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Adidas and other brands should pay back part of Yue Yuen workers’ social insurance in arrears!

[Open letter to Adidas – From HK groups]

Subject: Adidas and other brands should pay back part of Yue Yuen workers’ social insurance in arrears!

Hong Kong, 20 June 2014

Between 5 April and 28 April 2014, workers from Yue Yuen Dongguan factory have gone on strike. Striker size flew up from 1,000 to 50,000 in only few days. Almost all factory workers have joined the strike, including frontline production workers and various ranking management staff. This shows the anger of workers towards government and the company has reached the limit. Reports say the strike expansion to Yue Yuen’s Jiangxi factory too. Until intervention of massive police force which forced the strikers to go back to work at the end of the month, the strike was forced to come to an end.

The dispute was triggered by the conspiracy between the Yue Yuen factory and the local government – The factory did not fully pay social insurance for the workers and the local government officials did not observe this unlawful practice. Workers also discovered the work contracts they are holding are not legally valid. They request the factory to pay back pension and housing provident fund arrear payment, re-sign valid work contract and raise the wage.

It is correct that the workers blame Yue Yuen and the local government for the problem because Yue Yuen has cheated on their social insurance payment to lower their production cost, and exploit their wages and benefit; the local officials failed to observe the company’s illegal act and even assisted the company to exploit workers, in return to protect their tax income and corruption chances.

However, besides Yue Yuen and the local government, workers ignore the much stronger and more powerful international buyers who should also be made responsible for the dispute. Yue Yuen supplies product to international big brands like Nike, Adidas, Reebok, Asics, New Balance, Puma, Converse, Salomon and Timberland. The workers have been producing shoes for these gigantic buyers and enterprises. They gain the biggest part of this huge profit and regard all workers in the supply chain as slaves! The workers are the only victims of the violation.

According to reports, Adidas is the biggest buyer of Yue Yuen, thus Adidas cannot ignore its corporate social responsibility in the dispute. Adidas and other brands claim that they hire third party auditors to ensure suppliers meeting their production standards and code of conduct, and to monitor the working conditions and labour practice in their suppliers but they just never discover this malpractice over the years! Therefore, we demand Adidas and the international buyers of Yue Yuen should not just confirm their suppliers in China to obey the local laws and regulations, paying workers social insurance; they should bear the responsibility with Yue Yuen to pay back all workers’ pensions and housing provident fund in arrears.

Recently Yue Yuen announced that they will allocate USD 37 millions to pay back workers social insurance but the company refused to release any details of their decision. As the biggest buyer, Adidas claims that they keep close in touch with Yue Yuen. Our major demands are as follow:

  1. Adidas tell the public the details and progress how Dongguan Yue Yuen pays back workers' social security insurance.
  2. Yue Yuen should pay back the pensions in arrears over the years. All international buyers that buy orders from Yue Yuen should share the worker social insurance payment together with Yue Yuen.

 

Endorsed by

Globalization Monitor (GM)

Students and Scholars Against Corporate Misbehaviour (SACOM)

Asian Transnational Corporation Monitoring Network (ATNC)

Asia Monitor Resource Center (AMRC)

Worker Empowerment (WE)

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