BJ&B garments closure threat

On February 22, the BJ&B garment factory in the Dominican Republic
suddenly announced it was laying off all workers and closing. For the
majority of the workers the day of the announcement was their last
working day, though formally the factory remains open until May 22,
2007. At the time of the announced closure BJ&B was producing caps for
Nike. Previously the plant also produced for Reebok (now adidas).

The factory is owned by a Korean group called Yupoong, one of the
biggest caps manufacturers worldwide. BJ&B workers have a union and as a
result it is one of the few factories that could be deemed to be in
compliance with codes of conduct. However, Yupoong has diverted orders
from BJ&B to its other plants as part of a planned strategy to move away
from this one unionised facility to the advantage of the other
non-unionised factories owned by the group. The CCC believes that BJ&B's
parent company and clients have a role to play in keeping this factory
open.

Please take action to support BJ&B workers, who engaged in a long
struggle to get their union and improve working conditions.

More on this urgent appeal: Related info, background and story of some
of the union leaders: on
http://www.cleanclothes.org/urgent/07-03-20.htm

Take action now at: http://www.cleanclothes.org/urgent/07-03-20.htm#action

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BACKGROUND: LONG ROAD TO COMPLIANCE ENDS IN... CLOSURE?

For years, workers at BJ&B endured a range of worker rights violations,
including chronic forced overtime, verbal harassment of workers by
supervisors, and repeated efforts to coerce and intimidate workers who
sought to unionize. In late 2002, when all 20 members of a recently
formed union committee were fired, the workers filed a complaint with
the US based Worker Rights Consortium and sought the support of the
international labor rights community. An international campaign, in
which the Clean Clothes Campaign participated, led to the union
committee members' reinstatement. The workers went on in January 2004 to
negotiate a groundbreaking collective bargaining agreement, which
provided for a wage increase of 10% (unprecedented in the Dominican
apparel export sector)- and educational scholarships for workers and
family members, among other benefits. These efforts also led to general
improvements in working conditions and the elimination of most code of
conduct violations.

However, the advances achieved through the workers' efforts and support
from the international community proved short-lived. Soon after the
major breakthroughs occurred at BJ&B, the company's parent company,
Yupoong, began a process of disinvestment from the company, selling off
key machinery and conducting mass lay-offs, while the company's major
buyer's - Nike and Reebok (now owned by adidas) - began shifting
production to Yupoong's other production sites in Asia. When the workers
began organizing in 2001, the factory had more than 2,000 employees and
was one of the largest cap manufactures in the Western Hemisphere. By
early 2005, the workforce had been reduced to only 350 workers.

CCC believes Nike, as the remaining BJ&B buyer, and adidas, as the most
important Yupoong buyer (and former BJ&B buyer) should do everything in
their power to work with Yupoong management and the union to keep the
factory open.

Our understanding is that the current Nike orders will be diverted to
facilities in Vietnam and possibly Bangladesh, while the Reebok (now
adidas) orders were shifted from BJ&B to other Yupoong facilities
already in 2004. We further understand that adidas is the biggest buyer
at the Vietnam plant, and a major buyer at the Bangladesh plant. As
mentioned above, Yupoong is diverting orders from its one unionised
factory to the other, non-unionised facilities in their group. It is
part of this strategy to not make the necessary technological
investments to keep the BJ&B plant 'competitive'. Recent signals from
the union to the buyer's on this matter have reportedly been ignored.

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NIKE AND ADIDAS VALUE CHEAP LABOR OVER COMPLIANCE

The union contacted both Nike and adidas by letter on February 23 and on
March 9. Soo far neither company has responded to them directly. Both
buyer's have been in touch with various other stakeholders on the case.
One of the key arguments put forward by the buyer's, particularly Nike,
as to why BJ&B will have to close, has been that it is 'impossible for
the factory to remain competitive'.

The CCC is not surprised that Yupoong is offering a better price for
caps made in Vietnam or Bangladesh, then for caps made at one of the few
decent factories in the Dominican Republic. We are dismayed though that
Nike and adidas, who publicly claim to believe in "responsible
competitiveness", seem to be content to move production purely because
it is cheaper elsewhere. There seems to have been no collaborative
process, involving brands, the union and Yupoong, to investigate
alternatives to closure. No thorough expert analysis has been conducted
to assess whether this closure is really necessary and what the
alternatives would be. As indicated above, the union believes Yupoong
purposely failed to make the necessary investment to keep BJ&B open.

It also seems as if calculations so far have been limited to BJ&B's
direct costs compared to other suppliers, without factoring in indirect
and more long term costs related to compliance, and without considering
all the cost factors that we know play a role in bringing a product to
the market. The CCC can only interpret this to mean that Nike and adidas
are not serious about implementing sourcing practices that support their
pledges for "responsible competitiveness". Making good on such
statements means looking beyond the "cheap" labour costs on offer and
assessing the value-added that comes with a workplace in compliance with
decent labour standards, including freedom of association. Nike and
adidas erode their credibility with stakeholders and consumers by
failing to consider the total costs throughout their supply chains when
making such short-sighted sourcing decisions.