25 April, 2013On 24 April 2013 Adidas and Indonesia Coordinating Committee of PT Kizone Workers and their union, DPC SPTSK-SPSI, announced an agreement potentially ending a 2 year long dispute.
The company and the union agreed not to disclose the details of the deal, however according to the preliminary reports the company agreed on severance pay for 2,700 workers who remain without jobs following the closure of PT Kizone apparel factory in April 2011.
The factory faced economic problems late in 2010 and failed to fulfill its obligations towards its workers regarding severance payments and compensation to families of the deceased workers. Later on the owner did not pay wages earned by workers till December 2010 and in January 2011 fled the country without any notice. Despite some efforts of Green Textile, the main buyer from the factory who took over the factory from February to March, in April 2011 the factory was closed and proclaimed bankrupt.
Since then workers of PT Kizone have been trying to get justice in their plight. The total amount of debt to the workers was almost US$3.4 million. Other buyers from the factory covered almost half of the debt by paying US$1.6 million to redundancy fund, Adidas till so far has been refusing to contribute.
It took 2 years of campaigning organized by a broad coalition of unions and NGOs including workers of PT Kizone, United Students Against Sweatshops (USAS), the Workers’ Rights Consortium (WRC) and the Clean Clothes Campaign (CCC) before the company agreed to resolve the dispute.
The case sets another precedent in making brands accountable for all terms and conditions of employment in their supply chains, obliging them to support decent wages and permanent employment through granting stable orders at fair prices to factories they are sourcing from.