Good news!!

18 Feb 2004

Dear Friends,

We are extremely happy to report a significant breakthrough in the case of PT Kahatex Sweater located in Bandung, Indonesia. The company has agreed to re-employ all of the locked-out workers who wish to return! Two hundred and ten of these workers have already indicated that they wish to be re-employed and the company has agreed that this group will start work by March 1. The remaining 287 locked-out workers have until the end of this month to send notification that they also wish to return. The company has agreed that those who do will be employed no later than April 19.

Dede, Engkus, and Aji, with Mrs. Chen in the foreground on the right are signing the agreement.

The company is changing its name to PT Micro Garment and expanding its operations to include a new workshop to which the re-employed workers will be assigned. In an agreement signed with worker representatives, and in individual employment contracts, the company has committed to full compliance with Indonesian law with respect to minimum wage, work hours, health benefits and other rights and benefits. The agreement was signed this past Saturday, February 14.

Workers employed at PT Micro Garment (formerly know as PT Kahatex Sweater) have requested that all campaigning on this case stop immediately. Please adapt your websites an other action materials to this effect as soon as possible!

A very important thing to note in this amazing victory is not only that workers will be able to finally return, after more than eight-months of being locked out of their jobs, but that they will be returning with the status of full-time, permanent employees. Permanent employee status is becoming increasingly rare in Indonesia and around the world, as manufactures shift to using short-term contract employees, who have few benefits and no job security. It is a great victory that the company has agreed to reinstate employees with permanent status as well as guarantee them, in writing, the wages and benefits they are due by law, but have not always received in the past.

Brief history:

In May 2003, 537 workers from PT Kahatex Sweater were locked out illegally by management for demanding that they be paid the minimum wage.

Following a request by the locked-out workers an international solidarity campaign began in July 2003, spearheaded by the CCC in Europe and USAS in the United States. Internationally many letters were written and actions were organized to put pressure on the many buyers at PT Kahatex Sweater.

The workers demands were simple: reinstatement at former permanent employee status, proper payment of the minimum wage, and company compliance with all other Indonesian laws (regarding leave, health insurance, overtime, etc.).

As a result of this pressure H&M and Nike agreed, at an early stage, to cooperate with the Workers Rights Consortium (WRC) and local groups to investigate the situation. H&M refused to place new orders unless the lockout was ended. Nike put pressure on the parent company , PT Kahatex, requesting that it use as much of its influence as possible to get PT Kahatex Sweater to take the employees back or for PT Kahatex to find them jobs elsewhere within the conglomerate. Coupled with continuous international campaigning, this increased the pressure on four German buyers. S.Oliver responded by hiring the audit company Systain to investigate (at a later stage Systain also played an active role in facilitating negotiation of the re-employment agreement ) ; Tom Tailor supported the position taken by the other companies. Olsen and Lerros, shamefully, did nothing.

Results:

During extensive, comprehensive negotiations stretching from early January until now (17th February 2004) between the WRC (Workers Rights Consortium), Systain, the Legal Aid Institute of Bandung (LBH), worker representatives, and the management of Kahatex Sweater (aka PT Micro Garment), an agreement was finally reached on re-hiring all the workers and providing them with a good employment contracts. Th ese contract s met the original demands of the workers:

• Employment will be permanent, with the standard three month probation period contained within;

• The regional minimum wage, accident, general health and life insurance will be paid, along with a pension contribution

• Compliance with all other laws and workplace standards is guaranteed;

• PT Micro Garment will not discriminate, in distributing orders, against the new workshop where the re-employed workers will be assigned

• The deadline for the remaining 287 workers who have not yet reapplied for their positions will be extended to March 1st, 2004.

The returning workers, WRC and LBH will continue to monitor the situation to ensure that the contract provisions are implemented.

Sustained support internationally by the CCC, USAS, CCC and USAS allies, and by all the other groups and people who worked on this appeal at Kahatex, contributed substantially to the successful outcome of this case. The Austrian and German CCC played a key role internationally in supporting the workers by keeping the pressure on German companies through letter-writing and creative actions.

Workers have reported that that they are especially pleased at being able to return to work with permanent employment status, as this is no longer common in Indonesia, due to changes to labor law. Additionally they are happy to be returning to work as early as 1st March, just early this month Micro Garment was saying that they would all have to wait until April 19th to begin working again.

These are substantial achievements for the workers of PT Kahatex/ Micro Garment and for workers rights in Indonesian. As the demands of the workers have been met at this stage, workers and labor groups in Indonesia request that the international campaign work on this case stops. They also call on all current and former buyers to honor their commitment to resume placing orders with Micro Garment now that the dispute/lock out has been resolved.

Thanks all of you who joined the campaign, and please continue to keep working with us on other cases where workers request your support!!