(Contents:)

Open letter to Nike

15 March 2000

NIKE'S RESPONSE TO THE BROAD POLICY CONCERNS WE RAISED IN OUR LAST LETTER:

The right to freedom of association

The right to freedom of association is listed in the UN Declaration of Human Rights. For many of us it is also our highest priority in terms of addressing labour abuses in Nike factories. We believe that other problems

• physical and verbal abuse, unsustainably low wages, inadequate health and safety, long working hours - are all inextricably linked to the repression of this fundamental freedom. If workers were allowed to have their own organisations and to negotiate collectively then your suppliers would find it much more difficult to exploit them.

Nike has long had a stated policy that this right should be respected. This commitment is in Nike's own code and in the Apparel Industry Partnership code which Nike has signed. Unfortunately these commitments have proved meaningless.

To the best of our knowledge (and we would very much like to see evidence indicating otherwise) only a tiny percentage of Nike's contract factories have democratically elected unions and the great majority of these are not being allowed to function properly. We recognise that in countries like China, Vietnam and Indonesia official government-controlled "unions" are operating in some of your factories, but this is very different from allowing workers to decide for themselves what organisation is going to represent them.

This absence of independent unions is not a coincidence. Nike contracts with suppliers who have a history of suppressing unions and Nike has encouraged them to locate their factories in countries where the right to organise is not respected. Nike has refused to allow the AFL-CIO Solidarity Center to provide training in union rights for Indonesian workers, even after your competitor Reebok agreed to participate in that program. Nike has turned a blind eye when workers have been subject to harassment and dismissal for engaging in worker activism. Over the 8 or more years in which Nike's labour practices have been in the media spotlight Nike has only once ensured the reinstatement of a worker dismissed for organising (Haryanto from the Lintas factory, discussed above). In other cases which we have brought to your attention Nike has flatly refused to believe the workers themselves and has instead promoted to the press the factory owners' version of why the worker was fired.

Unfortunately Mr. Kidd's response to our letter continued this anti-union tradition. We called on Nike to clearly communicate to workers that it will protect them from discrimination if they try to organise. Mr. Kidd's letter ignored this. We asked Nike to regularly release information regarding levels of orders from each factory so we can be sure that Nike is not punishing workers who try to organise by reducing orders from their factory. This was also ignored. We provided details of several factories in which workers' right to organise is being repressed or interfered with. In each case Mr. Kidd's reply rejected the workers' evidence.

We raised the issue of production in China - a country which punishes workers who try to organise unions by imprisoning them or sending them to "re-education through labour" camps. Of course not all of us think you should pull out of China - that would hurt workers who lost their jobs. We do all think that if you are going to source production in such a country you have a responsibility to actively promote greater respect for human rights there. Our letter pointed out that in the past Nike has in fact done the direct opposite - your company has played an active role in dissuading the US government from making China's "Most Favoured Nation" trading status dependent on improvements in China's human rights record. Mr. Kidd's letter did not respond to this. Our letter asked you to publicly call on the Chinese government to make it legal for workers to form their own organisations. This request was not even acknowledged.

Mr. Kidd did however say that Nike aims "to constructively... try to create parallel processes, so that issues normally addressed in a more open labor environment can be addressed in China as well". We would very much like to hear what steps Nike has taken to create space for such "parallel processes" in China. Do they involve workers being freely allowed to select their own representatives? Is Nike willing to disclose in which factories this has taken place so that it can be independently verified?

We have received recent correspondence from Mr. Kidd indicating that Nike has been encouraging its contractors and workers in Indonesia to access education in union rights provided by the ILO. We very much hope that this is not another PR smokescreen from Nike but instead that it, and the reinstatement of Haryanto, represent the first signs of a willingness on Nike's part to respect these rights. We urge Nike to prove it to be the latter by reinstating workers who have been fired for organising, sending an unequivocal message to other workers that they will be protected from discrimination if they try to exercise this right and by publicly calling on the Chinese government to give this right legal standing.

Excessive Forced Overtime

The Apparel Industry Partnership Code which Nike signed in 1997 requires:

HOURS OF WORK. Except in extraordinary business circumstances, employees shall: (i)not be required to work more than the lesser of: (a) 48 hours per week and 12 hours of overtime, or (b) the limit on regular and overtime hours allowed by the law of the country of manufacture or, where the laws of such country do not limit the hours of work, the regular work week in such country plus 12 hours overtime, and (ii) be entitled to at least one day off in every seven day period.

