Adidas PR Release Greeted With Caution

by Greta Hopkins Ê

Representatives of the German sports manufacturing giant met privately this week with members of the European Parliament, officials from the EU executive commission, individual EU member states, as well as non-governmental organizations (NGOs) and several journalists.

Jan Runau, company spokesperson, said after the visit that Adidas is willing to engage with all kinds of stake-holders.

Runau points to Adidas's "social and environmental policies" position paper, which heralds the largest European-based sports company's commitment to respecting core labor standards, as summarized in the company's code of conduct, the Standards of Engagement (SOE).

Runau says his company has never been keen on using the SOE as a public relations tool, believing it is more important to get on with implementation. But the social papers come after negative coverage in the media on conditions in third world facilities where the manufacturer sub-contracts labor.

The position paper says the company now has team of 27 people responsible for implementing the Standards of Engagement, monitoring 71 percent of factories in which it is engaged in Asia, and 90 percent of those in North America and Europe.

An Adidas facts and figures sheet says that about 700 audits were carried out last year, including full and partial audits of factory facilities, sewing subcontractors and embroidery subcontractors. It also says that 25 independent factory audits were carried out last year. Runau confirms that Adidas is also working together with third parties to carry out monitoring. But he said monitoring is only part of the picture, the main aim is to help suppliers achieve better standards.

However, the secretary general of the International Textile, Garment and Leather Workers Federation (ITGLWF), a trade union representing workers in 135 countries, told IPS that almost every multinational retailer -- including Adidas -- is still sourcing from factories that exploit workers.

"There is not much to indicate that this state of affairs has changed in the past year, whether we are talking about Adidas, Nike, Reebok, JC Penney, or any other retailer," says Neil Kearny of the ITGLWF.

"I have just come back from a field visit to China, where workers in factories contracting for major multinational names are sharing dorms 12 to a room, working a minimum of 60 hours a week, and suffering significant health and safety problems," he told IPS.

The trip to China convinced Kearny that it is not acceptable to carry out audits on factories in the developing world from the West, as every centimeter of the factories is cleaned and prepared especially for such visits.

Kearny believes that the only feasible solution is for the audits to be made by the workers themselves, in the context of their local trade unions.

Multinational manufacturers who complain that the problem is with the suppliers, who are not implementing the codes of conduct, have no sympathy from the ITGLWF head.

"They cannot hope for first class standards, when they pay fifth class prices and expect delivery yesterday. There can only be a change in working conditions with fair labor prices and reasonable delivery deadlines," says Kearny.

"All the retailers have adopted codes of conduct, hoping that it will provide a PR (public relations) umbrella against criticism of labor practices. Now that umbrella has not proven to be effective they are gradually taking more concrete action," he says.

Kearny is in no doubt as to who benefits from the exploitation -- and it is not the consumers. Sports stars are sponsored millions of dollars a year to wear brand names. A pair of trainers can cost anywhere from $80 to $200 in the shops, but costs only about $12 to make.

Labor costs per shoe come to about $1, while workers are paid one-tenth that to make sweatshirts, for which consumers will pay some $30.

"Manufacturers are being exploited and consumers are being exploited," concludes Kearny. He believes manufacturers could easily double wages without making any serious impact on profits.

By contrast, Runau says it is not realistic to compare what Adidas pays athletes, with what a supplier pays for a worker in Indonesia, or even with his own salary. He thinks Adidas has found the right balance between wages, sponsorship and prices.

"All these things are determined by the market, not by us," he said. Runau gives the example of Indonesia, where Adidas insists that suppliers pay more than the minimum wage, because it is clearly not enough to live on.

Activists from the Clean Clothes Campaign, a coalition of consumer organizations, trade unions, researchers, human rights groups and fair trade shops active in 10 European countries, also met the Adidas representatives this week.

The Adidas Code of Conduct says: "In all cases, wages must equal or exceed the minimum wage or the prevailing industry wage, whichever is higher, and legally mandated benefits shall also be provided."

But for its part, the Campaign, which endeavors to improve working conditions in the garment industry worldwide, disputes the way Adidas fixes salaries in Asia. NGO's within the Campaign have calculated that the average Indonesian worker, for example, needs at least three times the minimum wage to be able to live.

Frieda De Knock, coordinator of the Clean Clothes Campaign in North Belgium, says NGOs acknowledge that Adidas has made an effort to improve its labor policies. But she says the organization still sees a large gap between the Adidas code and Adidas practice.

De Knock says the campaign is pushing for independent monitoring of factory conditions. Adidas closed negotiations between Adidas and the German branch of the campaign on this point, she notes, but NGOs are keeping a watchful eye on pilot monitoring schemes in Honduras and El Salvador.

The NGO coalition is also concerned about Adidas's commitment to dialogue. The Belgian campaign organized an event that drew over 15,000 people last year, but Adidas failed to take up the invitation to take part.

When asked about this, Jan Runau said that while the company is open to dialogue, it is not possible to attend every meeting to which they are invited. "Our number one priority is rather to work closely with our suppliers and sub-contractors to improve standards," he said.

Adidas also came under fire from NGO's when it boycotted a public hearing in the European Parliament in Brussels last November, preferring to send someone from one of its auditing companies. Richard Howbeit, the member of the European Parliament who organized the hearing, told IPS that the Adidas Director of Social and Environmental Affairs, David Husselbee, has since apologized in public for failing to turn up.

In general, he is pleased at the direction changes within Adidas are taking, but says they are still in early stages. He said that ECU money is available for pilot projects to monitor companies.

"We need independent auditing. It is clear that any company is going to find it difficult to publish information which is prejudicial to its own commercial interests" said Howbeit. In his capacity of member of the European Parliament, and supporter of the clean clothes campaign, Howbeit also met the Adidas representatives this week.

NGO campaigner De Koninck, believes the tour is a sign of a change in Adidas's PR strategy, something the NGOs find very positive as well as a challenge. In the past, the company would only deal with NGOs on their terms, as with the current promotional tour.

"Next to these large multinationals, we are peanuts," says De Koninck. "However, we do represent some economic value for them. Image is part of their capital. If we do damage to their image, they cannot ignore us."

The Clean Clothes Campaign is holding a strategy meeting involving 85 campaigners in Barcelona from March 7-11. The meeting, which should set out priorities for several years to come, will probably focus on the need to coordinate closely with trade unions and NGOs from Southeast Asian countries, and keep increasing awareness among consumers.