Inside On's supply chain
Pricy shoes,
underpaid workers,
and a fearless union
“When I heard the lay-offs were going to be cancelled, I cried.” Sitting on a plastic chair outside the cafe at the entrance to the Yihong factory, where we had arranged to meet, Suryana (people from Java usually don’t have a family name, but one or more first names) is savouring what feels like a hard-won victory. The 30 year old works in a shoe factory in the Cirebon region on the Indonesian island of Java – three to four hours by car east of the capital, Jakarta – where he also serves as secretary of the SBDI-KASBI trade union. The father of an 18-month-old child and his wife, who had also worked for Yihong, had been without a steady income for 11 months, relying on support from her parents to get by. But Monday, 6 April 2026, the day we meet, marks a key turning point: six weeks after the first 40 dismissed union members were reinstated, the remaining 24 are going back to work today.
“When I heard the lay-offs were going to be cancelled, I cried.”
- Suryana, factory worker
Open once more, including to union members: the entrance gate of the PT Yihong factory.
Open once more, including to union members: the entrance gate of the PT Yihong factory.
“Stop Union Busting” is printed in Indonesian on the T-shirts of the SBDI-KASBI union.
“Stop Union Busting” is printed in Indonesian on the T-shirts of the SBDI-KASBI union.
The big day: trade unionists …
The big day: trade unionists …
… gather in front of the factory on 6 April 2026, the day the last of them were reinstated.
… gather in front of the factory on 6 April 2026, the day the last of them were reinstated.
Shortly after 7 a.m., workers begin arriving at the factory gates on scooters. Around a dozen people stand near the cafe, all wearing burgundy t‑shirts bearing the union’s yellow-star logo on the front and, on the back, in large letters above two crossed fists, the slogan ‘Lawan Union Busting’ (‘Stop Union Busting’).
The pride, relief and joy prompted by the victory is visible on the workers faces. At exactly 7:30, the guards swing open the heavy iron gate and the workers file in.
Many of them had long stopped believing they would ever return to the factory floor, yet here they were, heading back to work. “I don’t know of any other similar case,” says Syarip Aripin, an expert at the Indonesian organisation Lips, a research and advocacy group that studies labour rights.
But if the victory was unusual, Syarip adds, the reaction of the Yihong factory owners when workers started to organise in early 2025 was not in the slightest.
Like many textile and footwear factories in Indonesia, the Yihong factory where Suryana works is owned by Chinese investors. The company is a subcontractor for larger factories that supply the world’s leading sports brands: Brooks, New Balance, Under Armour, Asics – and the fast-growing Swiss label On. Assembly takes place at another factory known as Long Rich, a direct supplier of On products located about 30km away. Yihong, for its part, specialises in complex printing and dyeing processes that require specific expertise and equipment.
Swiss Engineering
made in Indonesia
Suryana’s job is to apply the labels, including the lettering ‘Swiss Engineering’, by hand. The labels could easily read ‘Made in Indonesia’ – as the lettering is just as much made in Asia as the Swiss cross is. The cross, for its part, has been allowed to adorn shoes sold in Switzerland ever since the Swiss Federal Institute of Intellectual Property changed its practice in March following intense pressure by On.
With the help of workers like Suryana, On’s sales are booming: in 2025, the year of its 15th anniversary, the company saw revenue jump by 36 per cent to around $3.75 billion US dollars for the first time. While the design — and, perhaps even more importantly, the marketing — may be Swiss-made, the shoes themselves are produced in Asia, by workers whose monthly pay is often barely equivalent to the price of a single pair sold in Switzerland. Of the roughly $250 US dollar price tag for a standard model in Swiss shops, only about $25 to $30 US dollars go to the company making it. This deeply unequal distribution of value earns millions for the company’s owners – and leaves the workers struggling to make ends meet.
1,126 dismissals overnight
The wave of emotion Suryana and his colleagues experienced in early 2026 has its origins about a year before. That’s when workers started clamouring for their rights.
