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Responding department: Social & Environmental Affairs

Stock Exchange Symbol: (ADS:GR)

Update 2016:

Disclosure to KnowTheChain

Disclosure to Corporate Human Rights Benchmark

(Note - also available: adidas' response for Myanmar Foreign Investment Tracking Project)

Does your company have a publicly available commitment to respect human rights?

Yes, Our human rights policy is integral part of our Labour Rights Charter. ([link])

The human rights section of our webpage describes our general approach and relevant policies and guidelines, (see: [link]).

Our responsible business practices FAQ explains how human rights is linked across our business operations and risk management systems. [link]

Related policies and guidance on human rights subject matter can be found, for instance, in our Workplace Standards and supporting guidelines on employment (labour rights), worker safety and environment, ([link]), or our policy on Forced Labour & Trafficking ([link]); or on privacy: (see [link]).

How are human rights governed in your company?

Human rights expertise resides in the Social & Environmental Affairs (SEA) department which is responsible for social and environmental concerns related to global supply chains, for consumer safety and for stakeholder outreach, as well as some aspects of government and community affairs. SEA has a total of 63 staff located in 20 countries around the world. SEA is a corporate function - it is part of the Group's Legal & Compliance Division. SEA acts in an advisory and investigative capacity, including management of the third party human rights complaint system. See [link]

SEA’s work in this area is led by a Human Rights Lawyer, who has 30 years of experience in dealing with social and environmental issues. He acts as an in-house counsel for the business. Other specialists within Legal & Compliance lead on related topics, such as business ethics and privacy. In terms of governance, ultimate responsibility for the Group's management of human rights impacts resides with the Group's Chief Compliance Officer/Legal Counsel. He reports directly to the CEO and to the Executive Board.

Responsibility for managing employee related issues across the Group rests with Chief Human Resources Officer and ultimately with the Executive Board. Human rights concerns also fall under the purview of the company's Supervisory Board, which oversees the activities of the Executive Board. The Group’s Legal Counsel and the Global Director for SEA provide regular briefings to the Supervisory Board. Following the German regulations on co-determination the Supervisory Board comprises independent appointees, trade union representatives and elected members of the company's Works Council, which represents employee interests. They take an active interest, for example, in working conditions in global supply chains, corporate ethics, employee affairs, etc. The Supervisory Board reviewed and approved the Labour Rights Charta, which contains the Group’s commitment to human rights. In accordance with the German Co-determination Law, the Works Council is involved in day-to-day business decisions and must be consulted on various subjects, such as changes in wages, benefits, working conditions, operational matters and the entrepreneurial direction of the business.

How are human rights managed within your company?

Human rights are a relevant consideration in our materiality assessments and internal risk management processes. It fits within our broader sustainability agenda which requires the Group to be “Effectively managing business risks and human rights concerns, including social compliance in our supply chain, which is expanding and becoming more complex with multiple relationships and stretched lines of communication and control.” See [link]

In answer to the specific questions: - How are actual and potential human rights impacts identified and assessed?

Introduction

We divide our due diligence work between the impacts of our own operations – as a business we are designing, marketing and selling consumer goods products globally through retail, wholesale and e-commerce channels – with supporting services linked to our Headquarters and to our subsidiary businesses and brands; and the impacts of business partners in our global supply chain who support the manufacture of our products.

Supply Chain

Our supply chain due diligence processes are very mature: for more than 17 years we have been assessing and addressing human rights impacts and supporting worker rights protection, occupational health and safety, community and environmental concerns. We have led our industry in addressing child labour, forced labour, migrant labour, freedom of association, occupational health & safety and other such topics. We are one of the few global brands in our industry with an extensive environmental and safety monitoring capability that extends to our materials supply chain and looks at chemicals, water rights, etc. We have developed guidelines built on practical experience which have acted as a model for adoption by others in our industry.

