REPORT ON ETHICAL

ISSUE OF ADIDAS
Human rights and its violation

Module: Business in Society

Module code: BUS1009

Submitted by: Binod Khatiwada

Email: binodkhatiwada1117@gmail.com

Submitted to: Ananta Mainali

Word count: 2192 (Excluding Reference and Abstract)

UNIVERSITY OF NORTHAMTION (UON)

Narayantar, Kathmandu, Nepal
Table of content

Table of Contents
Introduction.................................................................................................................................................2
History.....................................................................................................................................................2
Description of the case................................................................................................................................2
Detailed theoretical and practical analysis of the problem.........................................................................3
Theoretical analysis.................................................................................................................................3
Ethics...................................................................................................................................................3
Some information on human rights.....................................................................................................3
Human rights in the business world....................................................................................................4
Practical analysis......................................................................................................................................4
Few scandals in past............................................................................................................................5
What Adidas is doing to protect human rights?..................................................................................5
Process to report complaint to adidas.................................................................................................6
Some rewards/achievement of Adidas against human rights violation...............................................7
Develop Plan to Completely Eradicate Human Rights Violation..................................................................8
Conclusion...................................................................................................................................................9
Abstract.....................................................................................................................................................10
Reference:.................................................................................................................................................11
Introduction
History
DatyH (2011) states Adidas is the multinational firm founded in 1948 by Adolf Dessler who uses
his nickname Adi and initials of last name to form ‘Adidas’. Adidas is specialized of producing
sports apparels and footwears. In Herzogenaurach, Bavaria, Germany, Adidas headquarter is
located. Jyoti Sharma (n.d.) states all over the world Adidas holds second position in producing
large quantity of sports apparels and number one in European Nation. Reebok sports apparel
enterprise, Taylor Made-Adidas Golf Enterprise, 9.1% of FC Bayern Munich and Runtastic, an
Austrian fitness enterprise are holding enterprise of Adidas. Adidas was registered on 18 August
1949 by Adolf Dessler. There have been few transformations of the Adidas logo from 1949 to
2005. The first logo was made to recognize it as “three stripes company”, second was Adidas
trefoil, third was mountain logo, fourth as Adidas neo logo and the final and present one is just
simply having three stripes only (Abrosimova, 2019).

Description of the case

This report is prepared on the unethical behavior of Adidas towards human rights. Many
sources indicate the most unethical problem of Adidas is “Human Rights”. Employees of Adidas
are facing human rights violations by the company. The Japan times (2018) states after scoring
87 out of 100 in which a company used policies and procedures on matters like transparency,
compelled employment and their employee salary, Adidas came out on top. Although having in
the top spot they are violating human rights to some extent. Due to infringement, Adidas has
been blamed again and again for violating rights of workers (Mochalova, 2018). Full
compensation has never been paid by Adidas to their workers (Usas, 2012). Workers are
prepared with answers of the questions previously for investigation and if the workers reveal
the truth, they would lose their job (Marks, 2012).
Detailed theoretical and practical analysis of the problem
Theoretical analysis
Ethics
A moral philosophy is a behavior of people which concerned with what is ethically good and
bad and ethically correct and incorrect is known as ethics, also tried to any system of ethical
ideologies (Singer, 1998). Every people have a dignity which creates ethical ‘line in the sand’
that prevents people acting in certain ways either toward other or toward ourselves (because
we have dignity as well) but we may never treat a person merely as a means to an end (The
Ethic Centre, 2016). Elkins (2019) states, there are three approaches of decision making in
business: ethical egoism, which is the belief that the highest good is to be self-serving
regardless of others; altruism, which is the belief that the highest good is to help others; and,
utilitarianism. To be an ethical business they must have the characteristics such as; strong
ethical leadership, core value statement, integrity and fairness, respect for employees and
customers, loyal relationships with employees and customers and concern for people and
environment (Philips, 2019).

Khanna (2018) states, the unethical issue that are being commonly practiced in workplace are;
misleading product information, unfair competition, mistreating employees, manipulating
accounts and bribery. Those company who are disrespecting human rights, do not follow
ethical behavior and follow unethical behavior to boost their production and revenues. Those
unethical behavior includes child labor, compelled employment, sexual harassment, etcetera
which is violation of human rights.

