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Cross-strait Labour Organizations Response to Adidas’ July 24 Reply:

Ø   Compensation for occupational diseases is yet to be fully resolved

Ø   Though appreciate to see slightly improvement, we regret to Adidas does "not guarantee all workers free from occupational diseases"

Date: 13th August, 2013

Response by:

Globalization Monitor (HK)

Labor Education and Service Network, LESN (HK)

National Federation of Independent Trade Unions (TW)

Taiwan Association for Victims of Occupational Injuries/TAVOI (TW)

Youth Labor Union 95 (TW)

 

Dynamic Casting

Adidas First response: The inference from the petition headline is that Dynamic Precision is closing its operations in China and relocating to avoid paying the full and proper compensation to workers. This is both inaccurate and misleading.

 

We do not agree that the petition headline of “Face with outbreak of Compensation claims due to occupational diseases, Taiwanese owned Dynamic Precision Jumps Ship back to Taiwan” is misleading and inaccurate. In fact, Dynamic Casting has shut down and openly expressed its replacement in Taiwan. At the same time, they are avoiding workers compensations in certain extend and bring out three fundamental problems that appeared in the case of Dynamic Casting.

 

First, Dynamic Casting indeed caused large number of occupational diseases. This is an unavoidable fact for the three companies (Dynamic Casting, Dynamic Precision and Adidas Group). The issue at stake is whether all the affected workers could get proper medical treatment and legal compensation before and after the relocation.

 

Second, Dynamic Precision shut down the factory in China and relocated in Taiwan. We are concerned if the working environment in Taiwan is as bad as that in China and whether the workers will be guaranteed health and safety at work, in addition to whether the production practices will be closely monitored in Taiwan.

 

Third, according to the workers, Dynamic Casting is trying to avoid paying 100% full compensation to all affected workers under the labour law in China. In one of its replies, Adidas also admitted that Dynamic Casting asked the affect workers to sign a private agreement so that it could pay compensation lower than the legal requirement. Also, according to workers that Dynamic Casting only gave 70% of severance paid to workers between Sept 2012 and Jan 2013.

 

More than 40 groups that signed the petition letter demand Adidas learn from this bitter lesson and make sure its supply chain would eliminate all dangerous work practices and pay all those who have not received their compensation.

 

Adidas Second Response: Summary of occupational diseases cases

 

We urge Adidas’ announcing the updated status of all the affected workers in the plants and this has been our request for Adidas since 2012. This data proves that the occupational diseases occurred in Dynamic Casting are serious and extensive, which include HAVS, occupational deafness and benzene poisoning. It also proves that the work environment and production practices in Dynamic Casting were demonstrably bad. Adidas admitted that Dynamic Casting has been monitored since 2005. But the fact shows that Adidas had not try its best to monitor the conditions and allowed the bad working conditions at Dynamic Casting which eventually led to massive occupational diseases. This proves that Adidas’ audit and internal monitoring does not work.  

 

Additionally, the case summary is a good reminder for Adidas that the case has not yet been settled. To date, 3 workers with suspected benzene poisoning still cannot get diagnosis in recognized hospital, though their job histories have been corrected by DC and receive a ridiculous document from Hospital saying that they cannot be diagnosis. One worker recognized as third stage pneumoconiosis and need urgent hospitalizing. We never accept any workers left behind.

 

Moreover, Adidas and Dynamic Casting have not met workers’ demands:

1.       Suspected Benzene poisoning workers (Ms. Liu  and the other two female workers) demand a montly payment of average wage instead of minimum wage during their diagnosis period because most of workers with suspected occupational diseases staying at Guangdong Occupational Prevention Hospital are receiving average wage every month. Dynamic Casting’s refusal to give the average wage to workers is a second damage to workers. A document called “ Employee’s Rights” (員工權益書) released by DC in March 2013 also indicates: "If the employee is recognized as suspected occupational disease or occupational disease after the job-leaving medical checkup. ... shall be given the treatment as an occupational disease worker according to law." (“如果離職體檢後確診為疑似職業病或職業病..依法給予職業病待遇。) This provision indicates that those workers who have suspected occupational disease or occupational disease will be treated as the same. This is a publication by Dynamic Casting and DC should keep its promise.

