07 June 2012
Adidas are refusing to contribute to $1.8 million in severance pay still owed to 2,800 workers after a supplier factory in Indonesia shut down in January 2011. In July last year other companies that sourced from the factory announced that they would contribute $1.6 million to a fund to compensate the workers, yet despite repeated calls by campaigners Adidas still refuses to pay out.
Adidas had been sourcing from the PT Kizone factory in Indonesia for many years, where workers were paid as little as $0.60 an hour. In January 2011 the owner of the factory fled leading to the abrupt closure of the factory and all 2,800 workers losing their jobs – and not gaining the $3.4million in severance pay they are entitled to under Indonesian law.
Despite two other sportswear companies contributing more than half of the total compensation, Adidas claim they have no responsibility to the now unemployed workers. As a result of not paying the $1.8 million in severance and interest, former workers are now incurring debts to survive and are struggling to keep sending their children to school.
Marlina, a widow, worked at Kizone for eleven years. She has two children, a fourteen-year-old boy and an eight-year-old boy.
“I don’t know where to find money for school fees, for our rent, for food,” said Marlina. “Because I have no husband, I have to handle everything myself. I’m the head of the household, and I’m the housewife too. I don’t have anyone to share my problems with.”
In the six months after the factory closed, Marlina’s family accrued Rp 4 million (US$433) in debt. She owes money to the person who sells vegetables, to neighbours, to the person who sells rice, to the person who sells gas for the stove.
While the former Adidas workers struggle to get by, the same cannot be said for the multinational sportswear giant. Last month the company reported a 18% rise in net profits in 2011 $881 million (£559 million). The company also spent £100 million on securing its place as the official sportswear partner of the London 2012 Games and Team GB, in addition to its sponsorship deals with individual athletes.
Adidas must take responsibility for the workers who make their clothes, they must not be allowed to try and abandon them.
You can also read the Workers’ Rights Consortium’s more detailed briefings and reports on the PT Kizone dispute.
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