2005 - 2007: The PT Tae Hwa Factory Closure

published 30-01-2013 11:30, last modified 29-04-2013 11:48
On 11 February 2005, workers in Tangarang, Indonesia returned from a two-day holiday to find that their workplace, PT Tae Hwa sports shoe factory, had closed during their absence, with management nowhere to be found.
2005 - 2007: The PT Tae Hwa Factory Closure

Parkati, dismissed worker at PT Tae Hwa

Issue

On 11 February 2005, workers in Tangarang, Indonesia returned from a two-day holiday to find that their workplace, PT Tae Hwa sports shoe factory, had closed during their absence, with management nowhere to be found.

The rumour among the 3,500 (80% women) workers was that Tae Hwa closed as a result of Fila withholding substantial payments for reasons that Fila continues to refuse to divulge, effectively rendering Tae Hwa unable to meet its own outlays.

Employees also learned that Tae Hwa had sold all of its factory equipment during the holiday break. Now unemployed and facing unexpected hardships, they found themselves with no leverage to demand their back wages, despite that their rights had been reconfirmed by Indonesia’s courts on 2 May 2005.

Fila has to this day ignored demands to provide clarification on why it suddenly stopped contractual payments to the factory, precipitating its closure.

Actions

Fail on fair play

Less than two weeks later, on 22 February, the CCC, Oxfam International and the International Confederation of Free Trade Unions (ICFTU) sent a letter to Fila’s chief marketing officer, Robert Erb, demanding that Fila explain the closure and provide plans to reinstate employees and reimburse their back pay. Fila did not respond, precipitating numerous follow-ups regarding the closure and issues involving a number of workers presumably dismissed for labour rights actions.

This prompted the alliance to come up with Plans for a coordinated day of action on 28 June in April. On 1 June the alliance announced the stepped-up actions to increase global pressure on Fila during the summer, including during high-profile events like Wimbledon where activists staged a naked tennis match to draw attention to Fila’s failure to address the issues.

Others have also attempted to pressure Fila to take action. On 1 July 2005, Australian labour rights activists staged a symbolic action in support of dismissed workers in front of the Sydney Opera House and Sydney Harbour Bridge, taping their mouths to symbolise Fila’s silence on the issue. Meanwhile, Oxfam Australia urged a just resolution, highlighting Tae Hwa in its 2006 report “Offside!: Labour Rights and Sportswear Production in Asia”.

In 2006, Oxfam America confronted Fila with over 30,000 signatures from concerned consumers demanding that it follow up on the Tae Hwa case. Fila did not respond, however.

In 2007, the CCC followed up with another letter-writing campaign urging Fila to address both the factory closure and Parkati’s reinstatement. Fila’s only response to was to claim it was unable to react because Fila had changed ownership and thus had to review its licensing arrangements before taking action.

The Dutch CCC produced a short video highlighting Fila’s labour practices, which was sent to Sweatshop Watch. There were also follow-up actions planned for the US Open tennis championship involving the AFL-CIO, UNITE, USAS, and the Solidarity Centre.

In August 2005, Sweatshop Watch contacted a Korean ally it had worked with in the past regarding new strategies.

Demands

The CCC demanded that Fila meet its contractual labour obligations; assist workers in job placement efforts and ensure payment of back wages and unemployment compensation or a severance pay package in accordance with Indonesian labour law.

The CCC also demanded increased transparency regarding its role in the Tae Hwa closure and that Fila reformulate its codes of conduct to comply with ILO standards and cooperate with local unions to enter into constructive solutions negotiations.

Parkati Fired for Wearing Sandals

The CCC also reinitiated an earlier campaign calling for the reinstatement of Ms. Parkati, a key organiser of a 1998 strike demanding improved working conditions and an independent union. Hired thugs reportedly disrupted the strike and harassed Parkati, who was dismissed in 1999 for allegedly wearing sandals to work against company policy, which requires employees to work barefoot. The CCC says that she was dismissed for standing up for her rights (www.cleanclothes.org/betterbargain/921).

Parkati contested her dismissal and labour arbitrators recommended reinstatement. However, the factory appealed, winning a 2001 court case backing her dismissal. This left a powerful impression on co-workers, successfully scaring off future union-organising efforts.

In August 2004, Fila recommended Parkati’s reinstatement. But, to date, Fila’s mandate has yet to be forwarded to the CCC while Tae Hwa steadfastly refused to reinstate Parkati.

Background

Fila, owned by the US-based Sports Brands International, accounts for 70–90% of Tae Hwa’s total orders, making it Tae Hwa’s chief client. The Korean-owned Tae Hwa has been producing sports shoes for Fila since 1991.

Fila and Tae Hwa have a long history of violating workers rights including sexual harassment, verbal abuse, intrusive policies, inadequate wages, compulsory overtime, unreasonable production targets, and denial of trade union rights guaranteed by Indonesian law.

Fila had already been targeted during the 2004 “Play Fair at the Olympics” campaign.

Tae Hwa is just one of thousands of violating factories in the sportswear sector and, in some respects, Tae Hwa’s conditions are better than those in many other Indonesian sportswear factories. In fact, it usually meets Indonesian labour regulations regarding maternity and sick leave and most employees are offered permanent employment contracts.

Outcome

In July 2007, after consulting with Oxfam Australia, it was decided to stop public calls for action, leaving open the option for reintroducing the case in other sportswear campaigning fora at a later date. Fila showed an appalling lack of initiative in accepting responsibility for improving the working conditions at Tae Hwa. Although many thousands of workers and consumers demanded a solution, Fila resolutely refused to demand that Tae Hwa reinstate Parkati and improve its working conditions. This type of case clearly reveals just how precarious the lives of these workers truly are and highlights the need for continued consumer action in support of employees working in these types of factories.