HOW ADIDAS IS VIOLATING WORKERS' RIGHTS

The Badidas Campaign

What put the "bad" in Badidas? Adidas is the second largest sports apparel provider in the world, bringing in $8.21 billion in gross profit in 2011. But despite profiting more than ever, Adidas refuses to address serial human rights violations within its supply chain.

United Students Against Sweatshops, the nation's largest student-run anti-sweatshop organization, launched the Badidas Campaign to support Indonesian workers who sewed Adidas logo college apparel for $0.60 an hour. Since the closure of their factory, PT Kizone, Adidas has refused to pay over $1.8 million in legally-owed severance pay to 2,800 former PT Kizone workers – nearly half a year's wages. While other brands have contributed severance, Adidas is the only company that has refused to pay a single cent. As a result, workers have had to pull their kids out of school, and many are being pushed out of their homes. More than two-thirds are still out of work.

Beyond Indonesia, Adidas’s business practices have left a trail of devastation in communities across the globe. For too long, workers producing apparel for Adidas have endured death threats, illegal firings to repress union organizing, ever-increasing production quotas for poverty wages, and stolen severance. Students in the US, anti-sweatshop activists in Europe, and garment workers across the world are uniting to demand respect and dignity from Adidas. Will you join them?

The Company

Adidas is a publicly held, private sector apparel company headquartered in Germany. Adidas AG is the parent company of Reebok, TaylorMade, Adidas, the fashion lines Y-3, Neo, and SLVR, as well as another 173 subsidiaries around the world.

Adidas has 1,232 contract factories worldwide, producing $17 billion-worth of products annually, compared to Nike’s 904 factories producing $39 billion in products. In 2011, Adidas brought in $17 billion in total revenue and $8.21 billion in gross profit.

Herbert Hainer is the CEO of Adidas. In 2011 Mr. Hainer received $7.8 million in compensation.

Adidas’s Violations at PT Kizone

PT Kizone was an apparel factory located in Tangerang, Indonesia. Prior to its closure, the facility employed roughly 2,800 people who sewed Adidas apparel for 60 cents per hour, on average. The plant produced collegiate apparel for Adidas and Nike, as well as non-collegiate apparel for Dallas Cowboys Merchandising and other brands.

On January 31, 2011, the owner of PT Kizone, a South Korean national, fled Indonesia, precipitating the factory’s eventual closure and leaving no money for severance pay. At the time of final closure, on April 1, 2011, nearly 2,800 employees were owed US$3.4 million in severance pay. On its website, Adidas said that PT Kizone was an active supplier at least through January 2011.

Nike and its broker agent, Green Textile, paid $1.5 million in severance following the factory closure—this is largely due to the success of USAS's “Just Pay It” campaign in 2009 which forced Nike to pay $1.5 million in severance to 1,800 formerly subcontracted workers. Dallas Cowboys Merchandising paid $55,000.

Adidas owes a total of $1.8 million dollars in severance to the former PT Kizone workers, nearly half a year’s wages for the average worker. Adidas is the only major brand that has refused to pay a single cent of severance.

Most licensing contracts between U.S. universities and apparel brands include labor codes of conduct. These codes require that brands ensure payment of “legally mandated benefits” to all their employees, including the subcontracted employees, whom the brand doesn’t employ directly. Adidas’s refusal to pay severance constitutes a violation of Indonesian labor law and university codes of conduct. See the Worker Rights Consortium's report for more info on university code of conduct violations.

PT Kizone is one case in a pattern of abuse—Adidas’s failure to pay severance has left a trail of devastation in communities across the globe. For example, in 2005, Adidas pulled orders from the Hermosa factory after workers unionized, resulting in workers being laid off and robbed of $825,000 in severance. The Workers Rights Consortium has also documented at least four other factories in Indonesia where Adidas has refused severance to a total of 20,000 workers. See pages 6-9 of the May 15 WRC status update for more info on Adidas's serial violations of workers rights.

Students and Workers Are Fighting Back

On June 11, 2012, PT Kizone workers and their families took to the streets and marched in Jakarta to demand Adidas pay the $1.8 million dollars owed to them in severance pay. On October 1, 2012, PT Kizone workers again took to the streets demanding severance from Adidas, just 18 hours before 3 million Indonesian factory workers went on strike to protest sweatshop conditions.

In response to international pressure, Adidas recently began offering humanitarian aid to PT Kizone workers in the form of food vouchers, which falls well short of the $1.8 million that workers are owed. Many workers have rejected the food vouchers, describing them as "abuse".

Six universities have already committed to end their contracts with Adidas over the company’s refusal to pay severance to the former PT Kizone workers. In order, they are: Cornell University, Oberlin College, the University of Washington, Rutgers University, Georgetown University, and the College of William & Mary. Dozens more are considering cuts.

Students and activists across Europe and the U.S. have formed a coalition to force Adidas to pay severance. In September, workers rights activists delivered a petition signed by 47,000 international supporters to Adidas’s US headquarters as well as flagship retail stores in the UK and Germany.

Crisis of Compliance in Adidas’s Supply Chain

Globalization Monitor, a Hong Kong-based NGO, has released a report on unsafe working conditions at a factory called Dynamic Casting that produces golf clubs for Adidas's golf brand, TaylorMade. Because of unsafe equipment, at least 69 Dynamic Casting workers in Guangzhou are suffering from a workplace injury called hand-arm vibration condition (HAV), resulting from operating vibration units over a long period of time, which immobilizes workers' fingers and hands permanently.

At PT Panarub, Adidas's main global supplier of soccer cleats, 2,000 workers organized a strike in July 2012 that ended in police drawing blood and jailing at least one union activist. The strike protested outrageous production quotas and the factory's long history of anti-union repression.

At Pinehurst Manufacturing, one of Adidas’s Honduran factories, US national Jeff Brischke, the factory owner, fired workers who formed a union, and later repeated the same action when workers at his Nicaragua factory, Augusta, organized a union this year. He was forced to rehire all the union leaders after intense international pressure focused on two facilities, one producing entirely for Adidas and the other mostly for Adidas. Brischke continues violating agreements signed with both unions, while workers protest ever-increasing production quotas, likely demanded by Adidas.