Position on the case of the factory Flying Needle in Nicaragua

Herzogenaurach, 30 November 2012 - The adidas Group works to ensure fair labour practices and safe working conditions in factories throughout our global supply chain and takes an active role to promote and enforce workplace standards to protect and improve workers experiences based on the International Labor Organization’s core labour rights conventions. We also respond immediately to reports of suspected wrongdoing

This is the case with Flying Needle, an American-owned Nicaraguan based apparel factory that produces apparel products for the adidas Group and other brands.  The terminations of 12 workers at Flying Needle earlier this year were illegal and the factory did not immediately comply with the rulings of the Ministry of Labour to re-employ the workers. As soon as the adidas Group was advised by workers’ representatives about the terminations and Flying Needle’s lack of compliance, we engaged immediately and are pleased to report that the workers have been reinstated and will receive back pay.

We engaged with Flying Needle management in the US and in Nicaragua to ensure their immediate cooperation to reinstate the discharged workers and to improve the industrial relations atmosphere in the factory. A 10 point agreement, developed in conjunction with local factory and trade unions was ultimately finalised and signed on November 13 and supported by the Nicaraguan government including the Ministry of Labour. The agreement includes:

• The reinstatement of 8 workers with back pay. Flying Needle management has verbally agreed to reinstate all 12 discharged workers. But for reasons that are unclear, union leaders chose not to include in the written agreement four workers who could not be located. The adidas Group remains confident that if these four workers do appear to claim reinstatement and back pay, the factory will do so.
• A more formal schedule and accountability of meetings between the factory management and union leadership.
• A comprehensive dispute resolution protocol.
• Commitment from Flying Needle management and the national trade union confederation to develop and deliver training to supervisors, managers, workers and union members.

We continue to monitor, engage, and meet with all sides so that all aspects of the agreement signed on November 13 are executed.

There are recommendations to remedy the violations at Flying Needle and we can confirm each of these recommendations is in fact, already agreed, planned, or completed. This includes:

• Flying Needle’s management communicated with workers about their rights to affiliate late in the week of November 13 with a message that was agreed by the factory union, the national trade union confederation and the National Commission of Free Zones.
• Flying Needle management has instructed all managers that anti-union harassment, intimidation and threats will not be tolerated. At least one manager identified in these types of activities has been removed from direct contact and engagement with workers.
• Training for workers and management is being planned by the company and the national trade union confederation.
• The factory management has formally recognised the union, advised the workforce of that recognition, and fully comprehends their responsibilities for bargaining in good faith when so requested by the union.
• Flying Needle management has verbally agreed to reinstate all 12 discharged workers.

Through hundreds of annual factory audits in 69 countries where we do business, our company and independent organisations consistently review and evaluate supplier conduct, work with them to address issues and make improvements where necessary. The adidas Group employs a team of 65 specialists around the world who use a collaborative and industry-leading approach to provide guidance and training materials to our suppliers. We will continue to engage with all sides in the Flying Needle matter to ensure there is the appropriate oversight and management of this issue.