Appeal n° 317 (from 25 April to 1 July 2008)

Photo OxfamAus

Closure of factories and wronged workers

In November 2006, the 6,179 employees of PT Spotec and the 4,500 workers at PT Dong Joe suddenly found themselves without jobs, after their employers’ decision to close up shop without paying them their pending salaries and the compensation to which they were entitled. These two factories, near Jakarta, had produced sports shoes for a number of years for Reebok, and then for Adidas following their purchase of the brand in 2006. After the closures, the workers claimed the payment of their last salaries, as well the legal entitlements that they had a right to. More than a year later, they have still not been paid...

In January 2007, questioned by representatives of the workers, Adidas attributed the closure of the factories to "significant debt, instability and poor financial management of these factories" [4]. They denied all responsibility, explaining that they had made the management of the factories aware of the problems and demanded that they immediately put plans in place for their restructuring, to no avail.

But for the representatives of these factories’ workers, who for many years worked under difficult conditions to meet the demands of the market, this explanation was simply not acceptable: "It is really unethical of Adidas put its position equally as us, as we are the victims of the weakness in our company’s management", "we worked hard every hour, every day, and every week to produce and ensure that the shoes we produced wouldn’t embarrass Adidas’ image in front of the consumers. Until now, we believe that the consumers value the products’ quality and this can be seen as the company and Adidas are enjoying better profit. In contrast, we never enjoy those profits". On the contrary, "we have done a lot of sacrifices before the factory closed down and we never realised that we would have to sacrifice even more by losing our jobs, which we really valued..." [5].

Adidas should prove that it takes its social responsibility seriously, by proposing constructive, long-term solutions, and especially by ensuring that the ex-employees of these factories are compensated and hired by other suppliers in the region.

Adidas’ buying practises called into question

According to the trade unions, these closures are actually the result of the buying practices of the company, which exerts so much pressure on its suppliers that they are unable to treat their employees decently. Quality, speed, flexibility and low cost: the brand’s demands are all constraints that put suppliers under agonizing pressure.

In 2006, for example, Adidas gave the PT Dong Joe factory a particular order. The factory only had the capacity to produce 400,000 pairs of shoes a month, which they had clearly communicated to Adidas. By demanding nevertheless that the factory produce above its capacity, Adidas contributed to an increase in production costs by the supplier, which was forced to impose a number of hours of overtime on its employees. The workers at Dong Joe were required to work 19 hours at a stretch to satisfy this order! To crown it all, during this particularly burdensome period, Adidas demanded that Dong Joe finance a training programme to improve the company’s performance.

Not far away, another Adidas supplier, PT Tong Yang, has also been a victim of the group’s buying policy and has threatened to close down soon. Here as well, Adidas has questioned the management of the enterprise. If Adidas does not commit to maintaining a certain level of orders, it is a good bet that the 9,000 workers they employ will also find themselves unemployed soon.

Sold by auction to Taiwanese investors aligned with Adidas, the factory previously called Spotec, will soon resume its activities under the new name of Ching Luh. Adidas has already announced that it will put in orders with this company. For the representatives of the Spotec and Dong Joe workers, this is an opportunity for Adidas to demonstrate that it assumes responsibility towards the workers, by intervening to ensure that the ex-workers of these factories are hired as a priority by Ching Lu.

FOR MORE INFORMATION

Collectif Ethique sur l’étiquette (Clean Clothes Campaign - France)
Within the framework of its campaign “PlayFair 2008” (in French: "Jouez le Jeu pour les JO 2008"), which aims at respect for human rights in the workplace in the sports industry, the Collective is distributing in France a report titled "Clearing the Hurdles: Steps to Improving Wages and Working Conditions in the Global Sportswear Industry", which denounces the deplorable working conditions of employees in the major sports equipment companies, in particular Adidas, official sponsor of the French team for the Beijing Olympic Games.

is a member of the Collectif Ethique sur l’étiquette (Clean Clothes Campaign - France)and supports this Urgent Appeal. www.oxfamfrance.org

The Clean Clothes Campaign and Oxfam Australia are relaying this appeal at the European and international levels. These two organizations have jointly published a report titled "Sector-wide solutions for the sports shoe and apparel industry in Indonesia", that highlights the negative impact of the major sports brands’ buying practises on their sub-contractors in Indonesia, and proposes concrete measures.

WRITE !

By e-mail : Send immediately a protest e-mail to Adidas and a support e-mail to PT Spotec and PT Dong Joe workers’ representatives, by signing online HERE !

By post mail : Send a protest letter to Adidas and a support letter to PT Spotec and PT Dong Joe workers’ representatives by downloading the model letters at the botoom of this page, or by cpying the model letters below. Then, just send the letters to the recipient adress indicated.

PROTEST LETTER TO ADIDAS

M. Frank Henke Global Director of Social and Environmental Affairs
Adidas
Adi-Dassler-Str. 1
91074 Herzogenaurach
Germany

Dear Mr Henke,

I have been informed of the unlawful and unethical treatment of workers at your former suppliers PT Dong Joe and PT Spotec in Indonesia.

I am extremely preoccupied by Dong Joe and Spotec workers’ situation, and therefore urge you to:
  ensure workers receive their full legal entitlements;
  relocate the orders to other supplier factories in Indonesia and actively ensure that workers who have lost their jobs are offered jobs in other Adidas supplier factories in Indonesia;
  uphold your commitment to a fair and transparent process in the prioritization of hiring ex-Spotec workers in Adidas’ newly opened supplier factory, Ching Luh.
  increase orders at Pt Tong Yang to full capacity to allow that factory to continue operating.

Sincerely,

LETTER OF SUPPORT TO PT SPOTEC AND PR DONG JOE WORKERS’ REPRESENTATIVES

Peuples Solidaires
for the representatives of the workers of PT Dong Joe and PT Spotec)
10, quai de Richemont
35000 Rennes
France

Dear friends of PT Dong Joe and PT Spotec,

I have been informed of the unlawful and unethical treatment of workers at PT Dong Joe and PT Spotec.

I support your action and have sent a letter to the Global Director of Social and Environmental Affairs, Frank Henke, requesting that he takes immediate action to implement your demands.

With warm regards,

[1] Statement by Herbert Hainer, President of Adidas, 05/03/2008 Reuters.

[2] Statement by Herbert Hainer on the Adidas website: www.adidasgroup.com

[3] Extract from a letter addressed to Adidas by the trade union of the PT Spotec, 6 February 2006..

[4] January 2007, Adidas website: www.adidasgroup.com.

[5] Extract from a letter addressed to Adidas by the trade union of the PT Spotec, 6 February 2006.