adidas responded to the Thai Labour Campaign report – read below for the adidas response plus comments from the Thai Labour Campaign and Clean Clothes Campaign.

The Thai Labour Campaign (TLC) and the Clean Clothes Campaign (CCC) published a short report on ‘The Life of Football Factory Workers in Thailand’ on June 30, 2006. The report makes reference to two football manufacturers Molten Thailand and Mikasa Thailand, and to a plastics manufacturer Molten Asia Polymer Products. We have read through the report with some care and have set out below our responses to the issues and concerns raised with respect to Molten Thailand.

TLC/CCC: TLC (the author and publisher of the report) and CCC (which supported the distribution of the report and called for public attention for the issues highlighted in the report) welcome adidas’ quick response. We set out our joint reaction below.

A: Molten Thailand is Japanese owned and managed and produces ball products for adidas, as well as for its own Molten brand. Molten was selected as the supplier for the match ball of the FIFA World Cup 2006™. The company employs a total of 960 workers of whom 150 are directly involved in the manufacture of the +Teamgeist football. This takes place in a dedicated production building.

TLC/CCC: Both the subcontracted workers and regular workers interviewed by the TLC said that for over a year they were only producing for adidas.

A: We are disappointed that TLC - whom adidas has openly engaged with in the past - did not contact us before hand and request direct access to the factory. Instead the authors of the report have relied on information collected through a small number of off-site worker interviews.

TLC/CCC: This, of course, goes both ways…. Adidas could, at any given point in time, as part of its regular (and apparently even intensified, see below) auditing and monitoring activities, have asked TLC to provide information, specifically gathered via off-site worker interviews, which TLC has the contacts and skills to set up.

For many years TLC, the Clean Clothes Campaign, many consumers and labour rights activists have been pushing brands to recognize the need for internal monitoring systems that include off-site interviews with workers carried out by credible labour rights specialists. TLC continues to receive reports from workers – both in Bangkok and in the subcontracting facilities on the Thai-Burmese border – that management prepares workers for workplace visits from monitoring teams and coaches them on what to say. All visitors to the factories are considered “customers” to the workers. They are told by management that ‘the order will be cut’ if they don’t speak positively with visitors about working conditions.

A: As a result, the report contains many inaccuracies and draws a misleading picture about the factory.

TLC/CCC: We disagree with this conclusion, both the casual link being made between worker interviews and “inaccuracies and misleading pictures” and with the statement that the TLC report includes these.

The TLC report focuses on two important issues: wages and freedom of association (FoA). On the issue of wages, adidas does not seem to deny the findings (and neither does the Stiftung Warentest report referred to below, which does not discuss wages). On the issue of freedom of association, we believe a limited number of outside interviews are likely to provide a more credible picture of reality then many interviews carried out within the workplace.

TLC wishes to emphasize that in the past six or seven years they have witnessed and documented a great deal of sacrifice and suffering on the part of workers who took the risk of speaking the truth about working condtions and challenging management’s practices, without the support of brands/customers. Workers should not be blamed for not speaking up in a repressive environment: they are afraid that their supervisors and their personal managers will become suspicious and that there will be severe consequences if they speak out.

TLC believes interviews with workers in the workplace on FoA cannot be expected to be successful unless workers can speak collectively, as a “union”, thereby diminishing the risk of individual retaliation. It might be different if buyers would have a successful mechanism to prevent workers who speak up from being subjected to threats, discrimination, or dismissals, but thus far this is not the case.

A: It is important to state that in recent months Molten Thailand has been the subject of numerous work place inspections conducted by local authorities, staff of the adidas Social & Environmental Affairs Team and visits by international media. The media have directly interviewed workers about working conditions in the factory and their living conditions. Furthermore, in April 2006 the factory was visited by independent social auditors who were commissioned by a German consumer organisation to inspect and assess the factory in accordance with core labour, health, safety and environmental standards and to evaluate the social responsibility of the management. As a result of that inspection, the factory was given a high performance rating.

TLC/CCC: We fail to see why workers would have any confidence in the international media or in a German consumer organisation. On the inspections carried out by adidas: see above. We believe adidas needs to adapt its internal monitoring and allow for off-site interviews with workers, conducted by credible labour rights experts (working with trade unions and civil society) particularly on the issue of freedom of assocation. The article published by the German consumer associaton states that during their visit they could establish that Molten had high social and ecological standards since workers have health insurance, pensions and a worker representation mechanism is in existence. As you yourself state in your letter, the existence of a worker welfare committee (mandatory by law) is not the same as respect for trade union rights and should not be treated as an indicator. It seems as if based on this, the factory received its high rating on core labour standards. We believe this to be fundamentally wrong.

A: We would reject the notion that the Molten Thailand workers’ rights to form a trade union are being repressed. This is not borne out by the many hundreds of worker interviews our compliance team has conducted in the past 5 years, nor has these been found in the independent monitoring that has been carried out at this plant. There is no “atmosphere of repression”, or union-busting activities in evidence at Molten Thailand.

TLC/CCC: See above… and see the TLC report. We believe the stories of these workers should count as evidence on this matter and, given the general situation in Thailand and in this region, it should be expected that Molten has a climate of repression, rather then a climate of mutual understanding and respect for trade union rights.

A: To infer this from the situation at other unrelated plants, does not lend credibility to the argument.

TLC/CCC: We infer this from Molten Polymer, a workplace owned by the SAME owner (and therefore not unrelated). We also wish to repeat that the union leader was SHOT. It does not take much imagination to figure out that workers who might want to exercise their right to organize at the other Molten plant would be scared.