Given the breadth of international instruments and standards related to human rights, we are regularly reviewing and seeking to refresh our own guidance to suppliers and business partners. A great deal of material in the human rights arena is designed for execution by States or agencies with regulatory authority and do not lend themselves easily to on-the ground application by business. In 2013 we compared our own guidance material and tested its currency against other industry and NGO guidance on human rights subject matter. For example, we reviewed our approach in managing child labour and benchmarked this against Children’s Rights and Business Principles published in 2012 by UNICEF. Our policy and procedures, which were formulated 12 years ago to protect children’s rights, continues to match international best practice and our efforts to support children’s rights, through education and sport, is also closely aligned with the voluntary actions set forth by UNICEF.

We have reviewed our approach to managing migrant labour issues and benchmarked this against the Dhaka Principles developed by the Institute for Business and Human Rights. Whilst our policies and practice in this area are sound, we have sought to strengthen our communication to ensure our supply chain partners shoulder the full cost of recruitment and placement fees for migrant workers, thereby reducing the prospect of workers becoming indebted. Too often migrant workers spend a disproportion amount of their hard earned income to pay off loans to recruitment agencies and other unscrupulous middlemen.

We have reviewed our policies and approach to Freedom of Association. Our general approach is sound. However, there remain many challenges, both in countries where the State restricts the free election of independent unions, and in those countries where the trade union movement remains fragmented, and at times highly political. We have been one of a few global companies that have required our suppliers to issue Freedom of Association Guarantees to their workforce, when the right to freely form and join unions has been called into question. We have been examining our approach to living wages as a right, and have linked this to work we are developing through Fair Wage Assessments. See the Fair Wage section of our website which describes our “respect, protect and promote” framework which support wage improvement. [link]

Finally, we have concluded that our adoption, some 8 years ago, of a self-governance programme which promotes sustainable compliance and requires suppliers to have their own processes and systems to deliver fair, safe and healthy workplaces - accords with the UN Guiding Principles, which calls on all suppliers, as businesses, to have in place their own responsibility to respect human rights. We will continue to promote this approach and critically examine, through the use of key performance indicators, the suppliers progress towards full self-governance and due diligence of their own subordinate suppliers.

Country Risk Profiles

At the beginning of each year we complete a high level assessment of the socio-political and human rights issues that have a bearing on each of the countries where we source our product. Our country risk profiles are informed by our field teams and their regular engagement with local stakeholders (civil society, government, etc.), concerns brought to us by international NGOs, and an examination of US State Department Human Rights Reports and, in Europe, the Council of Europe human rights reports. Our country profiles inform the decisions we take in managing risk, as well as focusing our efforts on relevant human rights topics. Particular attention is paid to vulnerable groups. Country risk profiles can significantly impact our business activities, as we seek to reduce the potential risk of adverse human rights in our supply chain. An example would be a ban imposed on sourcing product from factories located on the northern border of Thailand. Our 2013 review for Thailand highlighted credible reports of forced labour related to the employment of unregistered migrant workers in this locality, as well as criminal gangs involved in counterfeit activities. We have never produced in this part of Thailand, but nevertheless we introduced a ban on sourcing from this location. 

Similarly, our 2004 review of Bangladesh flagged serious concerns over infrastructure, worker safety, labour rights and the longer term political stability in the country. In the years which followed, we actively restricted the growth of our supplier footprint. Today Bangladesh represents just 0.005 percent of our global supply chain. Those due diligence efforts predate the Rana Plaza building collapse by almost a decade. Another example is Cambodia. Our 2008 analysis flagged reports of high rates of anaemia among female workers, who make up 85% of the workforce in Cambodia. This triggered our work with the ILO looking at food provision for workers in our supply chain. We followed through by promoting the establishment of canteens and food services, both to improve workers nutrition but also increase disposal income (by offering free or subsidised food). This pre-dated concerns over poor nutrition and worker stress that led to a series of mass fainting’s by Khmer garment workers – a phenomenon that began in 2010 and rapidly escalated in scale and frequency across the garment sector.

