Uniqlo and s.Oliver workers still owed $5.5 million in severance pay: workers release open letter on 7th anniversary of factory closure

April 22nd marks the 7th anniversary of the Jaba Garmindo factory bankruptcy in Indonesia, and 2,000 Indonesian garment workers have been fighting for the $5.5 million legally owed to them in severance pay since 2015. The workers made clothes for Uniqlo and German fashion brand s.Oliver, among others. To mark the 7th anniversary of the factory closure, the workers have released an open letter (available here) addressed to Tadashi Yanai, chairman and biggest shareholder of Fast Retailing (Uniqlo’s parent company), and Claus-Dietrich Lahrs, CEO of s.Oliver, demanding the brands finally pay up.

Severance theft is a known risk in the garment industry and brands have a responsibility, as stipulated under the UN Guiding Principles on Business and Human Rights to do their due diligence and mitigate against risks. When failing to do so, they must take immediate steps to remedy rights violations. In the case of Jaba Garmindo, both Uniqlo (under parent company Fast Retailing) and s.Oliver failed to mitigate against the risk and both are still refusing to take any meaningful steps towards remedy and justice.

The workers’ letter addresses Yanai and Lahrs: “Our world and yours do not overlap often. We made the clothes you sell but we have no luxuries in our lives. Since the Jaba Garmindo factory closed in 2015, many of us have been forced to work informally - cleaning clams for fishermen, selling food on the streets, daily work which offered us no security. These jobs earned us even less than we were paid as garment workers and they disappeared overnight because of Covid restrictions. We were left penniless, again.”

“2,000 former Jaba Garmindo workers have been fighting tirelessly for the $5.5 million they are legally owed for 7 years now. What is being asked of these brands is not extraordinary, there’s a growing precedent for brands paying up in cases of severance theft but still Uniqlo and s.Oliver refuse,” said Ilana Winterstein, urgent appeals campaigner for the Clean Clothes Campaign. “Their inaction shows their talk of female empowerment to be completely hollow, nothing but PR spin as they continue to allow women in their own supply chains to suffer.”

Both Fast Retailing and s.Oliver are affiliates of the Fair Labor Association (FLA), and in July 2021, the FLA released the outcome of their 18-month investigation into the case. The FLA report issued recommendations that the brands come together to establish a financial relief fund for the workers, however this has yet to materialise.

Fast Retailing’s business has boomed during the pandemic and it is the world’s most valuable fashion retailer, with a share price of €88.7 billion (according to media reports, Feb 2021), surpassing Inditex for the first time. Yanai has a personal fortune of $24.6 billion. For the former Jaba Garmindo workers, the pandemic has had a brutal impact, leaving many unable to afford vital medical care, school costs and even food. With no adequate social security system to support them, the workers have struggled to survive, and many have been forced to borrow money to cover food and rent costs.  

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Notes:

In 2021, CCC produced a short documentary about the case, How to Steal Your Workers’ Future, which can be watched here.

A link to the Fair Labor Association report and recommendations can be found here

The UN Guiding Principles on Business and Human Rights (UNGPs) uphold values which state that, for business enterprises, “addressing adverse human rights impacts requires taking adequate measures for their prevention, mitigation and, where appropriate, remediation.” The UNGPs also state that businesses should seek to “prevent or mitigate adverse human rights impacts…even if they have not contributed to those impacts.” See here for more info on UNGPs.

Info on Fast Retailing’s surge in value can be found here.