Reebok, Nike remain committed to RI despite protest

Adianto P. Simamora, The Jakarta Post, Jakarta

World giant athletic shoemakers Reebok International Ltd. and Nike Inc. said on Tuesday that they remained committed to Indonesia despite contract terminations with a couple of local shoe suppliers that have sparked labor protests.

"Reebok remains committed to production in Indonesia, as demonstrated by the 19,700 Indonesian workers that we continue to employ at three factories," Hugh Hamill, Reebok's vice president of footwear manufacturing and development in the Far East, said in a statement.

He was referring to PT Tongyang, PT Dongjoe, PT Golden Adi Shoes, which produce some two million pairs of athletic shoes per month.

Hamill said that Indonesia would continue to represent Reebok's second largest global investment in footwear, with more than 25 percent of world output.

He added that Reebok had also terminated contracts with suppliers in China and Vietnam.

Earlier on Monday, more than 1,000 workers protested in Jakarta against the move by Reebok to terminate its contract with PT Primarindo Asia Infrastructure, which had been supplying shoes to the U.S. company.

Reebok terminated the contract with the West Java-based Primarindo in March "to maintain business efficiency". The protesters, who have taken to the streets several times to protest the decision, claimed that this had left 5,400 workers out of a job.

A report quoting a Reebok official earlier said that the termination of the contract had nothing to with slower global demand.

The Massachusetts-based Reebok was quoted by Reuters as saying last week that second quarter international sales fell 2 percent to US$250 million from $256 million a year earlier. U.S. sales rose to $334 million from $315.4 million.

Nike Inc. has also announced it will terminate its contract with local supplier PT Doson Indonesia in November.

"The termination orders to Doson is a business decision. It is not related with the changes on the government policy, such as labor policy, or a disagreement with Doson," Jeff Dumont, Nike Inc. general manager, said in a statement made available to the this paper.

He said that Nike had informed Doson about the plan in February, to give time for the latter to make adjustments.

Experts previously warned that various uncertainties at home, including labor and security problems, were sending foreign investors away.

But Dumont said Nike remain committed to Indonesia, pointing out that Nike would continue ordering athletic shoes from nine local suppliers employing some 60,000 workers.

Doson workers are planning to demonstrate on Wednesday.

Meanwhile, Anton J Supit, chairman of the Indonesian Footwear Association (Aprisindo), expressed concern over labor protest, saying it would further discourage foreign investors from coming to the country.

"We have to realize that the termination of a contract is a normal business practice.

"The most important thing now is that we create a conducive climate so as to invite more foreign investors to Indonesia," Anton said.