Winning Profits, Losing Rights

EXCERPTS FROM THE REPORT “PLAY FAIR”

The global sportswear industry

The shift from the marketing of sportswear as specialist performance items to promoting it as mainstream fashion items for the general public has greatly benefited the sportswear industry, drawing in young purchasers and expanding its consumer base. In 2002, the athletic apparel and footwear market was worth more than US$ 58 billion. The top three companies – Nike, Reebok, and Adidas – reaped pre-tax profits amounting to US$ 1123 million, US$ 195.5 million, and US$ 408.9 million respectively.

It is, however, a highly competitive market. To compete, sportswear companies have invested in strong branding and marketing to capture and retain customers. Advertising and promotional spending alone in 2002 cost Nike US$ 1,028 million.

The expenditure of others has been more modest, but figures still run into the millions, with Adidas spending US$ 775 million, Puma US$ 107 million, Mizuno US$ 81.6 million and Fila US$ 72 million. A great proportion of these budgets is spent on sponsorship and endorsement deals of sportsmen and women. In the run-up to the Athens Olympic Games, the top brands will be launching state-of-the-art products and running huge advertising campaigns to boost their exposure. This marketing campaign will include selling products which carry the Olympics emblem, outfitting those athletes or teams whom they sponsor, and supplying Olympics officials with services and products.

Making money from the Olympics

Since the Los Angeles Summer Olympics of 1980, corporate sponsorship has become an integral part of the OlympicGames. Originally intended as an philanthropic gesture when government funding for the event declined, sponsoring the Olympics now brings in big money. According to the official website of the 2004 Olympics, by December 2003 sponsorship revenues had reached US$ 648 million, with cash coming from multinationals like Coca-cola, Swatch, and McDonald’s, in addition to an array of Greek companies. Sponsorship is also provided in kind. For example, Adidas is the official sponsor of Sport Clothing for Uniforms at the Athens 2004, while Mizuno supplies the International Olympics Committee and the Athens Organizing Committee with their official clothing for all Olympic events. Marketing is the other big moneymaker of the Olympic Games. The movement, through the International Olympics Committee (IOC), the National Olympics Committees (NOCs), and the Organizing Committees (OCOGs), licenses companies to produce and market Olympics souvenirs such as caps, sweatshirts, and T-shirts. Upon payment of a royalty fee, companies gain the right to use the Olympics emblem on their merchandise. From the games in Athens 2004, royalty revenues are expected to generate around US$ 66 million. For companies, the publicity and sales that result from retailing Olympics merchandise are a lucrative business.

Roots, the Canadian clothing company that sponsors the US, Canadian, and British Olympic teams, sells replicas of the teams’ kits in High Street shops. The company is already planning to open some 100 stores in China by 2006. Sportswear companies also gain financially from sponsoring national Olympic teams. At the 2002 Salt Lake City Winter Olympics, Roots supplied the official team uniforms for the Canadian, US, and British teams. In the two-week period of the Games, Roots’ sales exceeded US$ 25 million.

Bargaining power within the supply-chain

In the last five years, the prices of athletic footwear and apparel have gradually fallen to meet both consumer demand and pressure from sportswear retailers. To maintain and increase profitability in a difficult business environment, companies have sought to rigorously strip out costs from their supply-chains. Outsourcing production to others, while retaining higher-value inputs like design and marketing, continues to be a favored option. Advanced communication technologies and cheaper transport costs have also allowed these companies to scour the world looking for suppliers who are prepared to supply them at the lowest price. The typical business model used by global sports-brands involves strategies designed to achieve the following objectives: deliver products efficiently and speedily to retail outlets; keep down production costs – including labor costs – in order to maximize profit; minimize inventory costs by shifting packing, warehousing, and freighting functions to the supplier; and shift the risks arising from poor forecasting of consumer demand to the supplier. The model thrives upon the immense power and negotiating strength that a small number of big global brands – and, to an extent, a few powerful mid-supply-chain players – are able to exert over their wide range of potential suppliers, especially those at the low end of the supply chain. Desperate to gain a foothold in the global marketplace, garment and footwear manufacturers, many based in the developing world, strive to offer the cheapest deals, in the shortest production times, in the most flexible manner, to the big brands.

