By Sarah Lynne and Phil Gasper | September/October 2012; updated December 2012
Abandoning his financially ailing factory in the Tangerang region of Indonesia, owner Jin Woo Kim fled the country for his home, South Korea, in January 2011 without leaving money to pay his workers. The factory, PT Kizone, stayed open for several months and then closed in financial ruin in April, leaving 2,700 workers with no jobs and owed $3.4 million of legally mandated severance pay.
In countries like Indonesia, with no unemployment insurance, severance pay is what keeps workers and their families from literal starvation. “The important thing is to be able to have rice. Maybe we add some chili pepper, some salt, if we can,” explained ex-Kizone worker, Marlina in a document released by the Worker Rights Consortium (WRC), a U.S.-based labor-rights monitoring group, in May 2012. Marlina, widowed mother of two, worked at PT Kizone for eleven years before the factory closed. She needs the severance payment in order to pay her son’s high school registration fee and monthly tuition, and to make important repairs to her house.
When the owner fled, the legal responsibility for severance payments to PT Kizone workers fell on the companies that sourced from the factory—Adidas, Nike and the Dallas Cowboys. Within a year, both Nike and the Dallas Cowboys made severance payments that they claim are proportional to the size of their orders from the factory, around $1.5 million total. But Adidas has refused to pay any of the $1.8 million still owed to workers.
The majority of what was produced in PT Kizone factory was athletic clothing sold to hundreds of universities throughout the United States. All collegiate licensees like Adidas and Nike sign contracts with the universities that buy their apparel.
At least 180 universities around the nation are affiliated with the WRC and have licensing contracts mandating that brands pay “all applicable back wages found due to workers who manufactured the licensed articles.” If wages or severance pay are not paid to workers that produce university goods, then the school has the right to terminate the contract.
Using the language in these contracts, activists on these campuses coordinate nationwide divestment campaigns to pressure brands like Adidas to uphold previously unenforceable labor codes of conduct.
The precedent of withholding wages and benefits is strong in the garment industry as a whole. Apparel brands rarely own factories. Rather, they contract with independent manufacturers all over the world to produce their wares. When one factory closes for any reason, a brand can simply take its business somewhere else and wash its hands of any responsibilities to the fired workers.
Past campaigns run by United Students Against Sweatshops (USAS) have cost brands like Nike and Russell millions of dollars when university contracts were cut. Campus activism has forced Nike to pay severance and Russell to rehire over 1,000 workers it had laid off, in order to avoid losing more collegiate contracts. Now many of these college activists have their sights set on Adidas.
At the University of Wisconsin (UW) in Madison, students in the USAS-affiliated Student Labor Action Coalition (SLAC) and sympathetic faculty are in the middle of a more than year-long campaign to pressure the school to cut its contract with Adidas in solidarity with the PT Kizone workers.
The chair of UW’s Labor Licensing Policy Committee (LLPC) says that Adidas is in violation of the code of conduct for the school’s licensees. Even the university’s senior counsel, Brian Vaughn, has stated publicly at a June LLPC meeting that Adidas is “in breach of the contract based on its failure to adhere to the standards of the labor code.”
But despite the fact that Vaughn claimed at the time that the University’s “two overriding goals are to get money back in the hands of the workers and to maintain the integrity of the labor code,” the administration has dragged its feet in responding to Adidas.
Instead of putting the company on notice for potential contract termination and giving it a deadline to meet its obligations as recommended by the LLPC, UW entered into months of fruitless negotiations with Adidasin spring of 2012. In July, when these negotiations had led nowhere, UW’s interim chancellor David Ward asked a state court to decide whether or not Adidas had violated the contract (despite the senior counsel’s earlier public admission that it had). This process will delay a decision for many more months—perhaps years if there are appeals.
Since the Adidas campaign’s inception in the fall of 2011,SLAC members have actively opposed the school’s cautious approach, calling both the mediation process and the current court action a “stalling tactic” by the UW administration and Adidas to avoid responsibility to the PT Kizone workers.
In response, student organizers planned everything from frequent letter deliveries to campus administrators, to petition drives, teach-ins, and even a banner drop from the administration building that over 300 people attended, all in hopes of pressuring the chancellor (who ultimately has the final say in the matter) to cut the contract with Adidas.
