Fast Retailing — owner of the Uniqlo brand — has insisted it “acted lawfully” throughout the process of the closure of its Indonesian supplier factory, as it continues to be bombarded with allegations of worker mistreatment and failure to compensate workers since the factory went bust in 2015.

The Jaba Garmindo factory in Indonesia filed for insolvency and announced bankruptcy in April 2015, a move affecting 2,000 workers. 

The factory was a supplier of Uniqlo clothing between 2012 and 2014.

In January this year, Fast Retailing issued a statement advising it had consulted with Jaba Garmindo in early 2014 to remedy the situation of “continuous quality issues and delivery delays”. Failure to resolve the issue led to Fast Retailing dissolving its business relationship with the factory in October 2014 “settling payment for all orders up to that date in a timely manner”.

This move followed a call for the settlement of severance pay and final salaries of displaced workers at the end of last year.

Earlier, the group faced protests outside Uniqlo stores in Japan and Hong Kong regarding the same issue.

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On Tuesday (9 October) Clean Clothes Campaign issued a press release calling for Fast Retailing to “immediately settle” the lengthy dispute.

It also alleges the group of worker mistreatment detailing one worker, Warni, who it says “couldn’t even take toilet breaks” and was refused holidays.

The release adds Uniqlo was contacted in 2014 by labour rights activists following reports of labour violations including unlawful termination of pregnant workers, unpaid overtime, health and safety hazards, and trade union harassment at Jaba Garmindo.

Mirjam van Heugten from Clean Clothes Campaign says: “While Uniqlo’s CEO flies back and forth to Europe popping the champagne and opening new stores, Warni and her colleagues have accumulated high debts. When factories close without paying its workers their wages and severance payments, this amounts to wage theft. The consequences for the workers are severe and lasting.

“International standards mandate that companies must prevent, mitigate and remedy possible human rights violations in their supply chain, which is where Uniqlo shamefully fails, letting Warni and her colleagues pay the price. Uniqlo can and should pay, just as other brands like adidas and NIKE have paid in similar cases of factory closures.”

Speaking to just-style today (11 October), a spokesperson for Fast Retailing asserts the company “acted lawfully throughout” the process and clarifies the employees were those of Jaba Garmindo — a “factory that supplied a number of brands”.

“Although the legal obligation in this situation rests with Jaba Garmindo, we would like to emphasise that Fast Retailing does empathise with affected workers. Accordingly, we are leading a discussion with the relevant parties to facilitate re-employment in an alternative nearby partner factory for any workers who remain unemployed. In addition, we are working with stakeholders across our industry to jointly develop methods that protect apparel industry workers from similar scenarios in the future.”

Fast Retailing adds it is continuing its dialogue with the trade union representing the affected workers and is working towards a November meeting in Jakarta.

Concerning allegations of poor worker conditions, the spokesperson tells just-style Fast Retailing has a strict code of conduct in place for all partner factories with a monitoring system in place to ensure compliance.

“We conducted audits based on this CoC three times at Jaba Garmindo over the period of our business relationship from October 2012 to October 2014. No serious violation of our CoC were detected in these audits,” he says.

In a separate announcement yesterday, Fast Retailing revealed it was investing US$885m in a warehouse automation in Japan — a move that will result in a 90% saving in human resources and switches the operation to a 24hr one.