Factory: PT Taekwang
Key Buyers: Nike
Last Updated: 2021
Case Summary
The apparel industry’s chronically low wages left most garment workers with no savings on the eve of the Covid-19 crisis. Since most governments in apparel exporting countries provide little or no unemployment benefits, the only thing standing between an out-of-work garment worker and immediate poverty for her family are the legally mandated severance benefits that most garment workers are due upon termination.
Research by the Worker Rights Consortium (WRC) reveals that many garment workers who were fired during the pandemic have been denied some or all of this essential compensation, in violation of the law and the labor rights obligations of the brands and retailers whose clothes they sewed.
PT Taekwang is one of the 31 export garment factories identified in the WRC’s report, Fired, Then Robbed: Fashion brands’ complicity in wage theft during Covid-19, which still owed workers legally mandated terminal compensation as of April 2021.
In June 2020, PT Taekwang dismissed 1,400 workers. As of April 2021, these workers were still waiting for $294,000 in legally owed compensation.
PT Taekwang, a footwear factory that produces for Nike, is located at Jl. Raya Cinangsi, Karanganyar, Kec. Subang, Kabupaten, Subang, West Java, Indonesia. The factory is owned by Taekwang Industrial Co., Ltd, which is headquartered in South Korea and employs over 90,000 people in Vietnam, Indonesia, China, and South Korea in industries including footwear, chemical and materials production, and electricity. The footwear segment of Taekwang Industrial Co. Industries primarily supplies Nike; the company also supplied textiles to Chementry Industries Inc., Fils Promptex Yarns Inc., JJB Inc., JYK Trading Inc., and KNG Textile within the last year. In a January 2021 letter to the WRC, Nike acknowledged it has sourced from PT Taekwang and claimed that severance was paid in full. Indonesian law requires, however, that unless an employer proves that workers’ dismissal was necessitated by at least two successive years of economic losses, or by force majeure, the employer must pay workers two times the ordinary severance entitlement. PT Taekwang did not provide proof to the workers’ union of two years’ economic losses, nor a claim of a force majeure incident; therefore, by law, workers are owed two times ordinary severance. They received only one times ordinary severance.
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