Would it matter if you knew the clothes you bought were made by workers who were cheated out of their hard earned pay? Would a brand name like Adidas be less cool to wear if it was responsible for such an outrage? Recently Adidas has come under fire for exactly that by independent watchdog organizations and independent student groups like PSU’s own United Students Against Sweatshops.
The controversy began in September of 2010, when an Adidas supplier in Indonesia called PT Kizone stopped making compensation payments to workers. A few months afterwards, the owner had fled the country and the new owner declared bankruptcy, leaving 2,800 workers without $3.3 million of back pay and legally mandated severance pay. Nike and the Dallas Cowboys, who also had contracts at the plant, acknowledged partial responsibility for the labor violation and paid $1.5 million. The other $1.8 million is still owed to the workers.
PT Kizone had been manufacturing, among other things, university logo goods. Adidas had, and continues to have contracts to provide apparel and athletic goods to many colleges, including Penn State. Questions were raised by colleges as to whether this incident breached their own school Code of Conduct. While many see it as case of misfortune in the course of business operations, it is important to keep the issue in context with previous incidents and with Adidas’ supply chain policies.
The PT Kizone incident is not the first time Adidas has chosen to ignore blatant labor violations by its supply chain partners. In the past ten years, there have been numerous illegal factory closings by Adidas‘s suppliers, involving tens of thousands of workers. Adidas has never paid any of the workers their full severance. In recent news, Adidas’ suppliers in Caribbean And Latin America stand accused of deteriorating factory conditions, the propping up illegitimate unions, as well as intimidation, firings, and death threats against union organizers.
At the core of the controversy is Adidas relying on subcontractors that are not monitored to its own corporate standards. Not having the burden of maintaining ethically responsible suppliers gives Adidas the option to squeeze out higher returns without having to worry about accounting concerns like solvency. And when labor violations do occur, Adidas seeks shelter behind a veil of deniability. Using subcontractors also offers a convenient way to clamp down, from afar, on any stirrings of organized labor, groups whose only goal is to improve basic working conditions.
While other apparel companies make concessions when their labor practices become the subject of unflattering headlines, Adidas has never chosen to do so. Even sustained pressure from activist groups in Europe has not fazed the company leadership. Instead, Adidas issues misleading press releases and claims conscientiousness through the so-called Fair Labor Association, an organization funded in part by Adidas. Could it be that Adidas feels their bottom line is too important to be sidelined by petty ethics?
Even as Adidas continues to earn profits in the hundreds of millions, there is no sign that the company will take responsibility for the consequences its business policies, or take the steps necessary to prevent future violations. For the 2,800 factory workers that are, for the most part, still unemployed, that means not having enough money to pay rent or send their children to school.
Individuals often do not have the resources to hold powerful corporations accountable. This is especially true for sweatshop workers in poor countries with weak legal systems, and in those countries in which the government is not willing to stand up for the rights its own citizens. In such cases, it left to the people paying for the product, people like us, to take up that role.
Getting involved in actions by independent student clubs like the USAS is the best way that we, as members of the Penn State community, can foster positive change in places our personal resources cannot reach. Two weeks ago, USAS held a ‘Work out for Workers’ Rights’ action in front of the Thomas building to raise awareness for workers‘ rights. We feel it is our duty as responsible human beings to stand up against unethical business practices, and promote a more positive relationship with the people that make our way of life possible. Workers’ right, are, after all, human rights. Ignoring the plight of workers that toil for sub-poverty wages is not the American way of doing business and cannot be condoned by Penn State. Last month, after pressure from students, Cornell University became the first college to terminate its contract with Adidas over labor rights violations. Oberlin soon followed. Now it is time for Penn State to do the same.