`
PLAY FAIR – A CAMPAIGN
FOR DECENT SPORTSWEAR
Has the first agreement between multinational
companies and local unions strengthened
freedom of association in Indonesia?
Report #66
This report has been published with financial support from Sida who was, however, not involved
in its design and has taken no position on its content. The report is authored by Linda Scott
Jacobson, supported by Swedwatch. The LO-TCO Secretariat has also contributed financially to
the report and assisted with their comments.
Author: Linda Scott Jacobsson
Photo: Oxfam in Indonesia
Layout and graphics: Daniel Fagerström, Paperhits
Publisher: Viveka Risberg
Published in November 2013
Swedwatch is a religiously and politically independent organisation that examines Swedish
companies who do business in developing countries. Swedwatch has no profit basis and all
reports are published freely. The organisation’s purpose is to reduce the social and
environmental ills of the global South, to encourage role models, share knowledge and, in an
open dialogue with Swedish companies, act to encourage business and industry to pay greater
attention to these issues. The Swedwatch member organizations are the Church of Sweden,
Diakonia, Swedish Society for Nature Conservation, Fair Trade Center, Solidarity Latin America
and Afrikagrupperna. www.swedwatch.org.
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Content
Summary ...................................................................................................................... 4
1. Introduction ...............................................................................................................5
2. Method ...................................................................................................................... 6
3. Background ................................................................................................................ 7
4. The Freedom of Association Protocol ...................................................................... 11
5. The Freedom of Association Protocol in practice .................................................... 15
6. Positive impact ......................................................................................................... 21
7. Problems and needs ................................................................................................ 23
8. Final discussion ...................................................................................................... 26
Reference list .............................................................................................................. 28
3
Summary
In this report Swedwatch examines a new instrument with the potential to strengthen
freedom of association rights and union activities at factory level in the sports shoe and
apparel industry in Indonesia, known as the Freedom of Association Protocol. This
Protocol, which was signed by the unions, suppliers and brand name companies in
Indonesia in 2011, not only establishes that unions are permitted but also provides a set
of detailed guidelines as to what freedom of association will mean in practice at factory
level. The Protocol stipulates, among other things, that collective agreements will be
negotiated locally, that unions will be supplied with their own premises and that
employees will be able to get time off for union work. It is hoped that the Freedom of
Association Protocol will strengthen the otherwise weak and oppressed unions at
factory level and ultimately improve the tough working conditions of the textile
workers who sew shoes and sportswear for brands such as Adidas and Nike. Research
has shown that brand name companies’ codes of conduct have not generally
strengthened union work and freedom of association, nor improved working conditions
in any general manner.
This report explains how the Freedom of Association Protocol was developed through
unique negotiations between international brand name companies and their suppliers in
Indonesia and national unions who were able to participate in the formulation of its
content. The report examines how the Freedom of Association Protocol has been put into
practice and the effect it has had so far on union activities at the factories producing
goods for the brand name companies who are party to it. One conclusion is that the
Freedom of Association Protocol has led to improved conditions for trade unions at
factory level and gives good examples where suppliers have begun to fulfil the
requirements stipulated in the Protocol. For example, new collective agreements,
membership numbers on the rise and new local union sections formed. There are also
encouraging signs that the unions are gaining access to their own premises. There are
also examples of the cessation of previous harassment and threats against union
members. However, the introduction of the Freedom of Association Protocol is still in its
initial stage and much work and follow-up is still necessary before it is possible to
determine whether the Protocol has been implemented in the manner intended and has
achieved sustainable, long-term effects.
To date, one of the greatest benefits of the Freedom of Association Protocol is the
improvement of communication between brand name companies and unions. This is a
direct result of the negotiations between the parties that established the Freedom of
Association Protocol. This improved contact has been meant that the unions, at least
during the transitional period, have access to a direct channel to the brand name
companies and are able to contact them to discuss any problems. In time, however, local
committees will partially replace this communication route. These committees will be
established to secure compliance with the Freedom of Association Protocol, together with
a national committee. The creation of a sustainable system is essential in order to
manage complaints and violations at the factories. Communication between unions have
also improved, which means that they are now working as a more unified force, moving
towards the same goal. This is a unique development within the fragmented Indonesian
trade union movement who have no tradition of cooperation.
4
INDONESIA
Djakarta
In light of the effects of the Freedom of Association Protocol so far, the report shows that
the Protocol has the potential to become a powerful, effective supplement to the brand
name companies’ unilaterally developed codes of conduct, particularly when it comes to
strengthening union work at factory level and, consequently, ultimately improving
working conditions. However the Protocol suffers from the fact that the processes
surrounding the negotiation and implementation of the requirements take a very long
time, relatively few brand name companies and trade unions have signed the contract and
that the Protocol only covers the first tier of suppliers. More companies need to sign it in
order to make it less vulnerable so that more workers will be able to benefit from its
effects.
Overall the Freedom of Association Protocol has demonstrated an exciting new
opportunity where national unions are directly involved in the negotiation of working
conditions with the foreign company purchasers, in addition to their immediate
employers.
1. Introduction
Indonesia is one of the world’s largest manufacturers of sports footwear and sports
apparel. Conditions for the workers who sew the clothes and shoes for the big sports
brands are often difficult. These jobs are often characterised by low wages, long hours
and insecure employment conditions.1 Indonesian law allows unions, however in spite of
the fact that there are many unions, the union movement is relatively weak which is due
in large part to the systematic violations and abuses that trade union activists have been
exposed to in the country. In spite of the big brand name companies’ codes of conduct in
which they state that working conditions must be decent and lawful, many of the
problems persist.2 The right to organise and bargain collectively are fundamental human
rights and form the foundation of employees’ ability to influence their working
conditions.
1
ITGLWF, 2011, An Overview of working conditions in sportswear factories in Indonesia, Sri Lanka and
the Philippines, Niclas Egels-Zandén 2012, Från global självreglering till lokal lagstiftning: Arbetares
rättigheter i globala leverantörskedjor, Sarah Rennie, 2012, Negotiating Freedom (film)
www.engagemedia.org/Members/labourrights/videos/negotiating-freedom.
2
Niclas Egels-Zandén 2012, Från global självreglering till lokal lagstiftning: Arbetares rättigheter i globala
leverantörskedjor.
5
Considering this background there is a need for new instruments to improve conditions
in the textile industry, in particular by strengthening the ability of unions to act and
negotiate at the factories. In 2011 several large brand sportswear companies, suppliers
and local unions in Indonesia signed the Freedom of Association Protocol.3 The Freedom
of Association Protocol states what freedom of association means in the factories
producing for major brands such as Adidas, Nike, Puma and New Balance.
This Protocol is regarded as historic and unusual in the manner in which it was
established i.e. through negotiations between multinational companies and Indonesian
unions.4 The unions hope that the Freedom of Association Protocol will strengthen union
activities at factory level so that they, in turn, will be able to negotiate and improve
working conditions. The question is how has this gone so far? Has the Freedom of
Association Protocol been realised as it was intended? Has it strengthened the unions
and if so, how? Can the Freedom of Association Protocol be an alternative instrument for
achieving the improvements that company codes of conduct have not? These are some of
the questions that this report seeks to answer.
Swedwatch wishes this report to examine whether the Freedom of Association Protocol
can be used as an effective instrument for strengthening trade union activities at factory
level in the supplier chain.
2. Method
This report has been written by Linda Scott Jacobsson who normally works as a project
manager for sustainable procurement in Lund Municipality. She contacted Swedwatch
when she was planning to travel to Indonesia to study how the Freedom of Association
Protocol was developing. Swedwatch took a decision to provide support and publish the
report. The LO-TCO Secretariat has also contributed to the publication of this report.
The report is based on interviews with representatives of four unions, one NGO, one
brand name company and a supplier in Indonesia. Interviews were also conducted with
three union members who work in a factory that manufactures products for one of the
brand name companies that have signed the Freedom of Association Protocol. The
interviews were conducted through an interpreter on the ground in Djakarta, Indonesia
in June 2013. Another three suppliers and three brand name companies had been asked
to participate in interviews in Djakarta, alternatively to answer questions via e-mail. All
of these have declined or not responded to the request. The reason given was lack of time.
Consequently empirical evidence is limited. The report is based, in addition to the
interviews, on material from previous research studies, especially that of Niklas EgelsZandén, a researcher at the School of Business, Economics and Law at Gothenburg
University. His research has played a central role. Reports, NGO websites and documents
relating to the Freedom of Association Protocol have also been utilised. All sources are
cited in the reference list.
3
Maquila Solidarity Update, 2011, Indonesian protocol strengthens sportswear workers’ union rights.
4
Play Fair website www.play-fair.org/media/index.php/workers-rights/foa-protocol/Niclas Egels-Zandén 2012, Från
global självreglering till lokal lagstiftning: Arbetares rättigheter i globala leverantörskedjor.
6
2.1 Definitions
A local union section is a member-based organisation representing the employees in a
•workplace.