New Sourcing Country Approvals

Where a new sourcing country is proposed, we would normally complete one or two years of engagement with relevant government departments, international agencies and civil society groups to determine country level risks and issues, both social and environmental. If we take Myanmar as an example our due diligence work with suppliers has extended to an assessment of the impacts of land acquisition and potential displacement and resettlement of occupants, as well as an examination of potential impacts on livelihoods and indigenous people’s rights (where applicable). Moreover, suppliers must ensure that their local business partners are not named in the US government’s SDN List. This is independently checked. In developing countries, independent building safety engineering assessments are a norm.

Attention is also paid to areas where capacity building is required, and where support may be needed for government agencies, for example in occupational safety, or environmental testing standards. Materials Supply Chain By way of industry initiatives we are also evaluate conditions in our materials supply chain (in particular textile mills and dye houses) as well as our cotton supply chain: from farm to factory gate. This has been delivered through the Better Cotton Initiative (BCI) – which is in partnership with other brands and European NGOs. BCI proactively engaged with the ILO and adopted and integrated into the Better Cotton Standard their relevant Conventions on ‘Decent Work’ such as child labour, forced labour, non-discrimination, freedom of association, etc. It also addresses safety (particularly the use of pesticides) and environmental impacts arising from water usage. See [link].

Company Operations

To complement the depth of our supply chain due diligence work, we have conducted a high level mapping exercising to assess all operational areas against potential human rights impacts in relation to the International Bill of Rights and the ILO core conventions. It has focused our attention on the most relevant and material issues and the adequacy of policies and procedures to safeguard rights-holders in these areas. It concluded that overall we have very robust systems in place to identify and address potential and actual human rights impacts and certainly from an employee standpoint we are regarded as a leading employer in many countries where we have operations. But it also highlighted areas where we need to go further to assess and possibly strengthen our oversight of human rights concerns: freedom of expression through the management of social media, and our sponsorship of major sporting events being two examples.

Engagement Channels

Issues can also be identified through the layers of engagement we hold with stakeholders, be they governments, civil society group, communities or individual employees or workers. Within the company we conduct comprehensive surveys on employee satisfaction benchmarking ourselves against other global brands. We also have multiple channels to capture and address complaints – be that within our company, from business partners, or from rights-holders and third parties representing their interests. Our SEA field teams regularly meet and interview workers and also track feedback from independent worker hotlines and from our suppliers’ own internal complaint systems. These systems are progressively become digital, and data rich, with SMS and online hotline services being rolled out in recent years.

- What steps are taken to prevent or manage negative human rights impacts?

At adidas Group we have developed a mature risk management system that has placed worker’s rights on an equal footing to other business considerations in screening, engaging and retaining suppliers in our global supply chain. Over the past 17 years our supply chain assessments have included an examination and remediation of instances of forced labour, child labour, freedom of association, right of assembly, freedom of expression, discrimination, indigenous people’s rights, occupational health and safety, resource consumption and environmental pollution. We have also dealt with specific cases where civil liberties were breached, expedited the release of workers where they have been subject to arbitrary arrest and detention, have reached out to judicial authorities where human rights defenders have also faced arrest and detention for supporting worker’s rights, and have petitioned governments for their failures in enforcement, particularly in relation to the right to form and join trade unions and the upholding of statutory minimum wages.

At times we have acted as advocates to promote rights which had not been fully protected, or fulfilled, by the State. And we have also brought cases to the government’s attention that lie outside our own supply chain, where we felt urgent action was required by the authorities, for example, over suspected criminal acts and especially the employment of child labour. We have sought to fill the gaps created by weak legal enforcement by governments, by binding our suppliers to a code of conduct, our Workplace Standards, which follows international human rights law and ILO conventions. We continuously monitor those suppliers where we have direct contractual relations and therefore influence, to assess their performance against our Standards, and seek to remediate issues where impacts occur.

