Respect for Human Rights at Ryohin Keikaku

Human Rights Due Diligence

In accordance with its Human Rights Policy established in December 2022, Ryohin Keikaku Group (hereinafter "RK Group") will fulfill its responsibility for respecting the human rights of all stakeholders involved in its business in the entire supply chain. Specifically, following the six steps based on the United Nations Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Responsible Business Conduct, we have developed a framework for human rights due diligence, continuously identifying and assessing adverse human rights impacts that our corporate activities may have on society, and taking appropriate measures to prevent or mitigate such impacts.

Identification and Assessment of Adverse Impacts

In FY2023, with cooperation of external experts, we identified human rights issues that we should address in order to prevent human rights risks from arising in RK Group's business domains, which include the production and sales of apparel, household goods, and food. In the process, we also referred to international guidelines, the results of factory audits, the monitoring results of employee engagement surveys, and others. We will prioritize the human rights issues identified, develop roadmaps for relevant divisions, and implement initiatives for preventing and mitigating the emergence of human rights risks, working with our stakeholders. Going forward, we will continuously monitor the effectiveness of the initiatives and review the identification and assessment of adverse impacts on human rights.

Methods of Assessing Human Rights Issues

We have identified high-priority human rights issues by assessing their severity and likelihood in reference to the United Nations Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Responsible Business Conduct, and with cooperation of external experts. We conducted the assessment for both our operations and its supply chains.

Salient Human Rights Issues to be Handled with Priority

Our operations:

Harassment (including customer abuse), discrimination, gender-related human rights issues, working hours, and the right to access to remedy

Supply chains:

Labour health and safety, forced labour, child labour, discrimination, environment, working hours, gender-related human rights issues, consumer safety and right to know, and harassment

Prevention and Remedy of Adverse Impacts

Respecting Human Rights in Supply Chains

RK Group neither owns production sites and facilities nor manufactures products. We outsource production to our production partners in Japan and elsewhere in the world. Some factories of the production partners are located in countries and regions that are at high risk of modern slavery due to the lack of good governance and weak rule of law, according to reports by international organizations and non-governmental organizations. Therefore, we believe that it is extremely important for us to work on respecting human rights together with our production partners through the Code of Conduct for Production Partners.

Collaboration with Production Partners

RK Group establishes the Code of Conduct for Production Partners for the purpose of building good partnership based on mutual trust and fulfilling its responsibility of considering the entire supply chain to secure a fair, safe, and healthy work environment and be responsible to the natural environment.
In accordance with the Code of Conduct for Production Partners, we promote initiatives for human rights by sharing the policies included on the working environment, respect for human rights, and environmental consciousness for the entire supply chain with our production partners, and by requiring them to comply with them. We have distributed and explained the Code of Conduct in Japanese, English, and Chinese to all factories in the world to which we outsource production. We do business only with production partners that comply with the Code of Conduct and sign a pledge at our request. In addition, the Code of Conduct prohibits our production partners from sub-outsourcing to other factories that are not pre-approved by RK Group, making it mandatory for them to obtain approval from RK Group.

List of Production Partners

RK Group firmly believes that guaranteeing transparency throughout the supply chain is our obligation to all stakeholders. By making our list of production partners publicly available, we aim to strengthen our engagement with our production partners and foster a conducive working environment.

Appropriate Ordering

RK Group protects the working environment and human rights of workers at factories by following appropriate procedures for placing orders. For example, we make sure not to set delivery dates in ways that disregard production lead times or frequently change order details, which could lead to excessive overtime, by sticking to appropriate schedules and quantities when placing orders.

Raw Material Sourcing

For our major primary raw materials (cotton, wool, down, linen, and wood), we use those that can be traced back to the production area as much as possible.
The organic cotton we use have obtained organic certification confirmed by a third-party organization. This certification is conditional on the compliance with labour conditions stipulated by the International Labour Organization (ILO).

