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NEWSLETTER 16, February
2003
OECD Guidelines Case Against adidas Settled
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In late December 2002, the charge raised by the India
Committee of the Netherlands (ICN) that adidas had violated
the OECD Guidelines in the production of its footballs in
India was settled.
The
Dutch National Contact Point (NCP) for the OECD Guidelines
concluded that with regard to the production of footballs
in India "adidas encourages its suppliers to operate
in a socially responsible manner." However, it was
also noted that "there has not yet been external monitoring,
verification and disclosure by FLA [Fair Labor Association]
that corroborates adidas own monitoring."
Background on the ICN charge
In June 2000 ICN, a member of the Dutch CCC coalition,
published its report "The Dark Side of Football: Child
and adult labour in India's football industry and the role
of FIFA." This report was based on field research carried
out in November 1999 and April 2000, which also built on
more elaborate research carried out in 1998 by the National
Labour Institute.
The report provided evidence that the Indian football industry
in and around Jalandhar and Batala, including adidas' supplier
Mayor & Company (referred to as Z in the NCP's report)
violated the OECD Guidelines for Multinational Companies
on several counts: local legal minimum wages, child labor,
freedom to organize, the right to collective bargaining,
and adequate health and safety standards. The report was
sent to adidas but adidas never reacted. Despite numerous
requests no comment on the reports' content was received
either from the Sports Goods Foundation of India Foundation
(SGFI: representing a large part of the India sporting goods
industry) or the World Federation of Sporting Goods Industry
(WFSGI).
Just
after its publication, FIFA wrote to the ICN saying "this
appears to be a comprehensive report" and promised
further study and follow-up. Nothing further was heard from
FIFA. Only after the ICN filed a case on adidas with the
Dutch NCP did they receive a reaction to their report from
the SGFI, which did not deal with many of the issues raised
in the report, as was explained by the ICN to adidas and
the NCP.
In July 2001, the ICN decided to put the case before the
Dutch NCP. However, it was not until March 2002 that the
NCP organized a meeting between adidas and the ICN. Adidas
informed the ICN that football production by their Indian
supplier Mayor & Co was concentrated in two factories
with 400 employees in total, that the OECD Guidelines were
adhered to, and that this was monitored by their own inspectors.
During ICN's visit to Mayor in April 2000 there was only
one factory with approximately 150 employees partly producing
for adidas, while Mayor & Co. were also sub-contracting
large-scale production to households in the town of Batala
under conditions violating a number of OECD Guidelines (To
read more about working conditions reported on by the ICN,
read "The Dark Side of Football," on the CCC website
at http://www.cleanclothes.org/campaign/liwfootbal.htm).
"Looking back it now seems that adidas has been in
the process of shifting its production to factories in 2000
and 2001, improving labor conditions to at least minimum
standards with regard to wages, health and safety and absence
of child labor," noted Gerard Oonk, coordinator of
the ICN. "As adidas did not react to 'The Dark Side
of Football,' information was lacking on this process, while
also no additional information was received from our local
partner organization in India."
Questions still remain
Even though sufficient evidence that adidas violated
the OECD Guidelines in India could not be given for the
reasons stated above, there are a number of outstanding
issues in relation to this matter which the ICN believes
still need to be followed up on. These include the issues
of wages; unionization and worker representation, as well
as the management system at the company in question (ICN
found their answers in relation to these questions evasive
and lacking in substance); the transparency (reports are
not accessible to the public) and quality of monitoring
done by SGS (the monitoring company that implements FIFA-supported
external monitoring for most of the Indian football industry
on child labor and health and safety), and other concerns.
ICN reports that while adidas first seemed to imply that
the Fair Labor Association had done the external monitoring
of their supplier's football production in India ("The
FLA monitors our global supply chain SOE systems, including
our work in India"), they later admitted (after ICN
checked their statement with FLA) that no actual monitoring
in India had taken place.
ICN also reports that the statement made by adidas in March
2002 that FIFA together with 'the industry' (represented
by the WFSGI) will communicate the facts "about the
significant progress that has been made in India, Pakistan,
and China" as soon as possible within three months
did not materialize.
Usefulness of the OECD process
Oonk said that the "ICN will use the agreement
with adidas and the NCP on transparency, disclosure, verification,
and strengthening of communication as well as the willingness
of the NCP to step in when communication breaks down to
get more information on these issues."
"Despite shortcomings, also with regard to presenting
hard enough evidence from our side, we feel that this NCP
procedure has been worthwhile," Oonk concluded, explaining
that this process compelled adidas to react to evidence
being presented and to present their own evidence. This
procedure can be used as a stepping stone for further communication
in the future (the ICN was invited to adidas' stakeholders
meeting on its latest social and environmental report),
he said, and as part of the ongoing efforts of the CCC and
the Global March Against Child Labour to put pressure on
FIFA and the World Federation of Sporting Goods Industry
(WFSGI) to implement their codes of conduct and establish
an independent system of monitoring, verification and disclosure.
This was also an important step in testing the NCP procedure
in the Netherlands and as a learning experience on how to
use the NCP procedure, said Oonk. The ICN will be publishing
an evaluation of their experience in testing the NCP procedure
later this year.