Many of us believe that in this area (and others) the AIP Code does not go far enough in protecting workers. In the absence of stricter legal limits in the country of manufacture companies need only ensure that compulsory work hours are within a 60 hour per week limit. In any case, Nike is clearly failing to uphold even this standard.

We understand from Indonesian NGOs that Indonesian law and labour regulations set the standard working week at 40 hours (UU No.1 Thn 1951) and require that all overtime should be voluntary except in extreme circumstances such as fire, natural disaster or explosion (SK Ministry of Labour R.I. Kep-72/MEN/1984).

Workers in Nike factories in Indonesia are being required to work much longer than this. The survey conducted by the Urban Community Mission Jakarta (UCM) in September and October 1999 found that 1,555 of the 3,500 Indonesian Nike workers surveyed regard compulsory overtime as the biggest problem in their factory. Peter Hancock's November 1999 research found that workers at PT Feng Tay were averaging 64.6 work hours per week and were often being required to work on Sundays. In August 1999 UCM informed us that:

• workers at PT. Dayupindo were being required to work up to 65.5 hours per week.
• in some sections of PT Nikomas Gemilang workers were being required to work 69 hours per week (11 hours a day from Monday to Friday, 9 hours on Saturdays and 5 hours on Sundays).
• hours in PT Citra Abadi Sejati I & II were 7 a.m. to 11 p.m. Monday to Friday and then 7 a.m. to 4 p.m. on some Saturdays (i.e. 82 hours per week).
• in the finishing section of PT Tuntex Balaraja during peak times work hours could stretch from 7.30 a.m. to 2.30 a.m. the next day.

The Social Information and Legal Guidance Foundation (SISBIKUM), also based in Jakarta, is preparing a report on conditions in 6 factories producing for Nike (PT Lintas Adhikrida, PT NASA, PT Karet Murni Jelita Jaya, PT HASI, PT Adis and PT Pratama) based on worker interviews conducted between June and October 1999. According to SISBIKUM overtime is compulsory at HASI, NASA, Lintas, Adis and Pratama and workers are regularly required to work in excess of 60 hours per week at HASI, NASA, Lintas and ADIS. Sanctions for refusing overtime vary from factory to factory. At the Lintas factory workers who refuse overtime are given a reminder letter and if they receive three letters they are threatened with dismissal.

There is also considerable evidence of forced overtime in Nike factories in other countries. In the Par Monthinee factory in Thailand workers are threatened with dismissal if they refuse overtime and management ensures that transport home is not available until overtime is completed (see Appendix 1). As indicated elsewhere in this letter there is also evidence of excessive forced overtime in the Hung Wah factory in China, the Natural Garment Factory in Cambodia (see Appendix 2) and the Lian Thai factory in Thailand (see Appendix 3).

Wages

Regarding wages, Mr. Kidd's letter claims that "Nike is doing all we can to ensure that the 500,000 people around the world who manufacture our products are paid a fair wage, accompanied by an appropriate package of benefits".

We do not believe this. We recognise that there is considerable debate regarding how a living wage should be calculated. While there is a range of opinions on this amongst the signatories to this letter, we all agree that at the very least a decent wage for a standard (i.e. not including overtime) working week should be adequate to provide for the basic needs (nutritious food, drinking water, decent shelter, clothing, basic healthcare, basic education, transport) for the worker herself and a small number of dependents and allow for some discretionary income and some money for saving. The actual wage levels which would meet this standard in each local area need to be worked out in consultation with workers themselves.

Nike workers tell us that the wages paid in your suppliers' factories fall a long way short of this. When Julia Pleites was working in the Formosa factory in El Salvador she could afford to buy milk for her daughter only once every month, even though she was working 12 hours a day and living in one tiny room with her mother and her daughter. Research conducted by the Interfaith Centre for Corporate Responsibility indicates that wages in your suppliers' shoe factories in Vietnam are barely adequate to provide a nutritious diet. According to that research, a worker who bought food from the cheapest market would still have to work for more than a day to be able to afford to buy one kilogram of chicken, and for half a day to buy a dozen eggs. Workers at the Lian Thai factory in Thailand only receive the minimum wage of 162 Baht ($US4.25*) for working an 8 hour day and say they need about 200 Baht ($US5.25*) just to cover the basics needs of one person (see Appendix 3).