We also invest time in capacity building to strengthen our suppliers’ internal governance and management systems, to reduce the potential for adverse human rights impacts. In doing so, we have created the space required for workers to exercise their rights. Our support for Freedom of Association and upholding the right of workers to freely form and join a union of their own choosing, is a good illustration of these efforts. In Indonesia, 90% of adidas Group’ suppliers are unionized (with one or more unions), and of those suppliers over 95% have collective bargaining agreement in place. This is in marked contrast with less than 20% trade union penetration in the manufacturing sector as a whole. In Indonesia adidas Group was instrumental in the launching of a Freedom of Association (FOA) Protocol to support representational rights in the workplace. It is the first such protocol to be developed globally, which involved buyers, unions, suppliers and non-government organizations.

In 2012 we also launched an innovative SMS worker grievance system with our manufacturing partners in Indonesia. So far it covers 14 factories and 80,000 workers. It allows us to independently track the way our suppliers resolve on-site grievances. We allow for progressive improvement of noncompliances, unless an issue falls within a zero tolerance area which requires immediate remediation. See link to Enforcement Guidelines below. We also screen all newly proposed suppliers to ensure that they meet our minimum expectations, before being approved for use by our business. We apply a rigorous and transparent enforcement mechanism to uphold our Workplace Standards, where continuous and unresolved breaches results in the termination of business relations.

Our enforcement guidelines are available at: [link] and follow well established administrative law precepts. As explained in the Guidelines, when taking enforcement action against a business partner, our “first priority is to prevent harm to workers or the environment from occurring and to ensure that such harm does not continue”.

In those parts of the supply chain where we lack any direct influence – for example with businesses that are upstream and contributing raw materials, componentry or other services - we expect our primary manufacturing and service partners to engage and apply our Standards. We also partner with other organizations, or collaborate with other brands, to increase our leverage to affect the changes we would like to see in our upstream supply chain. An example would the Zero Discharge for Hazardous Chemicals (ZDHC) initiative, where as a founding member, we have joined other international fashion and apparel brands to reduce, eliminate and/or replace hazardous chemicals in the broader materials supply chain. Through such improvements, risks are reduced both for workers and for downstream communities. adidas Group employs 50,700 people in 160 countries. Within our own business operations we have mature human resource management systems to address employee rights and ensure fair treatment, including equal pay, diversity and inclusion, non-discrimination, etc.

More information on this can be found in our annual Social & Environmental Reports. Go to: [link]

- How is the importance of human rights signalled to business partners?

We include language in our Workplace Standards, in our guidelines and in our contracts with licensees and any business seeking to manufacture our product, which specifies that human rights must be upheld and safeguarded. We have included labor, work place health and safety as well as environment –related clauses in contracts we hold with business partners we procure non-core products and services from (e.g. construction and cleaning services at major facilities, promotional products). Monitoring of compliance rests with the adidas Group Corporate Properties & Services and Sports Marketing/Legal departments.

- What training is conducted for staff and business partners?

Our global legal teams have received formal briefings on the application of the UN Guiding Principles on Business and Human Rights and the corresponding human rights requirements detailed in the OECD Guidelines for MNCs. Selected individuals within SEA have also participated in formal human rights training provided by Human Rights Education Associates (www.HREA.org). All new employees are given induction training to familiarize them with adidas Group policies and procedures, including our ethical conduct of conduct and adherence to our Labour Charta. They are also provided briefings by individual functions, including SEA. Face-to-face training is complemented by social media and electronic platforms, which suits the young age profile of our employees. Web postings and blogs on human rights and human rights related topics are also employed to raise awareness of the company’s programmes. See, for example, [link]

Within the adidas Group, familiarity with the requirements of the company’s Fair Play (ethical business) code of conduct is mandatory. All employees must participate in and pass online training on the code. Our supplier training programmes - whether conducted in-house or externally - are tailored to specific rights or standards, rather than more general training on “human rights”, although we are exploring the possibility of creating a standard online course on human rights for our business partners and have entered into discussed with the UN on this topic.

