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Factory Workers

Workers in our suppliers’ factories play a central role in our sustainability program.

It was our concern for the well-being of workers in our factories that led us to establish our "Workplace Standards", the supply chain code of conduct, which covers workers’ health and safety and provisions to ensure environmentally sound factory operations.

A number of topics related to the workers' well-being are of special interest to our stakeholders. These range from fair wages, child labor and freedom of association to health and safety.

 

FAIR COMPENSATION

The idea of a living wage is that workers and their families are able to afford a basic, but decent, standard of living that is considered acceptable by society at its current level of economic development.  Fair compensation goes deeper. It considers the fairness of the wage that a worker is paid  by benchmarking whether wages: are paid regularly and on time, include the legal minimum, allow decent living standards, reflect a worker’s performance and skills, reward overtime, follow price increases paid for the products they are making, are linked to their employer’s profits and sales, reflect changes in work technology, are negotiated individually or collectively with workers, are clearly and formally communicated to workers.

WAGES, BENEFITS AND COMPENSATION: As a responsible business we do not want the workers employed in our supply chain to face hardship in their daily lives. Our aspiration, as set out in the core principles of our Workplace Standards, is that workers earn enough for their basic needs and also have income remaining to cover their discretionary spending as well as savings. We seek business partners who progressively raise employee living standards through improved wage systems, benefits, welfare programs and other services which enhance quality of life. The question of calculating and paying fair compensation within global supply chains is complex. Wages are determined by the general economic conditions and cost of living in a country, national laws, the size and availability of its workforce, a worker’s skill level, the nature of the industry or sector and the competitiveness of the employer. We do not determine what factories pay their workers but we oblige employers to pay compensation that is legally required or has been freely negotiated through a collective bargaining process. As a buyer, we influence a factory’s ability to pay its workforce their wages in two ways:

  • in the prices we pay for products;
  • by sourcing and buying those products responsibly.

OUR APPROACH TO FAIR WAGES

Our approach to payment of fair compensation in global supply chains is built on three pillars and aligned with basic human rights concepts. Within each pillar we have a program of work activities which supports fair compensation and wage progression when workers achieve proficiency, performance and competencies in their jobs. In the last two years, we have deployed wage assessment tools and guidance to two dozen suppliers to progressively pay fair wages. The assessments provided suppliers with measurements of the strengths and weaknesses of the wage-setting system and highlighted the important linkages between pay and skills, pay and company performance and the need for effective social dialogue in the workplace. In the next years, we will align with FLA activities to promote supply chain fair compensation. This includes specific focus on supporting wage influencers such as collective bargaining, responsible sourcing practices, productivity and efficiency improvements and validating the data gathered in interviews with workers and managers. The general program of activities is described below.

RESPECT

Do not infringe on the rights of workers, their employers and governments to set fair compensation.

 

 

As a company we are committed to responsible sourcing practices. Our business decisions and actions do not act as an impediment to wage increases, or to the workers receiving fair compensation. We believe it is the duty and accountability of governments to set minimum wages at a level that reflects the welfare and development needs of society and in accordance with human rights norms and ILO conventions. The legal minimum wage must take into account a country’s general economic conditions, inflationary pressures and the needs of the workers and their families. For years, we have engaged and we will continue to engage with governments who fail in their duty to uphold this basic expectation, and we will call for them to fulfil their international human rights obligation to steadily move wages towards a living wage.

 

THE WAY FORWARD

  • Ensure prices that are negotiated and paid recognize the full payment of legally mandated minimum wages and benefits.
  • Ensure the prices paid account for wages negotiated through collective bargaining.
  • Advocate with governments to ensure that minimum wage setting takes into account workers’ living costs.
  • Strive for stable, long-term sourcing relationships with suppliers.
  • Support productivity initiatives and technologies to reduce work hours and improve pay for performance.

REMEDY

Conduct due diligence and act when business partners are not compliant with the law or our Workplace Standards.