The section may cover one or more factories. In Indonesia, only a small
number of members is necessary to form a union and consequently there are a large
number of them.
• A national union is a collection of many different local union sections at national level.
When ”unions” are referred to in this report, the word encompasses both local
•union
sections and national unions.
Brand name companies are the multinational companies (in this report for example
•Adidas,
Nike, Puma) who place manufacturing orders with suppliers.
•
Suppliers are the companies that manufacture the products on behalf of the brand
name companies. Suppliers are also the employers and owners of the factories where the
products are made. Suppliers may, in their turn, employ many sub-suppliers who
manufacture parts of their products, for example buttons or zippers.
3. Background
3.1The scope of the textile industry in Indonesia
Indonesia is, with its around 240 million people, the world’s fourth largest country as
concerns population.5 In 2006, the formal sector workforce amounted to more than 34
million people but most inhabitants, more than 60 million people, work outside the
regulated labour market in the informal economy. Generally the workforce has a low level
of education, the majority do not complete basic education and only 2% have a university
level education.6
The Indonesian textile industry







Indonesia has one of the world’s largest textile industries.
The textile industry accounts for approx. 10% of the country’s manufacturing industry.
The textile industry is expanding by more than 8% annually and is predicted to
continue to play a major role in the Indonesian economy.
40% of their manufactured products are sold to USA and 20% to EU.
More than 4 million people work in the textile industry in Indonesia.
Indonesian unions estimate that more than 70% of the textile industry workforce
are women.
Indonesia is, together with Vietnam and China, one of the world’s largest producers
of sports shoes and apparel, and manufactures approximately 12% of the world’s
sports shoes. The major brands - Nike, Adidas, Puma - all have production in the
country.
5
UN website, Country Profile Indonesia data.un.org/CountryProfile.
aspx?crName=Indonesia.
6
ILO, 2009, Freedom of Association and Collective Bargaining – Indonesian Experience 2003- 2008.
7
3.2 Brands
Several of the large brand name companies within sports shoes and sportswear
manufacture in Indonesia. This report focuses on those involved in the Freedom of
Association Protocol i.e. Nike, Adidas, Puma, New Balance, Pentland (who own
Speedo) and Asics, however also brands such as Fila have production here. Nike and
Adidas are among the major brands and together use approximately one hundred
suppliers.7 There is no such information regarding Puma, New Balance, Asics or
Pentland. It is clear, however, that production for these brand name companies
involves hundreds of thousands of people.8
3.3 Unions and freedom of association in Indonesia
During the Suharto dictatorship (1967-1998), free trade unions were banned and only
membership of the state union SPSI was permitted. SPSI had close links to the army and
the union was used more as a way to control the workers rather than to serve their
interests.9 After the fall of the Suharto regime in 1998, Indonesian labour law was
reformed and eight ILO core conventions were ratified. Workers were allowed to form
free unions.10
Since then, the number of unions has grown rapidly and there are now between 70 and
90 which cover approximately 10% of the formal workforce in the country.11 In the textile,
clothing and footwear industries the degree of unionisation is even lower, less than 2%.12
ILO core conventions




Conventions on equal remuneration and discrimination (nos. 100 and 111)
Conventions on freedom of association and the right to organise and
collective bargaining (nos. 87 and 98)
Conventions on child labour (nos. 138 and 182)
Conventions on forced labour (nos. 29 and 105)
Although union activities have been discouraged and restricted in various ways, the
Indonesian trade union movement is lively and active. The number of trade unions,
however, brings fragmentation and there is no tradition of collaboration although this
has improved somewhat in recent years.13 Fragmentation also occurs at factory level
where many different unions may be represented, which can cause difficulties when
negotiating with employers.14
Nike's website nikeinc.com/pages/manufacturing-map, E-mail correspondence with Harry Nurmansyah, Director of
Social and Environmental Affairs for Region Asia at Adidas in Indonesia, 27 Aug 2013.
8 Sarah Rennie, 2012, Negotiating Freedom (film), Play Fair website www.play-fair.org/ media/index.php/workersrights/brand-performance/.
9 Timothy Connor, 2002, We are not machines.
10 NiklasEgels-Zandén, 2012, Från global konsumentmakt till lokal arbetstagarmakt, Asia Monitor Resource Center,
2003, Asia Pacific Labour Law Review – Workers rights for the new century.
11 ILO, 2009, Freedom of Association and Collective Bargaining – Indonesian Experience 2003- 2008, LO-TCO
Biståndsnämnd website www.lotcobistand.org/Indonesia.
12 Niklas Egels-Zandén, 2012, Från global konsumentmakt till lokal arbetstagarmakt.
13 Ibid plus LO-TCO Biståndsnämnds website www.lotcobistand.org/Indonesia.
14 Daisy Gardener, 2012, Workers’ rights and corporate accountability – the move towards practical, worker-driven
7
8
3.3.1 Freedom of association with problems
Although Indonesia has labour legislation that legally guarantees working conditions and
has ratified the eight ILO core conventions, trade union rights in Indonesia are, in
practice, still significantly limited.15 Unions at factory level often encounter resistance
from employers, this applies extensively in the textile industry including the sports shoe
and sportswear industry.16 A number of reports have shown violations of the rights of
active union members in the form of threats and intimidation by employers, both inside
and outside the factories. There are beatings and discrimination against union activists
and summary dismissal of union leaders. Violations also take a more indirect expression.
There are examples where unions do not have access to meeting rooms at the factory,
where union leaders are denied time off from their regular work to participate in union
activities and where union leaders are assigned an unrealistic number of tasks to prevent
them carrying out their union activities. Sometimes employers do not recognise the union
at the factory and therefore refuse to negotiate.17 Although violations of the right to
organise are against the law, they continue. One reason is widespread corruption where
employers are able to buy their way out of prosecution.18
3.4 Many contract employees weaken unions
The ability of textile workers to become involved in unions is also weakened by
employers who employ workers on short contracts. A new law that allows fixed-term
contracts has led to the use of this form of employment increasing significantly. Under
the law, temporary workers may not replace permanent employees and they may not
perform tasks that constitute the core business of manufacturing. Yet suppliers in the
textile industry are able to employ more than half of their work force on fixed-term
contracts for many years.19 Temporary employees are not entitled to the benefits
permanent workers have, for example paid vacation and bonuses. Neither are they
covered by any union protection as it is difficult to organise temporary workers who are
often afraid of losing their jobs if they join a union.20 The unions believe that suppliers
thus use fixed-term contracts to weaken and splinter unions. There is evidence that
suppliers have closed down their operations and laid off all their employees only to reemerge and re-employ all former employees on fixed-term contracts, everyone except
the union leaders.
3.5 Low wages
In addition to restrictions on the right to organise, Indonesian textile workers who sew
sports shoes and sportswear face additional challenges of which low wage levels are the
most important. Indonesia has a minimum wage but this is used more as a guideline
for wage levels instead of a minimum level. Under the Act, the minimum wage is based
on the decent living needs of the employee and their family (calculated on two
breadwinners per family), however the prevailing minimum wage does not cover the
most basic needs.21 According to the Asia Floor Wage Alliance, the minimum wage for
change for sportswear workers in Indonesia.
15 Ibid plus Asia Monitor Resource Center, 2003, Asia Pacific Labour Law Review – Workers rights for the new century.
16 Oxfam and Clean Clothes Campaign, 2009, Sector-Wide Solutions for the sports shoe and apparel industry in
Indonesia.
17 Niklas Egels-Zandén, 2012, Från global konsumentmakt till lokal arbetstagarmakt, Daisy Gardener, 2012, Timothy
Connor, 2002, We are not machines, ITGLWF, 2011, An overview of working conditions in sportswear factories in
Indonesia, Sri Lanka and the Philippines, Oxfam, Clean Clothes Campaign, Maquila Solidarity Update.
18
Niklas Egels-Zandén, 2012, Från global konsumentmakt till lokal arbetstagarmakt.
19
2009, Freedom of Association and Collective Bargaining – Indonesian Experience 2003-2008, Oxfam and Clean
Clothes Campaign, 2009, Sector-Wide Solutions for the sports shoe and apparel industry in Indonesia
Ibid, ITGLWF, 2011 and Egels-Zandén, Från global konsumentmakt till lokal arbetstagarmakt, 2012.
20Ibid, ITGLWF, 2011 and Egels-Zandén, Från global konsumentmakt till lokal arbetstagarmakt, 2012.
