GU Cancelled Contract Despite Adidas' Assurances
Published: Friday, January 18, 2013
Updated: Friday, January 18, 2013 02:01
Before the university terminated its licensing contract with Adidas Jan. 14, the sportswear giant attempted to defuse Georgetown’s concerns about employee severance at the former Indonesian plant PT Kizone, according to a letter obtained by The Hoya.
Following an Oct. 11 recommendation from the Licensing Oversight Committee, a body comprised of students and administrators, that the university cut its ties with Adidas, Vice President for Public Affairs Erik Smulson sent a letter to Adidas representatives Dec. 3 saying that the corporation’s steps to help workers from the Indonesian plant following its closure “[could] not reasonably be considered a serious effort to effectively respond to this situation.”
Gregg Nebel, Adidas’s head of social and environmental affairs for the Americas, and Chris McGuire, director of sports marketing, disputed Smulson’s claims in a letter dated Jan. 3.
“Although the Adidas Group had no business with PT Kizone at the time of its closure — or for months before it closed — the Adidas Group has directly dedicated more towards the former PT Kizone workers than any other brand with our $525,000 in humanitarian aid,” they wrote. “The only difference with our actions is that we have distributed our humanitarian aid in the form of food vouchers and not cash.”
Nebel and McGuire said that while the Supreme Court of Indonesia had approved their manner of compensating workers following the plant’s closure, the distribution of their aid to workers had been prevented to date because of an appeal by the primary creditor, the State Bank of India.
“We remain committed to finding sustainable solutions to the Kizone case and we are confident that we are adhering to and, in fact, exceeding both the spirit and the letter of the codes of conduct our university partners require,” they wrote.
However, Georgetown administrators were not convinced.
“Quite frankly, their letter didn’t satisfy the university,” Scott Fleming, associate vice president for federal relations said. “Within a week, the decision was made and acted upon.”
Fleming pointed to other companies that complied with Indonesian labor laws.
“Nike also had products produced in PT Kizone and Nike stepped forward and made a cash payment that has helped the workers,” he said.
Although the university sent a letter Jan. 14 cutting ties with Adidas, Fleming attributed the delay to school holidays and pointed out that the school ultimately followed through on the LOC’s recommendation.
“The difference between Dec. 15 and Jan. 14 was irrelevant,” he said. “The process of considering things like this in a university is complicated. ... The important thing is that the university took a bold position — a clear position — to terminate the agreement.”
University spokesperson Stacy Kerr concurred.
“In these instances, we make sure that we are fully evaluating the matter, which we feel that we did,” she said.
According to Fleming, the LOC is promoting Alta Gracia, a clothing company that pays a living wage to its employees, as an alternative to companies like Adidas. However, the school said it would reconsider Adidas’s contract if the corporation adequately responds to the dispute.
“If you don’t hold out that opportunity, they’ll never change,” Fleming said. “One would think that at some point, an organization that relies on these licensing agreements to be able to sell products that people want to buy might come to the conclusion that they should revisit this issue.”