How buyers buy

The sportswear business model also thrives on the huge pressure felt by buying and merchandising staff in the big companies to deliver to very demanding deadlines and tight budgets. Often young and seeking to prove themselves within the business as a means of climbing the corporate ladder, sportswear buyers work very competitively to meet their performance targets: getting the best price, in the best time, and at the best quality. In a few companies, buyers are given some training to introduce them to the companies’ ethical commitments, but there is usually little attempt to integrate these commitments into the buyers’ role. So much so that in an independent piece of research carried out recently, researchers found that

buyers sometimes referred to their colleagues in the Ethical or Corporate Social Responsibility Team as the ‘Sales Prevention Team’.

Research shows that buyers are generally adopting the following purchasing practices to keep delivery lead-times short and prices low, and to maintain flexibility in meeting supply and demand.

Placing smaller orders more frequently

The traditional system of ordering in bulk to meet consumer demands in the basic four seasons has dramatically altered. For one thing, the number of fashion seasons has increased. For another, bar-coding systems track consumer purchases, allowing retailers to order stock automatically as it runs out in stores. This system also protects the companies from the problem of surplus stock if products

Pushing for shorter delivery lead-times

All the major sports-brands have prioritized shortening the time taken to deliver a product from the factory to the shop-shelf. As the General Manager for Global Sourcing at Puma says: ‘we try to shorten lead-times in order to become competitive. ’    The 2002 Adidas annual report states that the company aims to reduce lead-time for apparel from 120 days to 90 days.

Lowering unit costs

Across the board, unit cost per item of footwear or clothing in the sportswear sector has fallen year on year. In Honduras, two factories producing T-shirts for export for famous sports-brands reported

that the price paid per dozen by the sourcing company had fallen from US$ 3.70 in 2000 to US$ 2.85 in 2003: a fall of 23 per cent in three years. The owner of a Sri Lankan factory supplying to Nike estimated that while production costs had increased by approximately 20 per cent in the last five years, unit prices paid by Nike had dropped by 35 per cent in the previous 18 months.

Threatening to relocate

The threat of buyers moving to other locations where operating costs are lower has also exerted a downward pressure on price. Relocation to cheaper production is particularly true within the apparel sector. Unlike the shoe sector, where brands tend to build longer relationships with those factories that have developed technical expertise and capacity, it is easy for buyers to switch apparel suppliers, simply on the basis of cost. One supplier to Nike told researchers that the increasing demands for lower prices became so unrealistic that he finally terminated the relationship. He claims that Nike relocated production for that product to Viet Nam for a difference in cost which amounted to a mere US$ 0.40 per piece.

Flex and squeeze: the supplier’s response

Under these pressures, suppliers are generally not respecting labor standards in their workplace. Desperate to enter the supply-chains of global brands, factory managers agree to tight deadlines, fluctuating orders, and low unit costs, knowing that they can make their workers deliver despite the adverse personal effects on them. Hence the kinds of abuse and exploitation using the following workforce-management tactics.

Hiring women, migrants, and temporary workers

A common trend within the industry is to hire workers who seem less likely to challenge management in the face of unfair and difficult working conditions.

Short lead times, long working hours

Workers in a Bulgarian factory producing for Puma said that the targets in their factory were often unachievable within a normal working day. As they were paid by the piece, this then affected the

wage they received. Workers in this factory said that this wage was not enough to pay for their individual subsistence as well as meeting their household budgets.

Low orders, low wages

When orders are low, however, the opposite tactic is taken by management as a means of cutting costs: workers are forced to take unpaid leave. Even for those workers who are not forced to take leave, wages often fall to a minimum, or they receive nothing at all during the low season.

You fine us, we fine them

As factory managers face all manner of penalties from the buyers – fines for late delivery, contributions when the product does not do well in the shops, and penalties if the product is sub-standard – so they try to shift some of their liabilities on to the workers.

Prevent organizing

Workers are actively discouraged from forming and joining trade unions.

Faster, Longer, Cheaper

Campaigning on working conditions in global supply-chains has persistently focused upon getting employers to pay workers a living wage: a wage that allows workers and their families to live in dignity. The wages of the many workers who sew, assemble, and pack sportswear for export are not enough to guarantee a decent existence for them and their families. Workers in Indonesian factory G, producing for Reebok, told researchers, ‘We need at least Rp 10,000 (US$ 1.19) per day for food and transportation. The company gives us only Rp 2,000 (US$ 0.23) per day for transportation. If workers have children,

the daily cost of living is at least Rp 25,000 (US$ 2.97).”