21 Ibid plus Daisy Gardener, 2012.
9
workers in the garment industry in the Djakarta area represents only 73% of a living
wage. For a worker in the province of West Java it constitutes only about 28%.22 It also
appears that workers do not even receive the minimum wage.23 Low wages mean
overtime is essential. This complicates union work because workers are often exhausted
and have very limited time and energy for union activities.24
3.6 The right to organise not strengthened by CoC
Problems of poor working conditions within the sports shoe and apparel industry have
been reported since the 1990s, and criticism has long been aimed at the brand name
companies.25 In the mid 1990s and early 2000s, several major international NGOs put
pressure on Nike and other brands to take action to improve conditions. With increased
pressure from external campaigns, the major sports brand name companies began to take
labour conditions more seriously.26
Today, all the major brands such as Adidas and Nike impose some sort of code of conduct,
and several of them have advanced follow-up systems.27 Several brand name companies
have also taken steps to increase transparency in their supplier chains and to work with
unions and NGOs.28 This is achieved by training workers about their rights. Several
brands participate in the Fair Labour Association (FLA), an initiative for multi-party
consultations aimed at improving working conditions.29
Despite greater involvement by brand name companies, the 2000s have seen persistent
criticism of them for, on the one hand working to improve working conditions and on the
other hand purchasing in such a manner that does not favour unions and improved
working conditions. Oxfam, the Clean Clothes Campaign and Global Unions, an
international trade union umbrella organisation, have concluded that brand name
companies’ purchasing models are characterised by short delivery times and low prices.
These purchasing practices mean that suppliers are reluctant to allow unions to operate
in factories as this may lead to higher wages with higher costs as a result. There are also
examples where brand name companies have stopped buying from suppliers who have
allowed their employees to form unions at factories.30
Codes of conduct have long been used in the sports shoe and apparel industry in
Indonesia, however studies show that these codes have not been able to strengthen the
unions and that they have exerted only a limited positive effect on workers’ rights and
conditions. Examples where codes have had a positive impact concern the payment of
severance pay, overtime pay and social security contributions. The structural, long-term
changes necessary, such as the ability to negotiate collectively however, have been
conspicuous by their absence and the power balance between workers and employers has
remained skewed to employer advantage.31
Asia Floor Wage website, www.asiafloorwage.org, Wage Indicator website, www. wageindicator.org. Calculations based
on AFW calculations where Indonesia has a purchasing-power adjusted living wage of more than IDR 3 million in 2012
which is the equivalent of SEK 1 870. Minimum wage for the Djakarta Province was IDR 2.2 million (SEK 1 370) and for
West Java Province IDR 850 000 IDR (approx. SEK 530) in 2013.
23 ITGLWF, 2011, An overview of working conditions in sportswear factories in Indonesia, Sri Lanka and the
Philippines.
24 Ibid.
25
Daisy Gardener 2012.
22
26
Ibid, plus Oxfam, 2006, Offside! Labour rights and sportswear production in Asia.
Adidas website: www.adidas-group.com/en/investorrelations/corporate_governance/ codeofconduct/, Nike website:
nikeinc.com/pages/compliance.
28 See for example, the Nike production map on their website: nikeinc.com/pages/ manufacturing-map.
29 Fair Labour Association website: www.fairlabor.org/affiliates/participating-companies.
30 Daisy Gardener, 2012 and Oxfam, 2006.
31 Egels-Zandén, 2012.
27
10
4. The Freedom of Association Protocol
4.1 The Play Fair Campaign and the FoA Protocol
The Play Fair Campaign has been underway since the 2004 Athens Olympics. It is
coordinated by the Play Fair Alliance, a group of international unions and international
NGOs.32 Play Fair is a campaign that demands that anyone organising or operating a
commercial activity linked to a major sporting event should take active steps to ensure
that the workers who produce sports products such as clothes and shoes, or build sports
stadiums, are not exploited and that international standards of labour law are
respected.33
Pressure applied by the Play Fair Campaign led to a large number of unions, NGOs and
representatives of major sportswear and shoe companies gathering in Hong Kong in
2008 to discuss the work-related problems and recommendations that the Play Fair
Alliance had presented in a report.34 The parties decided that discussions would continue
at local level, with a view to proposing concrete measures to improve working conditions.
They chose Indonesia as the country is one of the largest producers of sports clothing
and sports shoes and it already has legislation that clearly allows for freedom of
association, unlike the other major producer countries China and Vietnam.35
Unions





SPN: a union of more than 400 000 members. More than 100 000 of their members
sew sports shoes and apparel.
FSPTSK: a union of 30-40 0000 members within the textile industry all over Java.
GARTEKS-SBSI: a union of 28 000 members within the textile industry.
KASBI: a union of approx. 130 000 members within the textile industry, plantations,
mining etc. Members are found all over Java, Sulawesi, Sumatra and Batam.
GSBI: a union of 27 000 members within the manufacturing industry. Also members
within mining and on plantations.
Sources: Sarah Rennie 2012, Negotiating Freedom (film), interviews with Lilis Mahmudah,
SPN 18 June 2013, KASBI 17 June 2013, Emelia Yanti, GSBI 25 June 2013 and a
representative of FSPTSK 14 June 2013.
In 2009, representatives of Nike, Adidas, New Balance and Puma, four major subsuppliers and five Indonesian unions met. Also attending were Indonesian NGOs with a
focus on labour and representatives of Oxfam, the Clean Clothes Campaign and the
Global Union International IndustriALL.36 Freedom of association was the issue selected.
The aim was to negotiate wages and fixed-term contracts at a later date.37
32
The Play Fair Campaign is organised by the International Trades Union Federation (ITUC), IndustriALL, the Building
and Wood Workers’ International (BWI) and Clean Clothes Campaign and Oxfam. See Play Fair website www.playfair.org, Sarah Rennie, 2012, Negotiating Freedom (film).
33
Play Fair website www.play-fair.org.
34
Maquila Solidarity Update, 2011. Reporten discusses was entitled Clearing the Hurdles, 2008.
Daisy Gardener , 2012.
36 Ibid plus Play Fair website www.play-fair.org.
37
Daisy Gardener, 2012 plus Ola Bergström and Niklas Egels-Zandén, 2013, Hållbara leverantörsled –
35
11
This signalled the beginning of a new working method for the unions, brand name
companies and suppliers.38 After two years of negotiations the Freedom of
Association Protocol was signed by six brand name companies; Adidas, Nike, Puma,
New Balance, Pentland and Asics, in June 2011. Four major suppliers to the brand
name companies also signed; PT Nikomas Gemilang, PT Panarub Industry, PT Tuntex
Garment and PT Adis Dimension Footwear. Five unions signed; Kongres Aliansi
Serikat Buruh Indonesia (KASBI), Serikat Pekerja Nasional (SPN), Garteks - Serikat
Buruh Sejahtera Indonesia (GARTEKS-SBSI), Federasi Serikat Pekerja Tekstil
Sandang dan Kulit (FSPTSK) and Gabungan Serikat Buruh Independen (GSBI).39
4.2 Scope and content of the FoA Protocol
The Freedom of Association Protocol may be regarded as a set of detailed guidelines for what
freedom of association should entail and how it should be respected at factory level. One
central element of the Protocol is that the supplier and the union will negotiate a collective
agreement within six months of a local union section forming at the factory and that
negotiations will take place without restrictions. The supplier must allow employees to form
and to join unions at the factory. The supplier must not interfere in union activities as long as
they do not conflict with the Freedom of Association Protocol, the collective agreement or
legislation, and no reprisals may take place due to union activities, reprisals such as
dismissal, deductions from wages or redeployment. The supplier must also allow and
facilitate union meetings and activities during working hours, both within and outside the
factory.
The second part of the Freedom of Association Protocol governs what the unions are entitled
to at the factories from a purely practical point of view. These stipulations include that the
unions are entitled to disseminate information on union activities to employees, and union
leaders have the right to take leave of absence for union commitments. The supplier must
provide and maintain facilities including information boards and other equipment to
facilitate union work. 40
Another vital element of the Protocol is the establishment of committees at the factory
charged with investigating complaints, settling disputes and monitoring the implementation
of the Freedom of Association Protocol. This committee must consist of representatives of
both the supplier and the unions at the factory. There must also be a committee at national
level which consists of representatives of unions, NGOs, suppliers and brand name
companies. The national committee will make recommendations on how disputes are to be
resolved. If the national committee’s recommendations are not implemented, the brand
name companies must take action or impose sanctions on the supplier. Similarly, the central
union will correct local union sections at factory level, if necessary. If disputes cannot be
resolved by any of the committees, the case will be taken to court. Committee operations are
governed by a document entitled Standard Operation Procedure (SOP) that was negotiated
after the Freedom of Association Protocol was signed.41 The SOP Document entered into force
in November 2012.
Detaljhandelsföretags implementering av uppförandekoder i Kina and Indonesien.
38 Daisy Gardener, 2012.
39 Play Fair website www.play-fair.org/media/index.php/workers-rights/foa-protocol/.
40 Play Fair website www.play-fair.org/media/index.php/workers-rights/foa-protocol/.
41 Ibid, plus Standard Operating Procedure for Freedom of Association Protocol Supervision and Dispute Resolution
Committee 25 Sept 2012.
12
Meeting on the FoA Protocol between the union, NGOs, suppliers and brand name companies in Djakarta September 2013.
