Feb 2003, Latest developments on the Matamoros Garment case and Puma

Latest developments on the Matamoros Garment case and Puma

27 Feb 2003

Dear all,

Please find below a report from CIR (member of the German CCC) about the meetings and press conference organized in Germany this week.

PUMA PLACES NEW ORDERS!!

The first meeting took place on the 24th, between reps. from CIR, Puma and CAT at the Puma office in Munster. We explained the point of view of the CAT and CCC:

Puma has still a responsibility for the workers of Matamoros and for complying with their own Code of Conduct;
Pumas methodology of investigation this case is very bad and the results from February 2 and 3 2003 aren’t worth anything;
the Puma control system is very poor because in the audit conducted in September 2002 they did not discover any labour rights violation nor that the Francisco Villa Union (CTM) is a corporist union;
that the only way for Puma to solve this case and to take up their responsibility is to go back to Matamoros immediately and to place orders;
that the whole process has to be monitored/verified independently by an organisation the workers do trust in.

In the end Puma declared that they will try to place orders again in Matamoros and that they are open for an independent monitoring/verification. We explained that this would be the right way but that we need facts. They answered that they will meet with us tomorrow before the press conference of the 25th and they hope to be able to present concrete steps.

On Tuesday 25 the German Clean-Clothes-Campaign (CCC) organized a press conference in Köln/ Cologne with Gabriela Cortes, a representative of the CAT/ Puebla. When we had the agreed meeting with Puma before the press conference they fell back in their old argumentation scheme that they would be willing to replace orders BUT it has to be clear that MG has the financial base to produce the order and to deliver in time. So nothing new!

At the press conference we explained the point of view of the CCC and CAT and our demands regarding Puma:

New orders
Communicate to the workers that Puma guarantees the right to freedom of association
Create the space for secret and free union elections + influence the authorities to register a new free union and to give them the collective bargaining agreement
Corrective action plan
Independent monitoring/verification

We also explained to the press that the (German) CCC had been untill now quite restrained with doing a public campaign on the MG case BUT that this time is running out now. Puma was present but did not say a single word.

After the conference at 2.30 p.m. Mr Hengstmann/ Puma called CIR and told that Puma had told Worldcat in Los Angeles to write two letters to
a) the owner of MG and
b) to the Puma agent which do confirm that Puma will place new orders at MG!

We responded that this would be the right way and that we will wait for proof of the orders actually being placed. I also asked him how we will conduct the independent monitoring/verification and Mr. Hengstmann replied that we have to clarify this after the orders are official.

In a communication that Puma send out on the same day, their intention to place new orders is confirmed (point 6). A copy of this statement is pasted in below. Untill we receive confirmation of the orders actually being placed and agreement to the other demands, including on independent monitoring/verification, we ask you all to continue the campaign and NOT stop the pressure on Puma. For your information, the "round table forum" mentioned by Puma under point 5 was for the first time announced to us at the meeting of the 24th and the idea did not seem very well developed.

We hope to be able to update you in more detail about next steps and how you can support us over the next week.

Puma statement February 25th:

Ladies and Gentlemen:

The following pertains to PUMA's former business relationship with Matamoros Garment Factory, Pueblo, Mexico.

Over the course of the last few days, PUMA has engaged in dialogue with the German Clean Clothes Campaign (Christlichen Initiative Romano), as well as C.A.T. (Centro de Apoyo al Trebajador). The meetings were intended to help promote the dissemination of correct information as well as to create understanding and craft an agreement with regard to the matters at hand.

At the initial meeting on February 24, 2003, C.A.T. and the German office of the Clean Clothes Campaign jointly confronted PUMA, alleging that the company left Matamoros Garment Factory because it did not wish to see the creation of a new and independent union. Going forward the groups demanded that PUMA recognize a new union, Sindicato Independiente de Trabajadoras de la Empresa Matamoros Garment, which is independent from the currently existing union (CTM). The groups also alleged that PUMA, via the use of video cameras, used unfair and coercive interviewing techniques throughout its post facto investigations. It was demanded that in order to restore the relationship between all vested parties that PUMA immediately award new orders to Matamoros Garment factory.

