AMSTERDAM – German sportswear brand adidas has refuted claims that it has behaved unfairly in a protracted row related to a group of Indonesian workers who were fired after striking for better wages back in 2012. 1,300 workers were fired from sneaker supplier, PT Panarub Dwikarya (PDK), in July 2012 and claims for compensation have been ongoing ever since. While some workers have settled early on, several hundred workers have been asking for 1200 Euros. Panarub recently offered workers individual settlements worth just under 240 Euros – an amount which several civil society organisations, including Clean Clothes Campaign, claim is not enough according to Indonesian law. Together with German Suedwind-Institute and the Indonesian labour rights organisation LIPS, Clean Clothes has filed a complaint against adidas to the German National Contact Point of the OECD for failing to provide access to remedy to 327 workers from the supplier.
The bone of contention is that adidas claims it did not have a business relationship with PT Panarub Dwikarya Benoa at the time of the strikes. In a statement to Apparel Insider, the business said: “We reject these accusations as adidas had no business relationship with PT Panarub Dwikarya Benoa at the time of the strikes, in July 2012. Despite this fact, we stepped forward, based on our long-standing relationship with the union’s parent federation, to encourage a resolution of the dispute. Six years later, the Indonesian union SBGTS has entered into a binding agreement with PT Panarub to accept a compensation payment for 284 workers who had lost their employment following the strike. It is our understanding that the settlement of this dispute, which has been signed by PT Panarub and SBGTS and registered with the Indonesian Courts, is a full and final payment.”
Clean Clothes contends that in actual fact adidas, as well as Mizuno, were major buyers from the factory unit of PT Panarub Industry at the time of the strikes. In a statement, it said: “Adidas was well informed about the labour rights violations in 2012 that eventually forced the workers to strike. The leading sportswear brand chose to instruct its supplier to no longer produce its shoes at the contested factory; an action that failed to prevent further rights abuses from happening. Other actions conducted by Adidas after the 1,300 workers were dismissed, did not result in effective pressure on Panarub to provide remedy to the workers. Nevertheless, adidas shoes have been produced at the PDK factory at the time the first union members were dismissed in February 2012 and until shortly before the strike. Furthermore Adidas continues to do business with PT Panarub Industry, the mother company of PDK.”
Clean Clothes Campaign argues that Adidas and Mizuno have violated the OECD Guidelines for Multinational Enterprises as well as the UN Guiding Principles on Business and Human Rights which state, that companies need to assess their human rights risks, carry out human rights due diligence and in the event of human rights abuses in their supply chain mitigate and provide access to remedy to rights holders, in this case the PDK workers.
We will be following this case for further updates.