A: The fact that there is no existing or established union within the factory reflects a situation that is widespread in Thailand. Less that 4% of the country’s work force are unionised; with State enterprises being the sector with the largest number of active trade unions.

TLC/CCC: Actually it is only 1.6% of the national work force that is unionized. This actually proves our point: unless pro-active measures are taken, there will be a climate in the workplace that is anti-union. Established in Germany, one of the most highly unionized countries in the world where about 60% of the national workforce is unionized, we are sure that adidas also knows very well the reason why the factory is not unionized. It is too simple to simply state that no evidence was found that workers were stopped from forming a union.

Thailand was one of the more than 60 countries that were founding members of the ILO in 1919. The ILO conventions on freedom of association and collective bargaining, conventions 87 and 98, were established in 1948 and 1949, however now, nearly 60 years later, Thailand has not yet ratified those two conventions. This is one of the main obstacles for workers in Thailand to unionize. During the past six years the TLC has documentated over 30 cases in which workers have been dismissed, beaten up and workplaces have been closed downin order to stop workers’ attempts to unionize their workplaces. Many workers’ leaders are the first to make sacrifices; most of them are dismissed.

A: What we can say is the factory has a very active Welfare Committee, with elected worker representatives. Welfare committees are not an alternative to a trade union and they cannot negotiate and enter into collective bargaining agreements.

TLC/CCC: Welfare Committees also on their own do not provide any evidence on the matter of freedom of associaton.

A: They do however support better worker-management communication and are mandated by Thai law. Worker representatives from the Welfare Committee have participated in independent, NGO-run, training on trade union rights.

The report is correct in stating that Molten Thailand employs both permanent workers and contract workers. It goes on to state that “the regular workers and sub-contract workers are treated differently”. To be clear, both permanent and contract worker receive the same legal entitlements in terms of pay, annual leave, sick leave, and benefits, including social security. Permanent workers however receive higher monthly incentive payments and end of year bonus payments. Monthly bonuses are designed to encourage full attendance, which is common practice in Thai factories. Such a practice is not, as the report suggests, a disciplinary policy where late attendance is penalised. We would agree with the report that asking the contract workers to pay for their uniform shirts is unreasonable and unacceptable. The factory has committed that the Contractor will stop such deductions.

The report states that working hours are “compulsory”. This is not correct. Workers are given a choice and overtime is voluntary. Also the report incorrectly states that the day shift workers work until 7.35 pm; their shift ends at 6.30 pm.

TLC/CCC: The reality of this situation is well-known. If one talks to workers they will report their “daily working hours”. In the situation where their minimum wage is too low too make ends meet (as is the case for the subcontract workers and often also for the regular ones) they are actually glad to be working and will “voluntarily” work 10 hours a day. Yes, workers do work more: because they cannot earn enough to live on, that’s why they need to work overtime, they don’t want to work but they want more money to survive! Workers should be paid enough money to live on just for normal working hours which is already eight hours per day, six days a week.

Most workers who have children have to leave their children with their parents in remote villages 200 to 600 kilometers away from the factories. For 18 years of working in the factories, they can never be with their children more than few days each year. Is this an acceptable phenomenon in the producing world? Why can’t the sporting goods industry do better?

A: The report sets out various figures for worker salaries. The current minimum wage in Chonburi, where the factory is located, is 166 baht per day. The average wages of the permanent and contract workers in Molten Thailand are 260 baht and 173 baht per day, respectively. Both contract and permanent workers are also eligible to receive monthly bonuses, based on attendance and work performance. These bonuses contribute a further potential income of between 600 to 750 baht per month. In addition to regular wages and overtime, permanent workers also received an annual bonus. The annual bonus in 2005 was a 3 month bonus plus 3,000 baht.

TLC/CCC: Adidas confirms these figures as well.

A: The report calls for further improvements to wages, especially for the contract workers. In response we would offer two observations.

Firstly, as is universal practice, the minimum wage is established by the Government. The Thai Government has recognised that minimum wages have not kept pace with consumer prices and inflation and have made three adjustments to wages in the past 18 months. We understand that further increases are pending.

TLC/CCC: Adidas (and other sports brands) could take the lead in paying more then the (by your own admission) insufficient minimum wage. Why wait for the government? There is no law against paying more then the minimum wage. In fact many people earn more than the minimum wage and we are sure that elsewhere in adidas’ supply chain this is the case.

A: Secondly, it is adidas policy to actively discourage the use of temporary or contract labour in the supply chain and we have continued to push the Molten Thailand management team to reduce its dependence on contract workers in their factory. We believe that long term improvement in pay for the contract workers is best achieved by having them become permanent employees, with increased job security and annual bonuses.

TLC/CCC: Thank you for this initiative. That is a good move from adidas. To make this clear adidas can include in its code of practice that there must be no contract workers in the manufacturing facilities working for adidas. There should not be different standards for different workers: every worker in these plants, working on the same products, sitting next to each other, should work under the same terms.

In conclusion, the TLC would like to emphasize that adidas should value external reports on labour standards at their suppliers more seriously. It took the TLC’s coordinator over two months to be able to thoroughly gather information on these workplaces: to better understand the situation and to gain the confidence of workers so that they would feel comfortable enough to speak out about their workplace reality. Two months! Just walking through a factory on a management-led tour will clearly not result in obtaining the truth about working conditions from workers. The adidas internal monitoring structure at the moment is not sufficient when it comes to the area of freedom of association.

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DOWNLOAD THE FULL TLC REPORT
"The Life of Football Factory Workers in Thailand"
http://www.cleanclothes.org/ftp/Life_football_workers_of_thailand.pdf