17 schools have terminated or suspended their contracts with adidas. Why?
"The issue revolves around the closure of PT Kizone, a factory in Indonesia with which adidas, along with Nike and the Dallas Cowboys, had contracts for the manufacture of goods. According to a report produced by the Worker Rights Consortium (WRC), violations at PT Kizone began in September 2010 when it failed to make mandatory terminal compensation payments to employees who left the factory. In December 2010, the factory failed to make regularly scheduled payments to current employees. The owner of the factory then fled Indonesia in January 2011. Thereafter, the buying agent, Green Textile, ran the factory and paid workers through March 2011. In April 2011, PT Kizone was declared bankrupt and closed.
The WRC, United Students Against Sweatshops (USAS) and other worker rights advocacy groups claimed adidas was refusing to pay $1.8 million in legally mandated severance owed to the 2,800 workers of PT Kizone. Total severance and other pay due under Indonesian law to the workers, who had no advance notice of the factory’s closure, totaled $3.3 million. Both Nike and the Dallas Cowboys contributed partial severance, but for nearly two years, adidas has maintained it does not owe any of the monies.
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