Fact of the Day

Adidas’ annual profits are on the rise, and yet workers in El Salvador are owed $825,000.

According to the Associated Press, adidas’ annual revenue rose 26% last year. “For all of 2006, Adidas said it earned 496 million euros ($649.76 million), up from 390 million euros the previous year. Annual revenue rose 52 percent to 10.1 billion euros ($13.23 billion) -- exceeding the 10 billion euro mark for the first time in the company's history, Adidas said.”
-Adidas Posts 4Q Profit, Associated Press, March 7, 2007

“Of the $825,000 that Adidas has recognized as the amount owed to us, it and other brands have decided to give only 4% of this amount. We know that these corporations, for which we sewed clothing, are very powerful and have multi-million dollar economic resources. We do not understand why you all have decided to offer such a small amount of what is owed to us.”
– The workers of the Hermosa factory, San Salvador, El Salvador, January 19, 2007

Today's Fact and More Press Links

More links from March 15, 2007-

The Capital Times:
http://www.madison.com/tct/news/index.php?ntid=123723&ntpid=1

Chronicle of Higher Ed:
http://chronicle.com/news/article/1807/wisconsin-will-not-pull-licensing-deal-with-adidas-over-labor-abuses

Boston Globe:
http://www.boston.com/news/education/higher/articles/2007/03/14/chancellor_wis_wont_end_adidas_deal/

Fact of the Day 3.20.07

Workers from the Hermosa factory in El Salvador have been blacklisted from other garment factories due to their organizing efforts. Once again, this has been acknowledged and confirmed by both the Workers Rights Consortium and the Fair Labor Association.

Workers Rights Consortium Report:
“There is substantial, credible evidence indicating that the ability of the workers to find employment has been impeded by the blacklisting of these workers by apparel employers in retaliation for their active protest of Hermosa’s labor rights violations. The WRC has initiated an investigation into alleged blacklisting of former Hermosa workers at the Chi Fung apparel facility, a producer of university logo goods, located near Hermosa in the town of Apopa, El Salvador. While the WRC’s investigation remains ongoing, sufficient evidence has been gathered to date to warrant a clear conclusion that Chi Fung has engaged in unlawful hiring discrimination against former Hermosa employees. WRC investigators have thus far conducted interviews with 45 of the group of 63 workers who have engaged in protest activities and pursued legal claims against Hermosa. More than one third of the workers interviewed have sought work at Chi Fung. Each of these individuals is a skilled apparel worker, with experience in the industry ranging from 5 to 18 years. Though the factory has consistently hired new employees throughout the past six months, not a single one of the former Hermosa workers who applied forwork at Chi Fung has been hired.” WRC report on blacklisting of former Hermosa workers at Chi Fung, Scott Nova, Workers Rights Consortium, April 20^th, 2006.

Fair Labor Association:
“Because of the exceptional circumstances surrounding the Hermosa case, the FLA Board of Directors for the first time approved the creation of an emergency fund to provide direct assistance to workers who have not been able to find employment since the factory’s closure in May 2005, particularly those victims of blacklisting. Former Hermosa workers who have not been able to find employment, particularly because of blacklisting, will be eligible to receive the payments.” Letter to Hermosa Workers, Auret van Heerden, Fair Labor Association, December 24, 2006.

More Press and Fact of the Day 3/16/07

USAS sent out a press release yesterday detailing our position on cutting the contract and as a response to the Chancellor's statement. There will be another story on Wisconsin Public Radio this afternoon.

Here are press links from the USAS press release:

UW Daily Cardinal:
http://www.dailycardinal.com/news/slac-wary-of-uw-s-adidas-investigation.html

And More From Yesterday 3.15.07:

Wisconsin Public Radio: (scroll down to "UW Checks On Worker Rights in Apparel Factory" and click on "Listen top this now...")
http://www.wpr.org/news/newsstories.cfm

Fact of the Day
In response to the University's trip to El Salvador to investigate what they call "claims," we will be delivering facts to the Chancellor everyday, so that he literally has the information at his fingertips. Though the material breach in the UW/adidas contract occurred in the Hermosa factory in El Salvador, the facts of the day will not solely cover the Hermosa case, because there have been numerous code of conduct violations by adidas at other factories which the University should take into account when considering their relationship with adidas.

