Labour rights and sportswear production in Asia Acknowledgements Any report of this size is a collaborative effort. The principal writers were Oxfam Australia Labour Rights Advocacy staff Tim Connor and Kelly Dent, but numerous Oxfam staff and representatives of other organisations made important contributions to the report’s development. Elena Williams, Mimmy Kowel, Sri Wulandari and other researchers conducted interviews with sportswear workers. Maureen Bathgate edited the report and arranged the design, and Martin Wurt arranged the pictures. Special thanks are particularly due to all the sportswear workers, trade union organisations, factory owners and representatives of sports brand owners who shared their experiences and perspectives through the research process. First published by Oxfam International. © Oxfam International 2006. All rights reserved. This publication is copyright, but may be reproduced by any method without fee for advocacy, campaigning and teaching purposes, but not for resale. The copyright holder requests that all such use be registered with them for impact assessment purposes. For copying in any other circumstances, or for re-use in other publications, or for translation or adaptation, prior written permission must be obtained from the copyright holder, and a fee may be payable. Copies of this report and more information are available to download at; www.oxfam.org.au/campaigns/labour/06report. Oxfam International Suite 20, 266 Banbury Road, Oxford, OX2 7DL, UK E-mail: [email protected] Publication of this edition managed by Oxfam Australia. ISBN: 1-875 870-61-X Original language: English Authors: Tim Connor and Kelly Dent Editor: Maureen Bathgate Picture Editor: Martin Wurt Design: Paoli Smith Print: Work & Turner Make Trade Fair is a campaign by Oxfam International and its 12 affiliates, calling on governments, institutions, and multinational companies to change the rules so that trade can become part of the solution to poverty, not part of the problem. For further information visit www.maketradefair.com Oxfam Australia, a member of Oxfam International, researched and wrote this report. No Australian government funds or donations which are tax-deductible in Australia have been used to fund the production of this report. Front cover soccer ball insert photos: Clockwise from top Martin Wurt/OxfamAUS, Dara O’Rourke, AFP photo/Adek BERRY. EXECUTIVEContents SUMMARY 1.0 BACKGROUND 1.1 INTRODUCTION 3.0 THE SPORTSWEAR INDUSTRY OVERALL 1.2 METHODOLOGY 3.1 INDUSTRY-WIDE SOLUTIONS 3.2 TRANSPARENCY: OPENING THE SUPPLY 2.0 FACTORY CASE SUDIES CHAIN TO INDEPENDENT SCRUTINY. 2.1 JAQALANKA (NIKE, VF CORPORATION) 3.3 WHO PAYS? PURCHASING PRACTICES 2.2 FACTORY A (REEBOK, UMBRO) AND TRADE UNION RIGHTS. 2.3 PT PANARUB (ADIDAS) 3.4 INCONSISTENT: SOURCING WHERE 2.4 PT BUSANA PRIMA GLOBAL (LOTTO) TRADE UNION RIGHTS DON’T HAVE 2.5 PT DOSON (NIKE) LEGAL FORCE. 2.6 PT DAE JOO LEPORTS (ADIDAS, VF 3.5 MAKING IT REAL: MAINTAINING CORPORATION) PRODUCTION IN UNIONISED FACTORIES. 2.7 MSP SPORTSWEAR (NIKE) 3.6 UNSTABLE JOBS AND UNSTABLE 2.8 FACTORY B (REEBOK) RIGHTS: FLEXIBLE VERSUS STABLE 2.9 PT TAE HWA (FILA) EMPLOYMENT. 3.7 A MULTI-STAKEHOLDER APPROACH: THE FAIR LABOUR ASSOCIATION 4.0 SPORTSWEAR COMPANY ASSESSMENTS 4.1 REEBOK 4.2 PUMA 4.3 ADIDAS 4.4 NIKE 4.5 ASICS 4.6 UMBRO 4.7 MIZUNO 4.8 PENTLAND (SPEEDO, LACOSTE) 4.9 NEW BALANCE 4.10 LOTTO 4.11 BASICNET (KAPPA) 4.12 SPORT BRANDS INTERNATIONAL (FILA) 5.0 CONCLUSION REFERENCES GLOSSARY OF ACRONYMS Oxfam International 1 Executive summary While global sports brands generously sponsor the world’s top sporting teams and players, the women and men in Asia who make their goods struggle to meet their families’ basic needs and many are unable to form or join unions without discrimination, dismissal or violence. Nike pays USD $16 million (13 million Euro) a year to the Brazilian national football team and adidas pays USD $1.8 million (1.5 million Euro) per year to French player Zinedine Zidane. Meanwhile the Asian workers who make the football boots and other sports gear worn by players are paid as little as 47 cents Euro per hour — 3.76 Euro for a standard working day. Shopping at their cheapest local markets, women producing brand-name sportswear in Indonesia need to work 3.75 hours to earn enough to purchase 1.5kg of uncooked chicken, which for some is all the meat they can afford for a month. This report considers 12 international sports brands — adidas, ASICS, FILA, Kappa, Lotto, Mizuno, New Balance, Nike, Puma, Reebok, Speedo and Umbro — and examines the steps they take to ensure their suppliers in Asia allow workers to organise trade unions and bargain collectively for better wages and conditions. It concludes that all sportswear companies need to take a more