27-6-98

Find below two messages on recent lawsuits against companies. The first message is about a lawsuit against ADIDAS for using prison labour in China, the second one about a lawsuit in Australia against 13 companies, including Adidas and Nike, for exploiting homeworkers.

ADIDAS LOOKS INTO PRISON-LABOR CLAIM

The Oregonian
Saturday June 27
(slightly abbreviated)

Frankfurt Germany (Dow Jones News Service) Adidas is investigating claims that political prisoners at a Chinese labor camp made Adidas World Cup commemorative soccer balls.
"We have to be quick. It can’t take us several weeks to figure out what happened," an Adidas-Salomon AG spokesman said. Adidas is confident it is clean, the spokesman said. "We are very open to the media and its customers about the whole issue," he said.
The spokesman repeated the company’s code of conduct: "We don’t tolerate prison labor, and all agreements with our suppliers contain a provision agains prison labor."

…The allegations against Adidas, whose US operations are based in Beaverton [Oregon] were first made early this month by a former Chinese political prisoner, Bao Ge. They concern an Adidas subcontractor that an official initially said arranged for promotional World Cup soccer balls to be stitched by workers in "rural workshops" near the labor camp where Bao served. The subcontractor later said none of its Adidas ball production is subcontracted to other factories.

However, Zhang Caiyu, manager of the factory attached to the "re- education-through-labor" camp north of Shanghai, said inmates stitched together thousands of soccer balls for the subcontractor, Shanghai Union Ball Enterprise Corp. He wouldn’t say what brands were involved. The inmates worked for virtually nothing.

The subcontracting arrangement leaves open the possibility that the promotional World Cup soccer balls worked on by Bao – who is suing Adidas – weren’t genuine Adidas products. That was a possibility the company raised when first contacted. Subsequently Adidas and its suppliers suggested that the balls may have been authentic but made in the labor camp without Adidas knowledge.

The prospect that prison labor might have been used to make Adidas soccer balls is a commercially sensitive matter. Adidas chief rival in the multibillion-dollar global sporting goods industry, Nike, has been attacked about conditions in its overseas factories.
"If it turns out that even one item was made by prison labor or in a prison,’ Adidas chief executive officer, Robert Louis-Dreyfus said in Paris this week, heads will roll, maybe even my own."

… Subcontracting is extremely common in China, including to labor camps… In Adidas case the Chinese factory manager, Zhang Tingyu, said his company had a contract to stitch balls for Shanghai Union, one of largest manufacturers of Adidas balls in China…

Last year, Shanghai Union, one of China’s oldest and largest sports- ball makers, farmed out promotional balls "to rural workshops" in Jiangsu province… because stitching together as many as 32 panels is so labor-intensive, the hand-work is regularly sent to the countryside where labor cost are low.

Although it’s not clear whether that production included Adidas balls, some of the work went to Dazhong Agricultural Machinery Factory in Jiangsu provinces’ Dafeng County, which uses some inmates from Shanghai Labor Re-education Camp No. 1, according to Zhang Caiyu.

"Yes, we make balls for Shanghai Union Ball," Zhang said when reached by telephone this week. "Some of the work is done by workers and some by criminals undergoing reform through labor. Criminals are sent to us to undergo reform through labor. They are under our control."

Bao, the former political prisoner, said…inmates sat in a hot workshop and sewed balls during the day and into the night – as long as 15 hours at a stretch, according to Bao. He said the prisoners were each paid about $1.50 per month and were pressured to work quickly. Inmates who were slow were struck by the guards, he said. Bao said his was to wax the edges of the panels, making it easier to pass a needle through them. Other inmates sewed the panels together.
Bao said he spent three years at the camp for trying to form a human- rights advocacy group. He was released in June 1997 and now lives in the United States. He is suing Adidas in Hong Kong for pain and suffering he said Chinese prisoners experienced in making the balls.

Adidas spokesman Peter Casnadi said the company is not responsible, noting that Adidas’ contract with Molten, the Japanese company, demands it not use child or prison labor.
Molten said it has received assurances from Shanghai Union that that the factory doesn’t use prison labor but that it is difficult to be certain those assurances are true. "We have a subcontracting agreement with Shanghai Union Ball, but nothing more, "said Molten’s quality-assurance manager, Hidesuke Kuriki. "We can’t be too inquisitive about them."

Second message:

News from the Australian Broadcasting Corporation:

http://www.abc.net.au/news/newslink/nat/newsnat-29jun1998-114.htm

The Textile, Clothing and Footwear Union has launched legal action against a further 13 companies, including Nike and Adidas, in a bid to end the exploitation of outworkers in the industry.

The union claims the companies are in breach of the Clothing Trades Award, with some outworkers receiving as little as $2.00 an hour.

It is believed there are about 300,000 people employed as outworkers throughout Australia. The companies face fines of up to $10,000 for each offence. The union says its sole aim is to ensure the code of practice is complied with.
Legal action has now been brought against a total of about 70 companies. Union spokeswoman Annie Delaney says taking the issue to the courts is a last resort.