Fourteen supplier factories of the sports clothing company Adidas-Salomon had their contracts severed last year due to poor workplace conditions.
Nine of the factories were in China, with two each in Indonesia and the Philippines and one in Estonia, according to the firm’s latest social and environmental report.
The company ended the contracts for a variety of reasons, including excessive working hours (more than 60 hours per week), serious health and safety problems and poor record keeping.
All factory owners had been warned several times about the problems and presented with an action plan by Adidas, but had failed to respond satisfactorily, according to the company.
Adidas suppliers have to meet ‘standards of engagement’ which set out the company’s expectations on issues such as discrimination, hours of work and disciplinary practices, and state the company ‘will do business only with partners who treat their employees fairly and legally with regard to wages, benefits and working conditions’.
Last year the company carried out audits in 460 of the 828 factories where its goods are manufactured. It concentrated on monitoring units deemed as high risk and those with large order volumes – 217 of them in Asia, 120 in the Americas and 123 in Europe.
An in-house team carried out all these audits, and US-based non-governmental organization the Fair Labor Association carried out a further 42.
Adidas says it does not have the resources to visit each facility every year, so has decided to target factories where the risks are greatest. It also plans to shift the focus from monitoring towards providing more training for suppliers.
In 2002, it trained managers and owners of 255 factories on the engagement standards, compared with 267 in the previous year.
This year it hopes to ‘substantially broaden the outreach’ of training by holding workshops for groups of owners and managers from different factories.
The company is also working on a new factory scoring system, to be unveiled this summer, that will help measure a factory’s level of compliance ‘in a quick, efficient and objective manner’.
It wants the system to measure the degree of non-compliance on issues such as health and safety and wage levels on a single scale, but admits this is proving difficult. It involved deciding questions like: ‘Is failure to comply with the wages standard worth twice as many minus marks as failure to comply with the discrimination standard?’