Anti-Sweatshop Advisory Committee Meeting
October 26, 2006

IU’s Coca-Cola Contract

Jennifer Foutty and Megan Kerton from IU Purchasing discussed IU’s exclusive contract with Coke, which covers all campuses and expires in mid-2009. Contract discussions may begin toward the end of 2007 but could be delayed due to changes in IU leadership. IU has two options as the contract expires: 1) renegotiate for an extension with Coke, 2) open a competitive bidding process for new contract with Coke and other vendors (Pepsi, RC).

Megan said that soft drink sponsorship contracts are typical for higher education institutions, usually exclusively with Coke or Pepsi. University of Michigan is an exception and has smaller contracts with Coke, Pepsi, and other drink vendors. Jennifer stressed that Coke has lived up to all its contract obligations with IU.

Megan described the costs incurred by universitys if a major vendor is changed:

The committee asked whether IU could terminate its contract with Coke early, and at what cost? Jennifer said she would find out. Committee members pointed out that it is hard to weigh the value of human life lost in labor struggles in Colombia against financial losses which would be incurred by abrogating the IU Coke contract.

Jennifer said that the ultimate decision would be up to the Vice Presidents and campus chancellors, so the committee should try to exert influence there if it is concerned with the continued relationship between IU and Coke. Jennifer and Megan said that the Board of Trustees also provides the Purchasing Department with guidance on these issues.  

Letter Regarding Hermosa & Chi Fung Factories.

The letter was sent to the following licensees: Russell Athletic, Majestic Athletic, Nike, Jansport, and Team Edition Apparel. Russell and Majestic have responded, saying they are trying to resolve the situation.

USAS Designated Supplier Proposal.

Jenny McDaniel attended the DSP working group meeting Oct. 24. Most of the meeting was spent discussing the “business letter of review” which has been prepared by attorney Donald Baker and will be sent to the Department of Justice to make sure the DSP would not violate any anti-trust laws. The plan is that the final draft of the business letter would go out to the universities for review on Oct. 27 or shortly thereafter for a review period of 30 days. Then it would be sent to the Dept of Justice in early Dec. The DOJ review process takes up to 6 months.

The changes to the draft DSP discussed in September were all adopted at the Oct. 24 meeting. The issue of a company “cutting and running” from a factory was addressed by specifying that if a company pulls all its orders from a faculty after 3 years, that company must move the orders to a unionized factory.

The DSP working group is seeking more feedback from universities and licensees on the revised DSP. They need to get more big-name universities on board to make the DSP effective.

WRC Update on Gildan Activewear

The WRC has reported (9/27/06) that Gildan Activewear has not upheld its agreement to remedy code of conduct violations at its El Progreso factory in Honduras which stemmed from mass terminations in January 2005. Gildan was supposed to favor former El Progreso workers in hiring at other factories. Although it did not comply during initial steps, Gildan did make attempts to help terminated workers later on. The WRC concluded, however, that mass terminations are difficult to remedy in any case, especially as time drags on before an agreement between the company and NGOs is reached.

Next Meeting

November 16th at 3:30pm in the Hoosier Room of the IMU