Sweat-shopping: Adidas & Mountain Equipment Co-op

“Adidas’s business practises/ethics and commitment to worker welfare have been scrutinised and often criticised” (Wikipedia’s Adidas page).

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A masterpiece of understatement if ever there were one (hy-POH-bowl-ee?), the words above count among the first encountered as I commenced researching Adidas-touted new corporate behavior, a purported shift in manufacture and out-sourcing ethics explained to me by Mountain Equipment Co-op (MEC) PR personnel when I wrote the Canadian chain retailer in the summer of 2014 asking, basically, WTF??? Why are you carrying Adidas products?

I had written because MEC, unlike many unscrupulous retail organizations, actually has a Supplier Code of Conduct written into its operating policies (http://www.mec.ca/media/Images/pdf/MEC_Code_of_Conduct_v2_m56577569831344307.pdf). The Code outlines in clear terms how MEC demands its suppliers pay living wages, operate within the bounds of the law, and are respectful of the environment. But evidence abounds that Adidas and its suppliers do not adhere to this code (in a case with several American universities who dropped Adidas as a supplier because of unethical treatment of workers in 2012, Adidas went on record stating,”we can’t be expected to stand in the shoes of our global business partners”). This was the bizarre response from MEC’s service representative:

We know many members, myself included at first, have associated Adidas with poor Corporate Responsibility and environmental practices. I have since come to realize that my views were in fact out-dated. Adidas has become a leader in sustainable business practices (personal correspondence with MEC, Oct.2014).

In response, I continued to research up to date information on the behavior of this global sports-wear giant. Below are some of my findings. WARNING: Adidas and Adidas suppliers’ treatment of workers and indifference to suffering is not for the squeamish!!!

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From correspondence to MEC, Sept. 2014: Hi. I’m saddened by the lack of response from MEC. I have written two emails in the last month or so, the latest one asking for some information on why MEC would want to take on Adidas lines when that company has such an abysmal worker relations history. I am a long-standing member of MEC and am muck-struck as to why I haven’t heard a peep from you. Have we entered the phase of corporate capitalism when even a company like MEC doesn’t give a damn about anything but profits? I’d like a response to this! I’m giving until the end of the year (2014) and if I hear nothing I will cancel my membership with MEC and I will encourage my friends, co-workers, and students to do the same. The buck has to stop somewhere: a company that evokes concern for the planet through its advertising campaign but simultaneously ignores workers’ rights isn’t a company I want to do business with.

MEC response, Oct. 2014: I would like to address your concerns around Adidas’s history. We know many members, myself included at first, have associated Adidas with poor Corporate Responsibility and environmental practices. I have since come to realize that my views were in fact out-dated. Adidas has become a leader in sustainable business practices. They belong to several associations to support this, among others: the Fair Labour Association (http://www.fairlabor.org/) and the Sustainable Apparel Coalition (http://www.apparelcoalition.org/), which MEC also belongs to. They have also publicly published a sustainability report for the last 13 years (http://ow.ly/xFyPE) detailing their increasing initiatives aimed at reducing environmental impact and supporting fair labour.

Seems fair, so I looked into these organizations to check that they existed, they were independent third-party and so on.

From my response, Oct. 2014: I note that the Sustainable Apparel Coalition’s use of the Higg Index is not actually a third party assessment mechanism but a self-assessment tool and ought not be included on an organization’s list of social/environmental merits. The reasons are manifold but include the point that “best practices” is a philosophical value and not an evaluation of merits in actual factories or in shipping etc.

As for the Fair Labor Association, they note that their organization “does not accredit brands or factories” but, rather, “a company’s compliance program to indicate the presence of systems and procedures required for successfully upholding fair labor standards throughout brands’ supply chains” (http://www.fairlabor.org/accreditation). What does “the presence of systems and procedures required for successfully upholding fair labor standards” actually mean? If we judge the statement on its own, it implies those systems are in use, but it does not say they are. From evidence available elsewhere (throughout this document) it appears that while those systems are present at manufacturer/shipper facilities, they are not employed as rigorously as implied.

