Adidas: PT Kizone and Student Movements

On September 3rd, 2010, PT Kizone, one of adidas’ supply factories in Indonesia, stopped paying legally mandated severance compensation to its workers whose employment had been terminated.  The factory eventually closed in January 2011 when its owner fled the country.  Initially, adidas claimed that it had terminated its contract with the factory in mid-2010 and, thus, did not owe compensation to the PT Kizone workers.  However, after facing further criticism and a report by the Indonesian Ministry of Manpower, adidas did confirm that its products were still being produced in the factory through the end of November, nearly three months after the initial violations of workers’ rights occurred. [1] Adidas continued to maintain that it did not owe the workers any severance despite the fact that numerous investigations revealed that adidas did in fact owe $1.8 million to more than 2,800 employees.  It was not until four U.S. Universities severed or failed to renew their contracts with adidas after student-led campus movements that the company reached an agreement with the factory workers in April 2013. [2] Unfortunately, adidas has, as of June 2013, only paid $1.02 million of the total amount of severance owed to workers. [3]

[1] Champagne, Jessica and Scott Nova (2012): WRC Update: Adidas’ Relationship with PT Kizone, online available at:http://www.workersrights.org/university/memo/010512.html(accessed 18.11.2013).

[2] Lai, Jonathan (2012): Rutgers University severs ties with Adidas over working conditions in Asia, online available at philly.com: http://articles.philly.com/2012-11-30/news/35437110_1_adidas-group-rutgers-president-rutgers-brand (accessed 18.11.2013).

[3] Worker Rights Consortium (2013): WRC Factory Investigation: PT Kizone, online available at:http://workersrights.org/freports/PT%20Kizone.asp (accessed 18.11.2013).

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