 

For our business partners, our starting point is full legal compliance. We insist on adherence to our Workplace Standards. We demand that our suppliers, as employers, pay the legally required wage and benefits, on time and in full, and we monitor our suppliers to ensure this. We expect there to be equality in pay for men and women. We verify the compliance status of our suppliers through internal and third party audits, worker hotlines and grievance processes. If we find evidence of non-compliance, we recommend remedial steps and actively engage with our suppliers to implement corrective action, drive improvement and prevent further non-conformance. However, where a supplier fails to meet our expectations or take the necessary remedial or preventive steps they will be subject to enforcement action; up to and including termination of the business relationship. Wherever new and higher wages are set (whether through collective agreement or government minimum wage adjustment), we require our suppliers to meet those wages and any other legally mandated allowances and benefits. Our purchase price is adjusted accordingly, within the normal cycle of price negotiations, to reflect our business partners’ costs of doing business. In parallel with this, our business partners are expected to deliver efficiencies and productivity levels that ensure their ongoing competitiveness as suppliers and engage with their workforce to that end.

 

THE WAY FORWARD

  • Regularly audit our supply chain for full payment of compensation.
  • Take enforcement actions when suppliers fail to pay the government-mandated wages and benefits.
  • Take enforcement action when suppliers fail to uphold legally mandated compensation and conditions.
  • Take enforcement when there are breaches of freedom of association and negative impacts on collective bargaining.

PROMOTE

Facilitate ways and actions that influence wage progression and fair compensation.

The path to improve the general welfare of workers is to promote wage-setting mechanisms which are transparent and have been developed with the direct input of workers. Ideally, this occurs through negotiation or collective bargaining with established and freely elected trade unions, or through alternative legal means, such as workers’ councils or welfare committees. We actively encourage our suppliers to consider and assess the impact living costs have on their employees’ wellbeing, worker turnover and retention levels. A worker’s total remuneration must include the legal minimum wage and mandatory benefits, reward overtime, be paid regularly and on time, and be clearly and formally communicated to workers. But to be truly fair, compensation must also include incentives and rewards, reflect a worker’s performance and skill, follow price increases paid for the products workers are making, be fixed to their employer’s profits and sales, reflect changes in work technology and allow decent living standards.

 

THE WAY FORWARD

  • Encourage suppliers to improve social dialog, including participation in collective bargaining.
  • Partner with non-government organizations and specialized institutions which can provide technical insights about wage influencers.
  • Benchmark and measure wage influencers such as productivity and efficiency, performance pay, reduced work hours and collective bargaining with fair wage assessments.

TIMELINE FOR RESEARCH & GUIDANCE ON FAIR COMPENSATION

1998

adidas issues its Standards of Engagement which includes wages and benefit expectations for suppliers

2001

We publish our Employment Standards to explain how wages and benefits (and a range of other labor rights) should be respected and delivered

2003

We commission a two-year study on fair wages in Indonesia, which examines different living wage methodologies

2003

We appoint a leading economist to review the research outputs from the Indonesia Living Wage Study and advise on wage benchmarks for Indonesia

2004

adidas hosts the first-ever MNC-led fair wage workshop bringing together government, manufacturers and trade unions to discuss living wage concepts, wage growth and the impact of wages on employment

2004

We publish a Guideline on Worker Cooperatives to support savings and loans for housing and the establishment of worker food cooperatives

2005

We commission an econometrics study for a cross section of footwear and apparel suppliers in China, which examines wage, productivity and incentive payments for workers

2007

We issue a new set of Workplace Standards which updates the wage provisions and highlights the need for discretionary expenditure and savings

2009

We provide access to selected factories in Asia, as part of the initial research into fair wage concepts conducted by Professor Daniel Vaughan-Whitehead and the Fair Wage Network.

