After our solidarity action at Adidas Hong Kong Office with other labor groups and a letter campaign to Adidas, Globalization Monitor has three meetings with Adidas and the latest one was on Nov 19. During the meetings, Adidas answered some of the critical issues we highlight in our September 24 report and workers’ demands in our letter campaign. Details are listed below:
1. Dynamic Casting refused to pay health examination fees in advance and send workers who got the “Notice of Acceptance of Diagnosis of Occupational Diseases” for diagnosis.
Adidas confirmed that 11 workers have been issued the “Notice of Acceptance of Diagnosis of Occupational Diseases” from the Guangdong Treatment and Prevention Hospital between September 2011 and April 2012and Dynamic refused to send any of these workers for diagnosis. However, in our findings, some workers received the “Notice of Acceptance of Diagnosis” in May 2012 but were still rejected diagnosis by Dynamic. Adidas admitted that Dynamic should cover the cost of diagnosis after workers received the above notice. It is unreasonable not sending workers for diagnosis if they receive the notice from hospital. Adidas should urge Dynamic to follow the law and send all workers who got the notice to be diagnosed. Adidas is still working on this issue.
2. Dynamic asked workers to sign a private agreement was unreasonably harsh
Adidas confirmed that 23 workers did sign a private agreement with Dynamic. Adidas admitted the content of the agreement is not good and their compliance team is working with Dynamic on a new one for the 23 workers to sign again. Adidas is still working on this issue.
3. Starting from March last year, Dynamic Casting has relocated its production lines elsewhere without explaining to its workforce why that was happening.
According to Adidas, Dynamic’s business has experienced decline since 2009 and a review discovered that Dynamic had significant mismanagement and corruption. As a result, TaylorMade and Dynamic developed a plan to shift part of its production from China to Taiwan in 2009 and started shipping finished products from there in 2011. Adidas said such a shift of location did not mean shutdown of factory. Therefore, although workers complained about the factory’s closure at the beginning of this year, both Adidas and Dynamic denied the allegation. Now Dynamic decided to shut down next year and Adidas claim that they only got the news from Dynamic in October.
4. Workers could not seek appropriate assistance from the Adidas’ hotline
Adidas said that their hotline received three complaints from workers related to HAVS at Dynamic in 2011 and as a follow up; Adidas’ audit team visited Dynamic and investigated. However, no worker was being officially interviewed before the public campaign was started.
5. Dynamic Casting delay to pay disability allowances in a lump sum to workers who had got the official disability recognition
Adidas confirmed that Dynamic did delay paying for the one-off disability allowance and Adidas also confirmed that workers can get back the one-off disability allowance upon their request starting from this month.
Although Adidas is willing to follow up with our questions, we are not satisfied with the way they monitor Dynamic. From 2009 until today, there are already 81 workers being diagnosed having HAVS and the compensation process is taken too long. Today, there are still 27 of them waiting for compensation. If the case was not made public, will Adidas take the HAVS cases seriously?
Adidas team claimed that they have been following the case since 2009 after discovering the first HAVS case. However, Adidas seems slow down the monitoring on Dynamic so that it cannot discovered Dynamic used various strategies to shrink its responsibilities on the affected workers in advance. For examples:
1. Dynamic was not responding to workers’ queries about its shutdown or downsizing plan although workers asked many times since last March.
2. Despite keeping the shutdown news from workers, Dynamic started to dismiss the affected workers in the previous months. On Oct 26, Dynamic dismissed 35 workers from the polishing and grinding department and asked them to sign an “agreement on job termination”. On Nov 13, 12 out of these 35 workers sent a letter to Adidas complaining (picture is shown below) that they involuntarily signed the agreement without any choice:
a. From the second half of 2011, Dynamic continue to cut their wages by 80% in order to force them to terminate their contract with Dynamic and shift to same work for a new subcontractor with less wages.
b. In the “agreement on job termination”, workers had to agree on the statement that they left Dynamic “without any occupational diseases” while some were recommended to do checkups again in three months.
3. Today, Dynamic still use excuses not to send those receiving “Notice of Acceptance of Diagnosis of Occupational Diseases” to Guangdong Treatment and Prevention Hospital for diagnosis.
For us, this is the key issue at stake. According to the Chinese law, work-related injured workers (i.e. including occupational disease patients, here after) are protected and their labor contract could not be revoked in general. If the factory is shutdown, the occupational disease patients should be paid both the severance (economic compensation) AND the compensation for the confirmed occupational disease according to article 23 in Regulation on Implementation of Labor Contract Law.
This means if a worker gets HAVS diagnosed successfully and obtains a grade of disability, the highest amount of compensation he can get from Dynamic Casting is 50 months of his average wages in the last 12 months. That means Dynamic may avoid paying an approximate amount of RMB 12 million for the 37 affected workers who may be diagnosed as HAVS. (Note: The calculation is based on workers getting a grade 5 disability).
We strongly support the workers’ demands and continue to monitor Adidas/Taylor Made taking actions to resolve the following critical issues:
1. Stop Dynamic using excuses to dismiss workers with HAVS and potential HAVS and dialogue with workers.
2. Send the 37 workers to be diagnosed, particularly for those who had received “Notice of Acceptance of Diagnosis of Occupational Diseases” from Guangdong Treatment and Prevention Hospital for diagnosis.
