Adidas, Nike under fire over supply chain abuses | Uber threatens EU pullout | Levi Strauss facing forced labour allegations

In today's Portfolio Intelligence Daily, where we highlight under the radar investment themes and idiosyncratic company risks:

• Adidas, Nike under fire over supply chain abuses in Cambodia
• Uber threatens EU pullout?
• Levi Strauss facing new forced labour allegations?

Auquan’s analyst team curates these summaries from our intelligence engine, which uses retrieval augmented generation (RAG AI) to uncover unique insights at scale, typically involving emerging markets, supply chains, financially-material ESG risks, and the impact of regulatory changes.

Adidas, Nike under fire over supply chain abuses in Cambodia

Adidas and Nike are facing fresh allegations over their supply chains in Cambodia where workers claim that they are unable to afford basic necessities and accuse the companies of wage theft.

• According to a report by ActionAid and the Centre for Alliance of Labor and Human Rights, 85% of workers in 15 Cambodian factories said their salary is insufficient to support themselves — and 50% reported going to work without enough food and 25% are earning less than they did in 2020.
• According to the report, major brands such as Adidas and Nike are facing accusations of owing millions in wages and severance pay to Cambodian workers affected by factory closures and layoffs during the pandemic.?
• The Cambodian government reported $16.7 billion in garment and footwear exports last year while workers' advocates argue that employees are paid based on the minimum monthly wage for the sector, which is $306.

“The unjust practices of major brands are trapping the workers who make our clothes in a cycle of poverty. We are calling on global brands manufacturing in Cambodia to ensure workers in their supply chains are paid a fair wage.” — Michelle Higelin, the executive director of ActionAid Australia (source )

Select timeline

• September 21, 2023 | Adidas and Nike under fire over ‘cycle of poverty’ in Cambodia (The Age)
• September 20, 2023 | As global brands bounce back from COVID-19, Cambodian garment workers face spiralling debt (ABC AU)
• February 8, 2023 | Cambodia Is Adidas' Biggest Apparel Supplier as Sportswear Giant Shifts Production Out of China (Yicai Global)

Tags: #nike #adidas #cambodia #supplychain #esg #laborrights #wagetheft #humanrights

Uber threatens EU pullout?

Uber warned that it may leave several EU cities because of new legislation that would categorize Uber drivers as employees, not contracted workers.?

• This week, the EU is voting on the Platform Work Directive, aimed at improving working conditions and social rights for gig economy workers by establishing seven criteria to determine employee status for digital labor platform workers. If three of the criteria are met, workers are entitled to benefits such as minimum wage, sick leave, and a pension.
• Uber has strongly opposed this classification in various domestic and international settings, with mixed outcomes.?
• Uber drivers in Germany, Spain, and the Netherlands are considered contractors by law. New Zealand categorized them as employees in October 2020, while the UK now recognizes them as "workers" in 2021. This classification grants them certain benefits, such as sick leave, although they do not receive full employee status.

Select timeline

• September 20, 2023 | Uber Threatens European Pullout Over Driver Classification (The Daily Upside)
• September 20, 2023 |? Uber warns of threat to drivers under EU gig work plan (FT)
• May 29, 2023 | Uber executive says European taxis joining platform (Reuters)

Tags: #uber #ridesharing #eu #workerclassification #lyft?

Levi Strauss facing new forced labour allegations?

The corporate ethics watchdog in Canada is investigating allegations against Levi Strauss Canada that they are working with companies in China that employ forced labor.

• Sheri Meyerhoffer, the ombudsperson for responsible enterprise, is investigating Levi's jeans company's supply relationships with Chinese companies that source materials from Uyghur people who are forced to work in the Xinjiang region.
• The complaint mentioned a report from Australia in March 2020 that documented the use of Uyghur labor in Xinjiang. It also mentioned a report by a professor at Sheffield Hallam University in the United Kingdom in 2021 that linked Levi Strauss to three companies that use or benefit from forced labor.
• In 2022, the United Nations discovered that China had committed severe human rights violations against Uyghurs and other Muslim minorities that could potentially be classified as international crimes against humanity.

Select timeline

• September 20, 2023 | Corporate ethics czar investigating Levi Strauss over alleged links to forced labour (The Canadian Press)

• September 20, 2023 |? | Levi's Claims Canada Forced Labor Probe Based on 'Inaccurate; Data (Sourcing Journal)
• August 6, 2023 | Levi's Vacates Better Cotton Initiative Board Seat. Is Xinjiang to Blame? (Sourcing Journal)

Tags: #levistrauss #levis #uyghurs #xinjiang #forcedlabor #canada

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