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Letters between Oxfam Australia and sports brands

Oxfam Australia's letter to adidas regarding their supplier factories, Dong Joe, Spotec, Tong Yang and Panarub

William Anderson
Head of Social & Environmental Affairs
Asia Pacific
Adidas Sourcing Limited
10/F, City Plaza Four
12 Taikoo Shing, Island East
Hong Kong

10 March 2008

Dear Mr Anderson,

First, we would like to thank adidas for responding to the letter sent by Oxfam Australia's Executive Director, Andrew Hewett. In particular, we acknowledge adidas' responses to questions regarding its general purchasing practices and the information it provided regarding its supplier factories in Indonesia.

The purpose of this letter is to express our ongoing concern for the 4,500 workers from adidas' closed Spotec supplier factory, many of whom are still struggling to find work. We understand from you that in August last year adidas' business associate bought the Spotec factory and renamed it Ching Luh. Many former Spotec workers are hopeful that they can get new jobs making adidas shoes again at the site of their former factory.

In December last year we received assurances from adidas that i) the recruitment system in the new Ching Luh (CLI) supplier factory had been designed to ensure prioritisation of ex Spotec workers into the new factory and ii) the recruitment process would be fair and transparent.

Unfortunately, so far the recruitment process has seen at least 150 ex-Spotec workers, who were scheduled to be interviewed, miss out because they never found out they had an interview in the first place. We believe that the tracking chart that adidas has initiated to monitor the prioritisation of ex-Spotec workers, if implemented, is a good first step.

In the interests of the fair and transparent prioritisation of Spotec workers into adidas' supplier CLI, Oxfam Australia urges adidas to ensure that:

Read the full letter (PDF, 81KB) from Oxfam Australia to adidas.

Read adidas' 17 December letter (PDF, 820KB) to Oxfam Australia.

Oxfam Australia's first letter to Nike regarding MSP sportswear in Thailand

Nike World Headquarters
One Bowerman Drive
Beaverton, OR 97005
Phone: 1-800-344-6453

17th January 2005

Dear Mr/Ms Harsh Saini and W. Krittika,

I am writing to you to request that Nike intervenes with the management of MSP Sportswear, Thailand to bring about a fair and acceptable resolution to mistreatment of workers at the factory who decided to organise and form a union due to the poor working conditions at the factory.

Oxfam Australia understands that as a result of attempts to organise, the union executive has been harassed and threatened. In October 2004 three executives of the union were unfairly dismissed, along with the mother of one of the union executive who also worked at the factory. Another member of the union Executive was arbitrarily transferred from the sewing to the cutting line without being given adequate training for his new duties. He was therefore unable to meet quotas and received a warning letter.

Oxfam Australia understands Harsh Saini, as a representative of Nike, met with the MSP Sportswear workers and CLIST - the labour organisation supporting them in Thailand. At this meeting you indicated Nike had decided to wait for the outcome of legal proceedings on this matter. We find this unacceptable as it is Nikes code of conduct that is being violated. It is Nikes' responsibility to intervene and discuss positive resolutions with management to reach a resolution, rather than waiting for lengthy legal proceedings to run their course. We hope that you will follow this course of action as it is similar action you have taken in other cases where your code of conduct has been violated.

In particular, Oxfam Australia requests Nike to intervene and use your influence with the management of MSP Sportswear

We also request Nike to call together all parties concerned, as requested in the December 15 letter of CLIST, to share the outcomes of your investigation and to discuss what steps should be taken after workers are reinstated.

We urge you to do everything you can to ensure that the concerns and welfare of the workers are addressed and that they will be able to form and join a union of their choosing free from intimidation and harassment in accordance with Nikes code of conduct.

I look forward to hearing from you soon about any action you have been able to take in relation to this serious matter.

Yours sincerely,

Kelly Dent
Advocacy Officer, Labour Rights

Nike's response of 19th January 2005

Thank you for your letter regarding the situation at MSP Sportswear factory in Huatalea Moung Nakornrachaseama in Thailand.

Nike's goal is to do business with contract factories that consistently demonstrate compliance with our Code of Conduct and that operate in an ethical and lawful manner. We take violations of our Code of Conduct, including freedom of association, very seriously. But we have also learned that alleged violations of freedom of association are some of the most complicated issues that both Nike and its contract factories face.

While your letter presents some disconcerting facts, they are representative of only one viewpoint: that of the union. The demands of the union do not necessarily reflect the views of all, or even a majority, of the workers currently employed at MSP. In fact, a number of MSP workers made an independent request to the provincial labor office to deny reinstatement to the workers in question.

