1. NEW PUBLICATION MAY 2000:

The knot in the thread Indonesian garment production for German fashion TNC's

by „Urban Community Mission", Jakarta, and Ingeborg Wick, published by SOUTH WIND Institute of Economics and Ecumenism and by the German Clean Clothes Campaign, SÜDWIND texte 11, Siegburg/Germany May 2000

DIN A 5 brochure in German, 152 pages, 17 DM.

(Please send your orders to SÜDWIND, Lindenstr. 58, D 53721 Siegburg, telephone 02241 / 53617, fax 02241 / 51308, e-mail: suedwind.institut@t-online.de)

CONTENTS

1. Introduction 2. The case of the garment worker Lui 3. Indonesian crisis overcome? 4. Close relations between Germany and Indonesia 5. The world market for textiles and clothing: data, analysis, trends 6. „Working conditions in the Indonesian garment and sportsshoe industries with emphasis on supplier factories of German companies", by „Urban Community Mission", Jakarta 7. Sourcing ethics: practice vs. theory adidas C&A Otto Versand Quelle Statements of the companies on the study of the „Urban Community Mission" and replies of the publishers 8. NGO's wrestling with TNC's - the boom of codes of conduct 9. Strategies for action 10. Annexe (abbreviations, bibliography, currency notes, information on the Clean Clothes Campaign) ---------------------------------

2. Summary of UCM findings relating to adidas-Salomon, C&A, Otto Versand and Quelle

The UCM study „Working conditions in the Indonesian garment and sportsshoe industry with emphasis on supplier factories of German company" dated November 1999 is based on investigations between January and April 1999 in the following supplier factories of adidas, C&A, Otto Versand and Quelle:

- adidas: Tainan, Tuntex, Nikomas Gemilang - C&A: Kahoindah Citragarment, Kolon Langgeng - Otto Versand: Kolon Langgeng - Quelle: Goldindo Menawan

The following violations of ILO Conventions, Indonesian labour laws and company codes of conduct are mentioned in the UCM study:

1. adidas-Salomon

1.1 Forced Labour

The ILO Conventions No. 29 and 105 are being violated at Tainan, Tuntex and Nikomas Gemilang by forced overtime. All three suppliers use threats and sanctions so as to make workers do overtime. The adidas code indirectly refers to the ILO Conventions.

At Tainan these measures include being fired; workers were locked into rooms for having opposed overtime; mistakes are fined by wages being kept for 10 days (pending system); late-comers up to one hour, sewing mistakes and failure to arrange the bench are being sanctioned with US $ 0.63; a tool lost is being sanctioned with US $ 3.13.

At Tuntex these threats and sanctions include mutations and suspensions; a worker had to reach the daily target of 350 pieces and was forced to work from 7.30 a.m. until 9 p.m.. Coming late up to five minutes is fined by the deduction of US $ 0.75 from the diligence premiumamounting to US $ 3.75); coming late three times per month means that the whole premium is omitted; the failure to switch off the machine is being sanctioned with US $ 0.63,

At Nikomas Gemilang these threats and sanctions include cleaning the toilet and standing in front of the office; mistakes are being sanctioned with the wage of five days being kept (pending system); other sanctions include US $ 0.84 for late-comers, between US $ 6.25 and 12.50 for tools lost.

1.2 Discrimination

The ILO Conventions No. 111 and 100 on discrimination are being violated by all three suppliers. In addition the Indonesian labour laws on senior workers getting a higher wage and on mentrual leave are being violated by Tainan and by Tuntex respectively. The adidas code of conduct indirectly only refers to ILO Convention No. 111.

At Tainan some newly admitted workers got a higher wage than those who had worked for more than a year which represents a violation of the Indonesian labour law; At this factory women workers are required to roll up skirts/pants above their knees even if they wear „jilbab"(Muslim workers' outfit).

At Tuntex male workers were preferred when it came to getting leave for emergency cases like family members falling ill; when women workers took their legal menstrual leave they were fined by a wage deduction of US $ 0.75.

At Nikomas Gemilang women workers are sexually harassed.

1.3 Freedom of association and collective bargaining

The ILO Conventions No. 87 and 98 are being violated by all three suppliers. The adidas code indirectly only refers to No. 87.

