Adidas must ensure employment of unfairly dismissed Panarub workers

In October 2005, 33 workers from PT Panarub Factory in Tangerang (near Jakarta) were unfairly dismissed after they demanded better working conditions and participated in a legal strike asking for better pay for workers. The factory’s 11,500 workers produced sports shoes for Adidas and other sportswear brands, and were paid as little as 60 cents an hour despite a dramatic rise in the cost of living in Indonesia. In response, the factory management fired nearly all of the leaders of the union, Perbupas, in an effort to stop the workers from fighting for better working conditions and exercising their right to freedom of association.

The unfair dismissal of the Panarub workers led to an international wave of protests. Workers’ rights organizations like the Clean Clothes Campaign in Europe, Oxfam in Australia and the Worker Rights Consortium of the United States demanded the reinstatement of the dismissed workers. For many months, the main buyer of Panarub goods, German sportswear company Adidas, delayed action in the case. The company was unwilling to offer significant incentives to the Panarub management for their compliance with labour rights and reinstatement of the dismissed workers. Even after the Indonesian Human Rights Commission officially confirmed that the workers had been dismissed unfairly, Adidas failed to put significant pressure on the factory’s management. Thousands of consumers in Europe, Australia and the U.S. supported the demands of the Clean Clothes Campaign and its partners and asked Adidas to take responsibility for the dismissed union officials. Finally, thanks to thousands of protest letters and e-mails from consumers worldwide, the workers were paid a monthly hardship allowance by the management. The allowance helped workers to survive while they tried to resolve their case for reinstatement. In April 2007, a year and a half after their unfair dismissals, the 33 workers accepted severance pay out of economic necessity. Today, many of the dismissed union officials are still looking for a new job.

The Clean Clothes Campaign and its partners call on Adidas to make good on its claim of social responsibility by finding jobs for the illegally dismissed union officials at another nearby Adidas supplier. The company has many suppliers in Indonesia and in the Jakarta area, where it produces a large share of its sportswear. Adidas should also address matters at the Panarub factory, where there are still on-going violations of workers’ rights, despite the reasonable severance pay-out. There has yet to be independent union membership verification at Panarub. Adidas should actively support the verification process, as recommended by the Worker Rights Consortium, and support the right of collective bargaining involving all unions of Panarub.