At the Adidas Group's request, the Global Forum for Sustainable Supply Chains will convene a summit in Switzerland on Oct. 23 to consider options for a private insurance fund that can be made available for workers affected by factory closures and non-payment of wages and benefits. Called by Adidas “Provident Fund,” this new tool would make up for the lack of legislation on severance payments in certain countries.
This comes after Adidas took flak for refusing to contribute to the payment of wages due to hundreds of Indonesian workers hit by the unethical closure of a factory that made Adidas-branded garments. Nike, which sourced garments from the same factory, PT Kizone, did pay $521,000. Adidas already initiated a job placement program and paid $250,000 in food aid, and earlier this month it committed another $275,000 in humanitarian aid for the workers – adding up to a contribution of $525,000.
The Swiss summit is set to bring together manufacturers, financing institutions, insurance experts and other interested parties. Established by the Fair Labor Association (FLA) last year, the Global Forum is meant to support the development of programs to address regulatory gaps in the supply chain, including violation of labor and human rights or environmental protection.
Adidas, Asics, New Balance, Nike, Patagonia, Puma and many other sports brands are among the numerous companies affiliated with the FLA, along with the Pou Chen Group, several universities and many other stakeholders (the full list is available at www.fairlabor.org).
Adidas points out that it was rated earlier this month as the industry leader for sustainability issues and corporate responsibility in the Clothing, Accessories and Footwear category under the Dow Jones Sustainability Index.