The Yihong factory in Cirebon had been in operation for three years by then, and discontent among the workers was growing. They had denounced multiple forms of abuse, among them harassment by supervisors, unpaid overtime and, for more than half the workforce, no written contract. But it was the company’s refusal to grant fixed-term employees proper compensation under Indonesian law that led to the explosion of discontent. At the time, Suryana and other colleagues reported the breaches to labour law to the regional inspectorate. A few days later, they formed the trade union SBDI, affiliated to the national KASBI trade union.
Factory management reacted immediately. Using a practice common in Indonesia, they pressured workers to join a hastily-formed, company-controlled trade union. In several waves, those who refused to leave SBDI-KASBI were dismissed. The situation escalated in early March. After the union’s secretary Suryana, its president Krisma, and another union official were laid off, a spontaneous protest broke out.
On the morning of 10 March, workers arriving at the iron gate found the factory shut. On the barred entrance, a list of dismissals bore the names of all 1,126 employees. The following day, owners claimed they had been forced to close the site, citing order cancellations they blamed on what they described as an unlawful strike. Yet, according to several witness accounts, production continued at a slow pace, with foreign workers transported to the factory by lorry.
A campaign targeting workers
As a result of the protests, the laid off workers found themselves bearing the brunt of an aggressive campaign on social media aimed at discrediting them, until then a tactic only seen in politics. In what was plainly a coordinated operation, influencers pushed management’s narrative, suggesting that the dismissed union members were to blame for the factory closure.
In media reports, workers were portrayed as troublemakers whose behaviour was weakening the regional economy. The message resonated. Cirebon is one of the country’s new industrial hubs – buttressed by local and national authorities in an effort to attract export-oriented companies.
Java is one of the most densely populated islands in the world and the heart of Indonesia's export industry.
Cirebon, located about four hours' drive east of Jakarta, is one of the new industrial zones where wages are significantly lower than in the capital.
At Long Rich, On's direct supplier, running shoes are assembled. The sub-supplier Yihong handles dyeing processes and the application of prints.
Rice farmers next to the factory walls: the Yihong factory stands in the middle of farmland.
Rice farmers next to the factory walls: the Yihong factory stands in the middle of farmland.
It’s the latest stage in a process that began in the capital Jakarta between the late 1970s and early 1980s. At the time, President Suharto launched a policy of establishing export-oriented industries, with low labour costs as the main selling point. But in the early 2000s, rising land prices and wages complicated the model. Production began to move along the motorway corridor stretching east from Jakarta, with new industrial zones emerging in agricultural areas.
This development model has had dramatic human consequences, both now and in the past, as Dian Septi of the labour organisation Asia Floor Wage Alliance (AFWA) vividly describes in a study. According to that research, unemployment in traditional regions of Indonesia is driving women into prostitution, tearing families apart, and leaving children to fend for themselves. In Cirebon, Suryana has been calling on companies producing in this region to take on their share of the social burden: “Industry is pushing out agriculture and fishing, which people here used to depend on,” he says. “If these companies leave, there will be almost nothing left for us to live on.”
Since 2023, the Swiss sportwear brand On has also been manufacturing in these new production zones. While Vietnam remains its main production hub, around 10 per cent of its shoes are now made in Indonesia. Unlike Vietnam, where the labour market is now largely saturated, Indonesia (and particularly its newer industrial centres) offers a young, sizeable workforce, as well as cheaper minimum wages – making the archipelago highly attractive to international brands.
A complex the size of
40 football pitches
At the invitation of the KASBI union, we visit its office on the Long Rich factory site, around 30km from the Yihong plant. The word “factory” barely does the site justice. A complex covering some 55 hectares, the equivalent of around 40 football pitches, Long Rich includes 29 production halls, several administrative buildings, a mosque and an emergency clinic.
In front of three of those halls, a large On logo catches one’s eye. Unlike their subcontractors, big factories typically display the brands they work for and regularly appear on supplier lists published by those brands. According to several Indonesian experts from trade unions and NGOs, larger factories generally comply with labour rights standards – something that can’t be said for subcontractors.