Here is today's fact:

Workers from the Hermosa factory in El Salvador are owed $825,000. This has been confirmed by both the Workers Rights Consortium and the Fair Labor Association.

Workers Rights Consortium Report:

“The Hermosa factory closed in May 2005 without having paid workers legally mandated severance and back wages. At the time of the closure, there were roughly 260 workers employed at the plant. It has been estimated that the total sum owed to all workers for severance, unpaid salaries, and unpaid benefits is roughly $825,000.

Information available on the amounts owed to workers is most precise with respect to a group of 63 workers who, as part of various efforts to secure unpaid compensation, sought representation by a respected Salvadoran labor lawyer and pressed for criminal charges against their former employer.4 The workers’ legal counsel, Zoraida Rodríguez, has developed detailed information on the compensation owed to each of the 63 workers. According to this data, the workers are owed, in total, $114,926.52 in unpaid compensation and benefits (including back wages, production bonuses, accumulated vacation, accumulated sick leave, and annual bonuses) and $49,650.55 in unpaid severance. On average, the workers are owed $2,612.33 each, with individual totals ranging from $1,568.20 to $6,045.70,” Update on Hermosa/Chi Fung, Workers Rights Consortium, October 10, 2006.

Fair Labor Association Report:

“The factory’s owner, Salvador Montalvo Machado, failed to make legally required payments to the social security and retirement funds of workers, although the owner did report the owed amounts to the appropriate government agencies.

During late 2004 and early 2005, workers were asked to work Sundays in order to complete production for FLA and non-FLA companies and were not paid for overtime work. They protested to the owner but did not get paid.

The factory had no fund, accrual of money, or identified assets in its accounts to cover severance payments. The factory owed approximately $750,000 to the bank that held the mortgage on the property and $150,000 to a bank for machinery. Total worker compensation due, including unpaid benefits, unpaid salaries, and severance, is estimated at $825,000,” Interim Summary Report Third Party Complaint Regarding Hermosa Manufacturing, El Salvador, Fair Labor Association, August 25, 2006.

March 14th Press Coverage

The Associated Press wire was picked up by BusinessWeek.com, Forbes.com, Hemscott UK, MN Pioneer Press, WI Capital Times, and Channel 3000 Madison. There was a story on WKOW Channel 27 Madison and in Green Bay and Appleton. Both UW campus papers also covered the Student Labor Action Coalition (SLAC) action and the Chancellor's announcement. This is now national, and thanks to Hemscott UK, international news.

Here are the press links, or you can find them by searching "uw" and "adidas" on google news:

Chancellor's Announcement- http://www.news.wisc.edu/13572.html

AP Wire- www.businessweek.com/ap/financialnews/D8NS77BG0.htm
http://www.forbes.com/feeds/ap/2007/03/14/ap3517343.html
http://www.hemscott.com/news/latest-news/item.do?newsId=40460739454447

Channel 27 (click on tiny camera icon in upper right hand corner to watch video)- http://www.wkowtv.com/News/index.php?ID=10107

Daily Cardinal- http://www.dailycardinal.com/news/uw-to-investigate-adidas-allegations.html

Badger Herald- http://badgerherald.com/news/2007/03/15/uw_stands_by_adidas.php

News coverage is great, but more student, community, and national pressure is necessary for the contract to be cut. To find out more about the Student Labor Action Coalition and United Students Against Sweatshops please visit:
slac.rso.wisc.edu
www.studentsagainstsweatshops.org

Or contact me at molly.glasgow@gmail.com for more information and to get involved.

