Is the sporting goods maker paying Chinese staff in line with its own ethical standard?

Workers making Adidas products in Guangzhou are paid too little to live on, allege labor rights advocates. The company denies violating its code of conduct. Who’s right? We visited the factory at issue. 

Chen Dawei (not his real name) was fed up. “The rice is bad,” said the 20-year-old worker. It’s inedible, undercooked, too little fat – and not just today, but every day.

Last year workers went on strike in the factory in Guangzhou that produces sportswear for Adidas. Some workers said it was because of the bad food. Others say the walkout had more to do with the meager pay. For whatever reason, the tailors and seamstresses turned off their machines and blockaded a nearby highway for hours.

Now conditions at the Adidas subcontractor’s factory 9,000 kilometers away are also being discussed in Germany. Just in time for the Football World Cup, in which Adidas is the number one supplier for participating teams, the Clean Clothes Campaign has produced an “action paper for humane working conditions in the global sportswear industry.” One of the businesses the human rights activists criticize most severely is the production facility of the Hong Kong-based Tien Sung Group in Guangzhou where Chen works.

“Adidas does not comply with its own code of conduct and is infringing ethical principles,” said Kirsten Clodius, who manages the World Cup campaign. She bases the allegation on interviews that the Hong Kong workers’ rights group SACOM (Students and Scholars Against Corporate Misbehavior) conducted with the factory’s workers last year.

The researchers have leveled four main charges at Adidas. First, the wages that Tien Sung pays its workers hardly suffices to cover their basic needs, the group says. Second, SACOM points out, the factory’s basic wage only equals the state-mandated minimum wage, which as of May 1 is 1,100 yuan (about €130) per month. In its workplace standards, Adidas says it always pays above the minimum wage.

Working hours far exceed the 60 hours per week that Adidas has itself put as an upper limit, said SACOM. In addition, workers have no chance of organizing independently to represent their interests more effectively, the group said.

What do the Tien Sung workers themselves say about the accusations? “Food is expensive in Guangzhou. My husband and I need 700 yuan,” said Sin Lan (not her real name), one of the seamstresses. In addition, she said, they pay over 400 yuan for rent and electricity. The remaining costs are for clothing, cosmetics, transportation and insurance (which constitutes 10 percent of gross income). That well exceeds the 1,500 yuan that she said she earns at Tien Sung every month. Her husband’s wages finance the rest of the family.

They live in a farming village in Henan Province in Central China. Sin pays for her two children, 9 and 13, who live with their grandparents. Her wages mostly allow her to “travel the long distance to the children once a year,” Sin said.

Whether the pay at Tien Sung is enough to live on is disputed.

Unions and activists organized in the Asia Floor Wage campaign say no. In a 2008 study they put the living costs of an unmarried worker at 2,600 yuan, including telecommunications, doctor’s fees, family support and retirement payments.

Kenneth Leung, the factory’s 49-year-old manager, disagrees. “People can live on the wages we pay,” he said. His workers are paid strictly according to the minimum wage mandated by the provincial government of Guangdong, Leung added. In real terms that means those who don’t work overtime or receive bonuses for high productivity take home 1,100 yuan.

The factory manager admits that he does not comply with the code of Adidas, for which his company works almost exclusively. The sporting goods corporation understands “appropriate wages” as “a basic salary that exceeds the local minimum wage.” No reason to worry, Leung said. All workers in the plant supplement this wage with productivity bonuses and overtime, he said, adding that take-home pay averages about 1,800 yuan. “The minimum requirements for workers in China are covered by the wage,” said Frank Henke, Global Director of Social and Environmental Affairs for Adidas.

That’s just a fig-leaf, believes Apo Leong of the Asian Monitor Resource Center. “We don’t believe Adidas’ code of conduct,” the activist said. But if Adidas really wanted to take action, what should it do? Leong and many others believe the answer is clear. In China today there is no way to found an independent union, he acknowledged. Still, he added, the company must compel its suppliers to open talks with workers. “The state union only represents the interest of the employees to a limited extend. But we are committed to moving ahead with improvements in the factories,” said Henke.


By: Hannes Koch