At Tainan the existing state union SPSI does not conform to the requirement of the ILO Conventions; nevertheless the union activities of SPSI and of the union SPTP which had been officially registered some months ago were hampered, for instance by threats to be fired, mutations and suspensions; attempts by the SPSI to reach a collective bargaining agreement were obstructed by threatening the SPSI chairman with the severance of working relations; union members are intimidated by mutations.

At Tuntex the existing state union SPSI does not conform to the requirements of the ILO Conventions; union activities are being hampered by continuous mutations and forced overtime.

At Nikomas Gemilang the existing state union SPSI does not conform to the requirement of the ILO Conventions.

1.4 Living wage

The ILO Conventions No. 26 and 131 on a minimum wage which should cover the basic needs of the worker and of those depending on him/her (= living wage) is being violated by all three supplier factories. However the legal minimum wage which according to UCM calculations covers about half of the subsistence requirements of a worker, is being paid by Nikomas Gemilang. This factory is also the only one amongst the three which pays the legal overtime pay. The adidas code only mentions the legal minimum wage vs. the industry-wide wage.

At Tainan daily wages are US $ 0.84 instead of the legal minimum wage of US $ 0.87 per day. Overtime pay is violating legal requirements too: instead of paying a 150% wage for the first overtime hour (= US $ 0.20) and 200% as from the second onwards (= US $ 0.26), Tainan remains below these limits and pays US $ 0.17 for all overtime hours.

At Tuntex the daily wages are US $ 0.83 instead of the legal minimum wage of US $ 0.87. Overtime pay is violating legal requirements too: for all overtime hours Tuntex only pays US $ 0.16.

At Nikomas Gemilang the wages exactly conform to the legal minimum wage requirement of US $ 0.87 per day. Overtime pay exceeds the legal requirement, with US $ 0.28 paid for the first overtime hour and US $ 0.37 as from the second onwards.

1.5 Working hours

The ILO Convention No. 1 on a maximum of 48 working hours per week plus a maximum of 12 hours overtime is being violated by all three supplier factories. The UCM findings on working hours even more represent a violation of ehe Indonesian labour law which prescribes a maximum of 40 hours plus 14 overtime hours at the most. The adidas code indirectly refers to the ILO standard.

At Tainan working hours per week are between 79-85 including overtime.

At Tuntex working hours per week are between 64-70 including overtime.

At Nikomas Gemilang working hours per week are 61 including overtime.

1.6 Occupational health and safety

The ILO Convention No. 155 is being violated by Tainan and Tuntex. UCM findings do not cover this ILO standard at Nikomas Gemilang. The adidas code indirectly refers to the ILO Convention.

At Tainan there is no air conditioning nor are there fans. There is no medical staff at the factory. The polyclinic of the export-processing zone KBN is only equipped with tablets for headache and stomach trouble.

At Tuntex there is no protection against dust and small particles of thread. Workers are subjected to rude treatment and psychological pressure: for instance jackets are thrown against them, they are pulled on the ear, pinched, slapped on the buttock etc.

1.7 Additional UCM findings on child labour in violation of the Indonesian labour law

According to the Indonesian law young people between 15-18 years old are allowed to work up to four hours per day during the day, but not at night. The UCM findings however show that at Tainan, Tuntex and Nikomas Gemilang there are 5-10 young workers each at the age of 14-15 who work the same amount of hours like the ohter workers - during the day as well as at night.

The adidas code mentions the age of 15 vs. 14 as the limit for child labour.

2. C&A

2.1 Forced labour

The ILO Conventions No. 29 and 105 are being violated at both supplier factories Kahoindah Citragarment and Kolon Langgeng by forced overtime. Both suppliers use threats and sanctions so as to make workers do overtime. The C&A code indirectly refers to these ILO Conventions.

At Kahoindah Citragarment mistakes are being sanctioned with keeping the wage of three days (=pending system) and with not paying the wage for the first day.

At Kolon Langgeng workers who had called for protests were locked into a room. Mistakes were sanctioned with keeping the wage of five days (= pending system).

2.2 Discrimination

The ILO Conventions No. 111 and 100 on discriminaltion are being violated by both supplier factories. The C&A code does not refer to these ILO Conventions.

At Kahoindah Citragarment workers are sexually being harassed. Newly appointed workers are fired when they are found to be pregnant. After maternal leave workers are considered as new workers and get less pay when they resume work after delivery. Workers who take their menstrual leave are sanctioned with a wage deduction of US $ 0.88.