 

2.       Former DC worker Mr. Huang, diagnosed as mild degree of hand-armed vibration disease and a former MengFung worker who demands DC to reinstate him and requests DC giving him a monthly average wage during his hospitalization. (Please refer to Appendix 1)

3.       Ms. Deng a and her two co-workers with lower level of white blood cells, demand Dynamic Casting to give them a copy of their pre-employment medical report and immediately send them for diagnosis and medical treatment. (Please refer to Appendix 2)

 

Adidas Third Response: void private agreement, Notify workers’ right, Specific Training and worker hotline

 

We urge that Adidas’ intervention and press Dynamic Casting to make reforms in a timely manner when they discovered the improper use of private agreement in dealing the compensation with workers. We also appreciate Adidas’ commitment to work closely with Dynamic Casting in tackling most of the affected workers’ compensation and matters related with Dynamic Casting’ closure in the later period.

 

However, when there is a chance, it is apparent that Dynamic Casting will continue to cheat the workers. For example, Dynamic Casting made the workers sign on termination of contract before arranging for them to have job- leaving medical checkups. It also did not provide accurate work histories to the occupational health hospital in advance and corrected them only under public pressure. This made workers further suffer and encounter obstacle on diagnosis.

 

Moreover, according to workers, they do not agree that there was any appropriate training for them. And they do not agree that either Adidas or Dynamic Casting has provided sufficient assistance for them before and after the relocation. First, Dynamic Casting refused to admit the fact of relocation until March 2013 but before the year, kept shipping its expensive machines back to Taiwan and decrease the production. Nothing about the arrangement of affected workers could be heard.

 

The effectiveness of the Adidas hotline also needs to be questioned. According to workers, Adidas worker hotline always asks workers to wait without explaining process. We would like to know how does the hotline run if it receives complaint from workers. Are there any reports to workers after the investigation?

 

Adidas forth response: It is not possible for Adidas Group to offer a blanket guarantee that all workers in China making for our contracted supplier, now or in the future, are free from any occupation disease or illness.

 

First of all, though we never demand from a company a blanket guarantee that all workers are free from any occupation disease or illness, this is the first time we have heard a major transnational corporation saying that they would not guarantee workers 100% free from occupational diseases! Isn’t it a shame that a global corporation like Adidas sees more than 110 cases of various kinds of occupational diseases discovered in just one your suppliers in China? The question is: Have you ever made any effort to avoid the tragedy?

 

Instead of taking good measures to protect workers and prevent them from getting incurable occupational diseases, you have tolerated your suppliers when they commit make numerous violations that include making workers perform repetitive tasks at fast speeds without proper protection and the use of toxic chemicals like Benzene.

 

Adidas reply on Occupational Diseases Cases in Stella International Holdings Limited:

l   Stella is a major brown shoe supplier with multiple factories across China. It produces goods for over 30 international fashion retailers and brands. Adidas Group is one of Stella’s smallest buyers, by volume. Although we have very limited leverage with this supplier, we have investigated these cases, communicated with the affected workers and engaged with Stella on their follow-up actions.”

l   “The results of the air testing conducted by the CDC, which WRC shared with us, would not in itself trigger concerns over potential exposure to benzene, or action by the government safety agencies…. Given the above results, it is possible that the individual workers have been exposed to benzene outside of the current workplace, but where and when it is difficult to determine.

 

In its reply, Adidas vaguely mentioned that no risk of getting poisoned while breathing benzene-containing air in workplace is found, thus no intervention of official OSH agencies is needed. However, it did not specify whether their suppliers apply benzene-containing solvents in the production process. In fact, the official OSH agency in Dongguan undertook air quality tests and follow-up investigations only after cases of benzene poisoning were found in the Xingang (Stella) factory. According to the occupational disease certificates of 3 workers we followed, issued by Dongguan Institute of Occupational Disease Prevention in 2005, 2006 and 2009 respectively, air samples of their workplaces were proven to contain benzene. On 23rd October 2009, the Dongguan Centre for Disease Control and Prevention inspected the workplace of the Stella International Holding limited owned shoe factory Dongguang Xingang, and found benzene with different content levels in various sampling sites –0.4 mg/m3 (STEL) in 大嶺山三廠調膠室, 0.2 mg/m3 (STEL) in 大嶺山二廠半成品車間貼合A4工作點, and 1.9 mg/m3 (STEL) in 大嶺山二廠成型車間3A線中理鞋工作點, in terms of short-term exposure limit. For time-weighted average, benzene content for the above 3 sites were 0.2mg/m3, 0.1mg/m3 and 1.6mg/m3 respectively. Therefore, the claims of Adidas that no benzene-containing chemicals are used in the Xingang production procedures, and no risks of occupational harm are found, are in fact blatant lies. The 3 workers mentioned above started working in factories under Xingang as early as 2001, 2007 and 2009, and were diagnosed with occupational diseases in 2011, 2012 and 2010 respectively. By illustrating production safety of its workplace with merely a report published in 2012, Adidas intended to obscure the facts and evade its long-term responsibilities. Therefore, we urge Adidas to forcefully execute its own code of conduct, and disclose the following information to the public – exact time and date, sampling methods, commissioned agencies of previous inspections, as well as the test results of various chemicals in all the air samples.