Improving Working Conditions Through Collaboration with External Organizations

Since 2016, RK Group has been a participant of the Better Work programme, a joint initiative of the International Labour Organization (ILO), a UN agency that aims to improve the working environment, and the International Finance Corporation (IFC). We strive to improve the working environment of factories by utilizing Better Work's service of assessing the status of compliance with the labour standards of each country where factories exist and in case of any lack of compliance, seeking advice from experts and using training services to resolve the issue.

Ryohin Keikaku has been supporting the One Village, One Product project by the Japan International Cooperation Agency (JICA) and have been developing products together with JICA. We aim to leverage regionally sourced products to help our producers to become self-sustaining through knowledge sharing, training, and other technical support, which in turn could help them create a self-sustaining business.
The product development project that we have been working on in the Kyrgyz Republic since 2010 has been approved as a Business Call to Action (BCtA) initiative by the United Nations Development Programme (UNDP), making MUJI the first retailer in Asia to do so.

RK Group will continue to collaborate with various external organizations to actively promote key initiatives for addressing human rights and environmental issues at production sites.

Education and Training for Employees

Human Rights Training for Employees

In FY2023, Ryohin Keikaku implemented online training programs for its officers and employees on the themes of "Business and Human Rights" and "respect for human rights as expected of companies." Going forward, we will regularly conduct training and other programs on human rights. In addition, we provide harassment training for employees in managerial positions in Japan. The training educates the officers and employees on the definition and case examples of harassment, prevention measures, and action to be taken when harassment occurs.

Training for Employees Involved in the Supply Chains

Since FY2019, Ryohin Keikaku has been conducting training for managers and staff involved in the supply chain covering procurement, production management, production planning, and quality assurance functions. The training deals with priority human rights issues, the Code of Conduct for Production Partners, and our monitoring results of factories. In particular, we require the employees who correspond with factory representatives to participate in the training.

Training for Production Partners

Ryohin Keikaku conducts regular training for its production partners so that they will have a correct understanding of its Code of Conduct for Production Partners, as well as respect for human rights.

3.Adverse Impact Monitoring

Factory Monitoring

RK Group checks factories' status of compliance with the Code of Conduct for Production Partners through regular on-site audits by third-party institutions. In addition, we share our feedback on audit results with the factories and request their management to make improvements according to audit findings, and provide support for improvement. Based on improvement reports prepared by each factory, RK Group not only address the issues to be corrected, but also works with the factories to identify specific activities or procedures, or the lack thereof that caused these issues, and to check out whether changes to the systems are necessary to prevent recurrence. In the event that a serious human rights violation, such as forced labour, is found with a factory and that RK Group cannot expect any correction of such violation even if we exercise our leverage, RK Group will consider dissolving its partnership with the factory in accordance with the Code of Conduct for Production Partners as an option at its discretion.

Company-wide Engagement Survey

RK Group conducts engagement surveys of its employees (including regular employees, contract employees, temporary employees, and part-time employees) engaged in its businesses in Japan and abroad. Considering the human rights of employees, we also identify our issues around employee satisfaction and their human rights in the work environment, by setting survey items including diversity, equality, and psychological safety. We conduct the survey annually and take actions for improvement based on the results.

Information Disclosure

RK Group regularly discloses its initiatives for respecting human rights through its website, MUJI REPORT (integrated report), and other communication tools.

Compliance with Laws and Regulations on Respect for Human Rights in Each Country

RK Group adheres to human rights laws and regulations in each country as we develop our business globally.

Compliance with the UK Modern Slavery Act of 2015

RK Group has issued a statement pursuant to the UK Modern Slavery Act of 2015, which came into force in the United Kingdom.

Compliance with the Canada's Fighting Against Forced Labour and Child Labour in Supply Chains Act

RK Group has published a report in compliance with the Fighting Against Forced Labour and Child Labour in Supply Chains Act enacted in Canada for preventing forced and child labour in its operations and supply chains.