2010

We revise and update our Employment Guidelines, incorporating fair compensation language into our guidance

2011

We engage with the Fair Wage Network to assess the fairness of wages paid by 26 suppliers in seven countries

2012

We extend the Fair Wage Network assessment to a quantitative evaluation of the outcomes from assessments in four suppliers

2013

We share our work and experiences on fair wages at the European Conference

on Living Wages, hosted in Berlin, Germany


 

 

VULNERABLE GROUPS

Although everyone’s human rights and fundamental freedoms must be respected and upheld, particular attention must be given to vulnerable groups, minorities, or those whose circumstances open them up to exploitation or the abuse of their rights. It is for this reason that we have developed specific programs and initiatives to address topics such as child labor, migrant labor, trafficking and forced labor, and women’s rights. These initiatives are summarized below.

CHILD LABOR

According to the International Labour Organization, child labor is often defined as “work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development”. This includes work that interferes with children’s schooling. Our Workplace Standards state that our suppliers must not employ children less than 15 or less than the age for completing compulsory education, if that is higher than 15.

Our policies on child labor have always been centered on a concern for the child and protecting their interests, as well as recognizing the importance of income to support households and schooling. Although cases of child labor are now a rare occurrence in our main supply chain, we do have very developed approaches to dealing with cases of child and juvenile labor, should they arise. Any finding of child labor would require a supplier to pay an ongoing wage to the family of the child laborer and for the child to return to school until they are of a legal age to work. They must then be offered re-employment by the supplier, in a role that would not involve excessive hours or hazardous work. In the past, we have often partnered with local NGOs to manage and track such activities, or support in the identification of school options.

The adidas Social and Environmental Affairs program was formed as a result of concerns over the presence of child labor in global supply chains. It was a core area of our work in the late 1990s. The founding director of our program was a former Director of Save the Children and our policies and practices led the industry. With the growing football stitching industry in Sialkot, Pakistan, we recognized at an early stage the need to address the underlying issues of poverty, employment and access to schooling for children through a combination of educational and social development programs. For the past years, we have now sponsored education programs in Sialkot, to improve access to schooling for children from the rural locations where home-stitching was once prevalent. One such program started as an industry-wide initiative supported by the ILO and UNICEF, establishing an independent child labor monitoring body which is now self-governing.

We are also aware of and concerned by the fact that the sourcing of cotton in certain areas can include child labor. Therefore, we joined an alliance of international investors, brands and non-governmental organizations to fight against government-backed child labor in Uzbekistan during the cotton-picking season. Click here to read more about the pledge we signed calling for the Uzbek government to end forced child labor.

Our requirements in managing child labor, as well as the employment of juvenile labor (those who are of a legal age to work, but under 18) are presented in our Employment Guidelines, which are shared with every supplier and apply equally to all subcontracting relationships.

FORCED LABOUR

The ILO Forced Labor Convention No. 29 defines “Forced Labor” as “work or service exacted from a person under threat of any penalty, which includes penal sanctions and the loss of rights and privileges, where the person has not offered himself/herself voluntarily”. In accordance with our Workplace Standards, business partners must not use forced labor, whether in the form of prison labor, indentured labor, bonded labor or otherwise. No employee may be compelled to work through force or intimidation of any form, or as a means of political coercion or as punishment for holding or expressing political views.

In a world where modern-day slavery continues to impact tens of millions of people, we have developed a policy to address forced labor and concerns over human trafficking. adidas strictly prohibits the use of any form of forced labor or the trafficking in persons across all of our company operations and in our global supply chain.

MIGRANT LABOUR

We have worked closely with the ILO and non-government organizations to safeguard the rights of migrant workers who have found employment within our supply chain. This has included the development of guidance and industry best practice to eliminate the exploitative actions of middle men and unscrupulous employment agencies, as well as ensuring freedom of movement, equal treatment and proper employment contracts for migrant workers. Details of our policies and guidance can be found in our Guidelines on Employment Standards.

