CSRreport.Itcanbedownloadedathttp://www.fastretailing.com/eng/csr/report/pdf/csr2014_e.pdf#page=1&pagemode=thumbs&zoom=80

1. Pre-ContractMonitoringPre-ContractMonitoringisconductedtodeterminewhetheragivenfactoryiseligibletodobusinesswith Fast Retailing. The procedures and criteria for these evaluations are essentially the same asthose used for regular monitoring but have added emphasis on particularly important matters ofconcerns,suchasviolationsofchildlaborlaws.

2. RegularMonitoringExternal auditors regularly conducton-site inspections.The inspections include an initialmeeting,followed by factory inspections and tours of related facilities such as cafeterias and dormitories,interviewsoffactoryworkers,andreviewsofrequireddocumentation.Monitoringconcludeswithawrap-up meeting during which the auditors confirm the findings with factory representatives andprovidefeedbackforimprovements.

3. FactoryGradingSystemFRgradestheresultsofthemonitoringfromAtoE.FactorieswithhighlyunethicalorseriousoffensesaregivenEgradesandFRimmediatelyreviewsitscontractswiththefacilitiesinquestion.FactoriesreceivingCorDgradesareprovidedguidanceforimprovementandfollow-upevaluationsareconductedtoverifyresults.Factoriesthatfailtoimprovearesubjecttostrictscrutiny,includingaBusinessEthicsCommitteereviewofthebusinessrelationship.Whenseriousviolationsareidentified,FRsendsCSRDepartmentstaffmembersonfact-findingmissionsandreviewsthepartnershipcontract.FRmakesitsfinaldecisionbasedonitsfindingswhilealsotakingintoaccountthefactorysbusinessconditionsandthelocalemploymentsituation.Afterimplementingthereview,FRthenworkswiththefactorytopreventtherecurrenceoftheviolations.Iftherequiredimprovementsarefulfilled,FRreviewsthebusinessrelationship,includingtheviabilityofreinstatingtheoriginalcontractconditions.

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Appendix4BriefIntroductionoftheProductionProcessinGarmentand

TextilesIndustry

(1)KnittingDepartment:Intheproductionofweftknittedfabrics,conesofyarn,afterwinding,areputoncreelstofeedintocircularknittingmachinestoknitthefabric.Intheproductionofwarpknittedfabrics,yarnsarewoundonabeam.Thebeamisputontotheknittingmachineandyarnsarefedfromthebeamtothemachineforknitting.Afterknitting,thegreigefabricsareinspectedbeforebeingtransportedtothedyeingprocess.

(2)DyeingDepartment:Inpreparationforthedyeingprocess,fabricsarefirsttreatedinascouringprocesstoremovedirtandimpurities.Chemicalsanddyesarethenaddedontothescouredfabricforthedyeingorbleachingprocess.Thedurationofthebleachinganddyeingprocessesdependsonthecolorshadeandtherawmaterialsbeingused.Dyedfabricsaretheninspectedbythequalityassurancestaff.Fabricthatdoesnotrequireprintingwillthenbeprocessedthroughthefinishingstep.

(3)CuttingDepartment:Garmentproductionstartswiththecuttingprocess.Inthisprocess,fabricisbeingcutintocomponents(shapesorpatternsofdifferentgarmentparts,i.e.front,back,sleeve,collarshapesetc.).Inmassproductionmultiplelayersoffabricsarelaidonatableandlargenumberofgarmentsisbeingcutatatime.

(4)SewingDepartment:Thesewingoperationinmostofthegarmentconstructioncompaniesiscloselysupervisedforqualitycontrol.Avarietyofapparelstylesandfabricsaresewnthesedays.Therearealargenumberofsewingmachinesavailableforalmostanysewingoperation.Someoftheexamplesofsuchmachinesaresingleneedle,doubleneedle,safetystitch,automaticmeter,automaticmultistitch,looptacker,pocketwelt,keyholebuttonhole,automaticbuttonsewer,roundeyeletetc.

(5)IroningDepartment:Inthegarmentindustry,equipmentforhandlingfabricswithdampheattoironsurfaces,foldedges,ironoutseams,shapeflatparts,andraisethepileduringthemanufactureofclothing.Ironingandpressingequipmentshapesthesemi-finishedgarmentbybringingthefabricfibersintoahighlyelasticstateandthendeformingand setting them. This is done by the simultaneous action of moisture, heat, and pressure on the fabric.Different typesof fabric requirespecificcombinationsofmoisture,pressurepersurfaceunit, temperature,anddurationoftheprocess.

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12.PleaserefertoAppendix3

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http://www.pacific-textiles.com/businesses_facilities.php?id=1

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20.OnetablemeetingsisthemeetingbetweenUNIQLO,fabricmanufacturersandsewingmanufactureronexchangingtechnologiesandexpertise

21.Mostoftheworkerssalaryarecountedasbasicmonthlypayplusovertimepay.Afterreachingtheproductivitytarget,theycouldhaveproductivitybonusbasedonpiecerate.

22.AveragesalarylevelofDongguangandGuangzhouin2013isfoundathttp://news.ifeng.com/a/20140713/41135455_0.shtmlandhttp://tjj.dg.gov.cn/website/web2/art_view.jsp?articleId=7726(onlyinChinese)23.IncreaseinConsumerPriceIndexisfoundatDongguangStatisticsInformationwebsite:http://tjj.dg.gov.cn/website/web2/art_view.jsp?articleId=8126(onlyinChinese)24.Article44Theemployershallpaylabourersmorewageremunerationsthanthosefornormalworkaccordingtothefollowingstandardsinanyoneofthefollowingcases:

(1)Wagepaymentstolabourersnolessthan150percentoftheirwagesifthelabourersareaskedtoworklongerhours;(2)Wagepaymentstolabourersnolessthan200percentoftheirwagesifnorestcanbearrangedafterwardsforthelabourersaskedtoworkondaysofrest;(3)Wagepaymentstolabourersnolessthan300percentoftheirwagesifthelabourersareaskedtoworkonlegalholidays.

25.WorkersdonotswipecardonSundayandtheworkingrecordisrecordedmanually.

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29.Thenewisathttp://big5.news.cn/gate/big5/www.js.xinhuanet.com/2014-08/08/c_1111991305.htm