 

The 3 workers we followed starting working in factories owned by Xingang as early as 2001, 2007 and 2009, and were diagnosed with occupational diseases in 2011, 2012 and 2010 respectively. One of them even spent his entire working life in the Xingang factory. With work in Xingang intense as 11 hours a day, it is not possible for them to be exposed to chemicals from other workplaces. The response and attitude of Adidas only brings more harm to workers.

 

Annual inspection of workplace is merely the first step in guaranteeing and enhancing occupational safety and stopping the use of poisonous chemicals. According to the survey we conducted outside the dormitory of Xingang workers, over 50% of the 50 interviewed workers reported bad odors in the workplace, and were not able to get a copy of their health test at work. In OSH trainings they were simply taught the use of personal protective equipment, and were never informed of the use of harmful chemicals, their proper usage, emergency measures and potential risks. From the cases of Xingang and Dynamics Casting Dynamic Casting, it is shown that Adidas plays no substantial role in guaranteeing the corporate social responsibilities and OSH inspection of its suppliers.

 

Adidas reply on the third demand in the petition letter: Fairly and justly address the health care needs and compensation for 3 workers suffering from Benzene Poisoning at the Taiwanese owned Dongguan Xingang Shoe Factory (Stella International Holdings Limited).

 

Adidas and Xingang alleged that medical expenses of the two workers who are now under treatment are fully covered, but it is simply not true. Negotiations with the factory are still underway, and no exact reply has been heard from the latter. The condition of one of the workers worsens these days, since the first generation of Glivec (medicine for Leukemia) is no longer effective. The use of the second-generation Glivec was recommended by the doctor, but it cannot be reimbursed via social insurance. That is why the factory refuses paying for second-generation Glivec for the worker, regardless of the worker’s worsening lung infection. The other worker needs urgent bone marrow transplant, but the factory refuses to pay for the bone marrow tests of the worker’s family members in advance. Therefore Xingang’s promises of assisting workers in financial and medical terms are simply empty words. We urge Xingang to give workers’ lives and medical treatment first priority and pay for the medical expenses immediately.

We emphasize that the factory paying for the costs of treatment and transportation is required by law. As of now the workers have not had their caretaking service expenses covered by the factory, and the factory never responds to their request for this. Moreover, school fees for children of workers under treatment are now deducted from the welfare fund of Xingang workers, which is an exploitation of welfare of other Xingang workers. This is definitely not encouraged; instead, Xingang should cover this expense on its own.

 

We are pleased to see that wages of the 2 workers under treatment are now paid in full by Adidas and Xingang under the pressure from different organizations. We further urge Adidas and Xingang to take the following actions promptly –

  1. Pay for the medical expenses of the 2 workers;
  2. Make and sign written terms of agreement with workers on the expenses of caretaking services and wages during treatment;
  3. Scrutinize the execution of the terms of agreement.

 

 

Adidas response on Sixth Demand: Adidas Carry out an industry wide production practices reform and agree to inspections by labour NGOs.

Adidas’ response: “Please explain what specific production practices you believe require reform.

 

We are disappointed to hear that a big company like Adidas saying 100% guarantee to prevent occupational diseases is not possible. If it is impossible, we would like to know the improvement measures of Adidas in occupational diseases in future. Could you please list the reform oriented measures taken in the aftermath of the Dynamic Casting Case?