WOMEN IN THE SUPPLY CHAIN

RESPECTING HUMAN RIGHTS: On May 1, 2011, adidas signed off on its Labor Rights Charter to commit the company to uphold labor and human rights for its employees and respect and promote such rights through our business relationships, and with that to support the United Nations’ Universal Declaration of Human Rights and to follow policies and procedures which “adhere to all applicable domestic laws and are consistent with core labor principles of the International Labour Organization.” Although the Charter does not make specific reference to “Women’s Rights” or the 1979 UN Convention on the Elimination of All Forms of Discrimination against Women, those rights are protected by umbrella commitments made to ensure that employees, and workers within the supply chain, are treated equally and are free from discrimination.

The Charter makes it clear that “equal opportunities for all employees and a prohibition on discrimination based upon one’s membership in a lawfully protected category are fundamental principles of our corporate policy. No person is to be unfairly disadvantaged, favored or ostracized because of (…) gender, gender identity, (...). Harassment of any kind is forbidden. (..) We believe Diversity is a key success factor for our business.” adidas lives these principles through its policies, procedures and daily practices, both internally and in terms of our business relationships. “We deeply believe that the respect for people is fundamental for business excellence. With this position we confirm our commitment to internationally recognized principles in the areas of human rights and labor conditions. We expect the conduct of our employees and business partners worldwide to reflect this commitment.”

Aligned with that commitment, we follow a holistic approach to uphold women’s rights, ensure gender equality and protect against all forms of gender-based discrimination, internally, and through our business relationships.

Own employees

As a truly international company with more than 80 nationalities at its German headquarters in Herzogenaurach alone, and numerous ethnicities and languages across its global operations, adidas embraces diversity and strives for inclusion and equality. There are many facets to diversity. Parity and equality across them all is essential in creating the ideal culture and protecting rights. Our goal is that at adidas every single person feels welcome. We believe in equal opportunity for all, regardless of race, age, abilities, gender, gender identity, sexual orientation, ethnicity or religion. We hold ourselves to the same high standard for all our workplaces around the world, without exception. This is supported and communicated by our Executive Board.

To support this drive for equality and diversity we have various initiatives in place, including

  • Female mentoring programs and networks: Members of the Executive Board have been proactive in mentoring female talents. We have applied an equal gender split to our Global High Potential program, to guarantee that our succession pipeline is balanced. In addition, we have a very active Women’s Network in place across the company, which is developing mentoring circles to foster the professional development of junior colleagues.
  • Mixed leadership teams: We believe that it is important that both women and men have equal opportunities to contribute and succeed. Globally, adidas has an even ratio of female to male employees. As of the end of 2017, 31% of senior roles were held by women. The company is committed to deliver a more gender-balanced leadership.
  • Equal pay: Under our Charter, adidas has committed to “provide our employees with fair and competitive compensation and benefits”. We are continuously improving our remuneration approach and are therefore investing in a number of projects and initiatives to increase the significance of our remuneration programs, as well as to ensure we are investing in the right people at the right level. One of the improvements we conducted was the initiation of a new salary adjustment approach. It was applied in Germany and the US in 2017 to minimize salary differences and, more importantly, inequity of employees on the same positions and grades. It is based on a higher level of detail for external market data and addresses internal pay gaps – also helping ensure that we pay equally at the same level for female and male employees.
  • Sexual harassment: Harassment of any kind is forbidden. To track complaints, we have established a network of 20 compliance officers worldwide. In 2013, we installed a global hotline called the ‘Fair Play Hotline’. With the Fair Play Hotline, our employees can submit complaints anonymously.

Click here to read more about all programs and intiatives for employees.

Women in our supply chain

Women make up half of adidas’ current global employee base and are the dominant gender in our supply chain; more than 80% of workers making our product are women. Women are given special status and protection under international human rights law. The International Labour Organization also regulates the treatment of women in the workplace through several conventions that specifically address fair treatment, non-discrimination and equal pay and conditions.