Seated around a table in front of a wall covered with leftist symbols and slogans, KASBI representatives nonetheless paint a worrying picture. One worker, who we are anonymising to protect from reprisals, speaks of “an atmosphere of intimidation throughout the building”. She explains: “The pressure is huge because of very high production targets, and supervisors spend their time shouting at us,” adding that the problem is widespread across all the site’s production halls. Formal labour rights, however, are largely respected: Workers are given proper contracts, they are getting paid for overtime and they are allowed to freely associate.
Though it might seem paradoxical, this fact has fuelled anxiety. Union members fear a repeat of a pattern already seen in other industrial zones in the country: brands shifting production further east where costs – and levels of unionisation – are lower.
Sharp regional disparities in legal minimum wages are a key driver of these relocations. In response, KASBI and other unions have launched a campaign with a clear slogan – ‘Same brand, same wages’ – demanding equal pay for equivalent work, regardless of the production site. In Cirebon, where the Yihong factory is located, for example, the monthly minimum wage currently stands at 2.9 million Indonesian rupiah, or $162 USD. That’s barely half the level in the Jakarta region, where it reaches 5.7 million rupiah. The discrepancy is unjustifiable, Birga, responsible for wages at KASBI Long Rich, argues: “Food and other basic necessities do not cost less in Cirebon than they do in Jakarta.”
At direct supplier Long Rich, several halls are reserved for making On shoes.
At direct supplier Long Rich, several halls are reserved for making On shoes.
Part of the factory complex: the KASBI union office on the Long Rich site.
Part of the factory complex: the KASBI union office on the Long Rich site.
Zaenal, chair of KASBI Long Rich, in the union office on the factory site.
Zaenal, chair of KASBI Long Rich, in the union office on the factory site.
Long Rich workers during their lunch break.
Long Rich workers during their lunch break.
“Without overtime, it's impossible to make ends meet”
- Tita, factory worker
Sitting on the carpet in the living room of her house, where she lives with her mother about a 10-minute scooter ride from the Yihong factory, 21-year-old Tita explains what it means to live on the minimum wage. A machine operator at Yihong, she had been reinstated six weeks before we met in early April. “I’m very happy and grateful,” she says. But when asked about her monthly 2.9 million rupiah salary, her answer is clear: “It isn’t enough. The cost of living in Cirebon is just too high.”
In the past, Tita made ends meet through overtime pay. “Before I was dismissed, I could make up to 4 or 5 million rupiah a month – but only because my employer was breaching the legal 50-hour working week limit,” she explains. Overtime was the only way for her to repay the loan on her scooter – a major expense representing the equivalent of almost six monthly minimum wages. Yet without reliable public transport, she couldn’t do without it.
Tita breaks down her budget. Of her wages, 700,000 rupiah goes to her parents and 500,000 to her sister, who is still in school. The rest covers day-to-day expenses: food, hygiene products, petrol for the scooter and other daily needs.
“I also used to put money aside so my sister could go to university one day,” she says. Tita would have liked to attend university herself. Unlike all of the other people we met from the region, she speaks fluent English. “But it was during Covid and my parents couldn’t afford it,” she adds.
In their 2025 Impact Progress Report, even On itself states that national minimum wages are often insufficient “to ensure a decent standard of living”. The company adds further: “We believe that every worker in our supply chain deserves a fair, living wage.” In 2023, the brand set a goal that by the end of 2025, all of its manufacturers would pay a living wage – however, this is restricted only to main suppliers and does not include downstream operations such as Yihong. For KASBI Long Rich union representative Birga, the gap between On’s intentions and the on-the-ground reality is striking. He says that machine operators at the factory, for example, are paid only the bare legal minimum, which falls well below a living wage.
Labour organisation AFWA has long been one of the leading voices on this issue. Around 20 years ago, together with Asian unions, the non-profit developed a method to calculate the level of pay needed to cover basic needs (see chart). It now puts that figure at 9 million rupiah a month ($500 US dollars – or nearly three times Tita’s income.