At the time of our research, the standard monthly take-home wage at this factory was only Rp 816,000 (US$ 98.6), 82 per cent of the amount needed.

Overtime work presents a dilemma. As one worker states: ‘We need overtime work because our basic wages are not enough to meet all of our living needs”.’ When asked why they worked so hard for so little, the answer was there is no choice. As one garment worker from a Turkish factory9 producing for Puma and Lotto said: ‘The wages are so scant and not sufficient for anything. But we do not have any alternative because wages in garment factories are nearly all the same. Our choice is between this wage and unemployment.’ As a worker in Bulgarian factory U sadly concludes: ‘It is chaos at home.’

The health costs of working in a sportswear factory

‘I have many health problems: headaches, diarrhoea, stomach flu, back pains, and muscle cramps. All these are caused by the situation in the factory – the bad air, having to stand all day, and the long hours of work without sufficient rest, water or food.’(Fatima, a 22-year-old Indonesian woman worker making products for Adidas, Fila, Nike, Puma, and Lotto in Factory D) ‘Exhaustion is the main thing after overtime hours. Many women tend to miscarry pregnancies because of the continuous work that is caused by overtime work following immediately after the daily shift.(Ita, a 25-year-old worker making products for Umbro and Puma in Factory I) At a Bulgarian factory producing exclusively for Puma, workers spoke of eye damage, varicose veins, back pain, dust allergies, respiratory diseases, and repetitive strain injuries.

Employed – but on precarious terms

Factories often do not issue workers with proper employment contracts, leaving workers no means of redress when their employers fail to respect labor laws on minimum wages, working hours, payment of overtime premiums, provision of health benefits and other forms of insurance, as well as other legal rights. This is further exacerbated when workers are denied their right to join and form trade unions. Many workers – especially migrants – do not feel able to ask for such contracts, and their absence has become accepted as an industry norm. Even where contracts are issued, employers still flout their terms and conditions. Among the worst-treated in the industry are workers who are employed on a temporary basis. Often, factories continually hire them on temporary contracts as a means of evading legal responsibilities to pay time-rate wages or benefits such as maternity leave, health insurance, or severance pay. Workers interviewed from a number of factories reported that, despite being employed by the same factory for periods as long as two years, they were still on temporary contracts. This sort of employment is a particular phenomenon in Indonesia. Another tactic is to hire workers from an agency, where the employer is the agency rather than the owner of the factory. Thus, the enterprise that owns the factory is able to avoid its obligations as an employer. Unions see this as a major barrier to organizing workers. When interviewed, a number of union leaders reported that temporary workers who seek to join in union activities often find that their contracts are not renewed. Many of the workers interviewed reported not receiving legal benefits such as health insurance or wage protection during periods of sick leave or maternity leave. Taking sick leave is at the expense of wage cuts.

 

 

Bullied, humiliated, abused

Managers in the factories often resort to harassment, humiliation, and abuse in order to exert their authority over the workers. Elina, a garment worker in Indonesian factory PT Busana Prima Global11 making goods for Lotto, said: ‘There is a lot of verbal abuse. The management calls us names throughout the time when we work. They call us “stupid”, “lazy”, “useless”, “bastard’s child”, and other crass words. They say “You don’t deserve any more than this”. Some girls start crying. Physical abuse happens too. Our ears are often pulled, and managers yell directly into our ears.’ More disturbing are regular incidences of sexual harassment of young women workers at these factories.

 

Trade unions undermined

The ability to join and form a trade union remains a great challenge in the sportswear production sector. In all four of the researched sportswear factories in Turkey producing collectively for Lotto, Fila, Puma, and Kappa, no unions were allowed. In one of the factories producing for Puma in Bulgaria it was reported that management had a hostile attitude towards any form of worker representation in the enterprise.

The obstacles to forming and joining a trade union are sometimes exacerbated by governments when they undermine workers’ rights as a means of attracting foreign investment. Sometimes the employers harass and discriminate against those who join in union activities. Workers refrain from participating because they are afraid that union membership will threaten their jobs.

Although freedom of association and collective bargaining is protected as a constitutional right in many countries, governments often allow employers to flout it in order to offer cheaper labor to global buyers. whether through changes to the law – for example, in a number of countries, the rights to unionize

and strike are prohibited by law in export-processing zones – or de facto through non-enforcement, thousands of workers across the globe are unfairly denied the opportunity to defend their rights.