We require that our business partners respect and promote women’s right to health, education and work. The latter includes both equality of opportunity (for example, through fair hiring and retention strategies) and equality of outcome (for example, ensuing equal pay and benefits while in employment). Our approach is closely aligned with the expectations laid out in the UNConvention on the Elimination of All Forms of Discrimination against Women (CEDAW). (For a definition of discrimination by the Convention on the Elimination of All Forms of Discrimination against Women 1997, see UN Office of the Commissioner for Human Rights, 2014, UN Women’s Rights are Human Rights, p. 6. Indeed the underlying principles of CEDAW are reflected in the language of our Workplace Standards and in our supporting Guidelines on Employment Standards (click here), which our business partners must follow.

Through our guidance to suppliers we seek to uphold and protect women’s rights. Our guidelines explicitly state that “workers must not be discriminated against on the basis of their gender, marital status, or because they are pregnant or breastfeeding.” Moreover, women are to be guaranteed “equality of opportunity and treatment in access to training, employment, promotion, organization and decision making, in addition to securing equal conditions of remuneration, benefits, social security and welfare services.”

We have developed specific guidance and offer tailored programs and initiatives in collaboration with organizations aimed at securing the rights and ensuring the occupational safety of female workers in our supply chain.

  • Gender equality and non-discrimination: Within our supply chain we have supported gender equality and non-discrimination by delivering specific programs and initiatives. For example, we have actively monitored and sought remedies for breaches of women’s rights, including discrimination in the hiring or treatment of female workers, based on gender, age or reproductive status; we have followed a zero-tolerance policy towards sexual harassment, conducting investigations into claims and developing remedies for victims; we have supported specific reproductive and post-natal health projects, such as the establishment of breastfeeding areas, special canteen areas/food for pregnant workers and the provision of child-care facilities; we encourage our suppliers to go beyond legal requirements and support and subsidize the cost of education and health care for women and their children; we have participated in joint industry initiatives, such as HER project from Business for Social Responsibility and the ‘Women in Factory’ program in China to support workplace-based interventions on health, financial inclusion, and gender equality; we have commissioned empowerment projects to support the hiring of women workers – where cultural norms had restricted job opportunities – and training initiatives to build skills for female workers whose employment has been displaced due to the introduction of new technologies. See below for more details about these projects.
  • Equal pay for equal work:Everyone has the right “to fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work”. (See Article 7(i), International Covenant on Economic, Social and Cultural Rights, 1966.) Ensuring that our suppliers recognize and pay workers the same wages and benefits, irrespective of gender, is a core component of our approach to fair wages in the supply chain. This is supported by our strict enforcement of government-mandated minimum wages and legal overtime rates for workers. Based on the wage research we have commissioned in the past and the wage data we collect during our regular factory monitoring activities, we have achieved a high level of compliance with this wage requirement.
  • Benefits and entitlements: To complement our work on fair wages, our close engagement with suppliers has resulted in consistently high levels of compliance in fulfilling female workers’ employment rights and benefits, such as maternity leave allowance, restricting overtime for pregnant women, menstrual leave, provision of day-care and nursing facilities. For example, as early as 2001 we engaged with Phulki, a Women and Child Rights NGO in Bangladesh, to promote improvements and access to day-care facilities, which are essential for young mothers re-entering the workforce. From this initial partnership, Phulki has been retained to engage directly with women workers to understand and track their concerns and issues.
  • Sexual harassment and gender-based violence: Sexual harassment or abuse, repeated use of rude or improper language, or any type of behavior which is inappropriate or used to intimidate workers is unacceptable. Sexual, physical or verbal harassment or any other types of activity which create an intimidating, hostile or offensive work environment are prohibited and are treated as a serious breach of our Workplace Standards. To address such issues, we require our suppliers to have in place appropriate policies, procedures and training programs for workers and managers, as well as grievance systems to handle worker complaints. (See detailed guidance given in our Guidelines on Employment Standards on pages 104-107.) We independently review the effectiveness of these systems and will intervene directly if we see evidence of sexual harassment taking place in our suppliers’ factories.

