Click Here for the PDF Version
For reference, please click Here for CLW's recent report
Statement in response to Adidas' reply towards China Labor Watch's recent report
After China Labor Watch (CLW) released an apparel sweatshops report on November 20 th , 2007, Adidas released a statement on its website in response to CLW's findings. The statement expressed that one of the factories named in the CLW report: Fuhua Textile Company, known to Adidas as Fook Wah, has a long history in terms of partnership with Adidas and also been audit regularly by Adidas Group Social & Environmental Affairs Field Monitors with the recent visit taken place in September 21 st , 2007 and by Fair Labor Association with the recent visit taken place in May 2006. According to Adidas Group, Fook Wah factory's conditions are in compliance with its Workplace Standards, and that it is an above average supplier.
Towards this response, however, CLW believes that Fook Wah is a rather poor performer, furthermore, a sweatshop. The main aspect which made CLW come to this conclusion is due to Fook Wah workers' wage. Fook Wah fails to provide workers' a living wage; instead, the wage paid to its workers is leading to workers' incapability in terms of maintaining their family.
Before October 2007, workers base wage was 700 RMB, and shortly after, it was adjusted to 750 RMB. In addition, before October 2007, workers' hourly wage was 4.06 (54 cents calculated by the current currency exchange of 1 USD: 7.5 RMB) per hour, if workers only work five days a week, eight hours a day, the wage they earned is impossible for them to support their family thus not difficult to explain why these workers would work overtime voluntarily.
When we look at the most current Fook Wah wage, the hourly wage is 4.35 RMB (58 cents), multiply by eight hours which means workers earn about 34.8 RMB (4.64 USD) per day. Thus, without overtime, each year workers earn about 9,000 RMB (1,200 USD), if a couple both working in Fook Wah, their combined annual wage would be 18,000 RMB (2,400 USD).
As reference for CLW's statement, please view the local standard below:
- In the heart of Shenzhen City , a one bedroom apartment with a living room costs about 2,400 RMB (320 USD) per month. Since Fook Wah is located in Shenzhen's industrial district, it is about 45 minutes of driving from the city.
- An 40 square meter one bed room apartment similar to Shenzhen City's with a living room nearby Fook Wah renovated by local villagers costs about 450 RMB (60 USD) per month.
- Rent:
1. One bedroom apartment with one living room: 400 RMB ~ 450 RMB
2. Two bedroom apartment with one living room: 600 RMB ~ 800 RMB
3. Three bedroom apartment with one living room: 800 RMB ~ 1,100 RMB
*Above rent not included with utilities
-Utility:
Gas: 125 RMB/Container
Electricity: 0.68RMB/Kwh
- To dine in the factory cafeteria will cost a couple a total of 420 RMB (56 USD) per month. Dine at home on a Sunday costs about 15 RMB (2 USD) per Sunday thus about 60 RMB (8 USD) per month
- Breakfast costs about 4 RMB (0.53 USD) per day, 120 RMB (16 USD) per month.
1 Jin = 500 gram (g)
* In terms of eating at home, below is the local commodity price chart:
• Rice:
• High Quality: 4.16 RMB/Jin
• Average: 2.8 RMB/Jin
• Low Quality: 1.7/Jin
- Pork:
1. Lean Meat: 16 RMB/Jin
2. Fat Meat: 12 RMB/Jin
3. Rib: 18 RMB/Jin
- Beef: 18 RMB/Jin
• Chicken:
• High Quality: 22 RMB/Jin
• Average: 16 RMB/Jin
• Low Quality: 8 RMB/Jin
• Fish:
• Carp: 4.8 RMB/Jin
• Cod: 6.2 RMB/Jin
• Grass Carp: 5.5 RMB/Jin
• Cantor: 12 RMB/Jin
• Swamp Eel: 21.5 RMB/Jin
• Other:
• Vegetable: 1 RMB ~ 2.8 RMB/Jin
• Beans: 1.2 RMB ~ 4.8 RMB/Jin
• Melons: 0.88RMB ~ 3.8 RMB/Jin
• Ginger/Garlic/onion: 4.8 RMB ~ 15 RMB/Jin
• Vegetable Oil:
• High Quality: 14 RMB/Jin
• Average: 9 RMB/Jin
• Low Quality: 5 RMB/Jin
• Kindergarten:
• Partial Care (Including meal): 6,000 RMB/year
• Full Care (Including meal and accommodation): about 1,2000 RMB/year
• Elementary: 1,000RMB/semester, 2,000RMB/year
Based on the information above, a couple's annual expense:
1. Rent: 450 RMB/month *12 months= 5,400 RMB
2. Living expense (Meals and etc.): Family with three members: 900 RMB/month * 12 months= 10,800 RMB
3. Children's education: 6,000 RMB/year
4. Medical insurance and Pension: 400 RMB/month * 12 months= 4,800 RMB
5. Clothes: 1,500 RMB/year
6. Other Expense: 2,000 RMB/year= 2,000 RMB
Total Expense: 30,500 RMB (4,066 USD)
Thus, from the stats, it is not difficult to imagine that it is merely impossible for workers to maintain a family with their current wage. As each worker earns 9,000 RMB (1,200 USD) without overtime, even if a couple both working in Fook Wah, with their combined annual wage of 18,000 RMB (2,400 USD) it is difficult for them to cover all the expenses. Therefore, workers “volunteer” to work overtime.