With the exception of your sportshoe suppliers in Indonesia, Nike only requires its suppliers to pay the relevant legal minimum wage. You would be aware that many poorer countries deliberately set minimum wages well below what would be adequate to cover workers' needs in order to attract and keep foreign investors. Like other Transnational Corporations, Nike has actively encouraged this by continually moving production to lower wage countries and putting pressure on local governments to keep minimum wages low. In 1997, for example, Nike spokesperson Jim Small responded to an increase in the minimum wage in Indonesia by publicly questioning whether Indonesia was "pricing itself out of the market".

We recognise that in some of your suppliers' factories workers are provided with accommodation, transport and food. Of course this should be factored into any calculation of whether a wage package is adequate, but on its own it should not be presented as evidence that compensation is sufficient. In most cases providing accommodation (such as it is) enables the factory owner to save money, since it allows him or her to pay wages which are so low that few workers would take the jobs if accommodation was not provided. In the great majority of cases that we are aware of this accommodation leaves much to be desired. Workers live 10 to 14 to a room in small dormitories with no privacy, no personal space, no capacity to conduct private relationships and with their "home life" extensively regulated by the factory. While we would certainly not prevent workers from freely choosing to live in this way, we believe that their wages should at least be high enough to give them the option, should they want it, of renting a small basic room of their own with some privacy and some control over their personal life.

Wages in Indonesia

Mr. Kidd's letter makes much of Nike's decision to raise wages in your sportshoe factories in Indonesia above the regional legal minimum wage levels to Rp271,000/month ($US37*) for a 40-hour work week, plus a minimum of Rp61,000/month ($US8.30*) in additional cash benefits. By comparison the legal minimum in the Jakarta area is Rp231,000/month ($US31.50*). Local NGOs inform us that in most cases the Rp271,000/month figure is being paid, although there are exceptions. According to the Social Information and Legal Guidance Foundation (SISBIKUM), for example, two Nike sportshoe factories in Tangerang pay workers less than this in their first year of service. In the PT NASA factory workers in their first year only receive Rp250,000/month ($US34*) and at PT KMJ first-year workers only receive Rp234,000 ($US31.90*) every four weeks. There is also some uncertainty as to whether additional cash benefits are being paid to the extent which Nike claims. It would be appreciated if you could make public which additional benefits workers are supposed to be receiving in each of your sportshoe suppliers in Indonesia so that this can be independently verified with workers themselves.

While we certainly recognise that this increase for sportshoe workers is a positive step, it needs to be put in perspective. The dramatic crash in the value of the Rupiah is such that this rise has not cost Nike very much. To the best of our knowledge these increases have, in US dollar terms, only brought these wages up to a par with the lowest wages being paid to Nike workers in other parts of the world. Further, price rises in Indonesia since the Asian economic crisis hit mean that even in those shoe factories where workers are being paid the wages referred to in Mr. Kidd's letter, workers are struggling to meet their basic needs. The research by Dr Peter Hancock cited above found that in Banjaran in West Java the Asian Crisis caused prices of basic items such as food, cooking oil and transport to increase by 100-200% between 1996 and 1999. During that period the price of rice in the largest open market near Banjaran more than doubled from 1,008 Rp per kilo to 2,320 Rp per kilo.

Recently the Indonesian Government itself has recognised that the legal minimum wage is completely inadequate to meet the basic needs of an individual worker. On 25 January 2000 the Jakarta Post quoted Syaufi'i Syamsuddin, Director General for Labor Standards and Industrial Relations at the Manpower Ministry, as asking "How can workers in a factory in Jakarta meet their daily minimum needs if they are paid Rp 231,000 per month?" On 11 February the same paper cited the Minister of Manpower, Bomer Pasaribu, as saying that in some provinces the legal minimum wage only covers two-thirds of the basic needs of a single worker. On 21 February the Indonesian government announced that minimum wage levels will rise from 1 April, including an increase in Jakarta to Rp.286,000 ($US39*) per month. In its commentary on the move on 22 February the Jakarta Post noted that even with that increase workers in the Jakarta area will only be receiving 81 percent of what is needed to meet the subsistence needs of one person. That is, according to this estimate Rp. 353,000 per month ($US48*) is needed to cover one person's most basic needs. Even if they are receiving the additional cash benefits which Nike claims, Nike sportshoe workers are still only receiving Rp. 330,000 ($US45.30*) per month for working standard (non-overtime) hours.