For specific supply chain-related topics, such as labour rights, workplace safety and environmental concerns there are thousands of individuals trained each year either through in-house programmes, given directly by SEA or through external training providers approved by SEA. For example, with respect to workplace safety, we have supported (along with other international brands) the development of EHS+ Centers in Asia. These academies were developed by the Institute for Sustainable Communities, a US not-for-profit, in partnership with local academic institutions and deliver high quality occupational health and safety training for managers in global supply chains. We have partnered with the ILO Better Work programme on Freedom of Association training and the development of supervisory skills training for factory line managers, which includes cultural awareness and fair treatment. There are numerous other examples of training run for our business partners, from health (HIV, Hepatitis B, pre- and post- natal care), safety, to nutrition, strike management (including use or involvement of security services), development of effective human resource management systems, development of OHS systems, etc.

- How does the company track the effectiveness of its actions on human rights?

For our direct supply chain we have social and environmental KPIs that assess the effectiveness of our suppliers’ management systems to protect labour rights, worker safety and the environment. For our licensee partners and agents that manage our indirect supply chain, we use a score card, that evaluates and score’s a business entities performance in applying our Workplace Standards and associated guidelines. All audits conducted in our supply chain are visible to us through the Fair Factory Clearinghouse (FFC) database. We were a founding member of the FFC, which promotes the sharing of social compliance, environmental and safety audits among global brands. See [link]

At the end of each month, SEA reports to the Executive Management, highlighting critical issues, investigations and remedial efforts in relation to individual factories and other country-specific cases for our direct and indirect supply chains, as well as our materials supply chain. This is the primary vehicle through which human rights concerns are shared with senior management. We are a founding member of the Fair Labor Association, a US not-for-profit which periodically reviews and provides accreditation of our social compliance programme, using the FLA Charter and Code of Conduct as its benchmark. The FLA code of conduct has been independently reviewed by Shift, another US not-for-profit, to ensure alignment with the UN Guiding Principles.

What is the company’s approach to the engagement of stakeholders (including workers, and local communities impacted by the company’s activities), on human rights issues?

Transparency and stakeholder engagement have been hallmarks of adidas Group’s sustainability programme for the past two decades. It is also central to our approach to managing human rights issues. Our approach to stakeholder engagement is summarized on our website, please see [link] and is further explained in a published guideline: [link].

As mentioned earlier, we use a multilayered approach to reach out to and capture views from stakeholders, including conventional channels (formal stakeholder dialogues on critical issues, worker hotlines, interviews, etc.), as well as digital ones, see [link].

Human rights have regularly featured in our stakeholder engagements undertaken for major international sporting events. See, for example, our stakeholder outreach for the 2008 Beijing Olympics [link] and the stakeholder dialogue held in the lead up to the 2012 London Olympic Games [link]

For information on other specific stakeholder engagements, please refer to our annual sustainability reports. [link]

Priority human rights issues: What are some of the priority human rights issues for your company?

The company selected the following from a check list:

  • Health (including environmental health, workplace health & safety)
  • Workplace diversity / non-discrimination
  • Forced labour and human trafficking (including in supply chains)
  • Sexual harassment
  • Access to water
  • Freedom of association and trade union rights
  • Freedom of expression and/or right to privacy/ digital rights
  • Women
  • Children (including child labour)
  • Migrant workers

Actions on 'other' issues

In response to earlier questions we have cited examples of the many subject matter areas where we are addressing human rights concerns. As an MNC, with global operations, our stakeholders (be they local or international trade unions, social or environmental NGOs, human rights groups or socially responsible investors) expect us to manage a wide array of human rights issues, concurrently, and to give all issues equal weight and priority. Our employees expect that their rights are respected and our duties as an employer in the many legal jurisdictions where we operate are upheld and fulfilled. In our day-to-day monitoring work across our global supply chain, we pay particular attention to

the issues faced by vulnerable or marginalized groups, including women, children and migrant workers. See the coverage of our rights protection work related to vulnerable groups posted on our website at: [link] is also presented on our approach to Fair Wages, Freedom of Association, Health & Safety and Chemicals.