In its sustainability report, On cites two other calculation methods, those of the Global Living Wage Coalition (GLWC) and the Wage Indicator Foundation (WIF), but without specifying the amounts used for Indonesia. For the Cirebon region, only WIF publishes an estimate, and it is roughly half the living wage calculated by AFWA.
In reality, many workers take on debt to make ends meet. According to an AFWA study, this is the case for four in five people in Indonesia’s textile sector. Wiranta Ginting, the organisation’s living wage expert, says there are no comparable data for shoe production. But the consequences of wages that fall far below a living wage are the same everywhere, he adds: “precarious work, dependence on excessive overtime, indebtedness, and persistent financial insecurity”.
Holding out means
risking everything
For the dismissed members of SBDI-KASBI, the immediate challenge was to find any source of income whatsoever. Yihong quickly began hiring again, but refused to take back those who would not leave the union. For Suryana, Tita and around 100 colleagues, giving in and accepting their dismissal was not an option. The result: no compensation and no unemployment benefits. They had to fight and hold out. In the months that followed, 48 workers eventually gave up and accepted their dismissal.
Union calls for international support
Following a referral by SBDI-KASBI, the regional labour inspectorate concluded during mediation in April and May 2025 that the dismissals were unlawful and called for the affected workers to be reinstated. Yihong ignored the request – and hit back by filing a complaint against union leaders over what they called an “unlawful strike”.
Eventually, SBDI‑KASBI sought the support of the Clean Clothes Campaign (CCC). The network created a case group, including the union and Public Eye, to remediate the situation.
The case group decided to approach the brands. According to testimony from workers collected by KASBI, these companies were having printing and dyeing operations carried out at Yihong via the Long Rich factory. The responses to the case group were mixed: Under Armour denied any link to the subcontractor; Asics evaded responsibility, saying it had no longer been producing at the site since 15 March 2025 – just after the mass dismissals – and therefore had only limited influence there; On, Brooks and New Balance said they would investigate the allegations.
Orders drop by 60 to 70 per cent
Soon after the CCC contacted the brands, order volumes collapsed by 60 to 70 per cent, according to Yihong management. For its part, On told CCC it was suspending its orders until the dispute was resolved. On 7 January 2026, Yihong’s complaint over an “unlawful strike” was dismissed by a local court. Management then made a U-turn: At a meeting with the union on 16 January, it apologised and promised to reinstate the union members who were still dismissed.
After two weeks of waiting, an agreement between SBDI‑KASBI and Yihong was signed following a second round of negotiations. The company pledged not only to reinstate the workers, but also to pay them part of their lost wages – eight of the 11 months – and to drop any further legal action.
That was the moment Suryana broke down in tears. Tita also found the news hard to believe: “To be honest, I’d given up all hope.” Even so, it was still not yet time to celebrate. Although the response by the brands had clearly forced the company to take action, workers now feared Yihong might close for good, leaving the whole workforce jobless. Fortunately, those fears proved unfounded.
Yihong's mea culpa
On Monday 6 April, 2026, the final 24 workers signed new permanent contracts and returned to their posts. That day, Public Eye was in Yihong management’s office alongside the leaders of SBDI-KASBI and two representatives of On. The company representatives had travelled from Vietnam at CCC’s invitation.
Yihong’s executive director, who goes by the name Carter, spoke on behalf of his superior Jack Feng, who was not comfortable speaking English. “We learned our lesson,“ the 62-year-old company higher-up repeated multiple times. Then he added: “Such a stupid mistake, it can never happen again!” The revealing scene mirrored words union secretary Suryana had spoken earlier: “For management, the brands are like gods.”
In an earlier exchange with Public Eye, Carter – who has spent more than 30 years in the footwear industry in China, Vietnam and Indonesia – had spoken mainly of “misunderstandings” and other “communication problems”. This time, his tone was far more self-critical. As if thinking out loud, he admitted: “Suing our own workers. So stupid!”
Across from him, Martin Phan, a manager at On, and a colleague, both dressed in the brand’s sportswear, listened closely. Phan mentioned the investigation launched by On and the action plan subsequently put in place, which he said had documented improvements at the factory. Then, as he would later repeat at the SBDI-KASBI office, he stressed: “Human rights are a core priority at On.”