 

If there are no new measures, has Adidas improved the quality and frequency of audits? Has Adidas updated the international standard of commonly seen occupational diseases in its audit monitoring list, especially for HAVS? Although Adidas does not have the capacity to change the government in China, we do think that Adidas has the capacity to improve its system in preventing occupational diseases. Additionally, and critically, Adidas should not turn a blind eye to the biases against workers in the labor courts system in China, which have been well documented by labor NGOs in Guangdong and in other parts of China.  By ignoring the reality of this biased labor courts system in China, it seems as though, for all intents and purposes, Adidas is endorsing the labor “justice’ system in China. This flies in the face of claims of your corporate social responsibility.

 

As a high-end luxurious entertainment, Golf has a long history in Europe and producers must have ample experience and technology know how to protect workers who produce golf ball and golf ball driver when it was produced in Europe. As one of the top brands in the field, Adidas do not need NGOs to show them how to implement a reform to guarantee no more incurable occupational diseases happen at least in their own supply chain. Dynamic Casting is an unprecedented case in the golf ball driver production chain but we believe it is not the only company that does not provide proper protection for workers. If this happens in Dynamic Casting, it can also happen in any other company that produces the same product. Therefore, we strongly demand the top brand companies in the golf ball and driver industry should set up an industry fund to discuss and come up with a reform in the industry to fully protect their workers. The top brand companies should also recruit experts in the field to improve and tackle the fundamental health and safety problems and to provide the most advanced guidance and training in HSE for workers in the industry.

 

Summary from Groups and reiterated demands:

 

  1. We regret Adidas’ response saying that: “It is not possible for Adidas Group to offer a blanket guarantee that all workers in China making for our contracted suppliers, now or in the future, are free from any occupation diseases or illnesses.” Adidas has acknowledged the mass incidence of occupational diseases in its supply chain as well as admitted its lack of capacity to monitor its supply chain in work safety issues. For these issues Adidas should make a public apology. And for its negligence, Adidas should propose remedial measures and open itself to civilian oversight, allowing trade unions, NGO organizations to intervene.
  2. Immediate to provide solution to meet Dynamic Casting and Xingang workers’ demands
  3. Improve the working conditions in Xingang’s production line and released the improvement report to the public
  4. Adidas should publicize different workers’ compensation offers.
  5. Adidas should require its suppliers to provide a hard copy of full medical examination report to workers. They shall not conceal the results.
  6. Dynamic Casting has a bad record in China. We hope that Adidas will provide an improvement plan to the Taiwanese public and publish Dynamic Casting’s safety management report to all the people openly. Adidas should prevent what disasters happened to Chinese workers from occurring at Dynamic Precision’s Taiwanese factory. Adidas should establish an oversight mechanism to make sure of this.
  7. From the response of Adidas, Adidas fails to grasp the true facts, and therefore Adidas should demand that Dynamic Precision to come forward with a clear response to these concerns.
  8. In order to protect workers from the harm of organic solvents, Adidas should request Adidas suppliers, including Dynamic Precision, to publicize their use of components that contain organic solvent and their safety assessment reports.

Appendix 1:

Obviously false medical diagnosis certificate on benzene poisoning, Demand Adidas immediate intervene to correct DC’s wrong doing

 

Deng Tangier and two other workers suspected benzene poisoning received the so called “Diagnosis certificate on benzene poisoning” on August 3rd issued by Guangdong OSH Hospital (See picture below).

 

However, this document looks very unusual and there is a possibility of fraud:

  1. This document called “Diagnosis certificate on benzene poisoning”, but Deng and the other two suspected benzene poisoning workers have not yet done any diagnosis on occupational disease, how can there be a certificate?

 

  1. The Certificate refers to the cases of Deng and the other two suspected benzene poisoning workers asserting that they “cannot be diagnosed as occupational benzene poisoning” and the rationale is:
    "Having reduced white blood cells situation prior to the start of their employment at DC" This reason is not consistent with the current situation in China, and is completely irrational. At the least, there are several reasons for doubt: First, usually workers found having health problems during recruitment will not be employed. Second, workers at DC did come in contact with benzene at work. If DC checked out a worker having "Having reduced white blood cells situation” during the recruitment stage, why would DC still would hire her? And even if DC eventually hired Deng, it should not arrange for her to work in a position with the same occupational hazards.