Material Breach in UW and Adidas Exclusive Contract

The University of Wisconsin, Madison has an exclusive relationship with adidas worth $1.2 million annually to provide uniforms to all UW sports teams. Adidas is also a university licensee and has the right to produce UW apparel. In signing the contract with the UW, adidas agreed to a code of conduct that stipulated its responsibilities in dealing with workers, factories, and suppliers. Due to workers rights violations by adidas, there has been a material breach*** in the contract, as well as other questionable practices. Specifics are laid out at the bottom of this post.

According to reports issued by both the Worker Rights Consortium and the Fair Labor Association, workers in the Hermosa factory have not only been blacklisted for union activity, but are owed $825,000 in unpaid wages and health care. In addition to the Hermosa case, this recommendation was based on three other cases of sweatshop abuse within Adidas’ supply chain: at the BJ&B factory in the Dominican Republic, where Adidas pulled out all of its orders as soon as workers formed a union and demanded a wage increase, and PT Panarub and PT Tong Yang in Indonesia, where workers have also been denied their right to form a union.

Yesterday, March 14th, the Chancellor came out with a statement saying he will engage with brands to fix the problem, but that the UW will not cut the contract. Though I commend the Chancellor for taking a step in the right direction, this is not enough. Cutting the contract and engaging brands to resolve the problem are not mutually exclusive. Both must happen. Therehas been a material breach in the contract because of adidas' blatant disregard for workers' rights. This is precendent setting and the UW needs to stand up to adidas and honor the terms of the contract.

The UW men’s basketball team, formerly #1 in the nation, now still #3, play in uniforms supplied by adidas. The players wear these clothes with confidence, but if they were told the truth of the conditions in which the apparel was made instead of being lead to believe they are only alleged claims, I presume this confidence would diminish and detract from their game. This would be a loss for everyone, so to make it easier on their conscience, let alone support the Hermosa, BJ&B, and PT workers and all other workers affected by this bad agreement between the UW and adidas and demand that the contract is cut immediately.

The Labor Licensing Policy Committee unanimously recommended that the Chancellor cut the contract with adidas. Not only did they vote to cut the exclusive sideline contract, but due to the insistence of Professor Dresang, also the licensing agreement. If the former director of the La Follette School of Public Affairs proposed and Jane Collins, a world renowned expert on the global garment industry agreed, then why would the Chancellor not heed their advice?

Workers have been struggling to find new jobs, and have called on us because changes need to be made now. The UW can no longer justify their exclusive relationship with adidas, not only due to the breach of contract, but also with values they claim to uphold.

UW leads the way in sports, now they need to lead the way in sustaining workers rights.

The Student Labor Action Coalition (SLAC) and it's national counterpart, United Students Against Sweatshops (USAS) are currently working to pressure the UW administration to take action. Efforts will continue until the contract is cut and workers receive justice.


***Material Breach:

1) Workers blacklisted for union activity in the Hermosa case, El Salvador, a clear violation of the Code of Conduct’s freedom of association provision: No employee shall be subject to harassment, intimidation or retaliationin their efforts to freely associate or bargain collectively.

2) Workers at Hermosa are owed $825,000 in back wages and compensation. Adidas' failure to ensure that subcontractors comply with the laws of the country in which they operate. In this case, adidas Group failed to ensure that workers’ legally mandated social security was paid for 9 of 10 years: The term “Licensee” shall for purposes of the Code, and unless otherwise specified in the Code, encompass all of Licensees’ contractors, subcontractors or manufacturers which produce, assemble or package finished Licensed Articles for the consumer. … Licensees must comply with all applicable legal requirements of the country(ies) of manufacture in conducting business related to or involving the production or sale of Licensed Articles.

Two of many other violations:
1) Moving orders out of a factory that just signed a collective bargaining agreement in the BJ&B case, the Dominican republic
2) Violating worker’s freedom of association and right to collective bargaining in PT Tong Yang and PT Panarub, Indonesia. The Workers Rights Consortium, and independent monitoring body has confirmed all of these violations. The Labor Licensing Policy Committee at the UW unanimously voted to strongly recommend that Chancellor Wiley immediately cut the contract with Adidas. The University of Wisconsin knows the truth and must act now to sever their ties with adidas. They have both a legal and moral obligation to do so.