How are human rights commitments and information about how the company addresses its human rights impacts communicated, internally and externally?

At the end of each month, SEA reports to the Executive Management, highlighting critical issues, investigations and remedial efforts in relation to individual factories and other country-specific cases for our direct and indirect supply chains, as well as our materials supply chain. This is the primary vehicle through which human rights concerns are shared internally with senior management and inform business decisions. Human rights commitments and updates on core policies are communicated by the Executive Management and the Chief Human Resources officers to the global work force via the internal communication channels. The adidas Group Chief Compliance Officer provides regular reports to Executive Management about core findings captured by the “Fair Play Framework” hotline system that is accessible for all adidas Group employees.

For the past 13 years we have published an annual Social & Environmental Report, which mirrors GRI requirements. See [link]. As part of our transparency efforts we also publish statements on specific cases, and track and report on complaints. To complement our own transparency efforts, the Fair Labor Association independently publishes its own findings from third party complaints ([link] well as the remedial actions taken at adidas Group suppliers, triggered by FLA unannounced audits. See [link],

We also use blogs and social media channels to communicate progress on sustainability, including human rights related topics. See, for example, [link].

The feedback we receive from stakeholder dialogues are also published on our website.

What provisions does your company have in place to ensure that grievances from workers and affected communities or individuals are heard, and can you provide examples of remedies provided?

In fulfillment of the UN Guiding Principles, our commitment to uphold the provisions of the OECD Guidelines for Multinational Enterprises and as a good business practice, we need to know whenever we are having a negative impact on a rights-holder whether it relates to our employees, our customers, the workers in our suppliers’ factories or the communities in which we operate. We have in place a number of well-tested grievance channels, which complement our stakeholder engagement and other due diligence processes.

For example, we have very mature grievance channels available for workers – through worker hotlines in each country, manned either by internal staff or independent NGOs. We have been continuously upgrading these reporting channels and have introduced an SMS complaint mechanism for adoption by our suppliers, which are being progressively rolled out across our supply chain,starting first with Indonesia and Vietnam. See [link]

Separate but related complaint mechanisms are available with respect to the adidas Group’s own business practices, in matters of any breach of national laws and/or external and internal regulations. For example, in relation to business ethics, privacy and employment practices. These parallel processes are managed by the adidas Group’s Legal and Compliance team, through an internal reporting mechanism to the General Counsel/Chief Compliance Officer, or to our Regional General Counsels, under the Group’s ”Fair Play Framework”.

The adidas Group reinforced its commitment to respect human rights by launching an improved Third-Party Complaint Mechanism in November 2013. We already had a good system for third-party complaints – that is, complaints from people and organisations that are outside of our company. This system was built on years of engagement with workers, trade unions, consumer advocacy and civil society groups but we wanted to strengthen it further. During the London 2012 Olympic Games, we worked closely with the London Organising Committee and were included in their complaint mechanism, addressing specific supply chain issues raised by international and local trade unions. We drew on this experience and the extensive stakeholder engagement that accompanied the establishment of the LOCOG complaints mechanism to modify our own approach. We further updated our grievance procedure in November 2014, based on feedback we had received from Human Rights Watch.

In the re-issued document, we have added our Anti-Retaliation Policy. See [link]

Over the past two decade we have addressed thousands of non-compliances issues through our social and environmental due diligence. We have also tackled specific complaints, often from civil society groups or from trade unions, as well as individual workers. The following  illustrates actions taken in 2014 with respect to Freedom of Association in Cambodia, following nation-wide strikes that were met with deadly force by the military police.

