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Statement on the second annual report published by the Fair Labor Association

August 30, 2004

Herzogenaurach, 30 August 2004 - The Fair Labor Association (FLA) issued its Second Annual Public Report August 19th, providing the public with an impartial, in-depth view into what 25 diverse companies did in the past year to improve working conditions in the factories where they produce apparel and footwear around the world. The new report includes updated progress reports on company labor compliance programmes, FLA's evaluation of the first labor compliance programme to be accredited and an overview of FLA's findings from its unannounced independent external monitoring visits to company supplier factories. It also features an in-depth report on the challenging issue of freedom of association, and case studies of third-party complaints received by the FLA during 2003.

During FLA's second year of monitoring (January-December 2003), FLA-accredited monitors conducted 110 independent monitoring visits in 20 countries. During the visits, the monitors evaluated factory compliance with the FLA Workplace Code of Conduct and applicable national and local laws. The FLA's Public Report complements the FLA tracking charts, very detailed reports that summarise and follow-up on the FLA monitoring visits to company supplier factories.

Reports are included for 10 FLA Participating Companies: adidas-Salomon, Eddie Bauer, GEAR for Sports, Liz Claiborne, Reebok, Nordstrom, Nike, Patagonia, Phillips-Van Heusen and Zephyr-Graf-X. There are also reports on 15 university licensees.

adidas-Salomon became an FLA participating company in 1999 and fully supports the FLA obligations. This includes internal auditing, independent and unannounced monitoring, consistent tracking of remedial actions, and transparent communication of the process. adidas-Salomon is committed to continuously improve working conditions throughout its supply chain, including standards for employment, health and safety and workers rights. Together with its business partners adidas-Salomon develops and implements action plans for continuous improvement in factory working conditions. Progress against action plans will be monitored by business partners themselves, our internal monitoring team and external independent monitors.

For further information on our commitment to the Fair Labor Association, external independent monitoring and verification of working conditions in our supply chain, please refer to the adidas-Salomon Social and Environmental Report 2003 "Staying Focused".

We invite you as well to review the FLA monitoring programme, posted on their website.