Statement responding to the article „Serious allegations against sportswear company PUMA” (Spiegel Online April, 19th 2008) and “Allegations against PUMA supplier” (Spiegel April, 21st 2008)
Herzogenaurach, April 21, 2008 - PUMA rejects the allegations against the company and its long-time Chinese manufacturer Taiway Ltd.referring to exploitation of its workers that were raised by China Labor Watch (CLW). CLW claimed that employees at PUMAsupplier Taiway would be “forced to work overtime without being paid accordingly”. PUMA employees of the Environment and Social Affairs (S.A.F.E.) team followed up on these allegations in China and initiated an audit at Taiway. Within this audit, the issues raised were investigated in detail. The results of this audit were handed over to CLW.
PUMA found out that the allegationsconcerning non-payment of minimum wages, working excessive hours of overtime, discrimination of minorities and bad food,which were raised by CLW, are not tenable.
Within its membership of the Fair Labor Association (FLA), PUMA decided to conduct a “Third Party Complaint” by FLAin addition to its own investigations. FLA as an independent organization will investigate the allegations that were raised against PUMA again and publish the results accordingly.
China Labor Watch, which is a US-non-governmental organization focussing on Chinese labor law and working conditions in China, provided PUMA with information about critical working conditions at one of PUMA’s supplier, Taiway, in March 2008. Taiway has been business partner and shoe manufacturer for PUMA for 30 years. The allegations referred basically to three topics:
- Non-payment of minimum wages and working of excessive hours of overtime
This allegation is false. After an extensive investigation and access to pay sheets, PUMA found out that Taiway pays legally correct wages. According to PUMA S.A.F.E. standards employees work overtime on a voluntary basis and are paid accordingly.On top of output peaks, regular power cuts due to overcharge cause shifts in working times. In order to deal with this problem, Taiway introduced a systemof eight hours regular work and two hours of overtime from Monday to Friday and another eight hours on Saturdays. All overtime at Taiway are done on a voluntary basis.Each employee is asked whether they want to do overtime and has to sign an overtime application form. Employees who are not willing to do overtime do not have to fear repercussions by the management at all. Overtime is being paid accordingto legal guidelines including overtime surcharges.
- Low-quality food
This allegation is also not tenable. During the audit, we found out that the factory management, employees and also PUMA technicianseat in the same canteen, which offers a variety of 28 meals in different price categories. All hygiene regulations and standards were met. The canteen is run by an external service provider and not by Taiway itself.
- Dicrimination of minorities:
PUMA investigated this allegation as well by checking up on staff records. During the last two months Taiway hired an increased number of workers from provinces, which had been underrepresented in the company according to CLW. The fact that there is a lack of qualified workers in Southern China and workers are able to choose their employment at this time makes the allegation of discrimination untenable.
In summary PUMA concludes that the allegations raised against the company are not tenable and unjustified.
After its most recent audit, PUMA downgraded its former A-supplier Taiway to B+. This downgrade is a result of not being compliant to all PUMA standards, relating especially to health protection and social sectorissues. Corrective actions had been set up for Taiway and the company began immediately to implement these in the first quarter. PUMA informed CLW about these corrective actions.
Taiway was one of the first manufacturers of PUMA, which participated successfully in a project together with Fair Labor Association in order to establish a management system. Amongst others, this systemalso includes an overtime management system. Taiway was already using an own environmental and social system, which is strictly compliant with PUMA standards.
During PUMA audits, staff records, pay sheets, time records and lists of time recording as well as operational safety (safe operation of machines and chemicals) and environmental protection (waste disposal, waste water treatment) standards are being checked.
Manufacturers which are not willing to cooperate and implement PUMA’s environmental and social
standards will have to face the termination of our business relationship and will not be included in the list of manufacturers.
The FLA conducts independent and unannounced audits of up to 5% of all PUMA manufacturers. PUMA joined this association in January 2004.
PUMA’s continued membership in the Dow Jones World / STOXX Sustainability Indices and the FTSE4Good Index show that our Corporate Social Responsibility strategy is welcomed by the social responsible investment community.
PUMA´s most recent Sustainability Report 2005/2006 has been released in October 2007 and is published in accordance with the new guidelines of Global Reporting Initiative (GRI), a large multistakeholder network and global leader in standard setting for sustainability reporting.
The Report was externally verified by German Technical Service and Assurance Provider TÜV Rheinland and obtained GRI application level A+, a unicum in the sporting goods industry. The independent environmental organization Greenpeace also confirms that PUMA’s commitment sets standards. Greenpeace has checked different companies regarding eco friendliness of their products, ranking them from red to green. After examining of PUMA’s product range, PUMA was given a “green” rating in 2007.
.
Since 1993 PUMA has been holding annual stakeholder dialogue meetings. In 2007, the German Network for Business Ethics, non-governmental organizations like Oxfam and Greenpeace as well as labor unions, manufacturers, representatives of the FLA and of the German Association for Technical Cooperation (GTZ) participated in this stakeholder meeting.
We emphasize our transparency through publishing the list of our factories.
The autonomous Swiss Research Agency SAM confirmed PUMA “an outstanding sustainability result in the sector clothing, accessories and footwear” also for the year 2008.
Almost 100% of all PUMA suppliers were audited in the last years in terms of Social Affairs, environmental protection and operational safety. In 2007, we audited 344 factories, of which 120 were audits and 224 re-audits. Our internal system for audits was accredited by the FLA in 2007. We are fully aware of the complexity of problemsrelating to all environmental and social standards along the whole supply chain. For this reason, we support our manufacturers by setting up and implementing corrective action plans.
Through our ongoing and continuous supplier audits, PUMA ensures that our manufacturers adhere strictly to the high environmental and social standards. We offer the best possible support for the factory management teams by offering participation in projects. PUMA has been consequently following up on potential issues for several years.