3. Make sure those work for the new subcontractor are working under safe and healthy environment.
4. No workers will be unfairly treated due to Dynamic’s shutdown.
5. Make sure Dynamic’s closure follow the China laws and Adidas’ Guidelines on Handling Redundancy Layoffs. See link below: http://www.adidas-group.com/en/sustainability/assets/Guidelines/2009_Jan_Guidance_Note_Handling_Redundancy_Layoffs.pdf
Lastly, we want to ask: “What is happening in the golf ball driver production chain of the international brands like Adidas/TaylorMade in China?” In only one factory, 81 workers are found suffering from this non-curable occupational disease. Adidas claim that they did not know the potential hazards in the polishing and grinding position but Adidas identified HAVS in their garment supply chain and mentioned it in their health and safety guidelines long time ago. We wonder how many HAVS workers in the industry are not “found”. Adidas/TaylorMade and the other golf ball industry leading brands should do a thorough investigation on their supply chain. For this reason we will continue to monitor this case and the industry as we believe in “People before Profit”.
Globalization Monitor, member of Asian TNC Monitoring Network (ATNC), is writing to inform you that one of TaylorMade‐Adidas golf drivers’ suppliers-Dynamic Casting (Guangzhou) is responsible for the suffering of at least 69 workers, who have contracted Hand‐Arm Vibration (HAV thereafter) disease.
HAV is a non‐curable disease which comes from the use of hand‐held power tools and is the cause of significant health problems including painful and disabling disorders of the blood vessels, nerves and joints. (Please refer to the photo)
After our investigation, we found that Dynamic Casting has several violations of China Laws and regulations.
Dynamic Casting has been using substandard polishing machines which exceeded the maximum permitted level required by the National Standard on Occupational Health for a long period of time.
Dynamic Casting failed to notice the hazardous factors of vibration units to workers.
Dynamic Casting refused to send some workers for medical examinations.
Dynamic Casting forced workers to sign confidential agreement, which requires them to give up all their legal rights, before giving them compensation. Workers complained that the agreement is not a fair deal.
V.Dynamic Casting unreasonably dismissed 4 affected workers and refused to reinstate two workers until today.
Dynamic Casting holds back part of the compensation of these 4 workers unless they agree to resign.
According to Adidas Group, they came to know the first cases of HAV disease in Dynamic Casting on late May 2010. Adidas only helped Dynamic Casting to up a timeline to provide medical examination and compensation in patches but not pushed Dynamic Casting to execute the plan. Therefore, until today, still several workers were not sent to have medical examinations. This shows that Adidas Group does not take occupational and health issues seriously. It is shame for their statement on its website that “Every employee must have a safe working environment Nothing less is acceptable.” Adidas Group claimed that Adidas SEA auudits/visited Dynamic Casting regularly. In fact, Adidas could not identify any HAV case through their audits. Thus workers working at Dynamic Casting have been always exposed in risky health condition. As the brand company of Dynamic Casting, AdidasGroup has unavoidable responsibility to compensate the workers as it is negligent to protect workers from possible hazards.
Based on these facts, we demand
I. Adidas make sure all affected workers with HAV receive immediatelycomprehensive medical examination and compensation demanded by workers.
II. Adidas set up an Occupational Hazards Victim Fund immediately to compensate all victims with HAV.
III. Adidas launch a full and immediate investigation on tracking the full number of workers affected by HAV diseases along supply chain in China.
We sent out a full report on Dynamic Cast case to Adidas on 25th September and demanded a full reply from Adidas but until today, we have not received Adidas’s full explanation on the case. Thus we have reason to believe that Adidas may shirk its responsibility on solving the case immediately.
Therefore, we urge you to take action with us in order to support those HAV workers in China.
We welcome the news that Adidas is actively following up the issues identified at Dynamic but there are still outstanding issues not yet been resolved at Dynamic. For examples:
1. Dynamic decided to shutdown next year. It does not reply workers’ queries about its shutdown or downsizing plan but keep terminating workers’ contracts, including those HAVS and potentially HAVS workers.
2. Dynamic outsourced the polishing and grinding production to a new subcontractor who only hired 23 out of the 35 workers whose contracts were terminated. These workers complained that Dynamic made them admit that they had "no occupational disease" even though some got similar HAVS symptoms in their medical reports.
3. Dynamic does not send workers receiving the “Notice of Acceptance of Diagnosis of Occupational Diseases” to Guangdong Treatment and Prevention Hospital for diagnosis.
4. Today, 27out of 81 HAVS workers are still waiting for compensation.
All the malpractices at Dynamic make us believe that Dynamic try to use various strategies to shrink its responsibilities on workers. We urge Adidas to help settle the outstanding cases at Dynamic in a speedy manner.
We strongly support the workers’ demands and continue to monitor Adidas/Taylor Made taking immediate actions to resolve the following critical issues:
1. Stop Dynamic using excuses to dismiss the workers with HAVS and potential HAVS and start dialogue with workers.
2. Send the 35 workers to be diagnosed, particularly for those who had received “Notice of Acceptance of Diagnosis of Occupational Diseases” from Guangdong Treatment and Prevention Hospital for diagnosis.
3. Make sure those who work for the new subcontractor are working under safe and healthy environment.
4. No workers will be unfairly treated due to Dynamic’s shutdown.
5. Make sure Dynamic’s closure follow the China laws and Adidas’ Guidelines on Handling Redundancy Layoffs.