The Freedom of Association Protocol is intended to cover all Indonesian suppliers
involved in the supply chain. In an initial phase the Protocol is, however, limited to
suppliers in the first tier i.e. the suppliers that have direct contracts with the brand name
companies. Suppliers, however, must disseminate the Protocol to their sub-suppliers in
Indonesia and encourage them to comply.42
Parts of what is stated in the Freedom of Association Protocol are already regulated in
Indonesian labour legislation, for example the right to form and join independent unions
and the right to negotiate collective agreements. However the Freedom of Association
Protocol goes farther than the law on several points, for example by stating that a
collective agreement must be established within six months, that factory committees will
be established and that the employer must ensure that there is an office available
equipped for union work. The Freedom of Association Protocol is more specific and
detailed than the law as it is a framework that not only states that freedom of association
must be complied with, but also how this is to be achieved and what it means, in concrete
terms, on site at the factory.
4.3 The FoA Protocol compared to codes of conduct
All the brand name companies that have signed the Freedom of Association Protocol
have already introduced codes of conduct and therefore it might be interesting to
compare the Protocol with these codes. The Freedom of Association Protocol differs
from codes of conduct on several points. Firstly it forces local partners to establish a
collective agreement which in turn covers other working conditions, while codes of
conduct include requirements for a full spectrum of employment law matters of which
42
Freedom of Association Protocol 7 June 2011.
13
freedom of association is one. Regarding freedom of association, the Freedom of
Association Protocol is substantially more detailed than the codes of conduct. This
becomes clear when comparing them as concerns obligations on premises, leave of
absence and information boards for unions with, for example, Nike and Adidas codes
where clauses on freedom of association in principle go no farther than stating that it
must be respected.43
A third difference is the way in which the Freedom of Association Protocol was
negotiated. Codes of conduct are often based on pre-established international standards
and conventions and are usually unilaterally developed by the brand name companies.
Unions cannot influence their content. When the Freedom of Association Protocol was
developed, the union representatives played a central role at the negotiating table and
were able to be involved and influence the content of the Protocol. On this point the
process also differs from global framework agreements. There are certainly union
representatives who participate in such negotiations but they usually operate on a global
level and not locally as is the case in the Freedom of Association Protocol.44
Another difference is that the Freedom of Association Protocol more clearly links both the
brand name companies and their suppliers to compliance with the requirements of the
Protocol, as opposed to a code of conduct where the responsibility lies primarily with the
supplier to meet the brand’s demands.45
The union representatives interviewed are from the largest unions GSBI and SPN. They
stated that the Protocol is a better instrument than the codes of conduct as concerns
strengthening the unions46 due to the fact that, whereas a code of conduct is a contract
between a brand name company and supplier, Play Fair also includes the unions who
have participated in, negotiated and designed the content. The unions thus have a clearer
mandate to demand compliance with Play Fair than with a code of conduct. Lilis
Mahmudah, Programme Director at SPN, states that according to the code of conduct, it
is up to the brand company to act but with the Freedom of Association Protocol, all three
parties sit down and resolve problems together.47 Another advantage cited is that the
Protocol goes into more detail than the codes do.48 Adidas regards the Freedom of
Association Protocol as a complement to its code of conduct and intends to study whether
the Protocol is to be included in their group of factory follow-up instruments.49
4.4 Is the FoA Protocol legally binding?
During the negotiations of the Freedom of Association Protocol, one of the union aims
was that the Protocol should be legally binding. Consequently a clause was included
which states that cases that cannot be resolved by the committees may be taken to
court.50 Nevertheless, it is doubtful whether punishment of offences relating to points in
the Freedom of Association Protocol that are outside current legislation would be
considered legally binding in a court of law.51
See Nike Code of Conduct nikeinc.com/system/assets/2806/Nike_Code_of_Conduct_original. pdf?1317156854 and
Adidas workplace standard: www.adidas-group.com/en/sustainability/
Suppliers/Our_Workplace_standards/default.aspx.
44 Niklas Egels-Zandén, 2012, Från global självreglering till lokal lagstiftning: Arbetares rättigheter i globala
leverantörskedjor.
45 Daisy Gardener, 2012.
46 Interviews with Emelia Yanti, GSBI, 25 June 2013 and Lilis Mahmudah, SPN, 18 June 2013.
47 Interview with Lilis Mahmudah, SPN, 18 June 2013.
48 Interviews with Chris Wangkay, Oxfam in Indonesia, 14 June 2013 and Emilia Yanti, GSBI, 25 June 2013.
49 Interview with Harry Nurmansyah, Adidas, 21 June 2013.
50 Ola Bergström and Niklas Egels-Zandén, 2013, Hållbara leverantörsled – Detaljhandels- företags implementering av
uppförandekoder i Kina and Indonesien.
51 Interviews with Chris Wangkay, Oxfam in Indonesia, 14 June 2013, Simon Field, Better Work Indonesia, 19 June 2013,
Coordinator of Training Department KASBI, 17 June 2013 and anonymous representative of FSPTSK , 14 June 2013.
43
14
5. The FoA Protocol in practice
So what has happened since the signing of the Freedom of Association Protocol in 2011?
How has it been translated into practice at factory level and what real impact has it had
on freedom of association and unions? These matters will be examined in this chapter.
5.1 Who has signed?
When the Freedom of Association Protocol negotiations were completed in 2011 it was
signed by six brand name companies, five unions and four suppliers, with the same
number of factories in the first supplier tier. Two years later, another union, Serikat
Pekerja Tekstil Sandang Dan Kulit Serikat Pekerja Seluruh Indonesia (SPTSK-SPSI),
joined.52 At factory level, however, 22 local union sections signed the Freedom of
Association Protocol. In addition to the original four, approximately seventy suppliers
have now signed according to Oxfam in Indonesia. Fifty of these suppliers deliver to
Adidas, twenty-four to Nike, four to New Balance, one to Puma, one to Asics and one to
Pentland. Many of the factories produce for several brands.53 It is not exactly easy to say
what proportion of brand name company suppliers in Indonesia have signed as several
companies do not wish to state how many suppliers they have. Chris Wangkay, Private
Sector Coordinator at Oxfam in Indonesia estimates, however, that most first tier
suppliers have signed.54
However interest has been cool from the other brand name companies and no more
have signed the Protocol. Harry Nurmansyah, Director of Social and Environmental
Affairs for Asia Adidas, says that he has been in contact with other brands on a couple
of occasions and described the positive effects of the Freedom of Association Protocol.
Despite this that have adopted a ”wait and see” attitude.
Adidas regards this as a problem. Suppliers may produce for several brands and it
would have been easier to push through the Protocol if more of the purchasers signed.
Another problem perceived by Adidas is that few unions have signed and those that
have do not always represent the majority of the unions in their supplier chain55. Chris
Wangkay at Oxfam in Indonesia also believes that these are problems since it makes
work with the Freedom of Association Protocol vulnerable.56
5.2 New union sections
One of the Freedom of Association Protocol’s first points states that suppliers must
permit local union sections to be formed in factories. Oxfam in Indonesia has received
indications that it is easier to establish new union sections at factories after the
Protocol.57 This is something that is confirmed by the SPN and KASBI unions where
membership numbers have increased as a direct result of the Protocol. For SPN this
concerns around 4 500 new members and KASBI reported an increase of about 2 000.58
However it is unclear how many new local union sections have been created by the
Protocol and how many factories that still have no functioning union. SPN actively uses
the Freedom of Association Protocol as an instrument to form new union sections in the
factories covered by the Protocol with no previous union presence. They have mapped the
Interview with Chris Wangkay, Oxfam in Indonesia, 14 June 2013.
E-mails from Chris Wangkay, Oxfam in Indonesia, 26 Aug 2013, 3 Sept 2013 and 24 Sept 2013.
54 Ibid, 3 Sept 2013.
55 Interview with Harry Nurmansyah, Adidas, 21 June 2013.
56 Interview with Chris Wangkay, Oxfam in Indonesia, 14 June 2013.
57 Ibid.
58 Interviews with KASBI 17 June 2013 and Lilis Mahmudah , Programme Director at SPN, 18 June 2013.
52
53
15
factories producing for the brand name companies that are parties to the Protocol and
have tried to visit fifteen of them since 2012. SPN’s representatives have only been
admitted to three factories, in spite of the fact that they had notified the brand name
company in advance that they planned to visit the factory to inform employees about the
Freedom of Association Protocol.
In the three factories that SPN successfully entered they explained to the employees what
the stands for and that they have the right to join a union. On factory visits SPN has also
explained to factory management that they do not have the right to prevent the formation
of local union sections with reference to the Protocol.59
Lilis Mahmudah , Programme Director at SPN, states that despite their success in
recruiting new members, it is difficult to form new union sections at the factories.
