Worker rights in Indonesia

Oxfam Australia has been monitoring worker rights in Indonesia for more than a decade and has regularly communicated and campaigned for the improvement of working conditions in adidas Group suppliers. In Indonesia, Oxfam Australia's principal concerns relate to workers' job security, their inability to exercise their rights and a failure by the adidas Group to commit and retain orders in unionised factories. Read more about this on Oxfam Australia's website.

Our engagement in 2008 centred on three topics, all of which carried forward dialogues from previous years:

  • We responded to a call from Oxfam Australia, in a report jointly authored with the Clean Clothes Campaign, for 'sector-wide solutions' to labour rights issues in Indonesia
  • We held meetings and exchanged correspondence with Oxfam Australia on specific factory issues and the infringement of trade union rights
  • We offered comments on draft proposals, for inclusion in a purchasing practices report being prepared with Oxfam International.

Sector-wide solutions

In April 2008 we received a steady stream of letters and emails from the general public in Australia and countries in Europe voicing support for the Oxfam Australia and Clean Clothes Campaign report on 'Sector-Wide Solutions for the sports shoe and apparel industry in Indonesia'.

Many of the topics covered in the report had been the subject of correspondence, calls and meetings with Oxfam Australia representatives in 2007 and again in early 2008. The report focused on ways to promote and protect freedom of association and the right for workers to organise and bargain collectively, to curb the use of short-term contract labour in factories and to secure severance and back pay for workers who had lost their jobs following a series of large-scale factory closures - in 2006/07, a total of 18,000 workers were made redundant, as three Reebok footwear suppliers filed for bankruptcy in quick succession.

As one of our key sourcing countries in Asia, the adidas Group has witnessed steady progress and improvement in the workplace conditions in Indonesia. Nevertheless, we also acknowledge and accept that our suppliers continue to face challenges as they strive to meet our Standards, as well as international NGO expectations. We wrote a statement, addressing each of the major issues raised in the 'Sector-Wide Solutions' report.

Factory issues

Throughout 2008 Oxfam Australia maintained regular contact with adidas Group SEA staff, exchanging information and views on progress with a number of factory cases. Particular issues raised during the year included:

  • Alleged discrimination against trade union officials in suppliers' recruitment practices
  • Concern that the current minority union at PT Panarub was not being allowed to freely organise and collectively bargain
  • Continuing delays in finalising a union verification process - allowing workers to freely choose membership between the majority and the minority union at PT Panarub.

Our response

We reiterated our commitment to investigate any deliberate act of discrimination in our suppliers' hiring practices and investigations were undertaken on the cases raised by Oxfam. The alleged restriction of freedom of association at PT Panarub was also investigated and resolved by mutual agreement between the factory management and the union concerned. With respect to trade union verification, we repeated our position that the responsibility for carrying out this process cannot be placed solely on the shoulders of the buyer, but as an internal matter requires the full participation and consensus of the affected unions and the factory management.

We agreed with Oxfam that given the length of time that had elapsed without any real progress, we would redouble our efforts in 2009 with the support of the Indonesian Ministry of Manpower. As for the employment status of former union officials at PT Panarub, we agreed to provide their union with the name and address of the HR Manager in each adidas Group supplier factory in Indonesia. We also requested that any application submitted to a supplier be copied to the SEA team in Jakarta, to independently track the recruitment process.

Purchasing practices

On 24 September 2008 Oxfam Australia wrote to the adidas Group, requesting our input to a report by Oxfam International on transnational corporation purchasing practices in the apparel and footwear industries. The report focused on how reforms to purchasing practices could 'help workers achieve sustainable livelihoods'.

Oxfam Australia sought information on adidas' general purchasing practices and also thoughts and comments on the recommendations they were considering including in their report. In our reply, we expressed our concern that their recommendations did not take into account the nature and complexity of global sourcing activities or existing purchasing practices; practices which are driven by commercial interests, competitive business requirements and risk management, rather than any overriding social objective such as promoting trade union rights, or supporting collective bargaining mechanisms at an enterprise level.

Our response

As a company, the adidas Group does share an interest in seeking the maturing of worker-management relations in our suppliers' factories as this furthers a safe and fair workplace. We also adhere to the need to protect trade union rights and collective bargaining processes (where these exist) in the countries where we source products. But, as we explained to Oxfam, we feel our interest in meeting this objective is best served through government and ILO engagement, rather than reforming our own purchasing practices, or by restricting sourcing activities.

In response to Oxfam's general call for greater transparency and information on where trade unions had been formed and where collective bargaining agreements (CBA) had been negotiated, we provided the NGO with the status of unionisation and CBAs for each of our 42 directly sourced factories in Indonesia. Of these 42 factories, 74% are unionised and 81% of those have CBAs. We have asked permission from our suppliers to disclose the full list of factory names and their union and CBA status.

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