 

  1. According to "Occupational Disease Prevention Law" If the occupational diseases occur in the new unit, a new unit should be responsible. That means letting Deng  and other workers be diagnosed is unquestionably DC’s responsibility.

 

  1. DC refuses to disclose the medical reports of workers during the recruitment stage, and the examination results have never been revealed to workers over the years. This is clearly intended to conceal the facts.

 

  1. Though these three workers "cannot be arranged to secure a diagnosis", their medical reports show that their white blood cells are very low. For example, two examination results of Deng  show that her white blood cells are only 2.9 or so, much lower than the statutory standard 4. Why it that only these three workers cannot be is arranged a diagnosis? Is it because their white blood cells are so low that there is a high possibility that the workers would be diagnosed as victims of occupational diseases, and thus DC is trying hard to stop them getting diagnosed? Does this case also suggest illegal collaboration with the OSH hospital staff?

 

  1. Adidas has always been saying that DC acts according to law, and DC’s practice are supported by the local government. However, these cases provide reason to suspect that DC has been involved in fraud, and is trying to escape liability due to the injured worker’s responsibility.  We would like to know how you deal with this case.

 

  1.  In 2010, Adidas’ Safe Production Regulations already clearly prohibits the use of Benzene and Methylbenzene in production, as they poison workers when they breathe in these chemicals. However, it is clearly stated that this DC workers has contacted benzenes and other hazardous elements in the period of 2009 to 2013. DC is the first tier supplier of adidas; please tell us how will adidas explain this to the public?

 

Adidas has been saying they will be responsible for the workers with occupational diseases, therefore now we demand the following:
 

  1. DC immediately discloses all the workers’ medical reports during recruitment.
  2. Adidas should explain publicly the use benzene in the production of this factory after 2010
  3. Adidas should take on the responsibility of arranging diagnosis and treatment for these three workers.  The following are two ways we suggest fulfilling this demand:
    1. Adidas subsidizes workers going back to the local OSH hospital of their hometown to do diagnosis and treatment, and in the meantime provide transportation fees, accommodation and pay wages equivalent to the average wage; or
    2. Adidas invite experts and use international standards to do diagnosis for workers. During the period provide accommodation for the workers and pay wages equivalent to the average wage. If the workers are diagnosed with occupational diseases, DC and Adidas shall provide treatment and appropriate compensation for workers.

 

A document to Deng called “Result of Occupational Diagnosis” on August 3rd issued by Guangdong OSH Hospital

 

Appendix 2:

Dynamic Casting irresponsibly use fake contractor to cheat workers, ADIDAS should keep its promise and make Dynamic Casting be fully responsible to workers!

 

Mr. Huang , aged 40, began to work at Dynamic Casting (here after DC) as a worker doing polishing in 2005. In August 2012 the result of his medical report arranged by DC was "not found to have suspected occupational disease," but was required to have regular arm cold temperature re-inspection. In October 2012, DC proposed to 24 workers (Huang is one of them) to end their labor contracts in private agreement. If the workers agreed, they can be referred to work at its contractor MengFeng (here after MF). DC also hinted to workers that DC will be shut down soon. That is to say: "If you wait until the plant closure, you may get nothing." Under the pressure from the company, privately Huang and all the other 23 workers had signed an agreement of contract termination. Huang got over 30,000 Yuan financial compensation.

 

However, after working at MengFeng more than 10 days, Adidas told DC that MengFeng is an unqualified factory which could not produce adidas’ products. Then MengFeng was shutdown. Meanwhile there have been rumors that DC would re-employ these 24 workers, but the labor relationship was never in writing so as to provide proof. Subsequently, as required, MengFeng arranged Huang to have job-leaving medical examination and the result was "re-examination after three months". Huang then seek assistance from DC who agreed to pay Huang 1300 Yuan per month, and DC required Huang to sign a letter of consent on contract termination with MengFeng. However, none of the workers was given a copy of this letter.

 

When Huang did his re-examination after three month, the result was "suspected hand arm vibration disease (HAVS)". According to Huang, DC’s senior manager Mr. Gao said that Huang’s treatment will be paid the same as employed workers who are having the same disease. However, when the diagnosis results came out, Huang was having "mild degree of hand arm vibration disease" .When Huang asked DC to pay for his wages, Gao refused. Now Huang receives only 35 Yuan a day from DC for his living expenses.