”It is difficult because the suppliers and brand name companies do not want the unions
there. Another problem is the workers themselves. Many are afraid they will lose their
jobs if they organise a union because many are working on short contracts. The suppliers
do not hesitate to threaten with a shorter contract if the employee joins the union.”
Chris Wangkay at Oxfam in Indonesia confirms that there are still major problems at
local level.
”Sometimes unions are not allowed in, in spite of the supplier being covered by the
Protocol. However now we can bring up these issues for discussion at national level and
get the brand name companies to push their suppliers.”
5.3 Collective agreements
One vital element of the Freedom of Association Protocol is the requirement that
collective agreements be negotiated between the union and the supplier at factory level. A
coordinator in the training department at KASBI, who did not wish to give his name, feels
that the Freedom of Association Protocol has made it easier for unions to negotiate with
their employers at the factories.60 He says the suppliers also are more open to unions.
”Before the Freedom of Association Protocol was signed, a union could be forced to send
five letters to factory management before they could possibly get an appointment for a
meeting. After the Protocol was signed, often only one letter is needed,” he stated.
Lilis Mahmudah at SPN also thinks the Protocol has had a positive effect on their ability
to negotiate. She believes that in the factories where the Freedom of Association Protocol
is properly translated into practice, the unions negotiate with the supplier about their
conditions and may include such requirements in the collective agreement.
”It’s happening already. Those who have has the opportunity to develop a collective
agreement have already obtained better terms of employment,” she confirms.
Chris Wangkay at Oxfam in Indonesia estimates that new collective agreements have
been negotiated in two to three cases. In several cases there has already been a collective
agreement in place which has been supplemented by elements from the Freedom of
Association Protocol.61 It is unclear how many factories still lack collective agreements
but in such cases, the Freedom of Association Protocol applies anyway.
Interview with a coordinator at Training Department at KASBI, 17 June 2013.
Interview with a coordinator at KASBI training department 17 June 2013.
61 Interview with Chris Wangkay, Oxfam in Indonesia, 14 June 2013.
59
60
16
5.4 Access to offices, leave and meeting rooms
According to the Freedom of Association Protocol, unions will be granted access to
facilities and information boards at the factory and union leaders will be granted leave in
order to coordinate union work.
”These are vital elements of union work if it is to function properly at the factories,” says a
representative of FSPTSK who wished to remain anonymous.
The fact that unions are in place in factories also allows more visibility to workers than if
union work were conducted externally.62 There is no general monitoring of how well
suppliers have fulfilled the Protocol on this point, but there is information about
progress provided by both union representatives and Oxfam in Indonesia. SPN has sent
out a survey to union sections in a total of 30 factories. From the 19 responses, of
varying quality, it was possible to deduce that most of the respondents had their own
offices, albeit small ones. Some replied that they could also use the factory’s other
facilities for meetings and some had no problem in taking time off for union work.63
Oxfam in Indonesia and KASBI have been informed that offices have been established at
factories and that union leaders and members have been given time off to coordinate
union work, or participate in meetings and training in working hours.64
”The active union members can now hold meetings at the factories. Previously, they had
to meet outside the workplace. Now they can do it at their own workplace. They also have
a greater opportunity to negotiate with their employers,” states the KASBI coordinator.
While there are many examples of the unions being allocated premises and leave, there
are also examples where this has not been the case.65 A representative of FSPTSK says
that offices are sometimes so small that it is impossible to work properly there. Offices
may also be located in an inappropriate place in the factory or they are poorly equipped.66
Adidas states that it may be difficult for a supplier to establish offices for all the unions in
factory as there can be many of them. There is simply not enough space and it can take
time to arrange these things.67
5.5 Establishment of local committees
One central element of the Freedom of Association Protocol is the establishment of local
factory committees to deal with complaints and resolve conflicts between employees and
employers. This part of the Protocol, known as the SOP Document however, was not
established until November 2012 and it is clear that this work is progressing slowly. There
is no list of how many committees have been established at factory level and there is
disagreement among the people interviewed about how many there actually are.
The unions stated that there were only a few, between one to four committees, but Harry
Nurmansyah of Adidas believes that committees are in place in almost all of the factories
covered by Protocol (that is, in the first supplier tier), about 50 in number.68 However,
none of the people interviewed knew how these committees worked in practice.
Interview with a representative of FSPTSK, 14 June 2013.
Interview with Lilis Mahmudah, SPN, 18 June 2013.
64 Interviews with KASBI, 17 June 2013 and Chris Wangkay, Oxfam in Indonesia, 14 June 2013.
65 Interview with KASBI, 17 June 2013.
66 Interview with representative of FSPTSK, 14 June 2013.
67 Interview with Harry Nurmansyah, Adidas, 21 June 2013.
68 Interviews with Lilis Mahmudah, SPN, 18 June 2013, representative of FSPTSK, 14 June 2013, KASBI 17 June 2013,
Harry Nurmansyah, Adidas, 21 June 2013 and Chris Wangkay, Oxfam in Indonesia, 14 June 2013.
62
63
17
Adidas believes that the committees in ”their” factories have just been formed and
therefore have not had time to achieve anything.69 This is confirmed by Roger Tan,
CSR Manager at PT Nikomas Gemilang (PCI Adidas) which is an Adidas supplier who
stated that they established their committee in May 2013. The Committee consists of
ten members from the union (SPN) and five people from factory management, which
is in line with the proportions given in the document governing committees. The
committee has only met once for its actual formation and has not carried out any
operations.70
The reason why the committees have not started up may be the fact that the SOP
Document was finalised in November 2012, states Harry Nurmansyah at Adidas.71
There is also evidence that there is some confusion about what the committee should
actually do. A representative of SPN had previously visited a factory supplying Adidas
and asked the newly formed committee how things were going. It then became clear
that the committee did not know what it was supposed to be doing.72
In certain cases there already were structures in place to process complaints and solve
problems at factories, which may also be an explanation of why it has taken time to
establish the new committees. At PT Nikomas Gemilang (PCI Adidas) workers, union
representatives and factory management meet on a monthly basis to discuss problems
and address issues. Roger Tan at PT Nikomas Gemilang (PCI Adidas) argues that this
forum will continue parallel with the local Play Fair Committee.73
5.5 The work of the National Committee
The members of the original group that negotiated the Freedom of Association Protocol
today constitute the National Committee consisting of representatives of five unions, five
brand name companies and four suppliers. Oxfam in Indonesia serves as coordinator and
arranges meetings but has no voting rights nor becomes involved in discussions.74 The
National Committee’s main task is to discuss and resolve the cases that committees at
factory level have failed to resolve. So far this has not happened as the work of solving
conflicts at local level has not yet begun. Although the National Committee’s work has not
started as intended, nonetheless a coordinator from KASBI expressed cautious optimism
about its work. He believes that it may function properly but that it will take time.75
5.6 Dissemination, training and communication
After signing the Protocol, the unions have worked actively to disseminate information to
their members.76 They distribute the Freedom of Association Protocol and SOP
Document to members at membership meetings and at factory visits. Emelia Yanti,
Secretary-General of GSBI, states that they have held an initial meeting of union leaders
at factory level and gone through what the Protocol means and discussed each section to
make sure it is understood.
Interview with Harry Nurmansyah, Adidas, 21 June 2013.
Interview with Roger Tan, PT Nikomas Gemilang (PCI Adidas), 24 June 2013.
71 Interview with Harry Nurmansyah, Adidas, 21 June 2013.
72 Interview with Lilis Mahmudah, SPN, 18 June 2013.
73
Interview with Roger Tan, PT Nikomas Gemilang (PCI Adidas), 24 June 2013.
69
70
74
Interview with Chris Wangkay, Oxfam in Indonesia, 14 June 2013.
75
Interview with KASBI, 17 June 2013.
76
Interviews with Lilis Mahmudah, SPN, 18 June 2013, KASBI 17 June 2013, Chris Wangkay, Oxfam in Indonesia, 14
June 2013 and Emily Yanti GSBI 25 June 2013.
18
The union leaders have since been asked to contact their employers and discuss how the
Freedom of Association Protocol is to be introduced into their factory.77
KASBI briefs both members who produce for the brand signatories and those who are so
far not covered by the Protocol.78 SPN disseminates the Freedom of Association Protocol
to the unions that have not yet signed but that are operating in the same industry. This
resulted in the SPTSK-SPSI union signing the Protocol.79
The FSPTSK representative says, however, that there are examples of factories where no
information about the Protocol is disseminated and that this has been delayed because
the unions have no premises to work in at the factory. The official also says that it is only
the active union members, perhaps 20% of workers in a factory, who know about the
Protocol.80
Adidas sees its main task as disseminating information and training their suppliers on the
Freedom of Association Protocol. It has organised several training courses at most of its
suppliers describing what the Protocol is about, what freedom of association is and that
suppliers may not prevent employees from forming unions at the factories. Specialised
training is also given to suppliers’ staff since they are regarded as key personnel in
communications with the unions. Harry Nurmansyah at Adidas says that suppliers often
think that the Freedom of Association Protocol only stipulates what employers must do so
he has therefore to remind them that suppliers can use the Protocol if there are violations
from the union side81. The Freedom of Association Protocol states that all parties who
sign it, including the unions, must comply, not only the supplier.