There is clear evidence of violations of trade union rights in this sector in all the countries mentioned in this report. The ICFTU produces an annual worldwide survey of trade union rights. For the Annual survey of trade union rights violations look at: www.icftu.org/survey

Many sportswear companies recognize that there are bad labor practices in their supply-chain. Their response to criticism has been to adopt codes of conduct covering labor practices, which have led to limited improvements. What is not acknowledged openly is the role that the company itself plays in causing the problem. This research shows that driving the harsh, abusive, and exploitative working conditions in the sportswear industry is a business model designed to bring products to the marketplace speedily and cheaply. To deliver this model, suppliers must be able to meet faster delivery times, keep labor costs low, and be flexible to respond to the fluctuating size and frequency of orders being placed by global brands. Factory managers respond by pushing their workers to work faster and for longer periods of time; by keeping their wages down in order to maximize their own profits and to meet prices offered by the brands; and by preventing them – through intimidation and other means – from challenging any abusive or unfair treatment, resulting in the kinds of experience described in the previous chapter. Governments, through their failure to enact or enforce workers’ rights, make it easier for unscrupulous employers to adjust to market pressures by cutting corners – and costs – through the erosion of workers’ rights. Under these circumstances, employers have gained a carte blanche to treat workers badly with impunity.

Respect for trade-union rights - the gap between rhetoric and reality

Bulgaria

Trade-union rights recognized by law. Trade unionists face harassment and discrimination. Employers resist collective bargaining.

Cambodia

Trade-union rights protected in law. Law allows employers to exclude unions from bargaining. Trade-union activity limited: most workers know little of trade unions or their rights. Employers are very hostile to unions, notably in the garment sector. Union activists face intimidation and dismissal. In January 2004, union leader Chea Vichea was murdered after receiving death threats reportedly linked to his political and union activities.

China

Trade unions recognized only within official structures. Freedom of association recognized in constitution but not in trade union law. Protection of right to strike was removed from constitution in 1982.  All attempts at establishing workers’ organizations outside official structures are repressed, often through imprisonment. Workers, especially migrants, are subject to violations of labor and other human rights. Labor law often flouted.

Indonesia

Right to form trade unions recognized, but within strong limitations. Government interference sanctioned by law. Much protest and strike action, but usually ‘illegal’ for failing to follow lengthy mediation procedures. Unionists face employer intimidation and unfair dismissal, protestors face police violence.

Thailand

The law recognizes trade-union rights and collective bargaining, and prohibits anti-union discrimination by employers. The right to strike is recognized. In practice, collective bargaining is not ensured. Only a small proportion of workers are covered by a collective agreement. In December 2003, 269 workers in an apparel factory were arrested

for striking illegally. Most of these workers were Burmese migrants with legal working permits.

Turkey

Trade-union rights recognized, but with heavy restrictions, notably on bargaining and the right to strike.

Collective bargaining is often obstructed; there are reports of harassment, union-busting, and strikebreaking.

Union leaders have been imprisoned for their activities, and can face ill-treatment in detention.

Whose responsibility?

Suppliers – as employers – have a direct legal and moral responsibility to ensure that their workers are treated decently, employed under fair terms, and work in healthy and safe circumstances. Many are failing to meet their obligations. The extreme working hours and excessive targets imposed on workers in the rush to meet export deadlines are partly a symptom of deficient production planning. If manufacturers are to invest in improving their production planning and worker management, the overwhelming pressure currently placed upon them by the sportswear companies must be diffused. Continual downward squeezes on price and increased demands for speed and flexibility leave factory managers little room to improve working conditions in their factories. This responsibility also attaches to the large multinational manufacturers – like Pou Chen – and trading companies – like Li & Fung – who sit mid-chain and often place the direct pressure in terms of price and delivery upon the factory managers.

Many of the sportswear companies mentioned in this report have issued codes of conduct covering labor practices, obliging their suppliers to ensure respect for their workers’ rights. These codes, however, assume that it is mainly the factory managers’ responsibility to take steps towards this end. Further, as these sportswear companies scour the world for new low-cost, ‘one-stop shop’ manufacturing locations to maximize profits for the benefits of their shareholders, so they forgo their commitment to a long-term business relationship with their suppliers. Some of the more enlightened companies are beginning to see that unless they acknowledge their part in causing unhealthy, unsafe, and unfair working conditions through aggressive purchasing practices, the chances of addressing the problems to any significant extent are low. For example, the Global Director for Social and Environmental Affairs at Adidas acknowledges: ‘If a factory manager says “we cannot comply [with social standards] because your order arrived yesterday to deliver this morning”, we have to review our internal processes’. Other companies, unfortunately, are indifferent to concerns that their purchasing practices are undermining their ethical commitments.