General Approach to FOA in Cambodia

We have engaged regularly with the ILO’s Better Factories Cambodia to conduct training on Freedom of Association and have mandated that our suppliers allow union officials to attend off-site training on the labour law. Each year, we organize a third party to provide capacity building for Industrial Relations Officers who we require to work as trade union liaison in each factory.We also provide a direct communication channel via our Worker Hotline number and email. Anyone in a factory can report to us their workplace concerns, including trade union members and leaders. And from time to time we do receive grievances, especially from the trade unions, which we have addressed. If it is major issue being reported to us, such a fundamental breach of associational rights, or a dismissal, we would start our investigations by making an unannounced visit to the factory concerned, followed by on or off-site interviews with those affected, and interviews with the plant management.

Apart from this, we maintain a regular dialogue with local human rights NGOs and with the independent as well as government-backed trade unions. We are open to receive their input and feedback on our factories performance with respect to Freedom of Association and any other issues that are pertinent to the workers’welfare and rights. We also engage with the local Arbitration Council (AC) which regularly manages and resolves labour disputes through conciliation. The AC provides a monthly update on cases, which we monitor to see if any of our suppliers have been involved in any industrial conflict which has not been disclosed to us. We will also review the Arbitral Awards – the decision of the Arbitration Panel - and apply the jurisprudence they have developed in our own assessment of FOA complaints which are brought to us for our own direct investigation.

Claims of unfair dismissal

Following clashes between workers and riot police that resulted in the death of several workers, garment factories across Cambodia reopened for business. Shortly afterwards, claims surfaced that union officials were being discriminated against and subjected to unfair dismissals. Previously, we had given briefings to all of our suppliers in Cambodia on the handling industrial disputes and made it clear that retaliation against workers for participation in any legitimate strike, or peaceful public demonstration, breaches our Workplace Standards. Although the 2014 strikes did not meet the tenets of legal notification under the Cambodian Labour Law, given that the entire industry sector was affected we treated it as a de facto national strike. When we subsequently received credible reports of dismissals from a local human rights group, we immediately investigated those allegations. In one case, at Bowker (Cambodia) Ltd., we required the reinstatement of four union officials, with back-pay, as their dismissal breached our Standards. At Elite (Cambodia) Co. Ltd. it was alleged that a female worker had lost her job for voicing an interest in forming a trade union. That allegation was not substantiated. Nevertheless the worker was offered re-employment by Elite, but they decided against this and took a job elsewhere.

In each case we engaged closely with the NGO, the local unions and the factory management, weighing up the information provided by each party and through a process of open a dialogue resolved these claims. Engagement with Government We also supported calls for the release from detention of workers and civil society members that had been arrested during several weeks of strikes and street protests. We joined other brands and the global trade unions in writing to the government to condemn the action by the military police, which resulted in the deaths of unarmed civilians. On this subject, we wrote to the government on three separate occasions highlighting our concerns and calling for an independent investigation, as well as compensation for the victim’s families. Those letters were directed to the Prime Minister, the Permanent Deputy Prime Minister and the Minister of Justice, respectively.

Our communication with the Minister of Justice addressed the death of Mr. Yean Vithy, who was a worker from Shenzhou, a factory which supplies a number of sporting goods brands including the adidas Group. We have spoken with the victim’s family and with the factory regarding compensation. This engagement was openly communicated with local human rights NGOs, with whom we had been discussing this case. Mr. Vithy had no trade union affiliation and was, as far as we could determine, a bystander when he was shot by the military police. Although not legally required to do so, Shenzhou treated this as a death-in-service and paid compensation to his wife, who is also an employee of the factory, and guaranteed lifelong schooling for Mr. Vithy’s child. We petitioned the Cambodian government to prosecute those who were responsible, and to pay compensation for this wrongful death. Our engagement with the Minister of Justice continues, but has yet to reach a successful outcome.

