Tuesday, 5 November 2013

Adidas: Making The Right Move In Bangladesh

In a move that's raised eyebrows in the boardrooms of sportswear multinationals and delighted campaigners, Adidas has become the first big-league name to sign the Accord on Fire And Building Safety in Bangladesh. The big-three manufacturer has been under fire in the past for their supposedly lax attitude towards worker rights and welfare in their South Asian factories.

Earlier in the year, the company were forced to pay nearly $2million in compensation to the employees of the shuttered PT Kizone factory in Indonesia: a payment that only happened after bad-tempered court appearances.

By signing up to a legally binding agreement that holds them accountable for the health and well-being of their textile and assembly staff across Bangladesh, Adidas are giving a clear signal to their critics, and putting the spotlight onto their competitors who haven't yet put their names on the dotted line.

There's little doubt that this is a hard-nosed business decision as much as a sign of corporate compassion. The rotten publicity over PT Kizone led to a raft of top US colleges cancelling their contracts with Adidas. If the company can prove they've changed, they might just be able to lure influential schools like Cornell back into the fold.

Whatever the motivation, the end result is a good one, and United Students Against Sweatshops, the college association that brokered the boycott, are rightfully celebrating. In fact, they're ramping up the pressure. The Worker Rights Consortium has now formally recommended that universities require brands producing collegiate apparel in Bangladesh to sign the Accord. 

It's another example of the Detox Effect I was talking about earlier in the week. The most vulnerable part of any corporate structure is its image, a fragile thing that it will do anything, including root and branch changes to the way it does business, to protect.

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