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Nike, Adidas Targeted by Labor Campaigns in Cambodia

The garment industry’s largest consortium of worker-rights organizations wants Nike to pay $1.4 million to Cambodian workers who were laid off amid the pandemic.

The current iteration of Clean Clothes Campaign’s crusade takes aim at the footwear giant’s position as a “wellness partner” with this week’s Global Fashion Summit. Nike, for its part, claims it had long since stopped sourcing products from the facility in question, Ramatex’s Violet Apparel factory.

“Wellness Partner at the Global Fashion Summit today is [Nike],” CCC wrote on Twitter Tuesday. “But Nike also owe women workers in Cambodia US$1.4M. A leading event for sustainable fashion can’t have ‘wellness’ paid for by the sweat of Asian workers! [Global Fashion Agenda], cancel the ‘Wellness’ & tell Nike to #PayYourWorkers.”

A consultant working with the Global Fashion Agenda, told the CCC that the GFA took the campaign’s remarks “seriously” and researched them itself. “To our understanding, Nike hasn’t produced in the named factory since 2006 and published a statement on this in 2020,” the GFA team said. The group said it would therefore not cancel its Nike partnership as CCC suggested. It also noted that Nike leadership would not attend the summit “because the company has an in-person leadership meeting in the US on the summit dates.”

According to the Business & Human Rights Resource Centre, which has tracked the laid-off workers’ efforts since October 2020, approximately 1,284 workers lost their jobs in July 2020 when the Violet Apparel garment factory “suddenly” closed. The former workers and their union have demanded $1.4 million in unpaid compensation and damages, which they say they are entitled to under Cambodian law. They have pushed for multiple companies who they claim sourced goods from the facility to take responsibility, including Nike, C&A, Carter’s, Matalan, Under Armour and Uniqlo.

Though Nike told the Business & Human Rights Resource Centre it did not source from the factory after 2006, the CCC claims it has “ample evidence” that says otherwise. It said it has communicated this information to Nike “directly.” It also pointed to an open letter to Nike supposedly written by the laid-off factory workers.

“We sewed clothes for Nike for years before Violet Apparel closed at the end of June 2020 and we have the right to the protections of Nike’s labour code after losing our job without getting what we were owed,” the workers wrote. “You are Ramatex’ biggest buyer, so you have a responsibility to make sure we are paid for our labour.”

The letter claims that the workers did not receive $343,174 in compensation in lieu of prior notice, nor damages of up to $1,048,120.

“Your refusal to take responsibility for the collective labour dispute at Violet Apparel, and in particular our severance payments, has caused us to face significant difficulties in our lives,” they added. “Many of us who lost our jobs after the factory closed haven’t been able to find new employment. Other factories discriminate against us because we were members from the union at Violet Apparel. And some of us are now middle aged, after all our years working at the factory, and face discrimination to find new jobs. In addition, the covid-19 situation makes it worse.”

The workers asked that Nike contact their representatives with the Cambodian Alliance of Trade Unions to find a resolution. The Business & Human Rights Resource Centre’s website includes an October 2020 “rejoinder” from the CATU asserting Nike products were produced at Violet.

“And this was not just a recent thing, workers were making Nike products there for years. Nike’s profits came from these workers making their products for them,” the CATU wrote. “As well as this, we see that Nike continues to make orders at Violet’s sister factories in Cambodia. And so, if Violet does not pay compensation properly according to the law, we believe that Nike should take responsibility.”

The Business & Human Rights Resource Centre has aggregated the other companies’ responses as well. C&A said it could “guarantee” none of its products were produced at the factory since 2019. Uniqlo claimed to have “no business or relationship” with Violet Apparel, but said its parent Fast Retailing, which works with Ramatex, contacted the group and requested the matter be handled properly. Carter’s and Under Armour are listed as offering “no response.”

Matalan, however, did not deny sourcing from the factory. Rather, it said that when it looked into the matter in March 2021, Ramatex told it the “vast majority” of workers had already collected the “compensation legally due to them.” The rest, it claimed, were urged to contact Ramatex. The two businesses chose not to continue their relationship in December 2020. “We have not placed any orders with any entities in the Ramatex group since that time and their account was subsequently deactivated,” Matalan said.

Adidas supplier faces strike

Nike competitor Adidas is at the center of an unrelated labor dispute elsewhere in Cambodia. On May 31, more than 5,600 garment workers at an Adidas supplier, the Can Sports Shoe factory in Cambodia’s Kampong Chhnang province, supported a strike, according to a statement shared on the Pay Your Workers website. The CCC said more than 1,000 workers rallied outside the factory.

These workers reportedly presented a list of 35 demands which had accumulated over “several years” and included payment of delayed wages and overtime, as well as access to food vendors. The following day, the factory agreed to “some” of these demands and workers agreed to return to work. Other demands, however, including regarding wages, “remain unresolved.”

According to the Pay Your Workers statement, the agreement only came after union leaders were arrested and required to sign agreements with “local authorities by thumb print stating that they would not carry out any further activities that would cause ‘unrest’ in the factory.”

“We take the allegations very seriously and are committed to upholding freedom of association in our supplier’ factories,” an Adidas spokesperson said. “We have asked the local authorities to explain why they intervened and prevented the union officials from freely exercising their rights.”

Patrick Lee, legal consultant at the Center for Alliance of Labor and Human Rights (CENTRAL) in Cambodia, dubbed the leaders’ treatment “union busting, plain and simple.”

“Adidas claims to respect workers’ rights, and yet a series of violations has taken place at one of their supplier factories leading to strike action and three union leaders have been arrested,” Lee said. “This is a clear example of authorities trying to intimidate union members and leaders in the hope of stopping workers from demanding their rights. Adidas needs to take immediate action to support workers’ rights and ensure something like this never happens again.”

Leaders in the Pay Your Workers-Respect Labour Rights campaign called on Adidas to negotiate and sign a binding agreement on wages, severance and freedom of association. Dozens of garment worker unions, as well as organizations like the CCC and Worker Rights Consortium, have backed its efforts, Pay Your Workers said. So far, it claimed, Adidas has refused to meet with the unions on the matter.

In July last year, the CCC shared a report claiming Cambodian garment workers were deprived of an estimated $109 million in wages during the April and May 2021 national lockdown. The figure is a projection based on unions’ assessment of 114 factories. Including the outstanding wages and severance pay from the first 13 months of the pandemic, the total amount owed to garment workers in the country is $393 million, the CCC said.

The organization determined that Adidas was linked to the largest wage theft of the factory sample. Across eight Adidas supplier factories, losses “inflicted” on 30,190 workers since the beginning of the pandemic totaled $11.7 million, it said. It contends that this amount is small compared to the company’s overall profits.

Adidas told Sourcing Journal last month that it rejects the allegations.

“Throughout the pandemic, Adidas has been committed to fair labor practices, fair wages and safe working conditions throughout its global supply chain,” a spokesperson said. “We continued to source from our partners and committed to paying all orders, whether they were completed or in process. We continued to ensure legal compliance in terms of pay and benefits for all workers and tracked the working conditions in each and every factory.”

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