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adidas Group response to Oxfam campaign letter: "adidas stop wearing us out"

May 17, 2010

Herzogenaurach, 17 May 2010 – Oxfam Australia has recently launched a campaign ("adidas stop wearing us out") expressing their concerns over worker rights and the weaknesses of recruitment practices in adidas Group supplier factories in Indonesia. Oxfam state that we have failed to live up to our promises. We would like to respond as follows.
We fully support workers’ rights and have had a programme in place for over a decade to actively monitor our suppliers to ensure that, whether through their acts or their omissions, they do not restrict the freedoms, rights and entitlements of workers. Where issues do arise, we do our very best and apply our influence as a business partner, to seek improvements in our supplier factories.
For the adidas Group compliance with our ‘Workplace Standards’, which are derived from international labour conventions and human rights norms, is a minimum expectation. It is a key factor in the selection and long term retention of our suppliers and is also taken into account in the allocation of their purchase orders.
Turning to Oxfam’s specific concerns, we continue to promote improved wage-setting mechanisms in our suppliers’ factories to ensure workers receive fair payment for their labour. However, the adidas Group does not set industry wages. In the case of Indonesia wages in the footwear and garment sector are linked closely with the minimum wage setting, which is a tripartite process involving government, local trade unions and the employers association. International brands have no place at the table.
As for promises and outcomes, we are aware of the weaknesses of our suppliers’ recruitment practices and we have been transparent and open in providing Oxfam with access to information and to the factories concerned. Until comparatively recently, the footwear sector in Indonesia has been in the doldrums: well before the Global Recession there was a series of mass layoffs as businesses folded due to bankruptcy. Over the past 3 years there have been very limited numbers of openings for workers and tens of thousands of possible applicants.
As a newly invested footwear plant, Ching Luh Indonesia (CLI) has been the exception. Given all the challenges of a new start-up they have tried their best to priorities former Spotec workers in their recruitment. To date some 1,500 ex-Spotec workers have secured work with them. Former Spotec workers represented 60 percent of those who were recruited during the factory’s initial start-up period. CLI had no obligation to recruit former Spotec workers. They entered into this process voluntarily, as a goodwill gesture for the adidas Group.
Over the past 3 years the adidas Group’s Social & Environmental Affairs department has redirected its staff resources from our general social compliance programme, which monitors health and safety issues for some 130,000 workers employed in factories in Indonesia, to address Oxfam’s concerns over the job search by the individuals named in their campaign. We have tracked job applicants, reviewed factory level job applications, advised of job openings within adidas Group suppliers, investigated claims of preferential and/or discriminatory recruitment practices and where our suppliers own internal systems have been found wanting, we have continued to push for improvements.
We believe are living up to our promises, which was to ensure that ex-union officials were given an equal opportunity to other qualified job applicants when pursuing work with our suppliers.