One of the world’s largest sports clothing companies has stepped up the monitoring of labour standards in its supply chain.
Adidas-Salomon will carry out an internal audit of each of its 570 suppliers at least once a year from now on, or more frequently if serious problems are found.
It will aim to have ten per cent of its suppliers audited independently by the US-based Fair Labor Association (FLA) this year and will organize 200 training events for supplier factory managers on its ‘standards of engagement’, which set out expectations on employment standards, health and safety, the environment and community involvement.
The FLA is an umbrella organization linking companies with non-governmental organizations to try to improve working conditions in factories around the world.
The German-based multinational will also launch a manual on labour standards for suppliers that will contain case studies from previous factory visits outlining what is ‘non-acceptable, acceptable and best practice’. A similar manual on health and safety will be updated to include a section on the environment.
Adidas, which has 267 suppliers in Asia, 122 in the Americas and 181 in Europe, says it recognizes that some stakeholders ‘have concerns about the credibility of our own monitoring programme’. But it claims it now has a ‘rudimentary system’ for checking how its suppliers perform against its standards of engagement and is determined to improve this over the next two years.
The measures are outlined in its first social and environmental report, published last month. Adidas is developing more detailed performance indicators that will appear in next year’s report.
This year’s report contains a ‘rough first attempt’ at assessing supplier performance on a country-by-country basis which grades suppliers on a scale of one to five for performance on labour and health and safety issues.
The majority of Adidas suppliers have what the company terms ‘minor’ compliance problems on labour standards and health and safety, although a significant number have some ‘serious’ problems such as pay below the minimum wage.
A small fraction of suppliers, mostly in Asia, have ‘numerous’ serious problems. Many of those with minor compliance problems are in Europe and the Americas.
Adidas says most of the compliance failures relate to poor time-recording, unpaid overtime and discrimination against union members . Supplier performance was weakest in China, Indonesia, Philippines, Taiwan and Turkey.
Adidas directly employs 13,400 people worldwide.