Unraveling and resolving the underlying issues in these types of cases requires the involvement of neutral, third-party organizations. As a buyer in the MSP factory, Nike is not an appropriate mediator in the dispute. Furthermore, where freedom of association is supported by law, as is the case in Thailand, we believe it is in the best interest of all workers to have local governments build capacity in addressing these issues.

With respect to the three workers dismissed from MSP Sportswear, on December 14, 2004, Nike representatives observed an informal mediation session in which representatives from the Thailand Ministry of Labor, MSP Sportswear, and the 3 dismissed workers met. Following that informal mediation session, the union elected to file a formal grievance with the Ministry of Labor. We are pleased to note that both the union and management view the Thai government as an appropriately neutral body. The Labour Relations Committee has already commenced their investigation, indicating their commitment to expedite this process as much as they are able.

Regardless of the Government's ruling, MSP management has also committed to working with the Ministry of Labour in the implementation of workers' training - - specifically focused on their rights with respect to Freedom of Association. Nike commends MSP in this decision; we believe this type of capacity building is one of the best investments a factory can make in promoting positive management-worker communication, and creating an environment free from intimidation and harassment for all parties.

Our goal in Thailand is that workers' rights are respected, and we will collaborate with all relevant parties toward that end. Please write to continuous.improvement@nike.com for response to future inquiries. We also invite you to visit nikebiz.com for the latest information regarding Nike's corporate responsibility initiatives. We appreciate your interest and support in the matter.

Sincerely,

Dusty Kidd
Vice-President, Compliance
Nike, Inc.

Oxfam Australia's response of 21 February 2005

Monday 21st February

Dusty Kidd
Vice-President, Compliance
Nike, Inc.

Dear Dusty Kidd,

Thank you for taking the time to respond to Oxfam Australia's letter of 17th January, 2005 which requested Nike's intervention in the dispute at MSP Sportswear factory in Huatalea Moung Nakornrachaseama, Thailand.

Your response contains a number of concerning comments about freedom of association and the implementation of Nike's code of conduct. For this reason we have responded in detail to each of the points you have raised. Oxfam Australia's response appears as an attachment to this letter.

In our letter of 17.01.05, Oxfam Australia requested Nike's intervention to bring about a fair and acceptable resolution to the mistreatment of workers at the factory who decided to organise and form a union due to the poor working conditions at the factory.

A government official from the Ministry of Labour in Thailand has clearly concluded that these employees were dismissed because of their union activities and has recommended that they be reinstated.

Our requests to you remain the same. Specifically, we ask that Nike intervenes and uses their influence with the management of MSP Sportswear:

We look forward to hearing that Nike has taken prompt and positive action towards assisting with the resolution of this serious matter.

Yours sincerely,

Kelly Dent
Advocacy officer, Labour Rights
Oxfam Australia

Oxfam Australia's response to Nike's letter

Thank you for taking the time to respond to Oxfam Australia's letter of 17th January which requested Nike's intervention in the dispute at MSP Sportswear factory in Huatalea Moung Nakornrachaseama in Thailand.

Your response contains a number of concerning comments with regard to both freedom of association and the implementation of Nike's code of conduct. For this reason we would like to respond in some detail to each of the points you have raised. In doing this we hope, through dialogue, we can convince you of the urgent need for Nike to become constructively involved in the resolution of this urgent matter.

1. [from Nike's letter] Nike's goal is to do business with contract factories that consistently demonstrate compliance with our Code of Conduct and that operate in an ethical and lawful manner. We take violations of our Code of Conduct, including freedom of association, very seriously. But we have also learned that alleged violations of freedom of association are some of the most complicated issues that both Nike and its contract factories face.

[Oxfam Australia's Response] In general, we would agree that violations involving freedom of association and the right to organise can be complex. They are also a core ILO convention and a critical pillar for the advancement and protection of workers' rights. As such no matter how complex they are, resolving them should be the highest priority of any company concerned about human rights.

In the case of MSP Sportswear the violation of freedom of association seems relatively straightforward. Oxfam Australia understands that three union organisers (and only union organisers) were dismissed. Your letter refers to the conciliation meeting of December 14 2004 which was organised by the Thai Labour and Welfare Protection Department of the Ministry of Labour (MOL). In that meeting the Ministry official clearly concluded that the employees were dismissed because of their union activities and recommended their reinstatement. Five representatives from Nike attended this meeting, and made no comments to the contrary. As Nike knows, MSP Sportswear has a history of union repression. Two of the workers concerned were fired previously and re-instated following intervention of the Thai Human Rights Commission, who expressly stated that MSP in future had to respect the right to freedom of association and collective bargaining.

MSP management claims misconduct, however Oxfam Australia has seen no evidence to substantiate these claims. Management appears to counter its own statements by offering compensation equivalent to ten months salary, while by law, no compensation is required if workers are guilty of misconduct.

