Update on the current situation at the supplier factory PT Panarub in Indonesia

Herzogenaurach, 2 May 2007 - In recent weeks we have received enquiries from students in Australia in response to a campaign by Oxfam Australia regarding factory issues in Indonesia. One of Oxfam Australia’s requests is that the adidas Group “actively work to ensure workers at Panarub are reinstated.” Oxfam is referring to the ongoing case of 30 workers who were dismissed by PT Panarub following a strike in 2005.
 
The following is an update of the status of that case.
 
For more than a year, the adidas Group has continued to place pressure on the management of PT Panarub to find a resolution to the termination of 30 workers who are members of the Perbupas trade union. The dismissed workers had their case heard by the Indonesian Manpower department, who found in favour of Panarub. However, in a separate investigation, the Indonesian Human Rights Commission questioned the grounds for the dismissals. On the basis of the Commission’s findings the adidas Group asked Panarub to reconsider its decision and to reinstate the workers. Panarub refused to do so, arguing that dismissals are in full accordance with the Indonesia labour law.
 
In mid April 2007, Panarub management and the dismissed workers agreed to hold a bipartite discussion to find a resolution to the case. This initiative was communicated by the Perbupas union (which is representing the dismissed workers) and the management of Panarub to all concerned stakeholders, including the adidas Group, Oxfam Australia, the US-based Workers Rights Consortium and the Clean Clothes Campaign in Europe. The outcome of those communications has been a common consensus from all stakeholders that they will respect the agreement reached in the bipartite meeting, so long as this is achieved in a fair and open manner.
 
The adidas Group has been informed by both Panarub and Perbupas that an agreement has been reached and that the agreement involves the payment of compensation to the dismissed workers, rather than reinstatement. We understand that PT Panarub and Perbupas plan to issue a joint statement regarding the details of the bipartite agreement. This will be communicated to concerned stakeholders, once it is available.