Adidas in Indonesia

World sportswear giant Adidas has been working with the PT Dada factory in Indonesia amid concern about conditions in Asian garment factories in the face of increasing globalization. The company is working with the International Labour Organization to improve working conditions in the factory has become a model in the region of good labour-management relations. ILO TV has the details.

Date issued: 25 July 2003 | Size/duration: 00:02:45 (6.71 MB)

The morning rush hour in Purwakarta, Indonesia. It wasn’t always like this. Until it became a bustling factory town, people had few options for a job. Nearly two-thirds of Indonesian workers have to make a due in the informal economy.

PT Dada is just one of many factories in the Asian region that sprang up when international brands went looking for cheaper means of production. The minimum wage, around 72 dollars a month, is better than what a worker can find elsewhere, but factory conditions have been the subject of international scrutiny.

Kitty Potter, Adidas

What you’re basically dealing with are hard to implement standards which are accepted by multinational companies in the local context and I think that’s why you look to local expertise from a group like the ILO to assist with that remediation process.

Adidas aggressively pursued changes at PT Dada. Safety warnings are posted and medical facilities have been improved. Temperatures are constantly monitored within the factory. Clean, chilled drinking water is readily available.

Rajiyo, trade union leader

Before the changes, workers sometimes fainted from the poor ventilation and long hours. Now the conditions are better. The management now conducts training once a week to discuss many things as well as to understand the needs of the workers. They did not have this in the past.

Adidas knew there were communication problems between management and workers that were having an effect on productivity.

So they turned to the International Labour Organization - the ILO - to train the two groups to work together. The results have been dramatic. Demonstrations have been replaced by dialogue, confrontation by negotiation and trust.

Y.H. Yoon, Factory Manager, PT Dada

This is not an easy job, but management and the unions keep trying to do business…

The ILO’s training has changed the way management and workers do business at PT Dada which has become a model for the region in labour management relations.

Kari Tapiola, Executive Director, ILO

We have the expertise and the knowledge and information on how to deal with the difficult questions of fundamental rights at work such as freedom of association and collective bargaining and that in cases where the enterprises are interested we can bring that expertise to the workplace at enterprise level.

When international brands engage in open dialogue with local suppliers, the road to globalization can lead to improved economic prospects for everyone concerned.