At Kolon Langgeng workers are sexually being harassed. After maternal leave workers are considered as new workers and get less pay when they resume work after delivery. In violation of Indonesian law workers with more than one year's duty don't get a higher wage than those newly appointed ones.

2.3 Freedom of association and collective bargaining

The ILO Conventions No. 87 and 98 are being violated by both supplier factories. The C&A code only refers to the freedom of association in the case that this conforms to national legislation.

At Kahoindah Citragarment the existing state union SPSI does not conform to the requirements of the ILO Conventions.

At Kolon Langgeng the existing state union SPSI does not conform to the requirements of the ILO Conventions.

2.4 Living wage

The ILO Conventions No. 26 and 131 on a minimum wage which should cover the basic needs of the worker and of those depending on him/her (=living wage) is being violated by both supplier factories. They even violate the legal minimum wage requirements of the Indonesian labour law. Overtime pay is not legal at Kahohindah Citragarment beyond the first overtime hour. The C&A code mentions the legal minimum wage vs. the wage agreed upon by collective bargaining.

At Kahohindah Citragarment the daily wage is US $ 0.84 instead of the legal minimum wage of US $ 0.87. Overtime pay for the first overtime hour is US $ 0.22 which is better than the legally prescribed US $ 0.20, but as from the second overtime hour onwards it is only US $ 0.24 instead of the legally prescribed US $ 0.26.

At Kolon Langgeng the daily wage is US $ 0.85 instead of the legally prescribed US $ 0.87. Overtime pay goes beyond the legal pay concerning the first overtime hour and conforms to to the one prescribed as from the second overtime hour onwards.

2.5 Working hours

The ILO Convention No. 1 on a maximum of 48 working hours per week plus a maximum of 12 hours overtime per week is being violated by Kolon Langgeng, and partly by Kahoindah Citragarment. The Indonesian labour law which foresees a maximum of 40 hours plus 14 overtime hours per week is being violated by Kolon Langgeng and partly by Kahohindah Citragarment. The C&A code does not refer to this ILO Convention.

At Kahoindah Citragarment the working hours per week amount to 52-70 hours including overtime.

At Kolon Langgeng the working hours per week amount to 74-80 hours including overtime.

2.6 Occupational health and safety

The ILO Convention No. 155 is being violated by Kolon Langgeng. The C&A code indirectly refers to this ILO Convention.

At Kolon Langgeng workers are subjected to a rude treatment and to psychological pressure by supervisors: for instance jackets are being thrown against them, they are pulled on the ear, pinched, slapped on the buttock etc.

2.7 Additional UCM findings on child labour in violation of the Indonesian labour law

According to the Indonesian law young people between the age of 15-18 are allowed to work up to four hours per day during the day, but not at night. The UCM findings however show that at Kolon Langgeng there are 5-10 young workers at the age of 14-15 who work the same amount of hours like the other workers - during the day as well as at night.

The C&A code mentions the limit of 14 years as limit for child labour.

3. Otto Versand

The Kolon Lang factory is not only a supplier of C&A, but also of Otto Versand. The respective labour rights violations mentioned under 2.) therefore also apply to Otto Versand.

As far as the Otto Versand code is concerned it makes indirect reference to the ILO Conventions on forced labour, on discrimination, freedom of assiciation and collective bargaining, minimum wage vs. Industry-wide wage, working hours and occupational health and safety as well as explicitly on ILO Convention No. 138 on child labour. Otto Versand is also involved in the „Social Accountability 8000" certification standard which explicitly refers to the relevant ILO Conventions.

4. Quelle

4.1 Forced labour

The ILO Convention No. 29 and 105 are being violated at Goldindo Menawan by forced labour. This supplier uses threats and sanctions so as to make workers do overtime. The code of the „Foreign Trade Association of German retailers" (AVE) of which Quelle is a member explicitly refers to this ILO Convention.

At Goldindo Menawan workers who had called for opposition to forced labour were locked into a room. Mistakes were sanctioned with keeping the wage of two days (=pending system). Late-comers of more than 30 minutes are fined by a deduction of US $ 0.84.