serious approach to workers’ right to freedom of association. Some companies — notably Reebok, Puma, adidas, Nike, ASICS and Umbro — are involved in positive initiatives which have led to improved conditions in some factories, but their overall approach to trade union rights has been inconsistent and at times contradictory. FILA, owned by Sports Brands International (SBI), has taken the least action to improve respect for trade union rights in its Asian supplier factories. FILA has failed to adequately address serious labour rights abuses when they have been brought to the company’s attention and since February 2005 has ignored multiple attempts by labour rights groups and trade unions to communicate with the company about labour issues. Top football players and other professional athletes are commonly represented by players’ associations which negotiate collective bargaining agreements protecting players’ interests and needs. In contrast, Asian sportswear workers who want to form unions and bargain collectively frequently face discrimination, harassment, threats of dismissal and, in some cases, violent intimidation. Two of the cases researched for this report — one in Sri Lanka and the other in Indonesia — involved violent assaults on workers who were attempting to form unions in sportswear factories. Women, who make up 80% of the global workforce in the sportswear sector, face particular barriers to participating in trade unions due to gender discrimination within their workplaces, their societies and within workers’ organisations. Transnational corporations (TNCs) in sportswear and other industries cannot, on their own, create the conditions where trade union rights are fully respected. Governments have a responsibility to ensure that labour rights are protected by properly enforced state legislation. However, governments in developing countries are frequently wary of regulating the behaviour of TNCs for fear that they will lose production and investment to other countries. In this context sportswear TNCs can play an important role in ensuring that trade union rights are properly respected in their own supply chains, thereby reducing pressure on governments to erode state protection for these rights. Women from the PT Doson factory (2.5) protest against the factory’s closure. Trade union leaders at Doson believe Nike’s decision to cut all orders to the factory was related to the union’s campaign to raise wages. Photo: AFP PHOTO/ Adek BERRY 2 Labour Rights Report The Play Fair Alliance — a network of organisations including, the Clean Clothes Campaign, the International Confederation of Free Trade Unions and the International Textile, Garment and Leather Workers’ Federation (ITGLWF) and 11 Oxfams1 — proposed in 2004 that the World Federation of Sporting Goods Industries (WFSGI) and sports companies cooperate in a Programme of Work to improve respect for labour rights in the industry. Major recommendations include: • confidential and accessible means for workers to report exploitation and abuse; • independent education and training for workers concerning their rights at work; • transparency regarding company supply chains and efforts to improve conditions; • purchasing practices which allow suppliers to respect labour standards (including stable business relationships and reasonable prices and delivery times); and • a framework agreement between the ITGLWF and the WFSGI to facilitate freedom of association and collective bargaining. In addition, this report recommends that sports brands should: • prioritise retaining unionised factories in the companies' supply chain; • ban, or severely restrict, the employment of workers on short-term contracts; • if factories close, ensure that workers' receive their full entitlement to severance pay and take steps to help ensure there is no discrimination against worker activists if they apply for jobs with other suppliers; and • not increase their sourcing in countries and Free Trade Zones where the right to freedom of association does not have legal force. Any new production should be in countries and zones where this right has legal effect. Progress towards these objectives has been limited. Some companies — notably Reebok, Puma, adidas, Nike, ASICS and Umbro — have taken steps toward greater transparency and have been willing to cooperate with trade unions and other civil society groups to allow some workers to receive training in their rights. They have also been willing to prevent discrimination against trade union members in particular factories, including the two factories described above where trade union members had received death threats. These companies also participate in the Fair Labor Association (FLA), a multi-stakeholder initiative which promotes adherence