The two fashion groups Uniqlo and s.Oliver were recently asked in an open letter by Indonesian workers to make the compensation payments to which they are entitled.
Exactly seven years ago, on April 22, 2015, the Indonesian clothing factory Jaba Garmindo closed its doors, putting more than 2,000 workers on the streets. Since then, they have kept their heads above water with various odd jobs such as cleaning mussels or street vendors in the informal sector.
However, money is lacking everywhere and many had to take their children out of school because they can no longer afford school fees, uniforms and books. The problem is 5.5 million US dollars (about 5.05 million euros) in compensation payments that are still outstanding.
Who pays in case of bankruptcy?
In the open letter, the workers address the Fast Retailing chairman and largest shareholder Tadashi Yanai and s.Oliver CEO Claus-Dietrich Lahrs directly. They point to Yanai’s $26.4 billion personal fortune and Lahr’s experience in luxury fashion.
“What happened to us is no secret from you, a documentary was even made on our case and you are aware of the Fair Labor Association report recommending that your two brands pay a significant amount into a relief fund for us . But you still don’t do it. You claim you don’t owe us anything, but it’s your products that we made. What would it cost for you to pay? How desperate should we be before you do the right thing?” reads the letter, which can be viewed on the Clean Clothes Campaign website.
S.Oliver recognizes moral obligations
The companies have not yet made any payments. However, S. Oliver confirmed to FashionUnited that he has taken all allegations seriously over the years and is currently in ongoing discussions to meet a moral obligation. In an investigation by the Fair Labor Association (FLA), the Rottendorf-based company was given no legal obligation, as s.Oliver had paid all the bills. In addition, the brand was not a main buyer and thus not involved in the bankruptcy of the factory – this is attributed to financial mismanagement.
“The s.Oliver Group recognizes a general responsibility towards everyone who works in its value chain, also in this special case. Therefore, the company is in close contact with the FLA and the Fair Wear Foundation to discuss the process and commitment to the former workers of the Jaba Garmindo factory and to contribute to a relief fund for them,” reads one Statement by s.Oliver.
Fast retailing refers to ending business relationships
In a statement published in 2018, Fast Retailing confirmed that it commissioned Jaba Garmindo to produce clothing for the Uniqlo brand from October 2012 to October 2014, but then stopped the business relationship due to quality problems and delivery problems and paid for all orders up to that point.
“Fast Retailing has no legal obligation in this matter, including a responsibility to financially compensate former PT Jaba Garmindo employees,” the January 18, 2018 statement read.
“While Fast Retailing has no legal obligation, the company has compassion for those affected by PT Jaba Garmindo. Accordingly, the company has offered to work with the relevant parties to facilitate the re-employment of unemployed employees. In addition, Fast Retailing is currently in discussions with stakeholders from across the industry about methods that could protect workers in the apparel industry from similar scenarios in the future.
Compassion is the best advertisement
As the situation as a result of the Covid pandemic has shown, this did not happen and here, too, factories and workers had to wait a long time for payments to which they were entitled. FashionUnited has contacted Fast Retailing for a more up-to-date comment and will update this report should it be received.
The requested sum is a per capita amount of 2,750 US dollars (around 2,500 euros) and even the total sum of 5.5 million US dollars is a small amount compared to the average advertising budget of a clothing company. They don’t seem to have realized that a compassionate gesture is the best advertisement and proof of a company’s integrity.