Penn State has suspended its licensing contract with Adidas, according to a Penn State News press release. The decision was made in light of issues raised after the closing of an Indonesian clothing factory, PT Kizone, which left workers without severance pay. The decision is to be put into effect immediately.
United Students Against Sweatshops member Lili Hadsell said Adidas owes the former workers of the PT Kizone factory $1.8 million.
"Members of the Penn State community, including students, faculty and administration, have engaged in collaborative discussion and decision-making for months regarding the very important issues raised by the closure of the PT Kizone factory in Indonesia in 2011,” University President Rodney Erickson said in the letter to Adidas. “It is obvious to us that there are profound limits to our University's influence over the substantial and complex issues created by the current supply chain model for the global manufacture of apparel. Even so, we are determined to do our share to redress shortcomings where we find them and encourage our licensees to behave responsibly and justly vis-a-vis the workers who produce their products in our name."
According to the release, the suspension will give Adidas 60 days to compensate those who worked at the factory. Adidas is forbidden to produce any items carrying the Penn State logo, and if the suspension expires before workers are compensated, Penn State will terminate its license with Adidas.
Wednesday was the deadline for Erickson to make a decision about the contract.