Roger Tan at PT Nikomas Gemilang (PCI Adidas) reported that in May 2013 his company
began to disseminate information on the Freedom of Association Protocol to its
employees. This has been carried out through meetings, information on bulletin boards,
local radio broadcasts in the factories and via the factory in-house magazines aimed at
employees.82
5.7 Follow-up and reporting
In the absence of a general view of how far the introduction of the Freedom of
Association Protocol has progressed at factory level, monitoring is something that is
in demand and there is an ongoing discussion about the design of a follow-up model.
A review of the Protocol is planned for the autumn of 2013.83 A certain amount of
follow-up has already been implemented. Adidas sent out a follow-up questionnaire
to their suppliers which included questions about whether the criteria stated in the
Protocol had been implemented. Results vary but Harry Nurmansyah at Adidas
estimates that about 80% of their suppliers are working to comply with Protocol
requirements, requirements such as providing office space and leave of absence. In
the remaining 20% work has not started and Harry Nurmansyah argues that it is
primarily factories where unions have only recently been established.84
Adidas follow-up also includes the supplier submitting a plan of action covering the
77
78
79
80
Interview with Emily Yanti GSBI 25 June 2013.
Interview with KASBI, 17 June 2013.
Interview with Lilis Mahmudah, SPN, 18 June 2013.
Interview with a representative of FSPTSK, 14 June 2013.
81
Interview with Harry Nurmansyah, Adidas, 21 June 2013.
Interview with Roger Tan, PT Nikomas Gemilang (PCI Adidas), 24 June 2013.
83 Interview with Chris Wangkay, Oxfam in Indonesia, 14 June 2013.
84 E-mail from Harry Nurmansyah, Adidas, 22 July 2013.
82
19
requirements that have not yet been fulfilled.85 SPN, as previously mentioned, sent
out a form that the union joint working group had developed and the Play Fair
Alliance has requested certain information from brand name companies and posted
it on its website.86 Chris Wangkay at Oxfam in Indonesia believes that, in addition to
the follow-up, an evaluation is necessary both of the process of developing the
Protocol and of its impact. This is essential in order that other unions, companies
and organisations can learn lessons and understand how the Freedom of Association
Protocol was established and functions.87
Interview with Harry Nurmansyah, Adidas, 21 June 2013.
Interview with Lilis Mahmudah, SPN, 18 June 2013 plus Play Fair website www.playfair.org/media/index.php/workers-rights/brand performance/.
87 Interview with Chris Wangkay, Oxfam in Indonesia, 14 June 2013.
85
86
20
6. Positive impact
6.1 Improved communication
Something that was raised by several people who were interviewed is that the process of
establishing the Freedom of Association Protocol has led to better communications
between the parties involved.88 Previously the unions did not usually communicate with
the brand name companies, and if they did the process was experienced as stiff and
response times were long.89
Lilis Mahmudah from SPN states that unions can communicate with these companies
much more easily now and this is because of the process of developing the Protocol:
”Because of the negotiations, we have gained experience in communicating with them
and there is no longer a barrier. So if there is a problem, we need not wait for meetings
with the supplier. We can just call the company and tell them that there is a problem and
discuss how we solve it,” she explains.
Adidas is also in favour of the unions turning directly to the brand name companies
instead of, as often before, taking their problems to an NGO. However, says Harry
Nurmansyah, it is important for the factory committees that conflicts and problems are
primarily solved there.90 Improved communication between the unions and the brand
name companies has also meant that suppliers are more careful about interfering in
union work because they know that the brand name companies will hear about it.91 Chris
Wangkay at Oxfam in Indonesia believes that improved communications also reduce the
risk of strikes: ”Before, it was impossible for workers to contact brand name companies
directly. But now, if there is a case at factory level, they can call direct to Nike or Adidas
and complain or send a letter. This means a new approach, a new strategy. Not just
going out on strike, out onto the street, you can call, discuss and solve the problem
instead.”
The process of establishing the Protocol also improved communication between unions.
Unions have different opinions on other issues which may cause conflicts between them.
In the Protocol process they worked as a joint force and now have a better understanding
of each other’s strengths and weaknesses.92 ”Unions can work together, even though we
have different political backgrounds. It’s a very positive thing, I feel. If we have different
opinions we can try to understand each other,” says Emelia Yanti from GSBI.
The Adidas representative believes that the primary and most important impact of the
Freedom of Association Protocol is a greater awareness amongst suppliers on the crucial
importance of freedom of association: ”We can see it very clearly! There is a greater
awareness by the factory management that freedom of association is crucial. This
Protocol creates awareness. Brand name companies are a part of it, NGOs are a part of it
and this puts some pressure on the factory level that suppliers should not violate or
neglect to implement the Protocol. Suppliers minimise infringements now and they will
make every effort to comply with requirements,” says Harry Nurmansyah of Adidas.
88
Interviews with Lilis Mahmudah, SPN, 18 June 2013, Chris Wangkay, Oxfam in Indonesia, 14 June 2013 and Harry
Nurmansyah, Adidas, 21 June 2013.
89 Interview with KASBI, 17 June 2013, Chris Wangkay, Oxfam, Indonesia, 14 June & Lilis Mahmudah, SPN, 18 June 2013.
90 Interview with Harry Nurmansyah, Adidas, 21 June 2013.
91 Interview with Lilis Mahmudah, SPN, 18 June 2013.
92 Interview with Chris Wangkay, Oxfam in Indonesia, 14 June 2013 and Lilis Mahmudah, SPN, 18 June 2013.
21
Roger Tan at PT Nikomas Gemilang (PCI Adidas) thinks that the main advantage of the
The Protocol states what applies, in black and white, and it gives unions the opportunity
to correct the suppliers if they do wrong, and vice versa. Even if PT Nikomas Gemilang
(PCI Adidas) does not see that the Protocol brings anything new to their current
routines, they do realise that there is an advantage in that operations are regulated in
writing. It offers both suppliers and workers better understanding and knowledge about
their rights and obligations as concerns rights of association.93 Roger Tan sees that the
Protocol has also had an impact on a personal level: ”After fifteen years of experience, I
feel that the Freedom of Association Protocol has given me a greater understanding of
the nature of the rights and obligations that unions should have. And also about the
rights of workers,” he asserted.
6.2 Increased security
The Freedom of Association Protocol has, in some cases, functioned in terms of
increased security for active union members. This is shown in an example from a factory
producing for Nike. The factory has only been in existence for a few years and there were
initially no independent unions represented, only a ”yellow union”. A yellow union is
often established by factory management, has connections with government and does
not work in the interest of its members. In February 2013, KASBI formed an
independent local union section at the factory. Factory management tried to intimidate
the members of the new union by, for example, allowing mafia-like gangs into the
factory. In some cases, they did nothing more than hang around to intimidate workers
with their mere presence.
At other times members of KASBI were beaten up. A KASBI member describes how he
was abducted by twenty people from a criminal gang inside the factory. They took him
out of the factory area and began to question him and insult him, grabbing his shirt in
an aggressive manner. They told him to leave KASBI and stop running the campaign for
higher wages which was underway just then.94 According to information from KASBI,
after repeated incidents of threats, beatings and other intimidation Nike heard about the
case. Nike representatives visited the factory and convinced the supplier to sign the
Freedom of Association Protocol and explained that the supplier had to comply with its
requirements. The supplier signed the Protocol in May 2013 and after that the threats
ceased and the workers felt safer.95 The fact that security levels have generally improved
is also something that is confirmed by KASBI at national level.
6.3 Alternative conflict management
As previously mentioned, the Protocol is regarded by several of the people interviewed as
a potential alternative method for solving conflicts between unions and suppliers.
Instead of taking the case to court, the two parties can resolve the conflict more rapidly
on their own at factory level. SPN is hoping for this development since lawsuits can take
a very long time.96 Harry Nurmansyah at Adidas consider this is the reason that the
brand name companies are working to strengthen the factory committees. He
emphasises that the Protocol does not replace the right to go to court, but argues that the
Protocol may, if it works optimally, be a good instrument for solving disputes.97 The
protocol may also serve as an alternative to going out on strike.
Interview with Roger Tan, PT Nikomas Gemilang (PCI Adidas), 24 June 2013.
Interview with members of KASBI, 24 June 2013.
95 Interview with members of KASBI, 24 June 2013.
96
Interview with Lilis Mahmudah, SPN, 18 June 2013.
97 Interview with Harry Nurmansyah, Adidas, 21 June 2013.
93
94
22
7. Problems and needs
7.1 Continued violations of rights of association
The Protocol is still in its start-up phase and work so far consists largely of disseminating
information about it, both to suppliers and unions at the factory level. Although there are
several good examples of progress and positive added value, many problems still remain.
