July 2005, PT Tae Hwa Closed Without Notice

NEWSLETTER 19, July 2005

PT Tae Hwa Closed Without Notice

On February 11, 2005, workers returned from a two-day holiday to find the PT Tae Hwa factory in Indonesia had closed down in their absence, and the management was nowhere to be found. Nearly 3,600 people were employed at this factory and to date they have not been given any explanation for its closure.

Rumours soon circulated among the workers that the closure of the factory, which produced sports shoes, came as a result of the major buyer Fila withholding a large payment, rendering PT Tae Hwa unable to meet its debts. Fila, which takes 70-90% of the factory's production, is owned by the US-based Sports Brands International. Fila was one of the targets of the 2004 "Play Fair at the Olympics" campaign, and a report on labour conditions at the PT Tae Hwa factory provided a case study for the campaign.

Since the sudden closure, the CCC and partners, including the International Confederation of Free Trade Unions (ICFTU) have repeatedly written to Fila and telephoned its Chief Marketing Officer Robert Erb in an attempt to get clarification about the situation regarding the PT Tae Hwa factory and its dismissed workers. There has been no response. The CCC and partners around the world plan to continue to draw attention to FILA's fail-ure to follow-up on this matter. FILA has a responsibility to these workers who were producing goods for FILA right up to the last day before the factory closed!

It is hoped that public opinion will force Fila to take responsibility for the unemployed workers by meeting the following demands:

Fila must assist its workers in finding new employment;
Workers must be paid their back wages as well as any other money they are legally entitled to;
Workers awaiting new employment must receive financial assistance or a severance pay package in accordance with Indonesian labour law, in order to support them until they find new jobs. This money could be drawn from a fund established by Fila for this purpose;
Fila must demonstrate transparency in explaining its role in the closure of the Tae Hwa factory.

The Clean Clothes campaign is also demanding that Fila reformulate its code of conduct so that it complies with international labour standards. The company must allow for inspections to be carried out by a third party to verify compliance with this code of conduct. Fila must also cooperate with local unions and organisations so that situations similar to the Tae Hwa case can be resolved in a more constructive manner.

Case study on Fila and the PT Tae Hwa factory for the "Play Fair at the Olympics" campaign are available at:
www.cleanclothes.org/ ftp/04-09-Fila_casestudy.pdf