Russell’s exclusive contract revealed

In Part 1 of our look into the University’s purchasing policies, the Journal looks into the University’s three-year, $200K contract with Russell Athletic

Queen’s signed a three-year contract with Russell Athletics last May, making it the University’s sole supplier of athletic apparel.
Queen’s signed a three-year contract with Russell Athletics last May, making it the University’s sole supplier of athletic apparel.

An interim report on the Fair Labor Association’s website states that in December of 2005, Christliche Initiative Romero, a non-governmental organization based in Germany, filed a third-party complaint with the Fair Labor Association regarding Hermosa Manufacturing, a factory located in Apopa, El Salvador.

Several manufacturing companies, including Russell Athletic, outsourced their production to the El
Salvador factory. The complaint alleged the factory closed suddenly in May 2005, leaving about 320 workers without employment.

The complainant claimed workers were owed wages and overtime payments and didn’t receive severance pay. A year after the factory closed, Queen’s University’s Department of Athletics and Recreation signed a memorandum of agreement with Russell Athletic.

The company, according to the agreement, became the “exclusive supplier of athletic apparel to the University’s Athletics and Recreation” in a deal worth an estimated $200,000 to Queen’s. The Fair Labour Coalition (FLA) is a coalition of brandname companies, universities and non-governmental organizations meant to promote and monitor adherence to ethical labour codes.

In May, Chad Currah, a division manager for Russell, told the Journal his company was a publicly traded company that ensures its manufacturing practices comply with labour and trade laws. “It’s something we take very seriously,” he said in May. “It’s a very important issue.” According to documents the Journal obtained through the Freedom of Information and Protection of Privacy Act, the University wants to hold Russell to its word.

* * *

In November, a student group named Queen’s No Sweat expressed concern to Principal Karen Hitchcock and Dean of Student Affairs Jason Laker about Russell’s labour ethics, specifically related to its involvement in the closure of the Hermosa Factory. Dave Wilson, co-ordinator formarketing and communications for Athletics and Recreation, contacted Russell after No Sweat raised concerns about the Hermosa Factory incident. “I had contacted by phone the Canadian distributor for Russell
... H.D. Brown out of Toronto,” Wilson said. “When I had mentioned the information that was
brought forth to me, he in turn contacted the head office in Atlanta.”

Ivan Iviera, Russell vice-president of international human resources and social compliance, responded
to Wilson’s query in a letter, stating that Russell was “working with government officials in El Salvador
to take steps to meet some of the needs of employees affected by the closure of the Hermosa factory.”

“This situation is truly something that must be handled by El Salvador government under their laws and
regulations,” Iviera wrote in a letter obtained by the Journal. In an interview with the Journal, Iviera said the biggest issue in the factory incident was the El Salvador government, because they never monitored the factory.

“They never did anything for those employees. I think it’s very clear if you see the website; we
have been responsible for our side, up to the level that we felt we had responsibility. … I don’t have the authorization to tell you more.”

The website Iviera was referring to was the FLA’s. FLA Executive Director Jorge Perez said the responsibility for compensating the workers lies with the Hermosa Factory’s owner, not with the U.S. companies. “An emergency fund was set up. … It was not a compensation fund, it was an emergency fund,” he said. “I mean, the responsibility is the owner’s responsibility— the question is how to collect it
from him.”

* * *

Wilson said Queen’s is concerned about fair labour practices. “We’re trying to get a better understanding of exactly what the issues are from our perspective,” he said.

“The University has, for a lack of a better term, a corporate watchdog that is monitoring the situation, and the advice has been, ‘You want to use your ability to leverage business with a company like Russell to ensure the proper things are being done.’ ” That watchdog is the Workers’ Rights Consortium, an independent labour rights monitoring organization based in Washington, D.C.

The consortium helps enforce manufacturing codes of conduct among more than 100 North American colleges and universities. Nancy Stefan, assistant director of policy and communication for the Workers’ Rights Consortium, said the brands investing in the Hermosa Factory have a responsibility to the workers that hasn’t been fulfilled.