4.2 Discrimination

The ILO Conventions No. 111 and 1000 on discrimination are being violated by Goldindo Menawan. A worker who has worked for less than a year and who gets pregnant, does not receive her wage. The AVE code refers to ILO Convention No. 111.

4.3 Freedom of association and collective bargaining

The ILO Conventions No. 87 and 98 are being violated by Goldindo Menawan. The AVE code refers to these Conventions.

At Goldindo Menawan the existing union „Goldindo Menawan Trade Union" which was founded in 1998, was officially registered according to the labour law No. 25 dated 1997 and therefore does not conform to the requirements of the ILO Conventions.

4.4 Living wage

The ILO Conventions No. 26 and 131 on a minimum wage which should cover the basic needs of the worker and of those depending on him/her (=living wage) is being violated by Goldindo Menawan. However the legal minimum wage which according to UCM calculations covers about half of the subsistence requirements of a worker, is being paid by Goldindo Menawan. The AVE code partly refers to the ILO Conventions: it mentions the minimum requirement according to local conditions, but ssys that it should cover the basic needs of the worker.

At Goldindo Menawan the daily wage is US $ 0.93 and therefore goes beyond the legal minimum wage, but does not conform to the rquirement of a living wage.

4.5 Working hours

The ILO Convention No. 1 on a maximum per week of 48 working hours plus 12 hours overtime is being violated by Goldindo Menawan. The AVE code does not refer to this Convention. The Indonesian labour law prescribes a maximum of 40 hours plus 14 overtime hours per week - Goldindo Menawan therefore also violates this Indonesian law.

At Goldindo Menawan the working hours per week amount to 64-82 including overtime.

4.6 Occupational health and safety

The ILO Convention No. 155 is being violated by Goldindo Menawan. The AVE code refers to this Convention.

At Goldindo Menawan workers are not protected against dust and small particles of thread.

4.7 Additional UCM findings on child labour in violation of the Indonesian labour law

According to the Indonesian law young people between 15-18 years old are allowed to work up to four hours during the day, but not at night. The UCM findings however show that at Goldindo Menawanthere are 5-10 young workers at the age of 15 who work the same amount of hours like the other workers - during the day as well as at night.

The AVE code refers to ILO Convention No. 138 on child labour which puts the limit for child labour at the age of 15. ---------------------------------------------------

3. responses

adidas Salomon Response to PMK Report. At adidas Salomon we are ensuring that our Standards of Engagement are taken seriously by our suppliers in Indonesia and around the world. Steps are being taken to that ensure that changes are made where unacceptable working conditions described in this report are confirmed by our auditors.

Since the time that the research for the report was done we have appointed 3 people to monitor our suppliers on employment, health, safety and environment issues in Indonesia as part of our international Standards of Engagement Team. In addition to these full time monitors, quality controllers also monitor conditions in factories. They audit factories against the Standards of Engagement, which are based on International Labour Organisation Conventions. In addition to auditing and assisting factories to develop action plans for continuous improvement, they help to train factory representatives and our own staff in our Standards and to raise awareness.

The study states that three factories, Tainan, Tuntex and Nikomas are supplying us. In fact the last order placed by adidas with Tainan was in July 1998 and the business relationship was closed in October 1998. So our response concentrates on the other 2 factories, where we have audited the factories and developed action plans to improve conditions. Nikomas has made more progress than Tuntex, and the details from our audits are below, using the headings from the report:

Bonded Labour and Overtime: At Nikomas workers are paid every 2 weeks, 5 days after the period of work they are being paid for. This 5 days allows reasonable time for overtime, allowances and incentives to be calculated in a such a large factory. At Tuntex the workers are also paid twice a month but they have to wait 11 days after the period worked which is an unacceptable. The factory is being asked to speed up payments. There is no evidence that this system is used to prevent workers leaving, and full payments are made when workers resign.

Overtime is strictly controlled at Nikomas and permission to work overtime at the factory has to be given by the union. At Tuntex the quota targets are set too high so the factory management have been asked to make the targets easier to achieve without excessive overtime being necessary. A system allowing workers to sign confirming they agree to do overtime is needed.

Discrimination At Tuntex a woman who takes menstrual leave does lose her attendance bonus of 6,000, and the factory are being asked to change this practice. There was one supervisor who was found to be guilty of sexual harassment at Nikomas and he was dismissed at the end of 1998.

