Hear Lap's story
This fact sheet is based on the research of several people. We received a response from Nike after sending letters expressing our outrage over the CBS revelations. Nike claims that CBS News was not accurate in its investigative report. To check our information, we contacted people in Vietnam -- Vietnamese as well as American lawyers practicing there. As documented below, we found that Nike is in violation of several Vietnamese laws and its own code of conduct.
The Nike story in Viet Nam: CBS News 48 Hours reports the following:
- Nike workers in Viet Nam earned an average of 20 cents per hour
- 15 women workers were hit on the head by their supervisor
- 45 women were made to kneel on the ground for 25 minutes with their hands in the air
- and a Korean supervisor fled the country after accusations that he sexually molested female workers.
When CBS News approach Nike's representative at Nike Vietnam's headquarter, the man simply covered the camera with his palm and said 'I have things to do'.
In America, Nike's response has not been much better. In front of several hundred shareholders, after announcing record earnings and a stock split, Nike's president and CEO, Phil Knight minimized the problems in Vietnam as simply an incident in which a single worker was hit on the arm by a Korean supervisor. Roberta Baskin of CBS News said, "It turns out Nike has a great deal to learn about what goes on inside these factories."
NIKE - VN FACT SHEET
- Workers at VN Nike shoe manufacturing plants make on 20 cents an hour or $1.60 per day. The workers told Vietnam Labor Watch that the cost of three meals per day in Cu Chi is about $2. Many of them skipped meals or receive extra financial assistance from their families. During the first three months of employment, all workers received $37 per month which is below the minimum wage of $45 per month in Vietnam.
- Nike also claims that the workers are paid a lower wage because Vietnamese law allows for a training wage less than the minimum wage. Viet Nam's legal code, however, specifies that the training wage can be paid only for a "trial-period" of 6 days, (under Article 32 of the Labor Code of June 23 1994 and Article 5 (2) of Decree 198-CP of Dec 31, 1994).
- So Nike is in Triple violation of Vietnam Law, violating the provisions regarding minimum wage, Article 3 of Decree 197-CP of December 31, 1994, Section II. (1.) of Circular 11/LDTBXH-TT of May 03 1996, as well as provisions regarding labor contracts, Article 28 of the Labor Code and Article 5 (4.) of Decree 198-CP in addition to the above-cited provisions relating to the "trial period"
- 15 Vietnamese women told CBS News that they were hit over the head by their supervisor for poor sewing. 2 were sent to the hospital afterward.
- 45 women were forced by their supervisors to kneel down with their hands up in the air for 25 minutes.
- Nike claims that it disciplined these supervisors immediately. But at the shareholder meeting on Sept 16, 1996, Nike CEO Phil Knight minimized the first incident, stating incorrectly that only one worker was struck -- on the arm
- On Nov. 26, 1996, 100 workers at the Pouchen factory, a Nike site in Dong Nai, were forced to stand in the sun for half an hour for spilling a tray of fruit on an altar with which three Taiwanese supervisors were using. One employee (Nguyen Minh Tri) walked out after 18 minutes, and was then formally fired. Mr. Nguyen Minh Tri was reinstated after intervention by local labor federation officials. Mr. Tri, however, has declined to work for Pouchen.
- On International Day, March 8, 1997, 56 women at the Nike factory, Pouchen were forced to run around the factory grounds. 12 of them fainted and were taken to the hospital by their friends. This was particularly painful to the Vietnamese because it occurred on International Women’s Day, an important holiday when Vietnam honors women.
- A Nike plant supervisor fled Vietnam after he was accused of sexually molesting several women workers.
- Nike claims that the supervisor was fired and sent back to Korea -- i.e., but at the shareholder meeting on Sept 16, 1996, Nike CEO Phil Knight further insulted these two women, by claiming that the supervisor was just trying to wake them up and must have touched the wrong places. Nike also did not try to have the supervisor stay in Vietnam to face criminal charges. The governement of Vietnam later instigated extradition procedures against the supervisor.
- Women workers have complained to Vietnam Labor Watch about frequent sexual harassment from foreign supervisors. Even in broad daylight, in front of other workers, these supervisors try to touch, rub or grab their buttocks or chests. One supervisor told a female factory worker that it is a common custom for men in his country to greet women they like by grabbing their behinds. .
- Women workers told CBS News that they are forced to work overtime to meet a daily quota which is set unrealisticly high. Most workers at VN Nike plants are forced to work 600+ hours of overtime per year -- well above the VN legal limit of 200 hours per year. If they do not accept the forced overtime, they will get a warning and after three warnings they will get fired.
- Based on our analysis of paystubs, Nike factory workers are working 26 to 27 days per month plus 40 to 65 hours of overtime. We found months when workers were forced to work over 100 hours of overtime per month. We recognize that Vietnam is a poor country but there must be a level of corporate decency for a US corporation operating in Vietnam.
- Article 69 of VN Labor Law stipulates that "The labor user and the laborer may agree to work overtime, but not for more than four hours a day, 200 hours a year". Forced overtime at Nike factories in Vietnam is a clear violation of this Article.
Inhumane Working Conditions
- Workers cannot go to the bathroom more than once per 8-hour shift and they cannot drink water more than twice per shift.
- It is a common occurrence for workers to faint from exhaustion, heat, fumes and poor nutrition during their shifts.
- Health care is inadequate. At the Sam Yang factory, with 6000 employees, one doctor works only two hours a day but the factory operates 20 hours a day. Night shift employees do not have any on-site medical emergency services.
Nike is in control of its subcontractors
- Nike dictates the price per shoe and even the cost of operation to its subcontractors forcing them to set high quotas for their workers and to pay low wages. A British NGO estimates that the labor cost involved in making one pair of Nike shoes is only $3, yet this may sell for $100 in the US (Christian Aid, 1995). Nike can afford to give some of this profit margin back to its factory workers.
Nike can do better
- Other American companies do employ better labor practices than Nike. Coca Cola does not use a subcontractor. The company is not in Vietnam for cheap labor, but concentrates on quality and productivity. Workers at Coca-Cola in Viet Nam got a wage of $80 a month and fringe benefits such as English lessons and sales training. Reebok used two Vietnamese contractors to make its shoes in Vietnam, Thai Binh and Hiep Hung. Both Reebok factories treat workers much better than Nike factories and also pay them better. Thai Binh, located in a lower wage province paid its workers $55 per month and Hiep Hung paid its workers $65 per month. Sewing Factory #10, a Vietnamese state-enterprise, paid its entry level employees $90 per month.
Nike is not investing in the 3rd World
- Despite Nike's claims of being responsible for the economic development of Japan, Taiwan and Korea. Nike's corporate practices are good indicators that the company is only interested in exploiting low wages in third world countries. Just like the colonial masters of the 19th century, Nike's main interest is to take profits out of these poor nations by exploiting workers.
- Nike is not investing in the 3rd World through worker training or human resource investment but has continually shifted its operation to the country with a lower wage. In the 1980s, Nike produced 90% of its shoes in Taiwan and Korea. Nike has left these countries due to increases in the local minimum wage. Nike now makes most its shoes and apparel products in China, Indonesia, Vietnam and Pakistan.
- Import figures for training shoes to UK (in thousands of pounds), showing shifts in the location of production in Asia.
1990 1992 1994 South Korea 58,896 29,675 10,970 Thailand 6,376 6,315 8,109 Indonesia 17,436 18,358 28,067 China 307 463 8,865 Vietnam 6,966
(Source: EUROSTAT CD-ROM, DTI)