Some information on human rights

United Nations (n.d.) states, “Human rights are rights inherent to all human beings, regardless
of race, sex, nationality, ethnicity, language, religion or any other status. Human rights include
to right to life and liberty, freedom from slavery and torture, freedom of opinion and
expression, the right to education, and many more.”
Human rights in the business world
There are two ways an organization engages with human rights: one, positive way, in which an
association promote, fulfill and protect workers right from violations and second, negative way,
where people’s rights are violated and are not secured (Kolstad, 2012).

The fundamental rights which are being violated by companies around the world are (Human
Rights and Business, 2006):

 Using slave in their work (including compelled, contracts, or obligatory labor);

 Penalization of workers, severe or cold-blooded treatment;
 Using child in harmful activities that may hamper their ethical or physical well-being and
their development;
 Workers are sent to work in the place where there is no protective measure and are not
aware of the potential danger ahead of them which they will be facing;
 Misusing of workers who work full-time at very low wage.

Like the points above Adidas also violate those fundamental rights of employees. They have
the intention to be number one company in the world which is good in their view but what
they are doing is against human rights and are not accepted by universal human rights law.

Practical analysis
Adidas is also one of the companies which is violating the fundamental rights of human beings
mentioned above in theoretical analysis. The entire figure of workers of the Adidas group
around the world at the end of 2019 fiscal year is 59,533 (O’Connell, 2020). Adidas is not only
the top suppliers of footwear and apparels for relaxation and sport, but also of dishonors linked
with the abuse of the human rights throughout the manufacture of their several products
(Mochalova, 2018). Working situation of Adidas was exceptionally awful as there was child
labor, compelled overtime and sexual harassment where 15 years old children were working 15
hours a day and 70 hours a week but just paid a fair of 60$ a month (Hererra, 2014).
Few scandals in past
In July 2012, 2000 employees of PT. Panarub Dwikarya (PDK), portion of the Panarub Group
and footwear dealer of Adidas, went on strike to demand the charge of the provincial sectoral
wage and also enhancing working stipulations and the right to freedom of affiliations but the
result was dismissal of 1300 workers participated in the strike. Clean Clothes Campaign claims
that Adidas has dishonored the OECD Guidelines for multinational Enterprises and the UN
Guiding Principles on Business and Human Rights which state, that companies have to access
their human rights risks, perform human rights due perseverance and within the event of
human rights exploitations in their supply chain moderate and supply access to remedy to
rightsholders, during this case of the PDK employees (Paul, 2019).

For the London Olympics in 2012, nine regionally owned and managed factories in Indonesia
was agreed to produce Olympic footwears and apparels for Adidas where mostly young and
female workshop personnel work up to 65 hours (25 hours extra than the normal working
week) but were paid very much low (Worstall, 2012).

What Adidas is doing to protect human rights?

Although having lots of cases in last 10-15 years, Adidas has improved a lot and are trying to
eradicate human rights violation. In order to be in shape with the official explanation of
acknowledgement of the human rights and fulfill the factory standards, in 2014 Adidas started a
different apparatus of the third party (individual/community group/local and international and
joint Trade Union or NGO) criticism technique that has to prevent the obedience and to
emphasize the problems that could not be seen easily. In general, all of us can uplift the issue
based totally on the actual data by addressing to Adidas (Mochalova, 2018).
Goldsmith (2017) states Adidas official has targeted to wipe out all kind of servitude within
Germany sports apparel and footwears company’s supply chain, and hopes offer their
employees the technology to talk out will help. The business enterprise started “worker
hotlines” giving 300,000 workplace employees in China, Indonesia, Vietnam, and Cambodia the
chance to anonymously ask questions, make proposals or specific concerns through written
messages and cellphone applications, after knowing it was not enough, they started pilot
project in China with apps for employees to anonymously file issues-data that is composed and
then examined (Goldsmith, 2017).