Child Labour It is now the policy of Nikomas to employ people who are 18 years old or above, so there are no young people below that age working at the factory. Copies of the ID cards for all the workers are kept on the workers' files, and are audited by adidas Salomon.

Freedom of Association Nikomas has held discussions with SBSI, an alternative union to the government supported union, and have requested them to continue discussions after they has been registered with the Ministry of Manpower. Nikomas is waiting for SBSI to take the next step. adidas Salomon has ensured that factories understand the new trade union laws and have requested them to comply with these laws, although Tuntex is still considering the application of the laws to their working practices.

Wages At Nikomas in the period of the study the basic salary was Rp 250,000 per month which is Rp 8, 333 per day. This was increased to Rp 9,033 basic pay per day, before bonuses, overtime and allowances. This will be increased again in April 2000. Tuntex records show that they were paying Rp 7,000 per day at the time of the study, however legal overtime rates were not being paid and the factory are being requested to amend this immediately.

Nikomas have abolished the use of illegal deductions from wages. Employees who arrive late or who leave early without permission are given a warning letter, but are not fined. Tuntex policy includes a system of written warnings. We have not found evidence of a fines system there.

Working hours Nikomas is now working below adidas Salomon's standard of 60 hours per week and punishment for refusing to do overtime has been stopped. At Tuntex total working hours has been as high as 70 during peak times, but this is balanced out by fewer hours during the quiet times of the year. adidas is working with the factory to improve on this record.

Health and Safety We have health and safety and fire safety professionals in our team who work with factories to improve conditions. For example the use of needle guards by workers on their sewing machines will reduce the risk of needle fragments damaging workers' eyes.

Finally we have arranged for the independent auditing of factories in Indonesia, China, and Vietnam in March and April 2000 as part of a broader independent auditing programme this year. This will include confidential interviews with workers away from the factories, and will help us to check that problems are being resolved effectively.

(Translation)

C&A Germany Mr. Jochen Overmeyer Legal Department Bleichstr. 20 D 40211 Düsseldorf

February 29th 2000

Statement on the study „Working conditions in the Indonesian garment and sportsshoe industry with emphasis on supplier factories of German companies" by the „Urban Community Mission"/Jakarta (November 1999)

Dear Ms. Wick,

we refer to the study on labour conditions in several Indonesian garment factories which you have communicated to us.

Unfortunately, due to the proposed shortness of time for our statement and to the scope of the findings, a thorough investigation has not been possible. According to to our findings so far the respective factories Kolon Langgeng as well as Kahoindah Citragarment are not suppliers of C&A at present.

The factory Kahoindah Citragarment produced garment for C&A for the last time in 1998. After that business relations were stopped.

We do not know any factory in Indonesia which is called Kolon Langgeng. However a Korean supplier under that name is in our books. According to his information this supplier does not maintain a second factory in Indonesia. We are currently checking if this is true, and above all if possibly suppliers did not disclose all their factory sites to us.

Therefore at present we cannot concretely follow up the criticism on the spot.

If the facts communicted to us are true they would violate the C&A Code of Conduct for Merchandise. They would equally violate ILO norms as well as international and national law.

Your study proves impressively that the reality especially in developing countries is often different from what we would like it to be in spite of all conventions. Again and again we are also confronted with situations like these when we monitor factory sites in the framework of our monitoring system. These conditions are not acceptable to us, and we take steps against them whereever we can influence them. Unfortunately, due to the complex overall situation, model solutions do not exist. It cannot be in the interest of all parties concerned not to source from these countries at all. Your statement „TNC's like C&A make use of these conditions in order to obtain maximum profit" is known to be wrong since it accuses us to be an accomplice. No, we don't make use of these conditions, but we are confronted with them in the framemwork of our world-wide sourcing. Besides that I cannot see where you find the big profits which the garment trade is supposed to make due to the furthering of these conditions. Here too, the reality is different from what ideologically influenced views would like it to be.

As you also know we try, through meaningful and pragmatic steps, to build up alternatives and to promote change. The auditing of SOCAM is part of this process, And it is a long and difficult one.

For the time being we can only take note of the cases presented to us. With regard to factories which are not our business partners we shall neither succeed in installing „independent" unions - even more so when the Indonesian authorities apparently do not allow them - nor in punishing specific violations of the integrity and health of the workers. Whenever we learn of similar abuses in other factories through SOCAM we shall surely act and call for change if we can do that. Otherwise we shall not maintain our business relations with these factories.

