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Wiley: UW-Madison will act on Hermosa situation

March 14, 2007 By John Lucas

University of Wisconsin–Madison Chancellor John D. Wiley is deeply concerned with reports of workers’ rights abuses at a former adidas Group subcontractor in El Salvador and plans to take steps to influence the situation.

Wiley says he will immediately initiate high-level talks with executives of adidas and send an envoy to El Salvador in an effort to gather independent information to help inform those discussions.

At question is 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.

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

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

“I am prepared to pursue my very grave concern about what has happened with the Hermosa facility directly to the senior management of adidas,” Wiley says. “Bottom line, if there has been a breach of (the code), I intend to do everything necessary to confirm it and to address the problem immediately.

“Even if there hasn’t been a breach, I intend to do everything possible to encourage adidas to take more corporate responsibility for the Hermosa situation,” he adds.

Earlier this month, 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.

The LLPC also expressed concern over the treatment of workers at Reebok-affiliated factories in the Dominican Republic and Malaysia. Wiley, who plans to meet with the LLPC to explain his views in greater detail, says that the Dominican Republic and Malaysia factories are not covered by the current Code of Conduct and not currently actionable.

Dawn Crim, assistant to the director of community relations in the chancellor’s office, will travel to El Salvador on April 12 with a delegation of the Workers Rights Consortium to meet with former Hermosa workers and nongovernmental organizations in the region and to visit several factories in which adidas and other licensees hold contracts.

“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 writes in a March 14 letter to the LLPC.

Wiley says that he will not take steps to terminate the adidas contract at this time, preferring to engage with the company to remedy the situation.

“Our emphasis is on working with the contractual partner to ‘cure’ the identified failures in performance,” Wiley writes. “This approach has been true of every other licensee with which we have identified concerns relating to our code of conduct and is the standard by which all UW–Madison contracts are administered.”

To date, adidas has been a responsive partner to university concerns, Wiley says. 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.

Wiley says he hopes that the company will take the current concerns seriously and move to resolve them.

“We selected adidas as a licensee and a sponsorship partner specifically because we understand the company’s serious institutional philosophy on labor rights issues,” he writes to the LLPC. “While we all can wish that more would be done, and more quickly, to remedy global labor rights issues, the fact is, adidas is a leader in the apparel industry that we can hold to high standards, and which in turn can help us to influence the industry. adidas already has given us an unprecedented level of access to its internal documents, and I expect to achieve a similar level of access in terms of direct discussion.”