Ultimately, governments too have a responsibility to ensure that workers are accorded those rights enshrined in the Conventions of the International Labor Organization (ILO). Of special mention is the Tripartite Declaration of principles, concerning multi-national corporations and social policy, adopted in as early as 1997 and amended in 2000.

Evidence in this report reveals that governments – in pursuing export-led growth – have adjusted their labor policies to meet the requirements of global sourcing companies. With encouragement from international financial institutions like the International Monetary Fund (IMF) and the World Bank, policies to create ‘labor market flexibility’ have been put in place, leading to the erosion of workers’ rights. Human rights such as the right to freedom of association and the right to collective bargaining have been undermined, in order to prevent workers from banding together to demand better wages and terms of employment. Governments turn a blind eye when employers avoid their obligations. Even where good labor laws exist on paper, enforcement is weak.

The trade-union movement – globally and locally – has persistently challenged the failures of governments. In recent years, it has had some successes in strengthening enforcement, amending laws that violate workers’ rights and changing policies that contravene labor protection. For example, in Bangladesh, as a result of persistent campaigning by international and national trade-union bodies, the government has given an undertaking to extend the National Labor Code to all its export-processing zones by the middle of 2004. But much more needs to change, if workers are to be adequately protected.

Fair play for workers: respect the rules

It is in the interests of the sporting world to put pressure on the sportswear industry to respect labor standards. So intrinsically linked is the practice of sport with the sports-brands that any taint on the industry’s reputation also stains the reputation of the sports institutions. Yet the sporting world – apart from a few exceptions – has done very little to call for change on the part of the sportswear companies.

Rules to protect the rights of workers are some of the oldest in the world. Today, 195 ILO conventions have been adopted, providing an array of protection to workers worldwide. But, across all the countries researched for this report, employers within the sportswear manufacturing industry are getting away with these rules of the game.

Abuses of workers have prompted a public outcry against companies who are guilty of perpetuating the misery of workers at the bottom of the supply-chain. Reacting to the threats to their reputations, a common response by companies has been to adopt codes of conduct covering labor practices within their supply-chains. In spite of all that abuses are too common for the following reasons:

1 There is a huge gap between ethical commitments and purchasing practices

In all the sportswear companies researched for this report, their ethical commitments are not reflected in any significant way in the purchasing practices used by their buyers. A recent World Bank report on corporate social responsibility reaches a similar conclusion, stating: ‘The majority of the participants in the survey acknowledged that unresolved tension among price, quality and delivery time on the one hand, and CSR (Corporate Social Responsibility) requirements on the other, risked undermining the credibility of the business case.

2 The current compliance model is flawed

Despite a general recognition that the most efficient method of implementing and upholding the principles enshrined in codes of conduct is via the recognition of independent trade unions and collective bargaining rights, the sportswear industry is still rife with virulent anti-trade union policies.

For a few years now, some more committed companies have been using firms that sell social auditing services to conduct workplace inspections as a means of assessing compliance with labor standards. While these firms’ audit teams generally are able to recognize the more visible breaches of labor standards, they tend not to detect the more insidious violations, such as the repression of the right

to organize, excessive working hours, or physical, verbal, and sexual harassment of workers. In some instances, to satisfy both the ethical team and the buying team, some factory managers routinely resort to falsifying the evidence when labor standards inspections are conducted. Workers report that wage records and time records are altered, that they are coached to give the ‘right’ answers on wages and overtime work, that the factory is cleaned up before an inspection, and that in some cases part of the workforce is put on leave during the inspection days, in order to make the factory appear more spacious.

The ‘checklist approach’ used by social audit firms is useful in identifying some problems in the workplace. But it fails to identify the causes of these problems or suggest effective solutions to overcome them. Conducted in isolation, with little consultation with local stakeholders such as trade unions or women workers’ organizations, these types of social audit are not proving to be the answer to improving working conditions. Further, the failure of these teams to gain the trust of workers, the trade unions, is a major stumbling block. Perhaps the biggest flaw in the current compliance model is the fact that workers– who are the main subject of these inspections and audits – are at the edges rather than the center of the whole system. In some workplaces, even though the code was displayed on the wall of the factory, workers said that they had never been asked about conditions in the workplace, nor had they a clear idea of how it related to their working lives. At one sportswear factory, a worker told researchers: ‘Yes, there are codes of conduct pasted on the walls, but they are both in English. They are pasted high up on the wall. It used to be that these codes would only get pasted up when the buyer was around, but since August 2002 they have been up every day. I have read a little bit of the code, but I don’t understand much of it.’ With little or no training on their rights as employees, to such workers these codes make no sense. All in all, this is a system that is not working effectively to bring about significant improvements in working conditions.