Modern slavery and human trafficking

In the absence of a legal definition for modern slavery, adidas defines it as the risks posed by forced labor, prison labor, indentured labor, bonded labor, debt servitude, state-imposed forced labor and human trafficking, where coercion, threats or deception are used to intimidate, penalize or deceive workers, thereby creating situations of involuntary work and exploitation. It is estimated that there are 40.3 million victims of modern slavery in the world. Of these, 24.9 million people are in forced labor and 15.4 million in forced marriage. There are more females (71%) than males (29%) in modern slavery. Where people have migrated for economic reasons, women are particularly vulnerable to the risks of slavery-like practices.

To address these issues, we have been progressively working closely with our supply chain business partners beyond our Tier 1 in high-risk locations, providing them with the guidance to identify and remedy unscrupulous employment practices. We conducted assessments of our Tier 3 raw material supply chain, to identify and address risks of modern slavery and use an external benchmark, managed by Corporate Human Rights Benchmark and others, to track our performance and programs in relation to our industry peers.

Women’s Empowerment Projects

  • Pathways for Promise Program (Bangladesh): In partnership with Asia University for Women, adidas supplier factories in Bangladesh are participating in a program whereby workers are supported while seeking further education at the university and students from the university are able to participate in an internship program with the factories. In this program, workers receive a salary from the factory while they are attending classes.
  • Women in Factories (China): Initiated in collaboration with Walmart in 2011, this program has been continued at one of our key suppliers in North China with more than 16,000 workers. It aims to provide capacity building to female workers through fundamental life skills training for women in the workplace. Topics include health, communication, skills necessary for career advancement and for gaining practical knowledge that can enhance quality of life for workers and their families. Every year, a new batch of female workers is enrolled into this program.
  • Americas Group (El Salvador and Honduras): Through its active participation in the multi-stakeholder initiative the ‘Americas Group’ (AG), adidas has been collaborating with other brands, the Maquila Solidarity Network, the Fair Labor Association (FLA), and local labor rights and feminist CSOs on finding sustainable remediation to macro-level issues heavily affecting women maquila workers. Much of the AG work in Central America derives from the “Women’s Labour Rights Agenda for the Central American Maquiladora Industry” published in 2014 by the Central American Women’s Network in Support of Maquila Workers (REDCAM). As priorities, the AG has been focusing on supporting local efforts in identifying sustainable ways for employers to meet their legal obligations around child-care provision. In addition, in 2017 the AG began exploring possible ways to help improve how brands and factories prevent, identify and remediate sexual harassment and other forms of gender-based violence in the workplace.
  • Women’s Empowerment with Baidarie (Pakistan): Launched in 2017, this project aims to provide women with economic opportunities by strengthening their knowledge and skills. It has equipped home-based women workers impacted by the automation of the football stitching industry with locally marketable and demand–driven skills, creating opportunities for the induction of trained female workers into the formal sector and enabling women to set up their own profitable micro- and small-sized business enterprises. Click here to read more.
  • Women Empowerment Program (Turkey): adidas currently runs a pilot project with an apparel supplier to promote gender equality and to empower female workers. The pilot is being led by an academic who is well known and respected for her work on social equality and women’s rights. Our aim is to increase the awareness of female workers on gender mainstreaming and women’s rights, increase the solidarity and communication among women workers and strengthen communication between female/male employees and the factory management through training, briefings, workshops and workplace activities.
  • UNICEF (Vietnam): UNICEF is implementing a workplace program at footwear and apparel suppliers in Vietnam covering issues of breastfeeding, maternity protection, maternal health & nutrition, wages and working hours, among others. Two adidas suppliers, with a total workforce of close to 76,000 workers, are enrolled in this program. 
  • Marie Stopes (Vietnam): Click here to read more about our work to improve sexual and reproductive health amongst workers of 11 adidas supplier factories in Ho Chi Minh City and Binh Duong province, Vietnam.