2. [from Nike's letter] While your letter presents some disconcerting facts, they are representative of only one viewpoint: that of the union. The demands of the union do not necessarily reflect the views of all, or even a majority, of the workers currently employed at MSP. In fact, a number of MSP workers made an independent request to the provincial labor office to deny reinstatement to the workers in question.

[Oxfam Australia's Response] As indicated above, these facts are not only the viewpoint of the union, they also reflect the opinion of the Thai Labour and Welfare Protection Department of the Ministry of Labour. The issue is not about how many workers support the union. Instead, it is about the right to freedom of association which is an individual right. It appears that the workers in question exercised this right and as a result were dismissed by factory management. Whether or not the majority of other workers support the union is irrelevant. This is still a violation of core international labour standards, Thai labor laws and Nike's own code of conduct.

Concerning the 'independent' request of other MSP workers to the provincial labor office: Oxfam Australia understands evidence has been provided to Nike that this was a management-orchestrated event. The five buses in which the workers went from the factory to the provincial labor office were hired by management. The demonstration took place during working hours, and workers were paid to participate. Workers carried placards in English, a language they are not accustomed to writing or reading.

3. [from Nike's letter] Unraveling and resolving the underlying issues in these types of cases requires the involvement of neutral, third-party organizations. As a buyer in the MSP factory, Nike is not an appropriate mediator in the dispute. Furthermore, where freedom of association is supported by law, as is the case in Thailand, we believe it is in the best interest of all workers to have local governments build capacity in addressing these issues.

[Oxfam Australia's Response] Oxfam Australia understands and agrees with your position that Nike itself is not an appropriate mediator. We do not, however, understand why Nike has not taken up the advice of the conciliator who presided over two formal conciliation meetings late last year, nor why Nike has failed to respond to proposals for further independent mediation.

During November and December 2004 there were two conciliation sessions organised by the Thai Labor and Welfare Protection Department of the Ministry of Labour. The recommendation of the MOL official was very clear. Yet Nike has not followed it and has not explained its position to the Union and their supporters.

The union has agreed to independent third party mediation. This is clear from the complaints filed by the union to the Thai Human Rights Commission and the Fair Labor Association, of which Nike is a member, in early January. Also in January it was suggested to Nike that your company should cooperate in establishing an independent mediation committee made up of human rights lawyers, academics and other experts. Nike has given no response. If Nike is serious about resolving the issues, why have you not actively pursued mediation so that a fair settlement could be reached? Nike's passive approach has resulted in delays that cause extreme difficulties for the dismissed workers and for the union activists still working in the factory.

It is in the interests of all to build Thai government capacity to resolve these types of disputes. It is also clear that the current regulatory gaps are among the main reasons for having a code of conduct in the first place. By not upholding its own code of conduct, Nike hides behind a legal system that it knows to have insufficient capacity to effectively protect workers rights.

4. [from Nike's letter] With respect to the three workers dismissed from MSP Sportswear, on December 14, 2004, Nike representatives observed an informal mediation session in which representatives from the Thailand Ministry of Labor, MSP Sportswear, and the 3 dismissed workers met. Following that informal mediation session, the union elected to file a formal grievance with the Ministry of Labor. We are pleased to note that both the union and management view the Thai government as an appropriately neutral body. The Labor Relations Committee has already commenced their investigation, indicating their commitment to expedite this process as much as they are able.

[Oxfam Australia's Response] Firstly, this was not an 'informal' session, but the second of two formal conciliation meetings (the first one was held on December 2) organised by the Ministry following a petition filed by the dismissed workers on October 25. As stated above, the recommendation of the government officials was to reinstate the workers, since they were fired, in their opinion, for organising. Since MSP Sportswear refused to do so, instead offering higher compensation money, the MOL officials also explained that the workers have the right to file a complaint to the Labor Relations Committee. At the 14 December meeting, the MOL official also stated that in his opinion, a legal process usually is very lengthy, and rarely ends with the reinstatement of the dismissed workers. The most likely outcome would be a severance payment, effectively breaking the union.

Nike states that the union 'elected' to file a formal grievance with the Ministry of Labour. Oxfam Australia understands that the union waited until the very last possible day to do so, hoping Nike would intervene with factory management instead. The union has consistently communicated their lack of faith in the legal process to Nike, including by letter on December 15. It is therefore inappropriate for Nike to conclude that the union sees the Thai government as an appropriately neutral body.

5. [from Nike's letter] Regardless of the Government's ruling, MSP management has also committed to working with the Ministry of Labor in the implementation of workers' training - specifically focused on their rights with respect to Freedom of Association. Nike commends MSP in this decision; we believe this type of capacity building is one of the best investments a factory can make in promoting positive management-worker communication, and creating an environment free from intimidation and harassment for all parties.