KASBI have received reports of violations from factories that manufacture the brands that
have signed the Protocol. For example, union leaders being assigned more tasks by the
supplier as a way of hindering their union work. There are also cases where union
representatives have been moved to other departments for the same reason.
Another example is the previously-mentioned case of KASBI members being physically
threatened.98SPN has also received reports that their active members have been
dismissed from a factory where the supplier itself had signed the Protocol.99 Obviously
signing is no guarantee for compliance for the factories that produce goods for brands
that have signed the Protocol, and neither is it a guarantee when the supplier actually
signed themselves.
7.2 Covers only first tier suppliers
Another problem highlighted by the unions is the problem of the Freedom of
Association Protocol only covering first tier suppliers i.e. the supplier that the brand
name companies have contracts with. Employment law issues are often more serious
further down the supplier chain and therefore there is also a need to consider these
tiers.100 Adidas sees it as difficult to include suppliers further down the chain where
they do not have the same influence although it is stated in the Freedom of Association
Protocol that suppliers are required to distribute the Protocol contents downstream and
encourage sub-suppliers to comply.101 Harry Nurmansyah at Adidas argues that if the
Protocol proves to be useful and effective then the company will consider the possibility
of including suppliers further down the chain.102 PT Nikomas Gemilang (PCI Adidas)
have not communicated the Freedom of Association Protocol to their sub-suppliers
with reference to the fact that the Protocol covers only the first tier. They believe that
they will only do this if Adidas and the other brand name companies instruct them to do
so.103
7.3 Different interpretations of the Protocol
All the union representatives interviewed consider that there are formulations in the
Freedom of Association Protocol that are problematic and it is unclear how they should
be interpreted. Consequently these should be changed 104. One example given by Lilis
Mahmudah from SPN is that in the Protocol states that time off for union work should
be taken without prejudicing production. This can be misinterpreted as the supplier
may think that all union activities disturb or affect production to some degree. Another
example is a factory where several SPN members before the Protocol were allowed to
Interview with KASBI, 17 June 2013.
Interview with Lilis Mahmudah, SPN, 18 June 2013.
100 Interviews with a representative of FSPTSK, 14 June 2013 and Emily Yanti GSBI 25 June 2013.
101 Freedom of Association Protocol, 7 June 2011, Chapter 1, Article 2.2.
102
Interview with Harry Nurmansyah, Adidas, 21 June 2013.
98
99
103
Interview with Roger Tan, PT Nikomas Gemilang (PCI Adidas), 24 June 2013.
104
Interviews with a representative of FSPTSK, 14 June 2013, Lilis Mahmudah, SPN, 18 June 2013, KASBI, 17 June
2013, Chris Wangkay, Oxfam in Indonesia, 14 June 2013 and Emily Yanti GSBI 25 June 2013.
23
work full-time for the union. After the Protocol, the number of members who were
given leave of absence was reduced to one. The reason is that the Freedom of
Association Protocol had been misinterpreted as only allowing one person to work for
the union full time.105
A third example raised is that it is not stated in the Protocol exactly how big the offices
provided should be and this has led to the unions being allocated very small spaces.106
Adidas is fairly content with the wording of the Protocol but has noted that there is
disagreement about how different formulations should be interpreted. Harry
Nurmansyah maintains, however, that this is possible to change after the fact:
”We know it’s not perfect but it is a start. It is a living document, meaning that it can be
updated, it can be changed,” he asserts.
7.4 Long and vulnerable process
It took two years of negotiations to draw up the Protocol, and another year before the
SOP Document was adopted, and the introduction phase has just begun. The long work
processes concerning these documents have been explained by the difficulties in getting
all the parties in the same place at the same time as they are busy people and several of
them travel a lot. This means it is difficult to make progress with the implementation of
Protocol requirements.107 A representative of KASBI emphasises that it is vital that brand
name companies state clearly to their suppliers that the Protocol must be complied with
if things are to happen.
If brand name companies do not press suppliers, the suppliers do nothing to realise the
Protocol and the process drags on.108 Roger Tan from PT Nikomas Gemilang (PCI
Adidas) argues that the union representatives get bogged down in details at their joint
meetings and that this also slows down the negotiation process.109
Oxfam in Indonesia’s website shows that the process of the Freedom of Association
Protocol is vulnerable. Representatives are often replaced and knowledge and dedication
are lost if those who have been part of it from the beginning are not granted a new
mandate to continue, or if they leave the company or the union. This has already
happened among brand name companies where only the Adidas representative is the
same now as at the start of the negotiations in 2009.110
7.5 Continued commitment necessary
In order to make the Freedom of Association Protocol work in practice, real
commitment from all the parties concerned is essential.111 Emelia Yanti from GSBI
believes that this commitment must go beyond the specifics of the Freedom of
Association Protocol. It cannot be just about fulfilling stated requirements as quickly
as possible, it also requires a more long-term commitment to improving
communications between the unions and the suppliers.112
105
Interview with Lilis Mahmudah, SPN, 18 June 2013.
106
Interview with a representative of FSPTSK, 14 June 2013.
107
Interviews with Lilis Mahmudah, SPN, 18 June 2013 and Harry Nurmansyah, Adidas, 21 June 2013.
108
Interview with KASBI, 17 June 2013.
109
Interview with Roger Tan, PT Nikomas Gemilang (PCI Adidas), 24 June 2013.
110
Interview with Chris Wangkay, Oxfam in Indonesia, 14 June 2013.
111
Interviews with Lilis Mahmudah, SPN, 18 June 2013, Emily Yanti GSBI 25 June 2013 and Roger Tan, PT Nikomas
Gemilang (PCI Adidas), 24 June 2013.
112
Interview and Emily Yanti GSBI 25 June 2013.
24
Lilis Mahmudah of SPN states that:
”Even if we have the offices, instruments and people necessary to be able to work [...]
If we do not have the commitment, we will not reach our goal.”
7.6 The next step
Training and dissemination of information on the Protocol, to union members and nonunionised workers and supplier white-collar staff, is scheduled to continue.113 Adidas will
also continue to monitor the implementation of the Protocol with their suppliers.114
However, the FSPTSK representative wishes to adopt a holding position for the moment
as they do not believe that the suppliers and brand name companies are taking the
Freedom of Association Protocol sufficiently seriously.115
As mentioned above, a review and evaluation are to be conducted. Oxfam in Indonesia is
also looking into the possibility of using the Protocol for other clothing brands that are
not specifically sports clothing and shoes, brands such as the Gap, Walmart and H & M.
Oxfam in Indonesia has also disseminated the Protocol to NGOs in the Philippines,
Cambodia, India and Bangladesh, who expressed interest and Oxfam in Indonesia sees it
as their task to continue spreading the Protocol to other countries.116
Since negotiations began in 2009 , there have been plans to develop two additional
agreements, one that regulates fixed-term contracts and one on wages. The idea is that
the union working group will now begin to develop a draft of the fixed-term contract
agreement which will then be negotiated with the other parties.117
7.7 Parties’ attitudes
There are mixed feelings about the Freedom of Association Protocol among the parties
concerned. As previously shown, virtually all interviewees state that there is positive
added value from the Protocol, even if there are many obstacles and difficulties to
overcome. The unions can, however, see some concerns. One union representative
expressed disappointment and did not believe that any progress had occurred and that
neither suppliers nor brand name companies take the Protocol seriously.118 Another says
she does not believe that the Protocol would ever be fully converted into practice and that
this is linked to a lack of commitment from the companies.119 Chris Wangkay at Oxfam in
Indonesia feels that it is sometimes difficult to keep the energy level of the union group up
and that there is still a lack of trust between the companies and the union
representatives.120 At the same time, hope is also expressed hope that the Protocol will
work as it is intended to do.
”I think it may work well. Although it is slow,” says a representative of KASBI.
113
Interviews with Lilis Mahmudah, SPN, 18 June 2013, Roger Tan, PT Nikomas Gemilang (PCI Adidas), 24 June 2013
and Harry Nurmansyah, Adidas, 21 June 2013.
114
Interview with Harry Nurmansyah, Adidas, 21 June 2013.
115
116
Interview with a representative of FSPTSK, 14 June 2013.
Interview with Chris Wangkay, Oxfam in Indonesia, 14 June 2013.
117
118
119
120
Interviews with Lilis Mahmudah, SPN and Chris Wangkay, Oxfam in Indonesia, 14 June 2013.
Interview with a representative of FSPTSK, 14 June 2013.
Interview and Emily Yanti GSBI 25 June 2013.
Interview with Chris Wangkay, Oxfam in Indonesia, 14 June 2013.
