Adidas settles with Indonesian workers over PT Kizone
Adidas said it will contribute additional aid to workers in Indonesia displaced by an unethical apparel factory closure. Company spokeswoman Katja Schreiber said the two sides have agreed to not disclose details of aid. Workers’ rights groups had been pressuring Adidas to pay what they called $1.8 million in unpaid severance.
Hundreds of displaced PT Kizone workers failed to receive severance payments from the former owner, who fled the country in January 2011, causing the factory to close in April 2011. The latest support comes on top of $525,000 in humanitarian aid as well as job placement services, and advocating issues related to workers' rights.
"We remain sympathetic to the plight of all former PT Kizone workers," Glenn Bennett, member of the Adidas Group Executive Board, responsible for Global Operations, said in a news release. "This additional assistance will provide direct relief to workers and their families still impacted from the unethical factory closure. At the same time, we strongly encourage our university partners, industry leaders and workers' advocates to join our efforts to pursue socially responsible and sustainable business practices to influence positive change within the global supply chain."
The Indonesian district labor union representing former PT Kizone employees – Dewan Pimpinan Cabang, Serikat Pekerja Textil, Sandang Kulit-SPSI Kabupatan Tangerang – will ask the Wisconsin state court to dismiss its claims against the company as a result of the settlement.
In addition to helping workers, the settlement represents a giant public relations stride for Adidas, which has its North American headquarters in Portland.
As recently as two weeks ago, protesters marched in front of the North American headquarters on North Greeley Avenue. The group of perhaps 30 people included representatives of United Students Against Sweatshops, whose website has focused on the PT Kizone issue, and Portland Jobs With Justice.
In a news release, United Students Against Sweatshops called the PT Kizone agreement "a watershed moment....building on the historic precedent that USAS activists set with Nike in 2010 when the brand was forced to pay $2 million in legally owed severance pay to 1,800 former Honduran garment workers."
A student at the University of Wisconsin-Madison, which brought the lawsuit against Adidas, also praised the agreement.
“For years, workers in the global apparel industry have routinely been robbed of their legally mandated severance pay when factories close, Lingran Kong said in a news release issued by USAS. "With today’s announcement, students and workers have established a new norm in the global garment industry; the two largest sportswear brands in the world have both acknowledged that they can no longer walk away when their contractors deprive workers of money they have legally earned.”
United Students Against Sweatshops also has targeted Adidas' branded apparel relationships with U.S. colleges and universities. No school affiliated with Adidas for its sports teams' apparel changed that partnership as a result. But the "Badidas Campaign," as the group called it, convinced other schools, including Penn State, the University of Washington and the University of Montana, to stop selling Adidas-brand clothing in campus store.
But with the announcement of Wednesday's agreement, "We will reach out to all of our partners and give an update," Adidas spokeswoman Schreiber said.
Adidas also said it wants to make the PT Kizone episode more than a learning experience for the company.
"The focus now turns to the Global Forum for Sustainable Supply Chains, which, along with the Adidas Group and other industry, labor and workers' rights groups, will pursue sustainable solutions to address issues created by unethical factory closures worldwide," says a news release announcing the agreement. "The Adidas Group is hopeful that there is a renewed commitment from these stakeholders to continue productive dialogue over how to best address complex issues surrounding unethical factory closures which continue to put workers' severance and unemployment entitlements at risk."