3 Bad practices by one company undermine good practices of another

Where different brands are supplied by the same factory, any potential improvements that could be made by one brand’s genuine commitments are undermined by the irresponsible behavior of others. The industry is structured in such a way that most companies share the same suppliers. It is rare to see one brand accounting for more than 70% of the production at a factory. So companies that have made ethical commitments may well be sharing a factory with many other companies which are indifferent to poor working conditions in their supply-chains.

Time to Play Fair

Make the change

Sustained campaigning has led some major companies in the sportswear sector to begin to address the appalling working conditions in their supply-chains. Some companies have demonstrated an awareness of this tension between their purchasing practices and compliance with labor standards. When interviewed about the gap between the two, the Social Accountability and Environmental Standards Team at Puma answered unequivocally: ‘We have to improve on this.’ Nike is planning to incorporate what it calls a ‘balanced scorecard approach’, which will place compliance with labor standards on a par with cost, quality, and delivery when making decisions on suppliers, as one means of addressing the problem. At Adidas, the Corporate Responsibility Team are currently engaged in a project that is evaluating the impact of their purchasing practices on working hours in suppliers’ factories. Although it is yet to be completed, Frank Henke, the head of the team, said: ‘Long working hours are a problem for many of our suppliers, and we realize that our own planning processes add to the time pressures on them. We are reviewing and adjusting the internal process of how we plan and give orders to take that pressure off.’ Those who have recognized the need to improve, however, are in the minority.

If sportswears companies are to be sure that workers’ rights are genuinely respected within the supply-chains, they need to do the following:

1) Develop and implement a credible labor-practices policy, calling for suppliers and their sub-contractors to respect internationally recognized labor standards, including all those identified by the ILO as being fundamental rights at work.

2) Change their purchasing practices so that they do not lead to worker exploitation by integrating labor-practice policies with current purchasing practices. Ensure that labor standards are a key criterion when selecting suppliers – alongside indicators of price, time, and quality. Negotiate a fair price with the supplier: one that reflects the true labor costs of production and allows the supplier to meet ethical labor standards. Develop more stable long-term relationships with suppliers and factories, enabling the latter, in turn, to engage more stable workforces on fairer terms.

Some companies, such as Nike, Reebok, Adidas, and Puma, have begun to collaborate with each other, as

well as with other companies through multi-stakeholder initiatives. While this is an important step forward, progress will be limited, unless the sportswear sector as a whole develops a program of work that promotes trade-union rights, and ensures on-going dialogue between the main companies in the sector and the International Textile, Garment and Leather Workers Federation (ITGLWF) via a sectoral or company-wide framework agreement.

3) Implement labor codes of conduct in ways that bring sustainable improvements in working conditions by communicating in clear terms to suppliers, factory managers, and their sub-contractors that workers’ rights to form and join trade unions and engage in collective bargaining are fundamental to the process of meeting labor standards, and that it is unacceptable to undermine these democratic rights. Conduct workplace inspections in conjunction with workers, trade unions, and credible local organizations, and ensure that such inspections address all forms of abuse. Provide accessible and safe means by which workers can report exploitation and abuse and be assured of action on the part of the company. Ensure that workers have access to information on what actions have been taken to improve working conditions in their workplace as a result of an inspection or social audit; enable them to report whether these corrective actions have been taken.

4) Work together to address endemic problems in the sportswear industry.

Companies should publicly acknowledge the value of a sector-wide approach with trade unions and other concerned organizations to addressing the problems.

5) Inform the public about the working conditions in which their products are made, and provide transparent information about how their business operations affect working conditions in their supply-chains.

Sportswear suppliers and factory managers must accept their direct responsibility to respect their workers’ rights. In their bid to take a share of the profits, they must not renege on their responsibilities by breaking labor laws and exploiting or abusing their workers – no matter how competitive the market is.