(Translation)

Quelle AG Mr. Stefan Küst Environmental Department Wittekindstr. 26 90431 Nürnberg

March 2nd 2000

Statement on the study „Working conditions in the Indonesian garment and sportsshoe industry with emphasis on supplier factories of German companies" by the „Urban Community Mission" (PMK)/Jakarta (November 1999)

Dear Ms. Wick,

in your letter dated February 16th 2000 you asked us to make a statement on the references to the Quelle AG in your planned booklet on the working conditions in the Indonesian garment and sportsshoe industry, specifically in the factory Goldindo Menawan.

Up to now Quelle AG placed an order at Goldindo Menawan only in 1998. This order only convered a small volume of merchandise. The situation at Goldindo Menawan described by PMK have also become known to our representatives on the spot and have finally lead to our decision to cut business relations with this supplier.

This corresponds to our company philosophy which also manifests itself in the Code of Conduct on an environmentally and sociallly viable production of the „Foreign Trade Association of the German Retailers" (AVE) which we have developed together with other German trade companies. As far as implementation of this Code is concerned, an effective monitoring system is currently being worked out. However, we know that especially in the Far East the development of a more environmentally and socially viable production has to be seen as a continuous process, and that is must be assessed differently from country to country, sometimes from region to region.

We hope that this information on our business relations with Goldindo Menawan is of help to you. We enclose the AVE Code of Conduct to this letter. Concerning further questions on our activities with regard to the observance of an environmental and social viability at the plants of our suppliers we are always at your disposal - also in a personal talk.

(Translation)

Otto Vesand Dr. Johannes Merck Director of the Department on Environmental And Social Policy Wandsbeker Str. 3-7 22172 Hamburg

February 25th 2000

Statement on the study „Working conditions in the Indonesian garment and sportsshoe industry with emphasis on supplier factories of German companies" by the „Urban Community Mission" (PMK / Jakarta (November 1999)

Dear Ms. Wick,

I refer to your letter dated February 16th 2000 in which you made known to us your research on the labour conditions in the Indonesian garment and sportsshoe industry. We would like to send you our reply with the following explanations.

Up to the spring of 1999 the factory Kolon Langgeng has been a supplier of Otto Versand. In the middle of 1999 this supplier was asked to undergo the social auditing foreseen for all our suppliers, as we have explained to you earlier. Normally our suppliers respond positively to our Code of Conduct and show their readiness not only to undergo the scial audit but also to meet the necessary improvements. The supplier Kolon Langgeng however, contrary to our experience so far, refused his participation in the social audit. That is why we deleted him from our suppliers' list.

The factory Dwi Sukses Utama which is also mentioned in your study is a supplier of Otto Versand. Our auditors visited him in October 1999 and audited the factory according to our Code of Conduct. The result was not satisfactory so that a corrective action plan was agreed upon. In the framework of re-audits which will soon be done in Indonesia there will be checks if the stated deficiencies have been corrected. Based on these results a decision on the continuation of our cooperation with Dwi Sukses Utama will be taken.

Dear Ms. Wick, we are sure that our social audit programme in Indonesia will be as efficient as in the other markets in Asia which are part of this programme. We think that it would further the public discourse on social standards in the consumer goods industry if you too would avoid to limit yourself to mere accusations in your statements. With regard to a constructive dialogue which you would like to promote it would be an important precondition to honour the efforts undertaken in order to remedy actual lablur rights violations. Therefore I think it is appropriate to delete the name of Otto Versand in the respective paragraphe on page 3. Please let me know if you wish to share our social audit experiences in Indonesia with us.

-------------------------------------------------

4. Reply of the publishers to the adidas statement:

Obviously the long-standing criticism of the Clean Clothes Campaign has not remained without effect. For some months now adidas has initiated a series of steps whose concrete advantages for the workers concerned however have still to be proved in detail. The supply relationship between Tainan and adidas-Salomon was proved by the „Urban Community Mission" (PMK) through adidas labels which were taken from the production at the Tainan factory during the investigation period between January to April 1999.

