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Production in the Far East: Fairness first

To date the outdoor brands have not been involved in tough labour disputes and deaths in the Far East, but it’s a different story with other sport article manufacturers. So, in the light of the latest incidents, the outdoor industry will not be able to avoid taking measures to ensure not only safety in their own or commissioned production facilities, but also fair pay – especially once the customers in the western world are aware of this and want to get to the bottom of it.


In the last few weeks one incident or tragedy followed the other: first of all, a factory in Bangladesh collapsed, burying more than a thousand workers dead in the rubble. In May there were two other calamities in factories, producing for the brands Asics and Nike in Cambodia, where three people were killed.

Social flashpoint Cambodia
In the last few years in Cambodia there has been an enormous increase in the production of textiles, but this alongside a definite discontent about fatalities and the notorious underpayment of the workforce. Following an incident at a Nike producer, the workers took to the streets to demonstrate – not only against the lack of safety measures but also to fight for fair payment. What they are protesting about in the factory, that manufactures for an American company, is an allowance of 14 $ a month for social security, accommodation and transport, in addition to a minimum monthly wage of a meagre 74 $. The government harshly countered the protests in front of the factory: more than a thousand armed security forces took action against the strikers with many people being injured and arrested. Obviously this industrial dispute about insufficient payment is spreading throughout the country and labour disputes are now part of the daily agenda.

Brand names struggling to maintain their image
The reactions of the brand names that are not directly responsible for these incidents are concentrating on keeping up their image. Nike expressed their deep concern and they want to carry out investigations in the factories concerned. The Asics supplier plans paying compensation: 1000 USD for every injured person and 5000 USD for the surviving dependents of the deceased.

In a quite different case in Indonesia, Adidas decided on improved compensation for employees of a factory that was closed down by the manufacturers at short notice. What was important here was that the consumers were actually mobilized. Activists demonstrated outside the US branches of Foot Locker –which is, after all, the world’s second largest sports retailer – and called upon the chain store to put pressure on the renowned three-stripe brand. On its part, Adidas promptly improved the compensation.

Outdoor brands a major step ahead
As it seems, in future the integral social conditions in the Asian production plants will have to be improved. Appropriate aid organisations are for instance the Fair Wear Foundation (FWF), which enables independent controls of the factories and provides the associated brands with support in every way to relieve social flashpoints. In the meantime a whole series of brands, such as Deuter, Mountain Force, Mountain Equipment, Maier Sports, Haglöfs, Sprayway, Vaude and Jack Wolfskin have joined the FWF. Just recently the FWF gave “Best Practice Awards” to Odlo, Mammut and Schöffel, who together carried out joint training schemes for factory staffs.

Enormous efforts in China
In China the manufacturers are already one step beyond the relatively young production countries like Cambodia. This has a lot to do with the fact that the wages in China have already reached a level that can only be achieved with the corresponding quality and higher social standards. 

An example of this is the manufacturer KTC Limited, who produces for western brands such as Arc’teryx, Mammut, Gore Bike & Running, Mountain Force and other sports wear. KTC is the first OEM producer in Asia that has joined the FWF. This Hong Kong-based business enterprise with production plants in Laos and South East China invests to a great extent in schools for workers’ children and other social measures, so that the employees can be maintained even in an environment with rapidly growing wages in China. The Managing Director, Gerhard Flatz even goes a step further and can envisage “Made in China” as a future seal of quality of the products combined with sound social standards. The products manufactured for Mountain Force already advertise with the slogan “Made in China by KTC“.
The company has reported that the wages they pay already meet with the standards of the “FWF Living Wage”. For China, FWF calls for a minimum monthly wage of the equivalent of slightly more than 300 euros. However, Flatz emphasised that this is only the average value, and depending on how long the workers have been with the company and the type of work they do, this can vary. Nevertheless, it is a start in the right direction.

On the way to transparency and fairness
The example in China does show that things are indeed developing as one would hope. We can expect further advances if the consumers put the pressure on and start addressing these topics at the sales points. The upcoming OutDoor in Friedrichshafen will also be a platform for discussions between the retail trade and brand names, where retailers will have the opportunity of putting their suppliers to the test in this instance. Here we can sound out the influence the call for more transparency and fairness in the value chain will have in the future. Conversely, the brand names have the possibility of presenting the impact of improved social standards on the price development.

The OutDoor Conferences in cooperation with the European Outdoor Group have also included this topic in their programme. With the presentation “Is your supply chain secure?” and the Early Morning Workshop of the sustainability work-group with the topic “Water-repellent materials”, current issues regarding sustainability and CSR (Corporate Social Responsibility) will also be dealt with at OutDoor 2013.

Realisierung Columbus Interactive GmbH