 

In November 2012, a Labour NGO found that all MengFeng’s production was done inside DC plant and all the products produced by MengFeng were originally produced by DC. And MengFeng never signed a labor contract with the workers. Such arrangement of DC and MengFeng is very suspicious, particular when it happened just before DC’s shut down. We have good reasons to suspect that DC made such a move to shirk responsibility on the workers.

 

First, regarding the health problems, among these 24 workers, at least six of them were found having problems in their medical examination in August 2012 and were required to have periodical reviews. They then also received the "occupational disease diagnosis notice" issued by the Provincial Occupational Disease Prevention Hospital;
 

Second, MengFeng itself was just registered as a subcontractor company which only required 50,000 Yuan as registration fee. Once occupational diseases were found, MF could not pay compensation and would probably run away irresponsibly;
 

Third, workers suspected that MF is related to hooligans or local gangster forces, which aim to deter workers. One example is: in January 15, 2013 MF called in a dozen thugs to injure the workers who claimed for their legal rights.
 

Fourth, if the workers voluntarily leave their jobs, they would not receive any compensation or payments. However, in this case, DC proposed to pay compensation to the 24 workers and asked them to sign an agreement to admit that they did not have any occupational diseases.

 

Below is adidas’ reply to an NGO’s complaint on MF’s bad working conditions on December 18, 2012:

“adidas has required DC to hire back those workers who took up employment at Ming Fung to ensure their legal rights are protected. That said, it must be understood that the former DC workers who had voluntarily taken up employment with Ming Fung, had already been cleared of HAVS and had received in full the legal severance due to them from DC, when they ended their original contracts at Dynamic.  When DC take over the employment contracts for the Ming Fung workers they will be paid severance and again when DC have proceeded with the closing of DC they will receive a third severance payment.”

 

Below is adidas’ another reply to Globalization Monitor on January 19, 2013:

“Effective from 26 January 2013 Ming Fung is no longer producing for DC. We understand that DC had approached Ming Fung workers to offer them employment at the factory, but given the low order volumes now being produced, these job offers were rejected by the workers. adidas compliance staff has spoken with at least one of these former Ming Fung workers, who confirmed that given the low volume of work at DC, he has taken a higher paying polishing job in another factory.  We are continuing to check and obtain feedback from other former Ming Fung workers, to ensure that they are aware of the opportunity to secure legal rights through a formal contract with DC, if they so wish.”

 

Adidas’ reply gives the impression that DC is really a good employer: “Workers got severance payment 3 times!” It is not easy for us to prove if Adidas is misled by DC, or adidas actually knows the truth. According to Adidas’ reply, we have at least the following doubts:

 

  1. Did DC really confirm that all workers do not have arm vibration disease before asking them to sign a voluntary agreement on contract termination?
  2. If yes, why were some workers diagnosed later having occupational disease?
  3. If adidas has required DC to hire back those workers who took up employment at Ming Fung, are all the former MF workers aware of the hire back?
  4. Did DC really hire back the workers? How many have been hired back then?

 

We demand both adidas and DC provide evidence regarding the above queries.

 

The truth is: Huang had already fallen sick when the medical examination was arranged, but DC ignored and required him to leave DC. In addition, when Huang was working at MF, he was not informed of any channels for being hired back. He always thought that DC’s willingness to give him three months' salary meant that he is DC’s employee. However, when his diagnosis was issued, he was surprised to see that he was excluded from the status of ‘DC worker.’

 

Now we have three questions for Adidas:
1. Does Adidas agree to the way DC treated the former MengFeng workers?
2. Adidas has been saying that it demands DC to be responsible for the workers with occupational diseases. However, Huang and the other workers’ cases obviously show that DC was playing tricks to cheat them in order to terminate their contract and save money on their wages during hospitalization, and living expenses. Does adidas call this being “responsible for workers?”
3. Besides Mr. Huang, did all the former MengFeng workers do their end of employment medical examination? If yes, what are the results?

We demand adidas provide evidence on the above questions.

Now Huang has two demands:

1. DC immediately reinstate Huang;

2. Huang gets an average wage monthly payment during the period of diagnosis and hospitalization.

 

Here is the full documents of reply from Adidas July 24:

 

~End~

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