“There’s been considerable effort since [the factory closed] to work with the companies to see what we can do to get the workers the money they’re owed, and it hasn’t been very successful,” she said. “That doesn’t reflect very well on the code of conduct compliance.” Queen’s requires all companies with whom it does business to sign a trademark and licensing agreement stating that Queen’s “is committed to contracting with licensees who uphold just labour practices as established by statute by the government(s) of their respective countries, and whose contractors do likewise. To this
end, the University will make best efforts to limit contracting only to such licensees.”

Stefan said the code of conduct holds companies responsible for working conditions in factories in which they invest, but is less clear regarding how responsible the companies are in ensuring the factories give workers their required financial benefits.

“One thing that is clear, for example, is that while the factory was in operation, it was with the responsibility of the brand to ensure they were paying the legally required benefits,” she said, adding that companies should also be responsible for severance fees should a factory—such as the Hermosa Factory—close down.

“It was the obligation of the companies to ensure the factory was keeping enough money for these purposes, so they should be held responsible for the factory’s failure to comply with local law in
that respect,” she said. “It’s not technically an obligation under the code for the companies to pay the money to workers, which is part of what’s made this difficult. Stefan said the emergency fund the companies established for the labourers isn’t enough.

“It’s certainly a positive step that they did get some money, but it doesn’t go very far in terms of addressing the total sum that’s owed.”

Stefan said she hopes the El Salvadoran court system can help compensate the labourers, but it won’t make up for the health care benefits and pension fund contributions the factory neglected to make.

* * *

Dean of Student Affairs Jason Laker said he’s glad students are engaged enough to come forward and talk with him about their concerns regarding Russell.

“It makes me feel good about our students that they would take the time to examine a company we do business with,” he said. “Obviously … it’s concerning to think that someone we’re doing business with is not being respectful of labour standards.” Laker said neither Russell’s Canadian distributor, H.D.
Brown, nor the University’s athletics department was aware of circumstances surrounding the Hermosa Factory when the issue was raised in November, but that the University has since been incommunication with Russell’s head office.

“There’s been a dialogue with the Russell headquarters in Atlanta, and in that dialogue this is what’s
reported to me—that Russell is joining with other sporting goods companies who use the same
manufacturing plant to try and resolve it with the government of El Salvador,” he said.

“It turns out even Russell doesn’t want to have that question about their business practices. From what is reported to me they are trying to deal directly with the government.”

Laker said he thinks the best policy in this instance is to try to work with Russell to resolve the problem. “Russell’s in Atlanta and they get their materials from all over the world, and the one of those many factories is having a problem—do you impugn the entire company? What do you do?” he asked. “We approach them as colleagues and say, ‘We’re aware of this and we want to know what
you’re doing. “It’s not good for the business and it appears, just on a moral issue, they don’t want to be implicated or complicit with mistreating people.” The three-year contract’s terms are under review this month. Athletics and Recreation Chair Leslie Dal Cin said she can’t comment on the contract.

“I don’t think I’d be in a position to comment on that at all,” she said. “I’ve never met with the Russell
folks to even talk to them at this point. I’d be making a really ill-informed comment.” Hendrik Pardoel, Athletics and Recreation communications co-ordinator, also declined to comment.

“We’ve been told not to say anything; the University wants to handle that,” he said. Debra Easter, the University’s trademark licensing co-ordinator, said the University is looking into issues surrounding Russell and ethical labour practices. “It’s certainly on the agenda,” she said, adding that this is
something they want to discuss on a Trademark and Licensing Review Board. The board’s mandate includes detailing requirements for suppliers, updating the Code of Conduct, recommending appropriate monitoring methods, deciding on appropriate remedial responses to infractions by licensees and reviewing the Queen’s University Trademark Licensing Agreement, among other things.

The board’s membership is comprised of administration, staff, students and parties with whom
Queen’s does business. “We’re eager to engage both of those issues,” Easter said. “We want to make progress in the area of vendor accountability.” Easter said the University works with the Workers’ Rights Consortium to keep companies they deal with accountable. “Our licensees send us a list of
all of their suppliers yearly, so that keeps us knowing who, in fact, deals with Russell,” she said. “[The consortium’s] advice is to do our best to encourage the licensees that we deal with to be aware and we will keep them aware of these issues, and that’s how we do it.”

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