Adidas Business In Indonesia

Adidas Business In Indonesia

They are the ultimate status symbols for sports stars and street-conscious young people. With their trademark three stripes, Adidas clothes cost a small fortune to buy and are promoted by world-famous names such as England skipper David Beckham, Olympic heptathlete Denise Lewis and Russian tennis player Anna Kournikova. But the company will this week become embroiled in controversy when the European Parliament hears of the barbaric treatment of employees in Indonesian sweatshop factories supplying the German conglomerate. The Parliament will be told that clothes for Adidas were made in two factories using child labour, forced overtime and sexual harassment. Representatives of workers in two Indonesian factories supplying the German company,will tell Euro MPs that in the Nikomax Gemilang and Tuntex factories, in the Indonesian capital of Jakarta, children as young as 15 were:
made to work 15-hour days;
expected to do at least 70 hours a week and punished for refusing to do overtime;
paid less than $60 a month, rates below the International Labour Organisation's demand for a living wage;
penalised for taking leave during medical difficulties and had illegal deductions taken from wages as punishments for minor misdemeanours.
Sports goods companies have been criticised for exploiting workers in the developing world before. There was a storm just before the 1998 World Cup, after footballs bearing the Manchester United club crest were being made by child labourers in India, working for as little as 6p an hour. Cricket ball manufacturers were also criticised.
A report by Christian Aid revealed that children, some as young as seven, were regularly used in the production of a wide range of sports goods in India. Most of the £13m worth of goods went to Britain.
Last year a worker from a Bangkok factory for Adidas claimed that for less than £1 per day she worked 12-hour shifts seven days a week, producing sportswear, shoes and replica kits for the company.
She claimed conditions were poor in the Thai factory and the management acted brutally to meet large orders within a limited time, often denying workers statutory rights such as holidays and sick pay. The accusations are similar to those made by the Indonesian workers.
The woman was eventually sacked in 1998 along with 23 others after they formed a union in an attempt to win more rights. The factory management claimed she was a disruptive influence.
Most Adidas goods are produced in Third World countries, particularly Asia, with orders awarded to locally run factories. Many orders are sub-contracted at local level, leading to claims that the companies have little idea of where and how their goods are produced.
Adidas denies ignoring workers' rights for the sake of profit, claiming they have strict labour codes and constantly monitoring wage levels and conditions to ensure a good working environment.
Adidas spokesman Peter Csanadi countered the allegations earlier this year: 'We have factories where the conditions are very good and we take this whole issue very seriously,' he said. 'We know we have had problems, and we had to terminate some contracts because we saw that the management were not interested in good working conditions.
'We work closely with factory management and demand that they ensure good conditions for workers. We also have a team of our own people who go to factories to sort out problems.'
Adidas, whose football shirts sell in a British high street store for more than £50, have admitted problems at the two Indonesian factories and have recently increased pay and taken steps to ease overtime demands. Copies of the labourers' identity cards are now held at the Nikomas factory to ensure that no under-18s work there.
The company admitted that at the Tuntex plant quotas were set too high. Workers complained of being fined for coming to work five minutes late. Adidas confirmed that women who took leave when menstruating, as legally entitled, lost an attendance bonus of 6,000 Rupiah (50p) and that a manager had been sacked for sexual harassment.
Pay at the Nikomas plant was increased to more than 9,000 Rs (75p per day) following the campaigners complaints, Adidas said.
The campaigners hope that the publicity surrounding the hearings next week will force states to become involved in the regulatory process.
Ingborg Wick, who oversaw much of the research, said yesterday that government involvement was crucial.'There has to be some overview of voluntary codes that companies sign with campaigners. There also needs to be an institutional framework and legal monitoring to ensure social standards in Third World production,' she said. The hearings - by the European Parliament's Development Committee - have been organised by Richard Howitt, the British MEP.

It's no secret why Adidas and other sportswear brands such as Nike, Gap, H&M and others get most of their products manufactured in developing countries. Wages are cheap, labour law is lax, and people are desperate for jobs. Over the past decade, such companies – in response to public pressure – have taken steps to monitor their supply chains, enforcing minimum pay and conditions and outlawing child labour.

But as The Independent investigation of Adidas's Olympic suppliers demonstrates, along with other scandals such as the mistreatment of Chinese workers making Apple products, it is very difficult to control conditions in locally managed factories.
Adidas says it is committed to "ensuring fair labour practices, fair wages and safe working conditions throughout our global supply chain". It conducts hundreds of factory audits annually in 69 countries where it does business. However, workers in its Indonesian factories told The Independent that the audits are farcical.
"They're always announced beforehand, so we have to clean, we have to sweep," said Jamiatun, a union leader at PT Golden Continental, which is not an Olympic contractor. "The first-aid box is filled, and we're told what to say if the inspector speaks to us. We have to tell them we're paid the minimum wage, and we mustn't tell them we work overtime at weekends."
Ratna, a worker at PT Panarub, said: "They [the management] get people to hide in bathrooms, so there are fewer people on the production line and it looks more efficient. If Adidas wants to ask questions, the workers are prepared beforehand with questions and answers. We can never tell the truth, otherwise we might lose our jobs."
Adidas suppliers are required to display its workplace standards on the factory wall. In several factories, workers say the code is not displayed or has been taken down.
However, they also say that Adidas has been helpful at times in resolving complaints. Golden Castle workers used to have to work from early morning until 11pm on occasions; that stopped after they contacted the company's Indonesian representatives.
Anna McMullen, a spokeswoman for the Playfair 2012 campaign, a coalition of international groups seeking a "sweat-free Olympics", said yesterday: "Adidas's own safeguards have failed, as this is an industry which defaults to the lowest standards in order to make the most profit. Unless proactive intervention is taken to deliver living wages and rights, workplaces like these will continue to be the norm."

In one Adidas factory, the lowest-paid employee received a miserly 14 cents an hour.
Hilary cites as one example a factory that makes baseball caps for Adidas. One in five employees interviewed clocked in more than 90 hours a week—in breach of Bangladeshi law—with the lowest-paid staff receiving a miserly 9 pence (14 cents) an hour. Four in five workers described verbal abuse from their managers, two in five said they’ve been pushed, and half claimed public humiliation. Sexual harrassment of female workers was just as widespread.
“They have slapped, kicked and pushed me often,” says Hajera Khanom, who works in a factory that supplies goods to Puma. “Calling us by abusive names is frequently done. This hurt us emotionally and mentally.” Poppy Akter, from the same factory, has been scolded with “very bad language, slapped, pulled by the hair, made to stand on the table and threatened to be fired and sent to jail.”
Although Sebastian Coe of the London Olympics organizing committee, has asked Adidas to uphold ethical standards at factories directly making Olympic-branded goods, such as the Stella McCartney-designed uniforms for Olympic volunteers, he does not seek the same of the company’s other factories.
“Lord Coe has called the Games ‘a powerful lever of change, improving lives across the world,’” says Murray Worthy, a sweatshop campaigner at War on Want. “Yet this research shows the appalling abuses committed by a company the games have endorsed. If the London 2012 organizers are serious about improving lives across the world they must demand that their official partners respect basic human rights wherever they operate. We hope they will make clear that they believe these conditions are completely unacceptable.”