UW-Madison: Hermosa efforts moving forward

The University of Wisconsin–Madison is moving forward in its efforts to investigate and respond to alleged workers’ rights abuses at a former Adidas Group subcontractor in El Salvador.

In March, Chancellor John D. Wiley noted his concerns over the treatment of workers at Hermosa Manufacturing, an apparel producer located in Apopa, El Salvador.

When the factory, which contracted with Adidas between 2000-02, was closed in 2005, 260 workers were dismissed without receiving $825,000 in back pay or severance. Additionally, some unionized workers may have been put on a “black list” for labor activism.

Adidas and other brands that contracted with the factory contend that they paid their obligations but that the factory’s owner embezzled the funds and is now being prosecuted in El Salvador.

Student activists and the university’s Labor Licensing Policy Committee have argued that the Adidas Group’s response to the situation has been insufficient.

Dawn Crim, assistant to the director of community relations, will travel to El Salvador on Wednesday, April 11 with a delegation of the Workers Rights Consortium to meet with former Hermosa workers and nongovernmental organizations in the region.

Crim will visit several factories at which Adidas and other licensees hold contracts, in order to collect information and provide Wiley with an independent source of information. Adidas has facilitated the visits with the permission of factory owners.

UW–Madison has scheduled a follow-up meeting with senior Adidas management with the goal of discussing specific facets of the Adidas response to the Hermosa situation and to reiterate the university’s desire to have its logo goods produced under the best possible conditions. Additionally, the university is working on scheduling a face-to-face meeting with Adidas America President Patrik Nilsson in Portland, Ore.

At noon on April 25, Wiley and Crim will meet with the university’s Labor Licensing Policy Committee to discuss the situation and follow-up steps. The session will be held in 260 Bascom Hall.

UW–Madison contracts with Adidas to provide uniforms and athletic equipment, and the company is a university licensee. In signing its agreements with UW–Madison, Adidas agreed to a code of conduct that stipulated its responsibilities in dealing with workers, factories and suppliers.

The current deal runs through 2011 and is worth approximately $1.2 million annually.

In March, the university’s Labor Licensing Policy Committee (LLPC) recommended that UW–Madison initiate termination of both sponsorship and licensing agreements with Adidas in response to perceived material breaches of the code of conduct related to Hermosa.

For its part, Adidas has stated that it has taken actions on behalf of the former employees, including intervention with the El Salvadoran government, U.S. State Department and U.S. Trade Representative. Progress on behalf of workers has been complicated by red tape and the criminal charges against the factory’s owner, who is accused of embezzling $353,000 from workers. The Fair Labor Association set up an emergency fund for workers.

Wiley has said that he will not take steps to terminate the Adidas contract at this time, preferring to engage with the company in order to work to remedy the situation.

“Through Dawn’s observations and fact finding, we will become more informed as an institution on the Hermosa situation and better equipped to advise Adidas on effective solutions to remediate the situation,” Wiley wrote in a March 14 letter to the LLPC.

To date, Adidas has been a responsive partner to university concerns, Wiley adds. The university has a one-of-a-kind arrangement allowing it to view the company’s books and internal working documents to gain additional information about labor and human rights practices.