Process to report complaint to adidas

To avoid the human rights violation, Adidas created a process to make a complain against
human rights violation. The main aspects file complain are (Kourabas, 2014):

 In request to cause a legitimate to gripe, the grumbling party must assert a break of a
universal human rights standard or Adidas’ Workplace Standard;
 Anyone legitimately influenced by Adidas or its distribution channel can submit a
question (or any association speaking to such gathering);
 Complaints can be made by means of hotline and by email;
 Adidas’ Social and Environment Affairs (SEA) division at that point lead an examination,
remembering for individual meetings and, conceivably, commitment with network as
well as common society partners. SEA’s discoveries will be imparted to all gatherings
(extensively characterized);
 Where an Adidas entity caused or straight forwardly added to an infringement it will
stop or modify the culpable conduct and take part in remediation where important;
 Remediation exercises will be screened by SEA.
Some rewards/achievement of Adidas against human rights violation
Adidas was judged globally victorious of the second Thomson Reuters Foundation Stop Slavery
Award, which celebrates businesses that excel in hard work to recognize, inspect and wipe out
compelled worker from their distribution channel (VOA News, 2017). The Japan times (2018)
states after scoring 87 out of 100 in using public information on practices and policies on
matters like transparency, compelled employment, and the existing salary of their employees,
Adidas was ranked top in the list.

In evaluating organizations respect for human rights based on the concept of United Nations,
Adidas scored the highest point i.e. 80-90 percent setting a new standard in business world
(Mathews, 2018).

Theme Score Out of For Theme

7.2 10 Governance and Policies
22.3 25 Embedding Respect and Human Rights Due
Diligence
15.0 15 Remedies and Grievance Mechanisms
15.6 20 Performance: Company Human Rights
Practices
20.0 20 Performance: Response to Serious
Allegations
6.9 10 Transparency

Figure: CHRB 2018 Company Scoresheet

Source:(CHRB, 2018)
Develop Plan to Completely Eradicate Human Rights Violation
Adidas being one of the top companies around the world has been violating human rights to
reach highest level in business world. In recent years, Adidas is trying to protect the human
rights it has been violating in past years. But that’s not being enough to fully eradicate human
rights abuse practices.

Being the consultant of the company, there comes the responsibility to protect human rights
and suggest the ways to fully eradicate human rights abuse. As the company is using child labor,
forced labor, to boost up it’s company revenues which is morally unethical so, they should
make division of the appropriate age group above 18-20 years old to legally work in the factory
and have to follow the contract in which workers can leave their job whenever they want to
avoid forced labor. To avoid human rights violation company should make a strict rules and
regulations regarding it. Human rights violator must be punished strictly so that others will not
have the guts to violate after that. If there are human rights abuse in the company, employees
must complain as fast as they can and there must be investigation regarding it in quick pace.
When there will be violation in doing something then that operation must be stopped.
Employees must have proper time period of work and deserving wages of their hard work. If
there is lots of work to do then company can separate shift among the employees in day and
night so they can have adequate rest. Those violating women rights and doing sexual
harassment must be kicked out of the company and filed to police. They also have to respect
the immigrants and minorities workers like that of the worker of their native country.

As the human rights violation has not come to an end, company has to follow some of the rules
which will help to eradicate human rights violation and they are; employees themselves are
responsible for stopping and addressing discrimination as they have to make complaint about
it; company have to ensure employees personal safety in case of harassment; company has to
apply policies and procedures as well as apply human rights principles while investigating about
human rights violation; company should make the consideration when settling complaints
internally and consider when an employee ask to sign a release (OHRC, 2008).
Conclusion
As there are many top companies in the world who are fighting for the top spot in business
world. To be successful in their objective, one cannot be always honest and respect human
right practices. So, they violate the human rights which will help them gain lots of profits which
is same in the case of Adidas as well. Adidas used to violate human rights like child labor, forced
labors, sweatshops, and so on. They gain one of the top spots in business world being number
two sports brand in the world. But, in being the number two they have violated human rights so
much that they had many scandals and cases regarding it. After lots of scandals, they tried to
come up with ideas to protect and promote human right practices and somehow, they have
succeeded in some extent which is not enough to eradicate abuse of human rights
permanently. So, they have to do even more homework to solve this worldwide problem take a
step forward.
Abstract
This report is all about Adidas violating human right practices which is their most noticeable
unethical behaviors. At the beginning of the report, there is introduction of the company where
there is history and about supply chain of the company. In description of case, there is
described about the human rights violation done by the company and how they are doing it. In
theoretical and practical analysis, there is some ethical practices the company has to do as well
as about human rights and what Adidas is doing against and for human rights respectively.
There is achievement of Adidas in which there is mentioned about what they have done to
improve human right practices in the company. At last being consultant of the organization,
there are some solutions to protect human rights.
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