2007-2008: Supplier Sacks 19 Workers for Union Activities

published 30-01-2013 11:55, last modified 29-04-2013 11:04
In May 2007, 26 employees at Jakarta’s PT Mulia Knitting Factory (MKF) formed the SBGTS-GSBI union to address the factory’s systematic violation of workers rights including withholding compensation for female workers during pregnancy leave and failing to provide transportation for female workers after the night shift. Moreover, MKF failed to pay mandatory health and pension benefits, often failed to provide adequate safety equipment and hired workers under precarious, temporary contracts.

Issue

In May 2007, 26 employees at Jakarta’s PT Mulia Knitting Factory (MKF) formed the SBGTS-GSBI union to address the factory’s systematic violation of workers rights including withholding compensation for female workers during pregnancy leave and failing to provide transportation for female workers after the night shift. Moreover, MKF failed to pay mandatory health and pension benefits, often failed to provide adequate safety equipment and hired workers under precarious, temporary contracts.

MKF responded with a harassment campaign aimed at destroying the union. It suspended the union president; three union officials were dismissed and 15 other union members were given the choice of renouncing their union membership or being transferred to another factory located at a distance so great that it made commuting impossible, which resulted in their dismissal for failing to show up at their new workplace. MKF also filed various frivolous lawsuits against the union such as accusing the union of illegally using the factory’s address on the union’s letterhead (a common practice in Indonesia). MKF also tried to have the Labour Ministry revoke the union’s registration number.

The union urged immediate reinstatement of the dismissed workers and filed cases with the Labour Ministry and Indonesia’s National Human Rights Commission (Komnas HAM). On 7 April 2008, the Commission concluded that the 19 workers’ rights had been violated. But local authorities, with a reputation for being management-friendly, disregarded the Commission’s ruling and decided in favour of the company.

Action

In February 2008, the CCC began urging brands sourcing from MKF to support workers’ demands for freedom of association. One brand, Phillips Van Heusen, advocated reinstatement of the workers, and also urged Tommy Hilfiger (Hilfiger) and Polo Ralph Lauren (Lauren) to join them. But both refused to cooperate. Hilfiger announced that it had conducted an audit in January 2008, but contacted only the management-backed union, SPSI, and never consulted MKF employees.

In September 2008, the CCC urged people to support the workers in their struggle to improve Indonesia’s garment industry.

In early 2009, the CCC again urged supporters to write Hilfiger and Lauren to demand that they urge MKF to reinstate the workers with back pay and social security retroactive from date of dismissal.

The CCC’s 30 June press release announced that Lauren, the official outfitter of the 2009 Wimbledon tennis championships, had left MKF employees in the cold by ignoring egregious labour rights violations.

The CCC reiterated that Hilfiger and Lauren should leverage their influence over MKF to demand: Reinstatement of all dismissed workers; respect workers’ right to freedom of association, including verbal and written guarantees; fully recognition of the SBGTS-GSBI; recognition of the CCC as a dialogue partner with specific expertise in garment worker rights and working conditions.

In February 2009, the CCC and Oxfam Australia launched the Sector-Wide Solutions document wherein they called upon the involved brands – but especially Hilfiger and Lauren – to implement sector-wide solutions to ensure workers rights.

In April 2010, the CCC urged supporters to criticise Lauren and Hilfiger for ignoring their responsibilities in addressing serious labour rights violations at MKF. CCC spokesperson, Wyger Wentholt pointed out that “both companies have beautifully printed, elaborate codes of conduct and supplier guidelines full of lofty ideals. But it is all phrased in ways that there are no legal commitments and it is impossible to pin them down on the values and responsibilities they say they stand for.”

Background

Unfortunately MKF is not an isolated case. Countless urgent cases of labour violations in Indonesia reveal the abuse of short-term labour contracts, the pervasive infringement of workers’ freedom of association, and their right to organise and bargain collectively.

Lauren, the upmarket US-based fashion giant, has regularly ignored MKF’s deplorable working conditions and anti-union activities despite the heightened awareness among brands of their overall supply-chain responsibilities. “Unfortunately, this is common practice for this designer of lavish lifestyle products,” Wentholt commented. “Although Lauren actively promotes charities and philanthropic programmes, they refuse to mainstream ethical trade principles in their day-to-day operations.”

The national GSBI union initiated negotiations with MKF, which resisted discussing freedom of association issues. The CCC and its allies in Indonesia and the US attempted to establish constructive dialogues with MKF’s chief clients to support a solution. Both Lauren and Hilfiger have resisted monitoring their own codes of conduct. The CCC and allies sent seven letters and made countless phone calls, but Lauren, true to its reputation, refused to even discuss MKF’s violations.

Outcome

Indonesian union leader Emilia Yanti met with Hilfiger director Ludo Onnink in January 2010. Yanti thought the meeting was promising because it established a dialogue between Hilfiger and the CCC. Hilfiger now seemed to be taking “the case seriously” and promised “to exercise maximum pressure” on MKF. However, Hilfiger, continued to drag its feet, raising serious questions about its commitment to its own corporate codes of conduct.

In May 2010, the CCC announced that, after a lengthy three-year campaign, garment workers had recouped their rights. MKF finally signed an agreement with the SBGTS-GSBI, acknowledging the right of MKF’s workers to join unions. The agreement also compensated five former employees dismissed in 2007 for union activities.

The GSBI and CCC expressed appreciation for Hilfiger’s role in pressuring MKF to sign this agreement. But it also regretted that it took Hilfiger over two years to address the issues. Meanwhile, Lauren, has steadfastly refused any positive course regarding the violations.

Lauren and Hilfiger’s inadequate responses meant that 14 former MKF employees, due to economic hardships related to their dismissals, opted for a less-than-satisfactory financial settlement with MKF and to date none have been reinstated.

The new agreement also does not cover issues like pregnancy leave, lack of night shift transportation for female workers as per Indonesian law, compliance with health and pension benefit laws, inadequate safety equipment and temporary contracts.