Yesterday, members of Georgetown Solidarity Committee and Georgetown Occupy gathered in Red Square to protest Adidas’s refusal to pay its workers severance at the PT Kizone apparel factory in Indonesia. The students claim the unpaid severance is in violation of both the University’s code of conduct for its licensees and Indonesian law. After demonstrating in Red Square, the crowd marched to President John DeGioia’s office to officially deliver a letter requesting that the University exert more influence on Adidas to pay $1.8 million in severance for the 2,800 workers.
“Adidas’s refusal to pay is in direct violation of both Indonesian law and Georgetown University’s Code of Conduct for Licensees, both of which require the payment of terminal compensation,” the letter read. “Despite the fact that Adidas sub-contracts with PT Kizone, Adidas remains in violation of Georgetown’s code, as the code applies to both ‘licensees’ and ‘contractors,’ and ‘contractor’ is defined as ‘each contractor, subcontractor, vendor, or manufacturer that engages in manufacturing process that results in a finished product for the consumer.”
Georgetown’s code of conduct stipulates that licensees have a direct responsibility to ensure the payment of terminal compensation. The code states: “The remedy will at minimum take all necessary steps to correct such violations including, and without limitation, paying all applicable back wages, or any portion of them, found due to workers who manufactured the licensed articles.”
“Anything that comes to President DeGioia is always given the most careful consideration and reviewed very carefully, and I can promise you we will do that with this,” Joseph Ferrara, DeGioia’s chief of staff, said. “I appreciate you bringing it by. And I appreciate your interest and commitment on this issue.” He went on to say that DeGioia would see the letter that day.
The PT Kizone factory was a subcontractor for Adidas, Nike, and the Dallas Cowboys Merchandising. Nike and Adidas used the factory to produce college apparel. Nike and Dallas Cowboys Merchandising have already paid the severance to the workers.
According to an email that Adidas representative Gregg Nebel sent to Scott Fleming, acting chair of the University’s licensing oversight committee, during the first six months of 2010, 490,000 units were placed at the factory. On June 30, 2010, the factory informed Adidas that they would no longer be accepting orders.
“Kizone operations stopped at the end of March and bankruptcy [was] declared in early April 2011. This was 5 months after our last shipment and ten months after Kizone told Adidas they would no longer accept our purchase orders,” the email reads. “Some are asking us to pay the money for severance and call it whatever we think it should be called if not severance… At the end of the day, what we intend to do with relief aid through PT Lidi could cost hundreds of thousands but it will be spent for the most relevant and expedient needs.” Effectively, Adidas contends that they have no obligation to pay severance because it’s not their policy to pay severance to workers who are laid off after their contract ends with the factory.
Gregg Nebel visited Georgetown this Tuesday to explain Adidas’s position to the licensing and oversight committee. “It was definitely good for Gregg Nebel to come here, but he still just gave a lot of excuses, explaining the different kinds of remediation that they’re going to go through. But they basically said that they would not pay the severance and that they will not accept financial responsibility. On the committee, there was a lot of hesitance about responding to that,” Louisa Abada (COL ’12), a member of GSC and the licensing and oversight committee, said. “It is a direct violation of our code, as well as it’s illegal in Indonesia.”
GSC wants the University to exert more influence on Adidas to make them pay the severance wages. “We would like to see Georgetown cut its contract with Adidas due to the company’s violation of Indonesian law and Georgetown’s code of conduct,” Rachel Milito (SFS ’12) wrote in an email to the Voice. “We hope that having Georgetown and other universities cut their contracts would pressure Adidas to do the right thing and pay the workers at PT Kizone what they are owed.”
