Four years after two Jaba Garmindo factories abruptly closed in Indonesia, displacing 4,000 workers, a group of labor activists is calling upon the Blackstone Group, which at one time controlled a sportswear label that was among the companies that produced goods there, to compensate the former employees $10.8 million in unpaid and severance wages.
Jack Wolfskin was the German outdoor brand that Blackstone previously controlled that was among the labels making products there. The International Labor Rights Forum, AFL-CIO, United Students Against Sweatshops, and Global Labor Justice put the word out Tuesday morning, claiming that the total amount reflects what is owed to the displaced workers. The two factories were in Cikupa, Tangerang, and in Majalengka, West Java.
A Blackstone spokesman said Tuesday, “While we are sympathetic to the situation of these workers, this factory was owned by a third party — not Jack Wolfskin. Furthermore, Blackstone no longer has any investment in Jack Wolfskin.”
In addition to Uniqlo and Jack Wolfskin, a Workplace Relations Commission report from December 2018 noted that s.Oliver and Gerry Weber produced knitwear and apparel there before Jaba Garmindo went bankrupt. Press also indicated that Jaba Garmindo supplied apparel to H&M, the report stated. Asked about that Tuesday, a WRC spokeswoman said, “We were not able to confirm that there was any H&M production in the plant. Our belief is that those press reports were in error.”
Melanie Kuntnawitz, head of vendor control for Jack Wolfskin, confirmed Wednesday that the company worked with PT Jaba Garmindo in Cikupa, Tangerang, until the factory went bankrupt. The brand’s production share was around 2 percent of the factory’s production and Jack Wolfskin’s last production run there was carried out in February 2015, she said. “We always paid on time, ordered constant production volumes with sufficient lead times so that the factory management was able to properly plan it into their production schedule.” Kuntnawitz said. “The Fair Wear Foundation investigated the case and our behavior thoroughly throughout the entire time.”
The multi-stakeholder Fair Wear Foundation, an independent external party, ensures Jack Wolfskin is in compliance with social standards. In March 2017, the organization write a report about the Jack Wolfskin and described it as “resolved.”
Kuntnawitz said, “We were the initial party, who organized the meetings with other buyers of the factory to push the Indonesian individuals who were in charge of the assets after the bankruptcy, to prioritize the payment of workers’ due wages and severance payments from its assets first – before they pay banks or other stakeholders. When we realized that the process would possibly take years, we were the only company of the buyers using the factory, which decided to take action. We actively contacted former workers and the union of the factory and set up a fund to support them.”
She said, “With the great support from the union, we managed to get the bank account details of almost all of the workers. who used to work in the factory. And with the help of the Fair Wear Foundation, the assigned individuals handling the assets as well as the local union, we managed to remunerate all workers of the factory from the fund we set up. We also invited other buyers to participate in this fund but we didn’t hear back from them. So we decided to go ahead with it on our own.”
Jack Wolfskin supported the former workers of the factory in Cikupa, Tangerang, with a financial payment, which reflected its share of production at the factory. The payment process was done on a collaborative basis involving Jack Wolfskin, the two trade unions (both at the factory level as well as the national level), FWF, the buying agent, the Worker Rights Consortium and the individual handling the factory’s assets. While workers were thankful for some compensation, they felt it was small in comparison to the amount still owed them, according to the FWF report.
A spokeswoman for Fast Retailing said she was unable to reach anyone at Uniqlo. She referred to a post from last year regarding the matter, which stated, “Fast Retailing met face-to-face with trade union representatives of PT Jaba Garmindo in Jakarta, Indonesia, in July 2017 and November 2018, in the presence of an independent mediator. The most recent meeting was attended by the Fast Retailing executive responsible for sustainability, as well as company members directly involved in the matter.
“On account of a mutual agreement to keep the content of the meeting confidential, further details are not available to be shared at this time. However, Fast Retailing confirms its plan to continue to discuss with trade union representatives the offer to help facilitate re-employment for former PT Jaba Garmindo employees who remain without employment today.”
Two other spokeswomen for Uniqlo did not respond to requests for comment.
The situation is symptomatic of the global garment industry, where failure to pay severance is “a critical problem,” especially in Indonesia, according to labor activists. Each Jaba Garmindo employee is owed $2,700. An International Labor Rights Forum spokeswoman said, “It’s really up to Blackstone to come up with the funds. If they wish to work with other brands that were also sourcing from the factories at that time such as Uniqlo and each pay a portion, that’s great. If they want to get the factory owner to pay up their fair share, that’s fine, too. It’s not really for us to determine what is the portion that Blackstone pays, but we’re calling on Blackstone to ensure that the full amount is paid.”
Acknowledging that the onus is on “all of the brands to pay up,” the ILRF spokeswoman said there has been an international campaign targeting Uniqlo for several years. Last fall, Uniqlo’s only offer was re-employment at a location far from where workers live, and workers refused since that would require moving, she said. Former Jaba Garmindo workers were part of a speaking tour in Tokyo last year and two will be part of one at Uniqlo’s flagship opening Friday in Copenhagen, where Fast Retailing Co.’s founder and chairman Tadashi Yanai is expected.
“We really want Blackstone, Jack Wolfskin and Uniqlo to work together to ensure that the full amount is paid to the workers There really should be no further delays at this point. It’s been four years already since the factories closed. It’s very hard for these workers and their families to make ends meet without the wages and severance that they’re owed,” the IRLF spokeswoman said.
A WRC spokeswoman said, “We believe that the proportional approach in the end does not work for people…The larger brands need to step up and take leadership.”
A Human Rights Campaign spokesman noted that in recent years, companies like Nike and H&M have covered what would be considered severance for factory workers when their overseas contractors shut down. But that only became more routine after the WRC would do studies showing universities that they were violating their Codes of Conduct. Then United Students Against Sweatshops “would go after the companies and beleaguer them in the way that you’re only too familiar with and eventually force them to do it,” he said, “Now with respect to H&M and Nike, they all do that now almost routinely. It’s not that they don’t need a watchdog. Blackstone isn’t doing it and there have been attempts to get them to do it for three or four years. Finally, U.S. labor rights group like WRC and the International Labor Rights Fund are getting on their case.”