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13 May 2022

Jasmin Malik Chua, Sourcing Journal

Global: Campaigners accuse Adidas of 'stealing' garment workers' wages & severance pay; call for a legally binding agreement to ensure brand accountability

"Adidas Denies $109 Million Garment Worker Wage Theft", 13 May 2022

Labor activists are accusing Adidas of “stealing” from the workers who make its clothes, despite the sportswear giant raking in billions in profits during the pandemic.

...Clean Clothes Campaign Germany say they planned to show up at Adidas’s annual general meeting...to demand that the company and its shareholders ensure that workers are “never again” deprived of the full wages and severance pay.

Cambodian workers who churned out clothing for Adidas and others were deprived of roughly $109 million in wages from April to May 2021 alone, the organization said, citing a “comprehensive” inventory by unions in 114 factories. Adidas, Clean Clothes Campaign Germany added, is linked to the largest wage theft in the factory sample. Since Covid-19 burst on the scene, some 30,190 workers across eight of its supplier factories have lost up to $11.1 million–or $387 per capita, it said...

Adidas told Sourcing Journal that it rejects the allegations.

“Throughout the pandemic, Adidas has been committed to fair labor practices, fair wages and safe working conditions throughout its global supply chain,” a spokesperson said. “We continued to source from our partners and committed to paying all orders, whether they were completed or in process. We continued to ensure legal compliance in terms of pay and benefits for all workers and tracked the working conditions in each and every factory.”

But Clean Clothes Campaign Germany says that companies like Adidas have been denying responsibility for workers for decades. Because the problem is systemic, it said, brands must be held accountable for wage and severance theft through a legally binding agreement...

...labor campaigners like the Asia Floor Wage Alliance have sought to reframe the idea of brands as simply “buyers” of garments. Rather, they argue, brands should be considered producers of those garments, since the items they commission can’t be sold by anyone else. Worker-rights groups have also asked for a severance guarantee fund, financed by brands, that can ensure workers can access to severance payments where traditional jurisdictional and governance routes fail.