29-Nov 2000, CCC report on EU-parliament meeting

A Special Meeting on "Standard Setting by European Enterprises in Developing Countries", called for by the Committee on Development and Cooperation, took place in the European Parliament on 22 November 2000. This followed the adoption of the Howitt Resolution by the European Parliament in January 1999. Two companies were invited to attend, among them adidas.

ADIDAS did not attend the meeting. Aqueel Khan of social audit company Verite spoke instead but stressed that he did not speak on behalf of the company.

Social auditors Verite have conducted 30 audits for ADIDAS in countries including China, Indonesia, Vietnam and the Phillipines. Verite worked with the company's internal auditing team to monitor compliance with both the adidas code of conduct and the legislation of the supplier country. Explaining the procedure used, Mr Khan stressed the importance of social auditing involving people who share the culture of those interviewed.

Mr Khan did not offer any information as to how many of the changes recommended by Verite had been implemented following the 30 audits Verite had carried our for adidas. Mr Khan had not encountered any instances of child labour with ADIDAS suppliers, but quoted supplier factory managers as saying that " the minimum wage is a maximum wage for me".

Rainy Hutabarat, the second speaker in the meeting, is a researcher with the "Urban Community Mission" (UCM) in Jakarta. Ms Hubarat focused on the Tuntex factory in Cakung, East Jakarta, Taiwanese-owned, employing1,700 workers, most of them women, and producing garments for Nike, Adidas, The GAP etc.

In April 1999, UCM researchers interviewed 5-10 workers and reported - forced overtime - extraordinarily high fines production mistakes - wages below the legal minimum wage - overtime pay below the legal requirement - 64-70 hours per week (legal maximum: 54 hours per week) - physical and verbal abuse of workers.

This study was communicated to adidas in February 2000 who in March 2000 disagreed with only two points: it was not aware of fines and Tuntex met the legal minimum wage requirement.

In September 2000, UCM researchers further interviewed 8 workers from Tuntex. The same problems were reported except that wages had been raised above the legal minimum wage level. The minimum wage, however, by the Indonesian government's own account, does not cover the basic needs of workers. According to UCM calculations, the legal minimum wage should at least be doubled in order to become a living wage.

In November 2000 (two weeks ago), UCM met with nine workers from Tuntex. They reported that:

• although overtime is no longer compulsory, poverty continues to force workers to work overtime n overtime is between 25-30 hours per week, sometimes more, and usually includes two Sundays per month (the legal maximum is 54 hours per week and workers must have at least one day off per week) n overtime pay remains below the legal requirement.

Workers also reported that those who suffered pierced fingers, a common injury, paid 90% of medical costs, the equivalent of six days' wages per finger.

UCM concludes that:

• codes of conduct have not led to meaningful change, as demonstrated by Tuntex
• the minimum wage should be replaced by a living wage so that workers are no longer forced to work overtime
• workers at supplier factories of adidas should be educated in the adidas code of conduct, and involved in its monitoring, not in an isolated form, but on an institutionalized basis, in close cooperation with NGOs and trade unions like the CCC
• workers in Indonesia must be able to exercise their right to full freedom of association.

Dr. Ratna Sapari, Institute for Social History, Amsterdam highlighted the weakness of legal frameworks in Indonesia, the extent to which Indonesian workers have been deprived of their rights and the tendency of government to interfere with labour legislation. She confirmed that the legal minimum wage remains well below what is needed to cover basic needs and that some companies could obtain derogations from paying the minimum wage anyway.

Improved legislation on the right to organise and collective bargaining was a positive step, but the new agreements are being violated by companies. The government, although wanting to demonstrate its respect of international rules, has chosen not to intervene in these violations. There has been no action on the part of adidas to improve freedom of association among its suppliers. Those promoting free trade unions are still labelled as communists and radicals - so that many workers are afraid to become involved.

Whilst the government continues to argue that there must be no action against foreign investors in this time of crisis, Dr Sapari stressed the importance of outside intervention to protect workers who remain in a weak position. She concluded that Northern governments should endorse binding measures for the behaviour of transnationals.

After the three presentations the floor was given to the Members of the European Parliament to ask questions.

Several Members stressed the negligence of adidas that did not find it necessary to come to this hearing. One Member stressed that "Companies like adidas stress their accountability but when we have questions they do not turn up. " He asked to transfer this as a complaint to the company. Richard Howitt accused the firm of showing utter contempt for a properly-constituted public hearing.

Richard Howitt asked the representative of Verite to state for the record why adidas was refusing to attend the meeting. The answer of Mr. Kahn, was that the PR manager of adidas could answer questions, and he gave the telephone number to the audience. Later Richard Howitt let the attendants of the hearing know that they tried to call the PR manager but he was not in the office to indeed answer questions.

Wolfgang Kreiss-Dorfler, German member of the Party of European Socialists, asked how codes could be made more binding.

Max van de Berg, Dutch member of the Party of European Socialists, commented on the production of footballs in Pakistan and India. The FIFA has rules which are not been respected. Here lies a task with the Europarliament also, to bring this matter up with the FIFA and to discuss how to make these rules binding.

MEP Howitt stressed the need for voluntary and binding measures, to look at how private initiatives of the Multinational corporations in question can be made more effective.

The European Clean Clothes Camapaign has asked the Europarliament to make sure that the Howitt resolution would be implemented. The chairman of the meeting, Joaquim Miranda concluded the morning with the remark that voluntary commitments were clearly not sufficient for companies to implement social standards. Urgently needed therefore were binding rules and control by politicians.

Clean Clothes Campaign