WORKER SATISFACTION SURVEY: FEMALE WORKERS' FEEDBACK

In line with our strategic ambition for 2020 to empower workers across our entire supply chain we started to conduct worker satisfaction surveys in factories of our strategic suppliers back in 2016. The aim is to better understand and respond to workers’ needs. Supported by an external partner, one of the latest surveys was conducted in 2017 and included female respondents, both workers and supervisors. Results show a clear trend toward a positive perception on the topic of fair wages and the absence of sexual harassment.

In detail, out of more than 7,500 female workers surveyed, 81,4% believe their wages to be “fair” or “very fair”, while only 1.3% stated it was “unfair”. A further 62,6% also stated they are rewarded for good performance. On the topic of sexual harassment three quarters of female survey respondents confirmed they have not experienced or witnessed any harassment or abuse in the factory.

Overall, we conducted worker satisfaction surveys in around 50 factories across nine Asian countries including China, Cambodia, India, Indonesia, Philippines, Thailand, and Sri Lanka in 2017. The survey results serve as good overview of our continuous quest to understand our workers’ needs through listening to them. We use the survey results to further ensure a stable and beneficial working environment, and we will track the trend and progress in the next round of survey.

HUMAN RIGHTS DEFENDERS

A human rights defender can be any person or group of persons working to promote human rights locally, regionally or internationally. Defenders can be of any gender, any age, from any part of the world and with different backgrounds and different interests. Typically, trade union organizers, environmental interest groups, human rights campaigners and labor rights advocates would be considered to be HRDs.

The threats faced by human rights defenders come in many forms – physical, psychological, economic and social – and involve the interaction of many factors (poor governance, the absence of the rule of law, intolerance, tensions over development issues, etc.) and can be triggered by different actors, both private and state.

adidas has a long-standing policy of non-interference with the activities of human rights defenders, including those who actively campaign on issues that may be linked to our business operations. We expect our business partners to follow the same policy; they should not impinge on the lawful actions of a human rights defender, or on their freedom of expression, freedom of association or right to peaceful assembly.


 

 

FREEDOM OF ASSOCIATION AND INDUSTRIAL RELATIONS

As a responsible business we believe that worker-management communication is vital for the success of any business enterprise. Workers must have access to effective communication channels with their employers and managers, both as a means of exercising their social and economic rights and to help them resolve workplace issues and disputes.

One important channel for worker-management dialogue is through trade union representation. Our Workplace Standards are clear that our supplier partners must recognize and respect the right of their employees to join associations of their own choosing and to bargain collectively. Our business partners must also develop and fully implement mechanisms for resolving industrial disputes, including employee grievances, and ensure effective communication with employees and their representatives.

Our approach to effective workplace communication and ensuring Freedom of Association

A worker’s right to freely associate must be protected and no employee should be discriminated against because of their trade union affiliations. Our approach to effective workplace communication and ensuring Freedom of Association in our global supply chain is built on three pillars and aligned with basic human rights concepts. 

RESPECT

We respect rights, ensuring that our own activities do no harm: adidas recognizes and respects the rights of all workers to freely associate, choose their representation in the workplace, and collectively bargain.

 

Effective communication in the workplace is the cornerstone of our social compliance efforts. Therefore, it is essential that employees exercise their right to freely communicate and engage with the management. adidas does not seek to promote, nor prevent, the lawful formation of workers’ organizations, in particular trade unions. Through our engagement with our business partners, we strive to protect the right of employees to make their own choices in this regard, free of unlawful interference, and ensure that employees have a voice in the workplace.

REMEDY

We seek to secure worker rights by monitoring and remediating issues we find and by preventing issues occurring whenever we see opportunities to do so: Our suppliers must recognize and respect the rights of workers to freely associate, choose their representatives in the workplace, and collectively bargain. If we find evidence of non-compliance, we recommend remedial steps and actively engage with our suppliers to help drive improvement and prevent further non-conformance.