At this point, MEC’s service rep turned me over to the co-op’s Director of Sustainability. The following is from her response:

I spoke to Adidas about your concerns, and they indicated that many of the cases you cite are from 2008 and earlier. Please see the website (adidas-Group.com/Sustainability) for current reporting and information.

Was this the case? Had Adidas gone through a moral sea-change? Was my research just shoddy? I resolved to have another go…

From my response, Nov.2014: Evidence of egregious behaviour of Adidas and Adidas suppliers continues to be reported, is current information, detailed by third-party news agencies and researchers.

Claims to the contrary by Adidas that such information is ‘from 2008 and earlier’ are unsettling ones, for two reasons: 1. the dismissive nature of the statement is suggestive of the irreverence Adidas treated questions about workers’ rights in a 2012 falling out with the University of Washington and Rutgers University NJ (in which UW and Rutgers dropped Adidas as their supplier because of Adidas’ poor track record with workers’ rights); 2. they are simply untrue—Adidas and its suppliers continue (i.e. since 2008) to be cited as violating workers’ rights to a living wage and freedom of assembly and, as a result, are in violation of MEC’s own SCC (above).

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For example, in the April of this year (2014) International Business Times article “Labour unrest at Nike and Adidas supplier Yue Yuen Industrial persists” (http://www.ibtimes.co.uk/labour-unrest-nike-adidas-supplier-yue-yuen-industrial-persists-1444941) workers went on strike when Yue Yuen Industrial (who manufactures for Adidas, Nike, and Converse), a $4billion annually manufacturing giant, persisted in withholding social insurance benefits, promulgated improper labour contracts, and paid intolerably low wages (i.e a month’s wages at Yue Yuen averages 1,310 Yuan, or $244 CDN—does this sound like it complies with MEC’s SCC?).

The strike at Yue Yuen eventually included 50,000 workers (I’m surprised Adidas didn’t mention it when they noted that most of the disparaging news was prior to 2008). The strike sparked international outrage, garnered the support of over 50 international unions, and became a hot topic on campuses everywhere, resulting in protests such as this open letter from Students and Scholars Against Corporate Misbehavior (http://sacom.hk/yueyuenopenletter/).

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The Clean Clothes Campaign (perhaps you have heard of them? their endorsement of MEC would be a major coup) notes that the Peoples’ Tribunal to assess human rights abuses faced by garment factory workers in Indonesia found continued (i.e. since 2008) “overwhelming evidence of systematic violations of the fundamental right to a life lived with human dignity” (i.e. a living wage and freedom of association) in factories supplying to, among others, Adidas (http://www.cleanclothes.org/news/2014/06/24/indonesian-wage-trial-human-rights-violations-systemic). Adidas response, represented in attendance at the hearings in January of this year was, “No factory is perfect”. Was the Indonesian tribunal meeting to assess whether the factories in question were perfect? No. What, then, can be made of such a statement by Adidas? Taken on its own, it is difficult to assess.

But recall the University of Washington/Rutgers case (2012 – actually involving 17 universities*) for a moment. When questioned by UW and Rutgers representatives about supplier PT Kizone (Indonesia) human rights violations, Adidas responded by saying it “can’t be expected to stand in the shoes of its global business suppliers” (http://www.prwatch.org/news/2012/08/11726/adidas-tells-wi-court-it-has-no-obligation-help-exploited-workers). Now take both of these statements and include them with Adidas’ request that we (MEC and its membership) take seriously the idea of Adidas conducting factory practices  self-assessments.

Okay, let’s go to Labour Behind the Label, a website for this activist group’s support of garment workers around the globe. In June of this year LBL reported the publication of “Stitched Up: poverty wages for garment workers in eastern Europe and Turkey!” (2014 Lugenbuhl & Musiolek), a peer-reviewed paper assessing the practices of global manufacturers and their suppliers including Adidas. Over 300 workers in ten countries were interviewed and researchers found “that nearly all those producing clothes for major European retailers such as Hugo Boss, Adidas, Zara, H&M or Benetton are paid below the poverty line, and many have to rely on subsistence agriculture or a second job just to survive” and while profits are on the rise for these global companies, “working conditions in the production countries of the researched region (post-socialist eastern Europe and Turkey) have deteriorated particularly since 2008/09”. Women comprise the most vulnerable sector of the workforce in this context. They are the majority of the workers, must deal with sexual harassment as well as wage theft, unsafe conditions, impossibly low wages, and summary dismissal if they attempt to organize.