25
8. Final discussion
The report shows several indications that Freedom of Association Protocol obligations
have been fulfilled. New local union sections have been formed in several factories,
negotiation of collective agreements have been carried out, local unions have, in many
cases, been given office space, threats and abuses against active union members have, in
some cases, decreased. Many problems remain and it is too early to draw any firm
conclusions. Because unions need both physical premises and the time to work in order to
even become visible at the factories, supplier fulfilment of Protocol requirements for
office space and leave of absence are of great importance. The Protocol is in operation to
some extent already today as a lever for union work and contributes to the strengthening
of the right of association at local level, which may ultimately lead to stronger negotiating
capacity and improved working conditions.
However even if the trend is positive, the process is still at an initial stage and many of the
requirements are still to be implemented. The lack of basic monitoring and evaluation of
the Protocol makes it difficult to draw general conclusions about its impact at local level.
If, on the other hand, we raise our eyes to the national level, the Protocol has brought
with itself significant positive effects in improving communication, both between the
companies and the unions and among the unions themselves. The unions worked as a
unified force towards the same goal, which is unique in Indonesian history. In the longer
term this collaboration may unify the fragmented trade union movement to become a
stronger negotiator and create space and power for unions to improve working conditions
and strengthen the right of association at factory level.
Another important effect of the Protocol is that the unions now have direct contact with
the brand name companies. These contacts may be a more efficient and effective way of
solving labour problems than code of conduct complaints offices. It is vital that the
committees aimed at dealing with complaints, both at factory and at national level, begin
working as was intended in order to become sustainable instruments for the management
of labour law violations at the factories. Continued improvements in communication and
increased dialogue between the parties may reduce both the need for strikes and for
international campaigns as leverage for better terms.
The processes behind the Freedom of Association Protocol, including negotiations,
dissemination and implementation of requirements, takes time because it involves many
parties and will be applied to many more. This situation imposes explicit demands for
long-term commitment and willingness from all parties. The people interviewed are
committed and have high hopes of the Protocol functioning in the longer term. At the
same time there is some scepticism and Oxfam in Indonesia are fighting hard to keep up
the energy levels and the will to succeed among the people involved. It also necessary for
more brand name companies and unions to sign, which in turn requires that work with
disseminating information on the Protocol must continue. Another problem is that the
Protocol in the current situation only applies to the first tier of the supplier chain. If the
Freedom of Association Protocol is to make real impact, more of the supplier chain must
be covered.
The Protocol has several advantages as an instrument in relationship to Indonesia’s
national laws and brand name company work with codes of conduct. A positive value
added is that the Protocol provides clarity on what freedom of association is in practice
much more effectively than the legislation and codes of conduct do. This may, in itself,
facilitate employee understanding of freedom of association as a means of gaining better
working conditions and increasing union organisation at factory level.
26
Unlike the unilaterally developed codes of conduct, suppliers, brand name companies and
unions have negotiated this Protocol together. This also gives the parties more
accountability, and perhaps even greater willingness to comply with the Protocol. Compared
with codes of conduct, brand name companies also support union activities and negotiation
between the parties in a more direct manner. The Protocol is based, as with the codes of
conduct, on voluntary participation and is not legally binding. If the committees are to work
well in the longer term, some conflicts and violations may be resolved in a better, more
direct manner than by taking them to court. The Freedom of Association Protocol has the
potential to become a more efficient instrument than the codes of conduct as it strengthens
the unions and will thereby improve the working conditions at the factories. The Protocol is
not supposed to replace codes of conduct, it is rather regarded as a vital complement. It
would be interesting to make further studies into how these two instruments can work
together to improve working conditions at factories.
Taken together, this follow-up highlights several positive signs that the Freedom of
Association Protocol may become a new, useful model for how to negotiate sustainable and
enforceable agreements between the fairly new partners in the globalised production and
labour markets - suppliers, brand name companies and unions. This model has great
development potential, but it will take both more time and a thorough evaluation in order to
draw conclusions that may form the basis of future strategies. Consequently further studies
of this Protocol are essential. It is also of interest to follow the negotiations for the next
agreements regarding fixed-term contracts and wages.
27
Reference list
Asia Monitor Resource Center, 2003, Asia Pacific Labour Law Review – Workers rights for the new
century, Asia Monitor Resource Center.
Daisy Gardener, 2012, Workers’ rights and corporate accountability - The move towards practical,
worker-driven, change for sportswear workers in Indonesia, Gender & Development Vol. 20 Issue 1,
Oxfam, Taylor & Francis.
Freedom of Association Protocol, 2011, English translation.
ITGLWF, 2011, An overview of working conditions in sportswear factories in Indonesia, Sri Lanka &
The Philippines, The International Garment and Leather Workers Federation.
Maquila Solidarity update, 2011, Indonesian protocol strengthens sportswear workers’ union rights,
Vol.16 No.2 September, Maquila Solidarity Network.
Niklas Egels-Zandén, 2012, Från global självreglering till lokal lagstiftning: Arbetares rättigheter i globala leverantörsled. I Ingemar Lindberg & Anders Neergaard (red.) Bortom horisonten - fackens
vägval i globaliseringens tid.
Premiss förlag, Stockholm.
Niklas Egels-Zandén, 2012, Från global konsumentmakt till lokal arbetstagarmakt i Marta Reuter, Filip
Wijkström and Bengt Kristensson Uggla (red.) Vem i hela världen kan man lita på?: förtroende i teori
and praktik, Studentlitteratur, Lund.
Ola Bergström and Niklas Egels-Zandén, 2013, Hållbara leverantörsled – Detaljhandelsföretags implementering av uppförandekoder i Kina and Indonesia, Handelns utvecklingsråd.
Oxfam International, 2006, Offside! Labour rights and sportswear production in Asia, Oxfam Australia.
Oxfam Australia and Clean Clothes Campaign, 2009, Sector-Wide Solutions for the sports shoe and
apparel industry in Indonesia, Oxfam Australia and Clean Clothes Campaign.
Standard Operating Procedure for Freedom of Association Protocol Supervision and Dispute Resolution
Committee, 2012, English translation.
Susannah Palmer, 2009, Freedom of Association and Collective Bargaining: Indonesian Experience
2003-2008, International Labour Organization.
Timothy Connor, 2002, We are not machines Oxfam, Clean Clothes Campaign, Global Exchange, Maquila
Solidarity Network.
Electronic sources
www.adidas-group.com/en/investorrelations/corporate_governance/codeofconduct/ 21 Sept 2013.
Asia Floor Wage website: www.asiafloorwage.org/Resource-Reports.html 21 June 2013. Better Work website:
betterwork.org/global/?page_id=318 20 July 2013.
Clean Clothes Campaign website: www.cleanclothes.org/resources/recommended-reading/freedom- ofassociation-protocol-indonesia/view 10 Aug 2013.
Fair Labour Association website: www.fairlabor.org/affiliates/participating-companies 21 Sept 2013.
UN website: data.un.org/CountryProfile.aspx?crName=Indonesia 2013-08-25. ITGLWF:s website:
www.itglwf.org/lang/fr/factories-list.html# 7 July 2013.
LO-TCO Biståndsnämnds website: www.lotcobistand.org/Indonesia 5 May 2013, 20 July 2013, 3 Aug 2013. Nike
website: nikeinc.com/pages/manufacturing-map 7 July 2013.
Nike website: nikeinc.com/pages/compliance 21 Sept 2013.
Play Fair website: www.play-fair.org 5 May 2013.
www.play-fair.org/media/index.php/workers-rights/brand-performance/ 11 Aug 2013, 25 Aug 2013.
Play Fair website: www.play-fair.org/media/index.php/2012/05/protocol-shows-promising-signs-for- workers-inindonesia/ 11 Aug 2013, 25 Aug 2013.
Wage Indicator website: www.wageindicator.org/main/salary/minimum-wage/indonesia 21 July 2013.
Film
Sarah Rennie Negotiating freedom 2012 (35:07) www.engagemedia.org/Members/labourrights/videos/
negotiating-freedom 25 Aug 2013.
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Interviews
Interview with Chris Wangkay, Coordinator Private Sector, Oxfam in Indonesia, 14 June 2013. Interview
with Emelia Yanti, Secretary-General of GSBI, 25 June 2013.
Interview with Lilis Mahmudah, Programme Director, SPN, 18 June 2013.
Interview with a coordinator at the Training Department of KASBI, 17 June 2013.
Interview with Harry Nurmansyah, Director, Social and Environmental Affairs, Adidas Region Asia, 21 June
2013.
Interview with representative of FSPTSK, 14 June 2013.
Interview with Simon Field, Programme Director, Better Work Indonesia, 19 June 2013.
Interview with Roger Tan, Director CSR, PT Nikomas Gemilang (PCI Adidas), 24 June 2013.
Interviewer with members of KASBI, 24 June 2013.
E-mail and chat correspondence
Chat conversation with Chris Wangkay, Oxfam in Indonesia, 12 July 2013.
E-mails from Chris Wangkay, Oxfam in Indonesia, 26 Aug 2013, 3 Sept 2013, 24 Sept 2013.
E-mails from Harry Nurmansyah, Adidas Region Asia, 22 July 2013 and 27 Aug 2013.
29