Subsequent to the above named meeting PUMA received an invitation to a press conference on February 25, 2003, sponsored by the German Clean Clothes Campaign. The invitation contained several allegations, which PUMA takes the following stand on:

1. PUMA wants to contribute to an objective discussion by providing information about the business relations with its former supplier Matamoros Garment Factory in Pueblo, Mexico. We reject every form of threat brought against the company and call for "fair play" rather than the dissemination of slanderous information. The facts are as follows: Matamoros Garment Factory was one of PUMA's garment suppliers, producing textile goods for the U.S. market. PUMA stopped placing orders with the factory on October 7th, 2002. Due to the insolvency of one of Matamoros Garment Factory's major customers, and the resulting financial limitations placed on the factory, PUMA refrained from placing new orders with Matamoros Garment. The factory's owner and PUMA reached this decision jointly. Historically, the volume of orders placed by PUMA only amounted to a fraction of Matamoros Garment Factory's total production capacity. Looking forward, even if PUMA were to place future orders with the factory, its existence would depend on its ability to attract large customer(s) to assure that its production capacity is sufficiently utilized.

2. The labor union CTM has been established as the official representative of the factory's workers. This agreement predates the point in time when PUMA's relationship with Matamoros began. PUMA, via its Code of Conduct has unequivocally stated that it support the employee's freedom of association. As such PUMA will neither aid nor hinder the creation of union(s) in the factories where it has placed contracts. Furthermore, PUMA, as a customer of the factory, will not allow itself to become involved in the struggles to redistribute power between union(s) and local governments. Although PUMA adheres to the laws set forth by a geographic state, it is beyond the company's scope to try and change them. By the same token, PUMA will not try to play co-organizer of the power games between the labor unions. At this point the fine boundary of ethical behavior involving business practices must be drawn into the domain of public responsibility.

3. From our perspective, nothing stands in the way of PUMA's future business relationship with Matamoros Garment Factory. We are willing to normalize relationships once several previously mentioned conditions are filled. These include: The factory's financial situation must improve so that normal business can be transacted without delay or further disruption. PUMA's S.A.F.E. (social and environmental) policies must be unconditionally met and adhered to. PUMA appeals to the German Campaign for Clean Clothes help to create a dialogue between vested parties to ensure that these conditions are met to everyone's satisfaction.

4. On January 31st, 2003, PUMA sent a team of auditors to the Matamoros Factory to investigate the allegations that had been made. PUMA's fact finding mission included gaining first-hand exposure to the situation, as well as proofing pertinent documents (including pay slips), and conducting interviews with 22 randomly selected employees. These proceedings were partially captured on videotape to provide proof against any assertions that PUMA's claims had been fabricated. All interviewed workers were given the option of declining to have their interviews filmed. As such two types of interviews were conducted: those being filmed and those that were not filmed. In addition to the above, PUMA tried to ensure that the interviews were conducted in an objective and non-inhibiting manner, that maintained the confidentiality of the subject.

5. PUMA continues to seek a constructive dialogue between all stakeholders. We feel that no-one's needs are served through the proliferation of false information and unrealistic expectations. As such, PUMA has independently laid the foundations for advance via the creation of a round-table forum that aims to strengthen the cooperation of all vested parties while also promoting responsible social and environmental behavior. PUMA intends to seek impartial moderation and include special interest groups, political leaders, union leaders, as well as NGOs in these events.

6. On February 25, 2003, PUMA's US sourcing company (World Cat America) made a formal request to Matamoros Garment Factory, as well as our US sourcing agent, to plan future capacity with said factory. Doing so underscores PUMA's commitment to return to Matamoros and reestablish normal business relationships.

PUMA's desires are focused on achieving a win-win situation for all parties involved. We believe that our concerns and objectives are realistic and fairly portray the needs of all stakeholders. As such we will try and continue a constructive dialogue to ensue that this situation is rectified quickly.

Sincerely,

Reiner Hengstmann