Michael Jordan, whose current multi-year contract, makes more money
from Nike than all the firm's mostly
young and female Indonesian workforce put together.
The following is reprinted with permission from The Inter-Press Agency. © Copyright 1996 The Inter-Press Agency. All Rights Reserved.
Nike Campaign Strikes at Firm's Record in Asia
by Farhan Haq
NEW YORK, Oct 30 (IPS) - Collaboration with dictatorships, sexual
harassment charges in Vietnam, workplace abuses in Indonesia, low
wages throughout Asia: the U.S.-based shoe giant Nike has faced
all these accusations in recent months.
From its 100-dollars-plus sneakers to its high-priced
spokespeople, including basketball star Michael Jordan, Nike has
become a symbol of glamour in the sportsware market, as
exemplified Wednesday by the opening of a 250-million-dollar
'Niketown' store in New York. But dozens of protestors denouncing
Nike's business practises in Asia point to the other side of the
success story.
''Companies like Nike make use of repressive regimes like
Indonesia's and China's to suppress worker efforts for better
wages and working conditions,'' argues Frontlash, a youth
organisation of the American Federation of Labour-Congress of
Industrial Organisations (AFL-CIO). ''No savings are passed on to
consumers despite the low wages paid workers abroad.''
In countries where Nike operates, workers are paid minimal
wages and must contend with heavy production quotas and abusive
treatment from subcontractors, adds Jeff Ballinger of the New
Jersey-based activist group Press for Change.
All of Nike's athletic shoes, and some 80 percent of its shoes
overall, are made in Asia, according to data from Nike. Indonesian
subcontractors account for 36 percent of all athletic shoe
production, and Chinese firms produce 34 percent of Nike's
athletic shoes, with South Korea, Thailand, Taiwan and Vietnam
accounting for the remainder.
For decades, Nike has argued that its practises in Asia have
helped boost development in countries like Japan and South Korea.
But even as Nike boasts 550 million dollars in profits for 1996
and launches new projects like the Niketown store, accusations
about Nike subcontractors in Asia are hurting the U.S. firm's
corporate image.
The U.S. television company CBS noted in a recent report on its
'48 Hours' programme that 15 workers in Vietnam have complained of
beatings at one factory making Nike shoes, while other Vietnamese
women workers have accused factory bosses of sexual harassment.
Indonesian workers have argued that Nike subcontractors have
responded to a raising of the minimum wage in that country (to the
equivalent of 2.40 dollars) by increasing production quotas,
speeding up production lines, and requiring longer working days.
Some Indonesian women have reported to Press for Change an
increase in verbal abuse and slaps to make them assemble shoes
more quickly.
Nor have Asian workers reaped the benefits of Nike's 6.5-
billion-dollar revenue for 1996.
John Cavanagh of the Institute for Policy Studies in Washington
notes that Michael Jordan, whose current multi-year contract with
Nike to appear on the company's advertisements is worth 20 million
dollars, makes more money from Nike than all the firm's mostly
young and female Indonesian workforce put together.
''Exorbitant profits are coming at the expense of overworked
and underpaid workers,'' the Rev. Jesse Jackson contended on a
July visit to Indonesia, where he decried practises by Nike and
another major shoe conglomerate, Reebok.
The Asian charges have saddled Nike Chief Executive Officer
Phil Knight with an unsavoury reputation, landing him on a list of
top ''corporate criminals'' compiled by filmmaker Michael Moore in
his new book, 'Downsize This!'
Knight has not taken the charges lying down. ''Whether you like
Nike or don't like Nike, good corporations are the ones that lead
these countries out of poverty,'' Knight told the Washington Post
recently. He argued that, ever since Nike started investing in
Asia in 1964, it has helped countries like Taiwan and Japan
develop through Nike partnerships with local owners.
''We watched it happen all over again in Taiwan and (South)
Korea, and now it's going on in southeast Asia,'' Knight told the
Post.
Ballinger disagrees: ''It's a little disingenuous'' to say Nike
improves Asian economies, he counters. ''They're on a search for
cheap labour. When labour becomes not so cheap, they're on their
way out.''
He argues that all the countries Nike has used -- from Japan in
the 1960s to Vietnam and Indonesia today -- are places where
labour costs are low. In addition, he said, Nike has only this
month set up a Labour Practises Department to investigate charges
of worker mistreatment by Nike subcontractors. (Dusty Kidd,
director of the Labour Practises Department, was unavailable for
comment.)
But Nike defends its record of monitoring workplace conditions
overseas. ''There are 800 Nike staff members in Asia alone, who
visit subcontractors on a daily basis,'' a Nike spokeswoman told
IPS.
She added that Ernst and Young, a U.S. firm hired by Nike to
oversee compliance with the company's code of conduct, continues
to investigate, not only workplace abuses, but subcontractor
compliance with Nike policy on adequate lodging and healthcare
facilities for workers.
''The average wage (in Indonesia) is about double the national
minimum wage,'' she added. The spokeswoman conceded that some
subcontractors previously paid unskilled workers lower ''training
wages'', but she maintained that the problem has been stamped out.
Ballinger dismissed those claims. ''They don't tell you that
workers are working 50 to 60 hours a week to get to those wage
levels,'' he said. Press for Change data indicates that, even
after three or four years of employment, workers at Nike
subcontractors in Indonesia still only earn the minimum hourly
wage rate, he added.