Adidas announced an agreement Wednesday to contribute additional aid to workers in Indonesia displaced by a factory closure. Details of the agreement were not disclosed. Adidas also noted that the plant’s workers union has moved to dismiss its lawsuit against Adidas.
As reported, Cornell University, Oberlin College, University of Washington, Rutgers University, College of William and Mary, Santa Clara and Georgetown University had cancelled orders due to the dispute. Labor rights groups charged Adidas with not paying 2,700 unemployed workers $1.8 million in owed severance pay at the PT Kizone factory.
Adidas had countered that the factory was unethically closed and abandoned by its owner, not Adidas, months after the factory ceased accepting orders from Adidas. The former owner fled the country in January 2011,
causing the factory to close in April 2011.
In its statement, Adidas Group said the latest support comes on top of $525,000 in humanitarian aid as well as job placement services, and advocating issues related to workers rights.
We remain sympathetic to the plight of all former PT Kizone workers, said Glenn Bennett, member of the Adidas Group Executive Board, responsible for Global Operations. This additional assistance will provide direct relief to workers and their families still impacted from the unethical factory closure. At the same time, we strongly encourage our university partners, industry leaders and workers advocates to join our efforts to pursue socially responsible and sustainable business practices to influence positive change within the global supply chain.
The Indonesian district labor union representing former PT Kizone employees-Dewan Pimpinan Cabang, Serikat Pekerja Textil, Sandang Kulit-SPSI Kabupatan Tangerang-will ask the Wisconsin state court to dismiss its claims against the company as a result of the settlement.
The union and the workers are very pleased that adidas has made this settlement, which will have a real impact on the workers lives, said a representative of the Indonesian district labor union. Now we can put the lawsuit behind us.
Adidas said its focus now turns to the Global Forum for Sustainable Supply Chains, which, along with the adidas Group and other industry, labor and workers rights groups, will pursue sustainable solutions to address issues created by unethical factory closures worldwide. The adidas Group is hopeful that there will be a renewed commitment from these stakeholders to continue productive dialogue over how to best address complex issues surrounding unethical factory closures which continue to put workers severance and unemployment entitlements at risk.
We are continuously exposed to complications resulting from lapses in governance across the global market economy and supply chains. This poses risks to all stakeholders-buyers, workers and consumers alike, Bennett continued. The industry-wide initiative led by the Global Forum for Sustainable Supply Chains represents a meaningful step towards long-term change in addressing what workers advocates, industry experts, universities and brands are all after-an end to the problem of unethical factory closures and better protection of workers unemployment and severance rights. This remains an ongoing priority for the adidas Group and is critical to our business. It is also the right thing to do.
The adidas Group will continue its long-standing commitment to take an active role promoting and enforcing workplace standards based on the International Labor Organizations core labor rights conventions, which protect and improve worker experiences worldwide. In 2012, the company held more than 170 training sessions and workshops for suppliers, licensees, workers and adidas Group employees and managed more than 1,560 factory audits around the world, many of which were carried out by external groups including the Fair Labor Association.
2012 marked the thirteenth consecutive time that the adidas Group was featured in the Dow Jones Sustainability Index. For more information about the adidas Group‘s continuing efforts, visit www.adidas-group.com/en/sustainability.