Concerning the specific labour rights violations at Tuntex and Nikomas Gemilang adidas-Salomon largely confirms them - with three exceptions: a) „Overtime in the factory (i.e. Nikomas Gemilang - note of the author) must be authorized by the union", b) Tuntex records show that they were paying Rp. 7,000 per day (i.e. the legal minimum wage - note of the author) at the time of the study...", c) „We have not found evidence of a fines system there (i.e. at Tuntex - note of the author)."

The publishers of the present booklet will investigate these replies by adidas.

Concerning the last paragraph we presume that adidas refers to single checks like the one done by the US audit company „Verité" in June 1999 at Formosa/El Salvador. Although these checks represent a progress with regard to company-own controls as foreseen by the adidas Code of Conduct, they fall far behind an independent monitoring system in which non-governmental organisations and unions are institutionally involved.

Reply of the publishers to the C&A statement:

The supply relationship between the factories Kohoindah Citragarment and Kolon Langgeng and C&A was proved by the „Urban Community Mission" (PMK) through C&A labels which were taken from the production of these factories during the period of the investigation between January and April 1999.

If C&A rejects the PMK statement „...TNC's like C&A make use of these conditions in order to make maximum profit", C&A ignores numerous research results over the last decade on the responsibility of the „Gobal Players" for the dynamics of social downgrading in labour-intensive industries like the garment industry. If this responsibility did not exist it would be strange to see these companies adopt codes of conduct as a result of public criticism.

It is true that C&A business went down over the last years. However other companies like Hennes & Mauritz, Otto Versand and adidas-Salomon made considerable profits.

The company-own control of SOCAM does not correspond to an independent monitoring system such as it is currently being tested in meaningful and pragmatic pilot projects with the Clean Clothes Campaigns in the Netherlands, in Sweden, the UK etc.

Reply of the publishers to the Otto Versand statement:

The labour rights violations stated by PMK are indirectly being confirmed by Otto Versand.

Unfortunately the social auditing procedure of the middle of 1999 at the factory Kolon Langgeng was not part of an independent monitoring system so that the conditions for the implementation of corrective actions and the concrete responsibility of Otto Versand are not known. Therefore it is not possible to say if the cutting of business relations with the supplier was justified or not.

Concerning the fear of Otto Versand the present publication would represent a one-sided accusation against the company we refer to the company profile on page 93.

Reply of the publisher to the Quelle statement:

The supply relationship between Goldindo Menawan and Quelle was proved by PMK through Quelle tags which were taken from the production at the factory Goldindo Menawan during the period of investigation between January and April 1999.

Since the cutting of business relations puts the jobs of the workers at risk it should be thoroughly examined in the framework of an independent monitoring system. This however was not the case at the factory Goldindo Menawan. ----------------------------------------------------------------------

5. Press Release

May 22nd 2000

„The knot in the thread - Indonesian garment production for German fashion TNC's (New publication SÜDWIND texte 11)

„Urban Community Mission" / Jakarta investigates working conditions at six supplier factories of adidas, C&A, Otto Versand and Quelle

Forced overtime, wages under the official minimum level, repression of union activities, military troops at the factory site - the study of the „Urban Community Mission" in Jakarta shows that these are not occasional labour rights violations in Indonesian factories. The case of the Tuntex factory is not an isolated one: workers at this adidas supplier factory get a daily wage of 0.83 US $, the pay for an overtime hour is 0.16 US $, the sanction for being five minutes late is 0.75 US $. Due to the close links between the economy and the military in Indonesia the garment workers can easlily be targets of gun shots.

More in detail than previous studies the new publication of the SOUTH WIND Institute of Economics and Ecumenism and of the German Clean Clothes Campaign analyses the steps of adidas, C&A, Otto Versand, Quelle against violations of basic social standards at supplier factories in the international garment and sportsshoe industry. The publication contains statements of these companies on the study of the „Urban Community Mission", company profiles, their codes of conduct and assessments of their sourcing ethics. The intention is to open better chances to talks with these companies which began two years ago. The publishers hope that the new publication contributes to the implementation of concrete improvements for garment workers and progress for their efforts towards an institutionalised independent monitoring system.

(For more information: Ingeborg Wick, researcher SOUTH WIND institute, telephone 0049 - 2241 - 53617, fax 0040 - 2241 - 51308, e-mail: suedwind.institut@t-online.de)