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Exploiting Indonesia: Adidas for London Olympics 2012

Posted by Pratap Chatterjee on April 16th, 2012
CorpWatch Blog
Photo: Martin Wurt/Oxfam Australia

Adidas, the German sportswear company, is making Olympics uniforms for the UK team at sweatshops in Tangerang city, near the main international airport of Jakarta, Indonesia. Young female workers are paid 5,000 rupiah (54 cents) an hour for a 65 hour work week, according to revelations made in the Independent newspaper.

The new scandal comes on the heels of widespread protests against the Olympic stadium sponsorship by Dow Chemical, the new owner of Union Carbide Corporation, responsible for the 1984 Bhopal gas disaster which killed more than 15,000 people.

Britain’s new uniforms were designed by Stella McCartney, daughter of the former Beatles singer. The manufacturing contract was awarded to Adidas, a company with an annual revenue of $16 billion, which in turn outsourced production to a number of Indonesian contractors like Taiwanese-owned Shyang Yao Fung which manufactures women's sports shoes, PT Panarub Industry who make football boots, as well as PT Golden Castle and PT Tuntex which make clothing emblazoned with the Olympic logo.

Kathy Marks, the reporter who uncovered the story for the Independent, says she discovered that four of the nine contractors paid less than the minimum wage. (Adidas defended itself claiming that only one company did so!) Workers also complained about long working hours and bad working conditions.

"The management says that overtime is compulsory," a worker named Sobirin at Shyang Yao Fung told the newspaper. "And there are many times when workers are working without payment on overtime, or are not paid properly. Every day there's a worker who passes out because they're exhausted or unwell."

"It's hard to get permission even to go to the bathroom," said Yuliani, a 23-year-old seamstress told the Independent. "If you're forced to go, the pile of work becomes so high that you get shouted at by the production line leader. They call you a dog, brainless, uneducated. Sometimes we have to sacrifice our lunch break to reach the target."

The use of sweatshop labor to manufacture clothing is very commonplace. BehindTheLabel, an activist group, estimates that over 2 million people work in garment sweatshops producing clothes for U.S. retailers with about 80 percent of them working “under conditions that systematically violate local and international labor law.” http://www.behindthelabel.org/specialreports.php

Adidas has come under criticism before for its labor practices in south-east Asia. For example, 90,000 workers went on strike at the Pou Yuen Adidas suppler in Ho Chi Minh City last August against low wages and inhumane treatment, according to the Committee to Protect Vietnamese Workers. Campaign groups like Oxfam Australia have launched online protests to bring attention to the plight of workers. (see “Sneaky Business”)

The company also faces protests in the U.S. where students at the University of Michigan have called on the chancellor to cancel sponsorship contracts with the company for shutting down factories in Indonesia and El Salvador without paying workers backwages.  Similar protests have taken place at the the University of California at Berkeley and at the University of Wisconsin in Madison.