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I am curious if this sounds like anything approaching the standards set forth in MEC’s Supplier Code of Conduct.

The 2013 peer-reviewed report, “Dirty Profits: Report on Companies and Financial Institutions Benefiting from Violations of Human Rights” notes that, in July 2013, “labour groups protested against Dynamic Precision Industry Corp, a Taiwanese Adidas supplier for health and labour violations” including “benzene poisoning, hearing loss, pneumoconiosis, and hand-arm vibration syndrome (HAVS)” (10). Factory managers issued severance packages in response.

In 2013 Greenpeace issued “Polluting Paradise: a story of big brands and water pollution in Indonesia” in which the environmental organization charged Adidas with condoning its supplier’s actions, the PT Gistex Group, of contaminating the Citarum River in West Java (Indonesia) with chemical dyes resulting from the manufacture of Adidas polyester apparel. Read “Dirty Profits” here: http://www.facing-finance.org/files/2013/12/DIRTY_PROFITS_II.pdf, read “Polluting Paradise” here: http://www.greenpeace.org/ international/Global/international/publications/toxics/Water2013/ Toxic-Threads-04.pdf, p.33.

Feel free to read up on more reports, all of which are quite current (i.e. since 2008):

  1. “Dirty Profits: Report on Companies and Financial Institutions Benefiting from Violations of Human Rights”: http://www.facing-finance.org/files/2013/12/DIRTY_PROFITS_II.pdf
  2. “Polluting Paradise: a story of big brands and water pollution in Indonesia”: www.greenpeace.org/ international/Global/international/publications/toxics/Water2013/ Toxic-Threads-04.pdf, p.33.
  3. The Clean Clothes Campaign report on Indonesian Tribunal: http://www.cleanclothes.org/news/2014/06/24/indonesian-wage-trial-human-rights-violations-systemic
  4. Clean Clothes hosting of “Stitched Up: Poverty wages for garment workers in eastern Europe and Turkey!” (2014) http://www.cleanclothes.org/resources/publications/stitched-up-1
  5. adidas (2013): adidas Group History: http://www.adidas-group.com/en/ ourgroup/history/history.aspx.
  6.  adidas (2012): Our Workplace Standards: http://www.adidas-group.com/en/ sustainability/supply-chain/standards-and-policies/.
  7.  International Union League (2013): adidas Workers Unite!: http://www.union-league.org/adidas.
  8.  Lori Zimmer (2012): Sweatshop Protestors Target adidas as London Olympics Approach: http://www.ecouterre.com/sweatshop-protestors-target- adidas-as-london-olympics-draw-closer/adidas-war-on-want-1/.
  9.  War on Want (2012): adidas exploitation. the truth behind the brand: http://www.waronwant.org/index.php?option=com_content&view=article&id =17524:olympics-inform&catid=390:olympics-content&Itemid=647.
  10.  Jonathan Lai (2012): “Rutgers University severs ties with adidas over working conditions in Asia”, The Inquirer, 30 November: http://articles.philly.com/2012-11-30/news/35437110_1_adidas-group- rutgers-president-rutgers-brand.
  11. Workers Rights (2012): WRC Comments on adidas’ Recent Communi- cation to Universities Concerning Labor Rights Violations at PT Kizone, 5 October: http://www.workersrights.org/freports/WRC%20comments%20 on%20adidas%27%20recent%20communication%20re%20PT%20 Kizone%2010.5.2012.pdf.

*These schools include Cornell University, Oberlin College, the University of Washington, Brown University, Rutgers University, Georgetown University, the College of William & Mary, Santa Clara University, Penn State University, Northeastern University, the University of Montana, the University of Minnesota-Twin Cities, Crookston, and Morris, Oregon State University, Temple University, and Washington State University.

Stitched Up

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