Clean Clothes Campaign to file complaint against Adidas to German National Contact Point for allegedly breaching OECD guidelines in Indonesia; incl. co response

In July 2012, 1300 workers at the Panarub Dwikarya Benoa (PDK) factory in Indonesia who went on strike to protest poor working conditions were dismissed. A 2016 ILO report affirmed that the situation at the factory constituted a violation of international human rights principles. Five years on, 327 workers have still not received any form of severance payment.

On 14th March 2018, Clean Clothes Campaign announced its intention to file a complaint against Adidas to the German National Contact Point of the OECD for failing to provide access to remedy to workers from their shoe supplier. The NCP complaint repeats an earlier claim by CCC, that Adidas had neglected its responsibility to address human rights violations in this case or to create the necessary leverage to resolve the dispute and calling on the brand to pay severance to the former workers. Previous coverage by the Business and Human Rights Resource Centre, as well as statements by Adidas in response to the allegations, can be found here.

We invited Adidas to respond to CCC’s most recent press release, announcing its intention to file a complaint against Adidas, the statement is included below. CCC issued a rejoinder in response to Adidas' statement to which we also invited Adidas to respond. Adidas sent us the following statement: "Thank you for the opportunity to offer a response to CCC’s rejoinder. We believe the arguments set forth by CCC are interesting but flawed when one examines the facts of this case. We look forward to debating these further through the mechanism offered by the NCP." The rejoinder and statement are also included below.

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Item
27 March 2018

Statement by adidas in response to CCC's rejoinder

Author: adidas

Thank you for the opportunity to offer a response to CCC’s rejoinder. We believe the arguments set forth by CCC are interesting but flawed when one examines the facts of this case. We look forward to debating these further through the mechanism offered by the NCP.

NGO rejoinder
19 March 2018

Rejoinder by Clean Clothes Campaign

Author: Clean Clothes Campaign

In its response to our press release, [...] the company claims there are no justifiable grounds for this route to obtain justice for the 327 workers still fighting for their rights in Indonesia...

Clean Clothes Campaign as one of the complainants in this case, objects against these arguments, and argues that the global sportswear brand is responsible to ensure adequate remediation for the 327 workers for the following reasons: 

...Adidas has acknowledged that the strike, and therefore the dismissal of 1,300 workers, directly rooted in the prior dismissal of union leaders in February 2012 and the non-payment of the minimum wage, both violations taking place when Adidas production took place in the Panarub Dwikarya factory. Therefore the expectation to Adidas to mitigate the negative human rights impacts after the strike are justified...

[W]hatever the responsibilities are of the Indonesian government [...] the UN Guiding Principles are firmly stating that companies like Adidas have an independent responsibility to ensure human rights are upheld throughout their supply chains, and that they use their leverage to mitigate negative impacts that are linked to their business.

...Bringing this case to the German National Contact Point for the OECD Guidelines, therefore, is a justified step to further pursue justice for the 327 workers who up to date remain without proper remedy.

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Company response
16 March 2018

Response by adidas

Author: adidas

Thank you for providing adidas with an opportunity to respond to the Clean Clothes Campaign’s (CCC’s) recent press release... 

We see no justifiable grounds for such a complaint. Nevertheless, we are happy to share with the NCP our efforts and actions to date to seek remedies and to assist the parties resolve their longstanding dispute...

We had no orders with PDB at the time the workers went on strike in July 2012, or at the time when they lost their employment, or at any time thereafter, up until the factory closed in January, 2014... Despite this fact, we stepped forward, based on our long-standing relationship with the union’s parent federation, to encourage an early resolution of the dispute...

- [W]e reached out to PDB and encouraged them to extend the deadline for workers to return to work...

- We facilitated the appointment of an independent third party.. and ...continue to urge both parties to negotiate and reach a mutual agreement...

The ILO Committee has [...] delivered its conclusions and a remedy: it has called on the Indonesian government to hold a formal inquiry to reach a decision on the legality of the strike, based on which the appropriate level of compensation due to the workers can then be determined... [W]e have met with the Indonesian Ministry of Manpower [...] and have also written to them, formally, to request that they complete an independent review and make a legal determination over the payment of severance. It is our belief, that only a final and legally binding decision will resolve these long outstanding claims. 

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Article
14 March 2018

Clean Clothes Campaign files complaint against Adidas for breaching OECD guidelines in Indonesia

Author: Clean Clothes Campaign

Clean Clothes Campaign (CCC) is preparing a complaint against Adidas to the German National Contact Point of the OECD for failing to provide access to remedy to 327 workers from their Indonesian shoe supplier Panarub...

Clean Clothes Campaign argues that Adidas has violated the OECD Guidelines for Multinational Enterprises as well as the UN Guiding Principles on Business and Human Rights which state, that companies need to assess their human rights risks, carry out human rights due diligence and in the event of human rights abuses in their supply chain mitigate and provide access to remedy to rightsholders, in this case the PDK workers.

Adidas was well informed about the labour rights violations in 2012 that eventually forced the workers to strike. The leading sportswear brand chose to instruct its supplier to no longer produce its shoes at the contested factory; an action that failed to prevent further rights abuses from happening... Adidas shoes have been produced at the PDK factory at the time the first union members have been dismissed (February 2012) and until shortly before the strike. Furthermore Adidas continues to do business with Panarub Group, the mother company of PDK.

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