While the administration claims that it is moving slowly to avoid being sued by Adidas, it is also getting considerable pressure from its powerful athletics director, Barry Alvarez (who is paid $1 million in annual compensation), to continue its contract with Adidas. As part of the deal, UW’s sports programs receive royalties and sports gear worth about $2.5 million every year.
“Just look at the money—what we lose and what it would cost us,” Alvarez told the Wisconsin State Journal, even though other major brands would certainly jump at the opportunity to replace Adidas. “We have four building projects going on. It could hurt recruiting. There’s a trickle-down effect that would be devastating to our whole athletic program.”
But Tina Treviño-Murphy, a student activist with SLAC, rejects this logic. “A strong athletics department shouldn’t have to be built on a foundation of stolen labor,” she told Dollars & Sense. “Our department and our students deserve better.”
Adidas is now facing pressure from both campus activists in the United States and the workers in Indonesia—including sit-ins by the latter at the German and British embassies in Jakarta. (Adidas’ world headquarters are in Germany, and the company sponsored the recent London Olympics.) This led to a meeting between their union and an Adidas representative, who refused to admit responsibility but instead offered food vouchers to some of the workers. This, however, is clearly no substitute for the severance that they are still owed.
In the face of intransigence from university administrations and multinational companies prepared to shift production quickly from one location to another to stay one step ahead of labor-rights monitors, campus activism to fight sweatshops can seem like a labor of Sisyphus. After more than a decade of organizing, a recent fundraising appeal from USAS noted that “today sweatshop conditions are worse than ever.”
Brands threaten to pull out of particular factories if labor costs rise, encouraging a work environment characterized by “forced overtime, physical and sexual harassment, and extreme anti-union intimidation, even death threats,” says Natalie Yoon, a USAS member who recently participated in a delegation to factories in Honduras and El Salvador.
According to Snehal Shingavi, a professor at the University of Texas, Austin who was a USAS activist at Berkeley for many years, finding ways to build links with the struggles of the affected workers is key.
“What I think would help the campaign the most is if there were actually more sustained and engaged connections between students here and workers who are in factories who are facing these conditions,” Shingavi told Dollars & Sense. Ultimately, he said, only workers’ self-activity can “make the kind of changes that I think we all want, which is an end to exploitative working conditions.”
But in the meantime, even small victories are important. Anti-sweatshop activists around the country received a boost in September, when Cornell University President David Skorton announced that his school was ending its licensing contract with Adidas effective October 1, because of the company’s failure to pay severance to PT Kizone workers. The announcement followed a sustained campaign by the Sweatfree Cornell Coalition, leading up to a “study in” at the president’s office. While the contract itself was small, USAS described the decision as the “first domino,” which may lead other campuses to follow suit.
The USAS prediction has proved correct. Shortly after Cornell’s decision, Oberlin College in Ohio told Adidas that it would not renew its current four-year contract with the company if the workers in Indonesia are not paid severance. Then in November, both the University of Washington and Rutgers terminated their contracts with the company, and reports indicate that Princeton, Montclair State, and other schools are reviewing the situation.
Perhaps just as significant as these successes, however, are the lessons that some activists are drawing from these campaigns.
“The people who have a lot of power are going to want to keep that power and the only way to make people give some of that up is if we make them,” Treviño-Murphy said. “So it’s really pressure from below, grassroots organizing, that makes the difference. We see that every day in SLAC and I think it teaches us to be not just better students but better citizens who will stand up to fight injustice every time.”
Sarah Lynne is a UW Madison student and a member of the Student Labor Action Coalition. Phil Gasper teaches at Madison College and writes the “Critical Thinking” column for International Socialist Review.
Sources: Worker Rights Consortium, “Status Update Re: PT Kizone (Indonesia),” May 15, 2012 (workersrights.org); Andy Baggot, “Alvarez Anxiously Awaits Adidas Decision,” Wisconsin State Journal, July 13, 2012 (host.madison.com); United Students Against Sweatshops (usas.org), PT Kizone update, June 15, 2012 (cleanclothes.org/urgent-actions/kizoneupdate).