[Oxfam Australia's Response] If Nike and MSP are genuinely committed to respecting worker's rights then the dismissed union activists should be immediately reinstated and the harassment of the remaining union activists in the factory should come to an end. Worker (and management) training in freedom of association can be an important element of the remediation process. Training that ignores a present conflict between active union members and management can not make a meaningful contribution to creating an environment free from intimidation and harassment for all parties.

As you are aware Oxfam Australia has for a long time supported worker-led campaigns in the sportswear, garment and related industries particularly across Asia both through our longstanding NikeWatch campaign and more recently through our Make Trade Fair campaign. Oxfam Australia operates within a rights-based framework, believing poverty alleviation is only possible when people are empowered to obtain their rights, including their labour rights. Oxfam Australia is working closely with CLIST, trade unions and international labour campaign organisations in support of workers at the MSP factory.

Thank you for your attention to this matter. We look forward to hearing about prompt and positive action Nike has taken towards assisting with the resolution of this serious matter.

Kelly Dent
Advocacy Officer, Labour Rights
Oxfam Australia
21st February 2005

Nike's response to Oxfam Australia's letter

Email Response from Dusty Kidd, NIKE to Oxfam Australia's letter received 15 March 2005

Thank you to all of those who have engaged with us on the issues of workers' rights at MSP in Thailand. Nike recently held a dialogue with two of the three dismissed workers, CLIST, Jeff Hermanson (American Center for International Labor Solidarity), Apo Leung and others in Thailand recently to discuss the MSP situation and suggested paths forward. Kelly Dent, an advocacy officer of Oxfam Australia, has forwarded her summary of the issues as she and CAA understand them. Ineke Zeldenrust of Clean Clothes Campaign also has offered her perspectives, as have a number of people affiliated with CCC. Rather than attempt to continue to address each of the various separate sets of communications, we think it best to establish one dialogue, and to keep everyone updated on our perspective through one communications channel. We hope you all will find that acceptable.

Like most cases where associational rights are in dispute, the facts around the dismissal of workers at MSP have been difficult to fully unravel. As Oxfam has rightly noted, these complications do not mitigate the need to resolve the dispute, but rather, they place an additional necessity for unbiased, transparent processes for investigating the claims and making a judgment about the appropriate path forward.

Here is our current understanding of the situation.

-- Of three dismissed workers, one has accepted a settlement and no longer has a claim pending with the Thai Labor Relations Committee. As Nike understands it, the remaining two have no interest in a settlement, and want to be reinstated as employees of MSP, with relevant back-pay and allowances. MSP management has declined to reinstate based on the preliminary investigation, and is waiting for the pending decision from the Thai Labor Relations Committee (TLRC).

-- The TLRC is expected to rule on the disposition of the dismissed workers within the next two weeks. If the decision is to reinstate the dismissed workers, MSP management has committed to abide by that decision. MSP has also agreed to forgo their right to appeal.

-- Under Nike's encouragement, MSP management has agreed to enroll its management and workers in a labor law and rights training process conducted by a third party mutually acceptable to management and workers' representatives, irrespective of the TLRC decision. It further has committed to establish clearly defined and mutually agreed rules of engagement between workers and management going forward, including the parameters by which workers may form associations of their choosing. MSP management has agreed to have the implementation of those rules of engagement monitored to ensure compliance on the part of all parties.

-- In conversations in December, Nike suggested as one path forward that workers might file a third party grievance with the FLA, and further suggested this is an especially helpful step when workers have concerns about local due process. Nike was informed that a third-party complaint was filed on January 12. The FLA has since decided to proceed with its investigation, and is currently meeting with the relevant stakeholders in Thailand.

-- We have just recently become aware of an application to form a new union within MSP. Understanding CLIST's concern around this development, Nike Compliance staff in Thailand will work with the Fair Labor Association to clarify the facts related to this application.

Our intention is to continue to facilitate fairness and due process. We do not have specific experience with the Thai Labor Relations Committee, and thus cannot evaluate its merits as a non-biased evaluator. In the interest of supporting local processes, we hope to hear the TLRC's ruling before taking any further action. Given that the livelihoods of workers are at stake, however, we recognize that a new course of action may be required.

As such, we have agreed with the Fair Labor Association that if the TLRC is unable to reach a verdict by next week, the FLA should proceed to identify a new local mediator: one that is acknowledged by both CLIST and MSP management as an appropriately neutral body. Our experience with the FLA third party grievance process is that it has produced fair and sustained results in several other factory compliance situations in a variety of countries, in most cases related to worker rights.

As always, Nike appreciates the feedback provided by all of our stakeholders. Please continue to share your concerns with us. We will continue to provide updates on the MSP situation and encourage the Fair Labor Association to move expeditiously through the investigation and resolution process.