On a different issue, Adidas stated that its field staff have directly observed and reviewed the basic safety training provided by the factory. However, according to CLW's follow-up investigation on December 7 th , which involved with interviews of 13 Fook Wah workers, out of the 13 workers, eight of them expressed that Fook Wah provides no safety production related training, and five of them said that there is a fire prevention knowledge introduction
Based on this information, CLW questions that whether the factory is truly implementing training to all workers or the trainings are only provided during field staff's visits arranged by the factory.
Moreover towards the wage in terms of its distribution date, from the contract signed between factory and workers, there's an agreement that the wage distribution date is the 7 th of each month, however, Fook Wah distributes wage after the 10 th of each month. Among 11 workers which we asked this question to, nine said that this issue was not discussed and agreed by workers, and two did not answer this question.
Towards the posted labour-dispute information and safety management regulations on an external wall of the factory, after the follow-up investigation, CLW suggests that Adidas' explanation was not reasonable as we believe that it is an act performed by the factory to restrict or distract workers' attention to the access of the information as the purpose of the folded gate is questionable.
Furthermore, Adidas stated that Fook Wah will request the government to relocate the notice board, however, as a clarification, the wall is the factory property, thus Fook Wah has the right to determine where to post the notice and requesting permission of notice relocation from the government is unnecessary.
Towards these concerns, CLW hopes that the Adidas Group's Social & Environmental Affairs team will look into the issues with Fook Wah and focus on remediation.
About the folded gate, please click Here for reference
Statement from Adidas:
Update on Statement in response to alleged poor working conditions found by China Labor Watch
On 6th December, 2007 adidas Group's Head of Social & Environmental Affairs for Asia met with Mr. Li Qiang, the Executive Director of China Labour Watch (CLW). The issues identified in CLW's 19th November 2007 report on the adidas Group supplier Fook Wah were discussed and SEA's follow-up actions explained. As an outcome of the meeting it was agreed that the adidas Group will coordinate its remedial efforts with the compliance staff at Wal-Mart, who also source from Fook Wah. The SEA department also offered to provide Mr Li with the adidas Group's China worker hotline number, so that future concerns or complaints can be addressed locally and immediately.
Statement in response to alleged poor working conditions found by China Labor Watch (November 23rd, 2007)
On 19th November 2007 the US-based non-governmental organisation China Labor Watch (CLW) issued a report that described working conditions in four textile factories in China . The report characterised the conditions in these four factories as being “poor” and expresses a hope that “by revealing the serious findings, corporations will commit to remediate workers' conditions.” Reference was made to adidas, as being a brand that sources products from these factories.
adidas Group has production in only one of the factories named in the CLW report: Fuhua Textile Company. Fuhua, which is known to us as Fook Wah, is a major swimwear producer located in Shenzhen, in Southern China . adidas Group has had a long standing relationship with this supplier. As such, the factory has been regularly visited by the adidas Group Social & Environmental Affairs field monitors, with the most recent visit having taken place in September 21st, 2007. The factory has also been the subject of independent monitoring by the Fair Labor Association, with an audit having been conducted in May 2006.
Our own assessment of Fook Wah is that workplace conditions are generally compliant with our Workplace Standards – our code of conduct - and this is borne out by the general findings of the CLW report. We would therefore not describe the factory as having “poor” conditions. On the contrary, it is an above average performer, with a cooperative management team. Moreover Fook Wah offers comparatively high pay levels for an apparel supplier in Southern China , with controlled overtime.
We do accept however that there are several practices described by CLW which are not fully compliant, or could be improved, and we are working with the factory to address these areas. The first of these is the deferment of payment of social security for workers in their first year of employment. As is the common practice in China , the factory has agreed the coverage for pension contributions with the local government. These contributions are based on incremental, or staged, payments. We have asked the factory to speed up the roll-out of the pension scheme for workers. On a positive note we can state that the factory has in place and is fully compliant with other social insurances requirements, including work-related injury insurance, medical insurance and maternity insurance.
The second is the supervisory staff “lecturing” workers who make mistakes in production. We encourage the suppliers to adopt positive approaches to reinforce messages and reward workers for improved quality and productivity, rather than to admonish them for non-performance. Fook Wah is currently developing a reward scheme for workers and is also updating its grievance and disciplinary practices, for incorporation into its employee handbook. The handbook and supporting factory regulations will be approved by workers in 2008, in compliance with China 's new Contract Labour Law.
CLW states that no safety-related training is delivered by the factory. This is not accurate and our field staff have directly observed and reviewed the basic safety training provided by the factory. CLW also notes that the Government has posted labour-dispute information and safety management regulations on an external wall of the factory and shows a photograph of this message board being obscured by metal panels. This is not a deliberate act on the part of Fook Wah to restrict access to information to workers. What is shown is a gate that is folded back. The gate is positioned at the entranceway of an adjacent factory, which is independent of Fook Wah's operations. Fook Wah will request the government to relocate the notice board.
The adidas Group's Social & Environmental Affairs team will continue to work with Fook Wah, to ensure that our expectations and Standards are met.
Click Here for Adidas' response on its website
