OPPORTUNITIES FOR IMPROVEMENT
Note: Depending on the structure and control of the company, the following recommendations may be applicable to the company itself and/or it may be the role of the company to require and ensure its brands implement those recommendations.
Traceability and Risk Assessment
While Fast Retailing discloses that it has 100% visibility of its first-tier suppliers of all its brands, the company is encouraged to develop and disclose a process to trace the supply chains of its brands down to commodity level. Further the company is encouraged to disclose the names and locations of the first-tier suppliers of its brands and to disclose at least some information on their suppliers beyond the first tier (e.g., sourcing countries).
While Fast Retailing discloses its focuses its auditing efforts on countries such as Uzbekistan, where it knows there is a high risk of forced labor, the company is encouraged to conduct forced labor risk assessments focused on specific commodities, regions, and/or groups and to disclose the forced labor risks identified throughout its supply chain.
While Fast Retailing discloses that it audits its brands' suppliers on the use of recruitment agencies, the company is encouraged to promote direct hiring of supply chain workers, and-where this is not possible-perform robust due diligence of third-party recruitment agencies. Further, Fast Retailing is encouraged to develop and disclose a policy that requires recruitment agencies in its supply chains to uphold workers' rights and to require brands and their suppliers to disclose to the company the recruiters that they use.
While Fast Retailing requires that supply chain workers shall not be required to hand over personal legal documents or make deposits of any kind during the recruitment process, Fast Retailing is encouraged to require that no fees be charged during any recruitment processes conducted throughout its supply chains, and, in the event that it discovers that fees have been paid, ensure that such fees are reimbursed.
While Fast Retailing discloses that it makes its supplier code of conduct available in Japanese, English, and Chinese and communicates its human trafficking and forced labor policies to workers in its supply chain, the company is encouraged to disclose further details on how it communicates its policies to supply chain workers (e.g., through training). Further, the company discloses that it has developed several projects to engage with workers outside the working place (e.g., its Uniqlo brand has introduced a factory worker empowerment project to train female workers on hygiene and household management), the company may consider across its brands to engage workers outside of the workplace to help them assert their voices. Where there are regulatory constraints on freedom of association, the company may consider encouraging its brands' suppliers to ensure workplace environments in which workers are able to pursue alternative forms of organizing.
Further, while the company requires its brands to implement grievance mechanisms to allow workers to communicate concerns confidentially and without the risk of retaliation, Fast Retailing is encouraged to put in place a grievance mechanism for supply chain workers of its brands and make the mechanism accessible as well as proactively communicate it to suppliers' workers.