Penn State has suspended its licensing contract with Adidas, the university announced Wednesday.
The decision, effective immediately, was made in light of issues raised after the closing of an Indonesian clothing factory in 2011, PT Kizone, which left workers without severance pay.
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. “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.”
The suspension will allot 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, according to a media release.
Wednesday was the deadline for Erickson to make a decision regarding the contract. If Adidas pays the Indonesian workers what it owes, then Penn State will lift the suspension and will continue its prior relationship with the company, Erickson said in the letter.
Penn State’s license with Adidas produced royalty revenues of $6,800 for the 2011-12 fiscal year, according to the release.
“We’re very pleased with administration for making an important decision that will have an effect on the whole country and the actual workers at PT Kizone,” Hadsell (women studies and English) said.
Hadsell said Penn State is the eighth school to take a stand against Adidas’ violations, adding that the university is “doing the right thing to sever [its] ties.”
During the suspension, Adidas is allowed to sell any existing Penn State inventory, but it is asked not to produce any new Penn State products.
“It is our hope that Adidas will instead adequately invest this time toward the remediation required,” Erickson said in the letter.
USAS club adviser and Labor Studies and Employment Relations professor Mark Anner said he doesn’t think that it is ideal for Adidas to continue selling its already-produced Penn State items. But he said he recognizes there are legal aspects to take into consideration and he remains hopeful that Penn State’s decision will benefit the Indonesian workers.
“The poor workers in Indonesia have been making garments with our name, and we hope that they get the benefits that they deserve,” Anner said. “This is a very strong statement. We are a major university that is telling a major corporation that their treatment of workers is unacceptable.”
Hadsell said that by suspending the contract with Adidas, Penn State is setting a precedent for all of its licensees and the collegiate apparel industry.
Members of USAS plan to deliver a letter to Erickson today, in response to his decision to suspend the contract with Adidas.
“We’re really proud of President Erickson and really proud of the school, so a lot of the letter will be congratulatory,” Hadsell said.
