Croatian state’s Coronavirus-support subsidises premium German brand Olymp

Croatian garment factory Orljava has been producing for Olymp, their main buyer, for 50 years. However, it is only now, having received government aid in response to Coronavirus, that the supplier is able to pay their workers' wages in accordance with the law.

Report ‘Exploitation Made in Europe,’ S. 19ff; Exploitation and labour rights abuses have been ongoing problems in the Orljava d.o.o. garment factory in Croatia, a long-term supplier for Olymp, a premium German menswear brand. Abuses include: unpaid wages, delayed wages and a lack of overtime payments; and workers health suffering due to conditions in the factory, including bad lighting causing eye strain, heat, exhaustion and malnutrition leading to workers fainting, and many workers reporting the need to take painkillers, antibiotics and tranquilizers as a direct result of their work at the factory. Workers also had to put up with unsanitary bathroom conditions, which included no running water, no soap and no toilet paper.
Orders from Olymp accounted for 70% of Orljava’s capacity pre-Covid. As the main buyer at the factory, Olymp’s purchasing practices have a key role to play in the labour abuses occurring. Olymp pays very low prices for products, workers estimate the brand pays as little as €3 Euro per shirt, resulting in the factory cutting costs when it comes to workers’ rights. The union in the factory, Novi Sindikat, was able to successfully claim outstanding overtime payments through litigation, however many abuses continue as the root cause, Olymp’s purchasing practices, has not been addressed.
In spring 2020, during the initial phase of the pandemic, Olymp reduced its orders from 70% of Orljava’s capacity to only 30%. This could have had dire consequences for the workers were it not for the Croatian government stepping in with subsidies aimed at helping Croatian companies survive during the pandemic. These state subsidies compensated for the reduction in orders and, for the first time for many years, the Orljava workers reported receiving their full wages on time.
Olymp should take immediate action to ensure conditions improve at Orljava d.o.o. and that workers’ rights are respected.
Novi Sindikat’s and CCC’s recommendations to Olymp:
1.     Double your buying prices. 
2.     Remedy the rights abuses immediately and start to participate in negotiations over working conditions with the unions active in the factory.
·      Expert interviews with workers and representatives of Novi Sindikat, betriebliche Gewerkschafts-Organisation bei Orljava d.o.o., in 2019 and 2020
·      Brand information on Olymp.
·      Report ‘Exploitation Made in Europe,’ S. 19ff;
·      SWR "Marktcheck“: Olymp; 25.8.2020; Ab min 19,14

published 2020-12-03