 

For our business partners, our starting point is full legal compliance. We insist that our suppliers recognize and respect the right of employees to join and organize associations of their own choosing, to bargain collectively and, when necessary, to participate in lawful strike action. Where the national laws restrict freedom of association, suppliers should take steps to create an open and effective means of communication for employees to discuss issues and express concerns in a positive environment.

 

Through internal and third party audits, worker hotlines and grievance processes, we verify the compliance status of our suppliers. The direct feedback of workers and their elected representatives is a key indicator for us, when checking the implementations of Freedom of Association. If we find evidence of non-compliance, we recommend remedial steps and actively engage with our suppliers to help drive improvement and prevent further non-conformance. However, where a supplier fails to meet our expectations or take the necessary remedial or preventive steps they will be subject to enforcement action, up to and including termination of the business relationship.

PROMOTE

We seek to build leverage and influence. We encourage our suppliers to act in accordance with their own obligations as business enterprises in upholding the UN Guiding Principles: We guide and encourage our business partners to find ways and actions that build good industrial relations, primarily through the facilitation of worker representation systems, the management of employee grievances, and by ensuring effective communication with employees and their representatives.

 

We believe that effective communication between employers and employees is an integral part of good industrial relations and the key to a fair and compliant workplace. We actively encourage our suppliers to establish mechanisms for resolving industrial disputes and employee grievances in a positive environment. These mechanisms should enable open and effective communication with employees and their representatives.

 

For instance:

 

Worker representation system: suppliers should create an environment which permits their employees to choose their own representatives, by common consent or election, and meet with them on a regular basis to help resolve workplace issues and disputes, and where unions have been formed to collectively bargain.

 

Suggestion and grievance systems: suppliers are required to have grievance systems in place where workers can freely and (should they decide to) anonymously post or share any complaints or suggestions they may have. All grievances and suggestions received must be properly considered and responded to in a timely manner.

 

Worker hotline: the adidas SEA team requires all authorized suppliers to post a corporate hotline poster in which we encourage employees to raise any concerns or complaints they may have either to the internal communication channels provided by the employer or directly to the SEA team via a corporate email address, postal address or by telephone.

Where we see evidence of governments failing in their duty to properly investigate and protect the Freedom of Association of workers in our supply chain, we will petition them and call for effective remedies. At times we have taken steps to expand the space for the exercise of representative rights.

For example, in Indonesia we were a leading party in a multi-stakeholder process with local trade unions, non-government organizations and suppliers to develop an FOA Protocol – a basic framework for the exercise of trade union rights in the workplace. Elsewhere, we have worked with labor officials, trade unions and suppliers to run FOA awareness training sessions, to strengthen workers’ understanding of their associational rights to form and join organizations of their own choosing and their right of access to trade union representation.

 

HEALTH & SAFETY

Workers in factories face risks from fire, accidents and toxic substances. Our Workplace Standards are explicit about the need to protect workers from these risks and ensure they have a right to adequate lighting, heat and ventilation as well as access to suitable sanitary facilities. Taking a structured approach is the best way our suppliers can ensure workers’ health and safety. So we require them to establish a health and safety management system that adheres to the standards and procedures of the international standard OHSAS 18001.

Through our own monitoring we are aware that breaches of good health and safety practices have historically been responsible for approximately half of all cases of non-compliance with our Workplace Standards. We therefore remain diligent in supporting suppliers to establish health and safety management systems by producing guidelines and training modules that help to meet the requirements of our Workplace Standards. We also support an academy to increase the pool of qualified environment, health and safety managers in southern China.

 

 

MANAGING CHEMICALS

Chemicals are widely used in global textile and apparel supply chains: from the cotton fields, to the mills and dye houses that make the fabric and the garment production. It is our goal to work with our suppliers and the chemical industry to eliminate and to reduce the discharge of hazardous chemicals in our sphere of influence as far as possible. But the management of chemicals in multi-tiered supply chains is a complex challenge, requiring many actors to play a role in achieving effective and sustainable solutions.