Which external and collaborative human rights initiatives does your company participate in, and what is the nature of your involvement?

adidas Group is a founding member of the Fair Labor Association (FLA). Our VP for Social & Environmental Affairs (SEA) for the Americas is currently an FLA Board Member and we participate in various working groups, including those related to responsible sourcing practices and fair wages. We are also a founding member and have a seat on the Board of the Fair Factories Clearinghouse. Our Global Director for SEA is currently the Chair of the CSR Committee of the World Federation of Sporting Goods Industries (WFGSI), which addresses social and environmental compliance issues in global supply chains in our industry sector. Since the year 2000 adidas Group has had a permanent seat at the Round Table on Code of Conducts as hosted and facilitated by the Ministry for Economic Cooperation and Development Germany. The Round Table that consist of representatives from the German Government, unions, employers and business, promotes exchange about best practice approaches in regards to safeguarding human and labour rights. adidas Group is a founding members of the Better Cotton Initiative (BCI) and the Sustainable Apparel Coalition (SAC). Within SAC we are members of various working groups which are evaluating the social and environmental footprint of suppliers, through the HIGG Index.

Although not a member of the Global Business Initiative on Human Rights, our VP for Social & Environmental Affairs for Asia Pacific and in-house counsel on Human Rights, is a regularly speaker at their events. He is currently Chair of the Steering Committee for the EHS+ Center initiative in Asia and a member of the OECD’s Responsible Supply Chains in the Textile and Garment Sector Advisory Group, which is examining the implementation of the OECD Guidelines for Multinational Enterprises, including the application of human rights and due diligence provisions.

adidas Group has been shaping and influencing the content and direction of the ILO initiative Better Factory Cambodia since 2001. Better Work (BW) was launched in 2008 and became a global initiative. We were one of the first brands to sign off on the’ buyer principles’ and have been a BW Partner since 2012. The BW program offers advisory, capacity building and training for adidas Group supply chain in the countries where BW operates, and multi stakeholder initiatives opportunities for the brands involved.

adidas Group has played a key role in the creation and implementation of an FOA Protocol for Indonesia, in collaboration with local trade unions, suppliers and other international buyers. We currently sit on the National Committee managing this initiative. adidas Group’ suppliers account for over half of all factories who have enrolled in the FOA Protocol. We are also signatories to the Bangladesh Fire and Building Safety Accord and participate in the brand caucus discussions related to this initiative, as well as complying with the Performance Standard established under the Accord.

Which are the key one, two or three elements of your approach to human rights that been developed or amended since June 2011? Please indicate if these actions were in response to the UN Guiding Principles.

Since the adoption of the UN Guiding Principles we have undertaken a high level examination of human rights impacts of our own operations, to complement our extensive due diligence of global supply chain issues. We have extended training on human rights topics and built awareness of the UN Guiding Principles among key staff. We have published an industry leading FAQ, to make sense of how the UN Guiding Principles fit within our existing and very mature risk management processes. We have actively reviewed our existing policies and guidelines, using the materials developed by other organisations to ensure alignment with the Guiding Principles (for example the review conducted by Shift of the FLA Code of Conduct, which is a cornerstone of our own social compliance programme). We have also strengthened and enhanced our Third Party Complaint system to ensure it captures, and addresses, human rights concerns.

What are some of the obstacles and challenges that your company encounters in implementing its human rights commitments?

Our primary challenge is how to conduct effective human rights due diligence, given the breadth and depth of our business, which includes tens of thousands of business relationships along a value chain that stretches from smallholders, farming cotton, to the final point of sale in a retail store. We source products from 65 countries around the world and our sales and marketing operations extend to over 170 countries, globally, serving tens of millions of customers. We believe country level surveillance, stakeholder engagement/feedback and easily accessible complaint procedures are necessary, to complement any targeted business-specific assessments and monitoring efforts for human rights impacts described earlier. The third party complaint mechanism we have developed allows anyone with an issue that infringes on their rights to bring that issue to our attention, anywhere in the world. We are committed to be fair and transparent in the handling of all such third party complaints and publicly report on our efforts.