The Olympics movement should make a serious commitment to ensure respect for workers’ rights

by the sportswear industry through the International Olympics Committee (IOC), National

Olympics Committees (NOCs), and Organising Committees (OCOGs) by taking these

actions:

• Amend the Olympic Charter to include a specific commitment to respect workers’ rights.
• Publicly call for an end to the exploitation of workers and the abuse of workers’ rights that are involved in the production of sportswear; and put pressure on the industry to take credible steps towards this.
• For the IOC: adopt a policy requiring that, as a contractual condition of all IOC, NOC, and OCOG licensing, sponsorship, and marketing agreements, labor practices and working conditions involved in the production of Olympics branded products must comply with internationally accepted labor standards, as defined by the ILO.

Governments have much to do to meet their obligations towards workers. They should actively ensure that labor legislation, consistent with international labor standards, is enacted, implemented, and enforced.

Commit resources to implementing an ethical labor-practices policy, including the establishment of mechanisms which address instances of exploitation and abuse of workers in the manufacture of products bearing the Olympics emblem; rigorous inspections of conditions, and prompt attention to complaints of abuse should be made a matter of routine.

Members of the public can play a crucial role in placing pressure upon the sportswear industry to reform its policies and practices.

Glimmers of hope

Respect for workers’ rights at the Sydney Olympics

The organizing committee for the Olympic and Paralympic Games in Sydney 2000 adopted a Code of Labour Practice for the production of licensed Olympic goods. The Code – negotiated with the Australian Council of Trade Unions (ACTU) and the Labor Council of New South Wales in 1998 – required the payment of fair wages, limitations on working hours, and respect for the rights of freedom of association and collective bargaining. FIFA commitments on labor standards in the production of soccer balls - In mid-1996, the international trade union movement uncovered evidence, supported by video footage, that child labor was being used to manufacture soccer balls bearing what appeared to be the logo of FIFA, the football world’s governing body. The balls were being made in the town of Sialkot, Pakistan, the source of some three-quarters of the world’s soccer balls at that time. The discovery was made just before the start of the 1996 European Championships and received extensive worldwide media coverage. On 3 September 1996, FIFA agreed to a ‘Code of Labor Practice’ for FIFA licensed products, as requested by the trade unions. Labour-standards criteria – based on the ILO Declaration on Fundamental Principles and Rights at Work – have now been included in the licensing agreements. The Clean Clothes Campaign has, however, repeatedly targeted FIFA for not implementing this code, presenting it with evidence of non-compliance.

A code for the sporting-goods industry The World Federation of Sporting Goods Industry (WSFGI) is an independent association formed by the industry suppliers, national organizations, and businesses related to the sporting-goods industry. Its membership includes global sports-brands, retailers, and manufacturers of sportswear and sporting goods. In 2000, it introduced a revised Code of Conduct based on the international labor standards outlined in the key ILO Conventions. The preamble to the Code states: ‘WFSGI members recognize the important role they play in the global economy and their influence on the social and economic conditions under which sporting goods are manufactured and produced. Although the Code is comprehensive on paper, the WFSGI has done little to ensure that members implement it. The Olympics movement is a particularly stark example of this indifference. In spite of its rhetorical commitments to fair play, international solidarity, and valuing

the worth of human beings, it has not taken any practical action at the global level to challenge the sportswear brands on the exploitative and abuse working conditions in their supply-chains.

As the leading governing body in world sport, the International Olympics Committee (IOC) has a moral and legal obligation to make these calls. Their obligation includes making sure that companies that use the Olympics logo respect fundamental workers’ rights. This lack of commitment seems irresponsible,

particularly given that currently, those sportswear companies that act as official suppliers of uniforms or kit to the IOC (for example, Mizuno, the supplier of official clothing to IOC officials) or to the organizing committee of the host nation (for example, Adidas, as the official sponsor of Sport Clothing for Uniforms

at the Athens 2004), or the national Olympics teams through their national Olympics committees are under no obligation to ensure that these products are not made by exploited workers. At the very top of

the hierarchy, the IOC is the owner of the rights to all Olympic marks, including the five-ring emblem, and is responsible for the overall direction and management of all Olympics marketing and licensing programs. If the movement as a whole made a commitment to respect labor standards, similar to its commitments on protecting the environment, it could play an important role in achieving improvements to working conditions for the many workers who produce sportswear worldwide.

REPRODUCED WITH AGREEMENT FROM OXFAM