Towards a no-sweat world

While it took western countries took two centuries to go through an industrial revolution, former Adidas executive vice-president Michel Perraudin says China is amid a 20-year industrial revolution.

Low wages and high productivity are China's hallmark and the reason why the biggest brands source their goods from mainland factories. Many of those factories can trace their heritage to Taiwan, where Asia’s top sporting goods companies are exhibiting their wares at the Taipei World Trade Centre through May 2 at TaiSPO -- the Taipei International Sporting Goods Show.

The convention kicked off April 29 with the World Federation for the Sporting Goods Industry’s 2010 manufacturers’ forum.
Executives from major retailers and brands spoke to an audience of manufacturers representing companies from Taiwan, Hong Kong and mainland China.

The world may be a long way from being sweatshop-free, but the international campaigns by various non-governmental organizations have made the issue of working conditions in sportswear factories top-of-mind among both consumers and the WFSGI.

Here's what two executives had to tell the manufacturers.

Intersport International Corp. business unit manager Markus Rist:

“No matter the size of the brand, it’s a requirement of the market that you have to fulfill. It’s not only a trend, it’s an absolute given fact. We are forced to comply with those unique regulations... the EU, the U.S., every market has more and more regulations. The sole objective of those regulations is to protect the consumer. This is nowadays so sensitive that nobody wants to burn his fingers. If you want to be a supplier to any of us, it’s a minimum requirement that you have to be able to fulfill and guarantee.

Vice-president of sourcing, quality and logistics New Balance Jim Sciabarrasi:

“The biggest issue that we have seen in the small manufacturer is a reluctance to embrace the compliance requirements. The requirements are not costly. For example, many small manufacturers believe the best scenario is to work many, many hours a week, but a very basic compliance requirement is to limit the amount of hours a week. When that happens, productivity goes up because quality goes up and there’s less retraining of workers who leave the small factory because they don’t like the life of working every single day, so many hours... The productivity more than makes up for the other requirements.”

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One of the world’s biggest athletic footwear makers is Taichung, Taiwan-headquartered Pou Chen Group. The 1969-founded company uses its home base for research and development. It’s forecasting production of 250 million pairs of shoes in 2010, up 50 million from 2009, for brands like Adidas, Nike, Reebok, New Balance, Rockport, Asics, Timberland and Puma. PCG and subsidiary Yue Yuen Industrial Holdings have a workforce of 400,000 people at factories in China, Indonesia, Vietnam, Bangladesh, Mexico and the U.S. PCG claims it makes one-in-seven pairs of branded shoes in the world.

PCG, by its sheer size, has been criticized by various non-governmental organizations for treatment of workers. Corporate social responsibility executive Eric Chi claimed the company has made progress with ventilation fans and air conditioning in factories, daycare centres and “spiritual consulting centres”, birthday parties for employees and ergonomic furniture “to reduce the fatigue and exhaustion of employees.”