As our letter indicated, we are particularly concerned about the desperately low wages being paid to Nike's clothing workers in Indonesia.

In Mr. Kidd's letter he claimed that "all but one of our apparel suppliers has increased its minimum wage base, with the lowest in that group providing at least Rp276,000/month to workers…working a regular 40-hour week". Contradicting this, the recent Urban Community Mission survey cited above found that 31% of the 1,200 Nike apparel workers surveyed were receiving a basic wage of less than Rp250,000 ($US34*) a month for a 40 hour week.

Mr. Kidd's letter mentions that Nike will be reviewing a wages survey conducted by the US Department of Labor for the White House Apparel Industry Partnership (AIP), and will be using it to guide your thinking on compensation issues. While we hope that you do take this study very seriously, we find it odd that you are using this as evidence of Nike's commitment to paying decent wages. We understand from press reports that the union and NGO members of the AIP pushed hard for the AIP Code to include a requirement that living wages be paid, but the companies involved in the AIP refused to accept this. Commissioning the DOL study was a compromise which falls well short of a commitment to pay decent wages.

For these reasons we simply do not believe Mr. Kidd's assertion that Nike has done all it can to ensure that workers are being paid a fair wage. We would nonetheless be very interested in receiving a detailed explanation of how the research projects Mr. Kidd mentions have led Nike to conclude that these wages are fair.

Disclosure of factory locations

Nike has disclosed the addresses of suppliers providing clothing bearing the logos of ten US Universities. Although (according to Nike's website) production for all US colleges represents less than 1% of Nike's production, this is a small step forward. As discussed above, when such a small percentage of factory addresses is involved it raises concerns that Nike may only be releasing the addresses of model factories. We urge you to become part of a monitoring and verification system which involves regularly releasing the addresses of (and levels of orders from) ALL your suppliers, so that concerned organisations can make contact with workers and ensure that they are being employed in decent conditions.

Nike and the exploitation of homeworkers in Australia

In Australia the majority of garment industry work is contracted out to small factories and subcontractors who in turn send much of the work to homeworkers. These workers (predominantly recently arrived migrant women) often work under extremely exploitative arrangements, and the issue is the subject of an ongoing campaign.

Mr. Kidd responded to our call for Nike to sign the Homeworkers' code by saying it is unnecessary because Nike does not allow suppliers to use homeworkers and "see(s) no value in signing onto a standard for a system we do not use".

Over the more than eight years which NGOs have been tracking Nike's labour practices we have repeatedly found that labour practices in Nike's production chain are radically different from Nike's stated policies, and hence telling us you have a policy not to use homeworkers does nothing to alleviate our concern. We believe that there is a very real possibility that some of the production of Nike garments in Australia is being sub-contracted out to homeworkers, quite possibly without Nike's knowledge.

You would be well aware that other companies who have a policy against homework have freely agreed to sign the Code so that the implementation of their policy can be independently verified. In contrast, Nike continues to stonewall in the face of a long-running and creative campaign calling on your company to sign.

The Homeworkers Code has been agreed to by more than 112 companies in Australia, including Nike's main competitors, Reebok and Adidas. It is ironic that while Nike has vigorously promoted the Fair Labor Association in the US on the basis that codes should be adopted on an industry wide basis, in Australia your company has refused to sign a code which has gained acceptance right across the industry. We suspect that the different systems of monitoring have influenced Nike's attitude. In contrast to the FLA system which allows Nike to choose which (accredited) monitor inspects its factories, the Homeworkers' code allows the local union (the TCFUA) to ensure that Australian workers are not exploited while producing Nike clothes.

The TCFUA has initiated legal proceedings against Nike in the Australian Federal Court for alleged breaches of the Clothing Award. Nike could settle the matter by agreeing to comply with the award and signing the code. We recognise Nike has the right to defend itself but believe that ultimately Nike's efforts and resources would be better directed towards maintaining the standards to which the majority of the industry in Australia have agreed to abide.

Nike's May 1998 Initiatives

Mr. Kidd's letter opens by discussing Nike's implementation of the initiatives you announced to the National Press Club in 1998. It is important to recognise that these initiatives never addressed a number of key issues. In particular they failed to address freedom of association and the adequacy of wages, concerns which we have indicated above are priorities. Nonetheless we do want to respond to Mr. