adidas Group response to calls for intervention over minimum wages in Cambodia

Herzogenaurach, 4 October 2010 – In recent weeks, the adidas Group has received regular mails and letters from international labour rights groups expressing their concerns over retaliations that have taken place against striking unions who have opposed the USD61 per month minimum wage, which was agreed between garment manufacturers and other national unions. The adidas Group has no physical presence in Cambodia and has therefore liaised closely with the officers of the International Labour Organization’s (ILO) Better Factories programme - which monitors labour conditions in adidas Group supplier factories - to provide us with regular updates on the unfolding situation in Cambodia.
 
As a relatively small scale buyer of ready-made garments, the adidas Group is not a party to the wage-setting process in Cambodia, nor do we hold sway or influence over the parties involved in the tri-partite negotiations. We are however concerned to hear reports of union officials being targeted for leading strikes to further the economic well-being of their members. We have therefore joined with other brands in a joint letter to government calling for all parties to:

• Respect the process and engage in good faith dialogue to find a solution.
• Show commitment to constructive action for a long term solution and refrain from any inflammatory action or counterproductive rhetoric.
• Find a solution that is inclusive of all parties’ concerns and provides longer term stability for the industry.

We have engaged closely with our suppliers to ensure that no retaliatory action or dismissal has taken place against any local union official who has participated in the recent national strikes. We can positively state that we have no evidence of such retaliation taking place within our own direct supply chain.
 
As an outcome of the national strikes, we understand that the government has established a high level working group with five representatives from the unions and five from the employers facilitated by the Ministries of Labour and Social Affairs staff to deal with the issue of discussing and establishing additional benefits above the minimum wage. This process is expected to allow other unions to join in these discussions under a common process. The task force would then submit its recommendations to the Labour Advisory Committee, which is the wage-setting body, for a final decision.
 
In a separate process the unions and garment manufacturers have also discussed a common approach to resolving industrial disputes. There is an agreement on a road map on how to establish more trust and confidence to Collective Bargaining Agreement and dispute resolution processes. We believe this is a positive development and should complement the work of the Arbitration Council which was established in Cambodia in 2003.