Social responsibility is an integral part of our brand values, and adidas-Salomon has a tradition of requiring its suppliers to conform to social and environmental standards. In 1998 further steps were taken to ensure that there are acceptable working conditions in the factories which supply adidas-Salomon products. The corporate Standards of Engagement (SOE) were sent to suppliers confirming the policy on minimum requirements for labor, health, safety and environmental issues at all adidas-Salomon facilities and those of our suppliers. The SOE is based on the World Federation of the Sporting Goods Industry model Code of Conduct and states that adidas-Salomon will not conduct business with suppliers who use forced labor or child labor and do not comply with the employment laws of the country concerned. It has been translated for display in factories into the languages of the contries where products are sourced.

Standards of Engagement being Monitored

To ensure that suppliers comply with the SOE, an internal monitoring program was initiated and SOE audits of suppliers around the world were conducted by regionally located adidas-Salomon personnel. Suppliers are being evaluated for compliance with the SOE and action plans developed with individual suppliers to improve conditions. adidas-Salomon has teamed up with Business for Social Responsibility, a non-profit organization which promotes corporate citizenship, to train monitors and suppliers' representatives. In addition, a manual on health, safety and environmental issues has been developed which will help to make the SOE effective in practice. Manuals on labor issues are also being developed.

Support for Child Labor Projects

adidas-Salomon through the World Federation of the Sporting Goods Industry supports the child labor project in Pakistan which is succeeding in providing education opportunities for children and thus alternatives to stitching balls. A similar project is being developed in India and both involve local sporting goods manufacturers, the UN's International Labor Organization, Save the Children, UNICEF and local non-governmental organizations.

AUTHENCITY
INSPIRATION
COMMITMENT
HONESTY

These are some of the core values of the adidas brand. We measure ourselves by these values, and we measure our business partners in the same way.

Consistent with these brand values, we expect our partners - contractors, subcontractors, suppliers, and others - to conduct themselves with the utmost fairness, honesty, and responsibility in all aspects of their business.

These Standards of Engagement are tools that assist us in selecting and retaining business partners that follow workplace standards and business practices consistent with our policies and values. As a set of guiding principles, they also help identify potential problems so that we can work with our business partners to address issues of concern as they arise.

Specifically, we expect our business partners to operate workplaces where the following standards and practices are followed:

GENERAL PRINCIPLE

Business partners shall comply with all legal requirements relevant to the conduct of their businesses.

EMPLOYMENT STANDARDS

We will do business with partners who treat their employees fairly and legally with regard to wages, benefits, and working conditions. In particular the following guidelines apply:

Forced Labor: Business partners shall not employ forced labor, whether in the form of prison labor, indentured labor, bonded labor, or otherwise.

Child Labor: Business partners shall not employ children who are less than 15 years old (or 14 years old where the law of the country of manufacture allows), or who are younger than the age for completing compulsory education in the country of manufacture where such age is higher than 15.

Discrimination: While we recognize and respect cultural differences, we believe that workers should be employed on the basis of their ability to do the job, rather than on the basis of personal characteristics or beliefs. We will seek business partners that share this value, and that do not discriminate in hiring and employment practices on grounds of race, national origin, gender, religion, age, disability, sexual orientation, or political opinion.

Wages and Benefits: Business partners shall pay their employees the minimum wage required by law or the prevailing industry wage, whichever is higher, and shall provide legally mandated benefits. Wages shall be paid directly to the employee in cash or check or the equivalent, and information relating to wages shall be provided to employess in a form they understand. Advances and deductions from wages shall be carefully monitored, and shall comply with the law.

Hours of Work: Employees shall not be required to work more than sixty hours per week, including overtime, on a regular basis and shall be compensated for overtime according to law. Employees shall be allowed at least 24 consecutive hours off per week, and should receive paid annual leave.

Right of Association: Business partners shall recognize and respect the right of workers to join and organize associations of their own choosing.

Disciplinary Practices: Every employee shall be treated with respect and dignity. No employee shall be subject to any physical, sexual, psychological or verbal harassment or abuse.

HEALTH AND SAFETY

Business partners shall provide a safe and healthy working environment, including protection from fire, accidents, and toxic substances. Lighting, heating and ventilation systems should be adequate. Employees should have access at all times to sanitary facilities, which should be adequate and clean. When residential facilities are provided for employees, the same standards should apply.

Business partners shall comply with all applicable environmental laws and regulations.

COMMUNITY INVOLVEMENT

We will favor business partners who make efforts to contrubute to improving conditions in the countries and communities in which they operate.