All’s well that ends well?
The three union leaders who spoke with Public Eye – Darja, Suryana and Krisma – unanimously confirm that, as far as they are concerned, the agreement is being respected. Together with their comrades, they took a considerable risk and paid a heavy price, spending a full year fighting for their jobs. But today, they speak of a major victory that they hope will set an example and help strengthen the independent trade union movement in Indonesia.
At Yihong, there is still room for improvement. Workers report a lack of proper protective equipment, difficulties in asserting their right to sick leave, and too little time for toilet breaks and daily prayers, which are essential for the Muslim-majority workforce. Company management has promised improvements; now, cooperation with SBDI-KASBI is needed to ensure these changes are implemented. And only time will tell whether trade unionists will face discrimination again in the future.
Niki Gamara, Coordinator of Urgent Appeals in Southeast Asia (see box), highlighted the persistent and courageous commitment of the union members. However, she noted the case would probably not have succeeded without the response of the three sportswear brands – On, Brooks and New Balance – to their subcontractor’s abuses. “What should be the norm is still too often the exception,” she said. Gamara argued for closer cooperation between unions and brands, as well as permanent mechanisms allowing abuses to be reported directly to brands and addressed quickly. She pointed out that this would have made a big difference in the Yihong case. “As extraordinary and gratifying as the resolution of the case is for the 64 reinstated union members – for 48 others, it came too late,” she said. This is largely due to the fact that those responsible apparently only learned of the case in late fall 2025 through the CCC – even though it had been widely reported in Indonesian online media.
Time for On to deliver
To fulfill their promises of social responsibility in their supply chains, On and the other sports wear brands must ensure that workers’ rights are respected in all facilities throughout their supply chains going forward. The rapidly-rising brand On, which markets itself as “Swiss” and claims that human rights are “a core priority”, should lead the way in this effort. In particular, the company must fulfill its promise that living wages are paid throughout its entire supply chain – not only at its direct suppliers, but also at subcontractors.
KASBI has asked On to sign the Freedom of Association protocol between unions and brands regarding the freedom of association, and to engage in discussions on wages. These would be important first steps toward ensuring that all those who manufacture the high-priced shoes – far removed from debates about “Swissness” – also share in the profits of the multi-billion-dollar athletic shoe business, at least to the extent that they earn enough to live in dignity.
On's responses
In a statement to Public Eye, On says it is in talks with PT Long Rich to close the wage gap. It also states that it is in the process of “evaluating” the “feasibility” of extending its goal of living wages in its supply chain to subcontractors. When calculating living wages, On adheres to a methodology that results in significantly lower wage targets than those of the AFWA union alliance. However, they add, they are “fully open to and interested” in engaging in an in-depth dialogue with the unions and their supporting organizations on the topics of wages and workers’ rights.
Regarding the allegations of excessive pressure and intimidation at Long Rich, On states that its most recent investigation did not reveal such abuses, but that it takes the allegations seriously and will look into them in the next investigation.
Furthermore, On acknowledges in its statement that the Yihong case demonstrated that their audit process for facilities in their supply chain is insufficient. To ensure they are informed in a timely manner in the future, they have commissioned an external firm to implement continuous monitoring, and they will also improve the grievance procedure in factories.
Public Eye will also keep at it and hold On accountable to its promises.
Swiss NGO Public Eye offers a critical analysis of the impact that Switzerland, and its companies, has on economically disadvantaged countries. Through research, advocacy and campaigning, Public Eye also demands the respect of human rights and of the environment throughout the world. With a strong support of some 29,000 members, Public Eye focuses on global justice.
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Imprint
Text: Florian Blumer, collaboration: David Hachfeld
English translation: Phinheas Rueckert
Editing: Antoine Panchaud, Florian Blumer, David Hachfeld
Photos & Videos: Muhammad Fadli/PANOS, Florian Blumer
Illustrations: opak.cc
Web implementation: Tim Haag
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