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Indonesia: Adidas & Mizuno failed to address labour rights abuses in supplier factory, says Clean Clothes Campaign

On 29th September, Clean Clothes Campaign issued a statement calling on sports' brands adidas and Mizuno to pay severance to former workers of the Panarub Dwikarya Benoa (PDK) factory in Indonesia who went on strike in 2012 to protest poor working conditions and low wages. A 2016 ILO report affirmed that the situation at the factory constituted a violation of international human rights principles.

According to Clean Clothes Campaign, adidas and Mizuno by virture of their long-standing relationship as leading buyers of the PDK factory had a responsibilty under the UN Guiding Principles on Business and Human Rights to prevent, address, and mitigate the labour situation at the PDK factory both before and after the strike in July 2012. We invited adidas and Mizuno to respond, their statements are included below.

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Company response
12 October 2017

Response by Mizuno

Author: Mizuno

[R]egarding this case, our standpoint is based on the statement that we will promote our business activities in good faith, by conducting business activities in a transparent and fair way, adhering to laws and regulations and respecting social norms in all countries and regions, provided in the 2 of CSR Basic Philosophy, and that we are conscious of the social responsibility of corporation and act with due diligence to achieve the promoting cooperation with stakeholders and endeavoring to actively endorse a positive dialogue with them, provided in the 7 Consideration of stakeholders of “Mizuno Corporation Ethical Standards”... Based on the above policy, in 2012 responding to the request by CCC et al. in the letter of August 25, 2012 (“CCC12-1”), we have sent an inquiry by the system of open letter, which we cc to the party in case we make official inquiries to the other party from a transparency point of view, to grasp the reality... AD ST [adidas] states that “Panarub’s position was that the strike was not lawful, and on this basis workers were treated as having resigned when they did not return to work within the time specified by the law” and that “hence Panarub’s initial offer of payment to the workers matched those amounts for a worker resignation, not for a situation of dismissal, or severance, or any subsequent claims for other material impacts”... [W]e at Mizuno fully agree with AD ST’s conclusion...

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Company response
2 October 2017

Response by adidas

Author: adidas

CCC state that adidas has neglected its responsibility to address human rights violations in this case or to create the necessary leverage to resolve this long-standing dispute. We believe the opposite to be true. We have stepped outside the normal boundaries of what would be expected of any buyer to help resolve this case – given the fact that we held no active or ongoing relationship with PDB [...] at the time the workers went on strike in July 2012, or at the time when they lost their employment, or at any time thereafter, up until the factory closed in January 2014. CCC are fully aware that throughout the period in question the factory was making products for another sporting goods company, not adidas. Despite this fact, we stepped forward, based on our long-standing relationship with the union’s parent federation, to encourage an early resolution of the dispute... We continue to engage with all parties and in recent months we have met with the Indonesian Ministry of Manpower on two separate occasions to formally request that they complete an independent review and make a legal determination over the payment of severance. Only a final and legally binding decision will resolve these long outstanding claims... 

Note: adidas has also posted a full statement on their website. You can find it here

Download the full document here

Article
29 September 2017

Indonesia: Adidas & Mizuno fail to adhere to international standards on workers’ rights, says CCC

Author: Clean Clothes Campaign

Sports’ brands adidas and Mizuno, as major buyers to the Panarub Dwikarya Benoa (PDK) factory in Indonesia in 2012, should finally ensure that 345 former workers receive the severance payments they are rightfully owed. In continuing to refuse to take responsibility adidas and Mizuno are directly violating international human rights norms and standards... The UN Guiding Principles on Business and Human Rights state that it is the responsibility of international operating companies to ensure that human rights are respected in their supply chains, through active prevention and mitigation of adverse human rights impacts. This responsibility is independent of the actions of states and even applies if the company’s contribution to the impact was indirect. The long-standing relationship between adidas and Mizuno as leading buyers of the PDK factory, as well as the group the factory belongs to, is an indisputable fact. Both brands therefore had a clear responsibility to prevent, address, and mitigate the labour situation at the PDK factory well before and after the strike in July 2012.

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Article
1 October 2016

ILO calls on Indonesian govt. to initiate formal inquiry into the case at the Panarub Dwikarya Benoa factory

Author: ILO

The Committee notes that the present case concerns allegations of dismissal by the PT PDK of PTP SBGTS-GSBI PT PDK trade union leaders, restriction on the right to strike by using police and paramilitary forces on striking workers, dismissal of trade union members and other workers for having participated in a strike and interference in trade union affairs by intimidating workers to change their trade union affiliation in favour of a union supported by management...

The Committee [...] considers that efforts should have been made [...] to giving priority to retaining the trade union leaders in employment, which would have enabled consultations to take place between the trade union and the company on the rationalization and staff reduction process...

The use of police for strike-breaking purposes is an infringement of trade union rights... [T]he Committee requests the Government to take the necessary measures to conduct an independent investigation into the allegations of the use of police and other forces on striking workers... 

[T]he Committee requests the Government to take the necessary measures to initiate an independent inquiry to address the allegations of anti-union termination of 1,300 workers and to determine the real motives behind these measures and, should it be found that they were terminated for legitimate trade union activities, take the necessary measures to ensure that the workers are fully compensated...

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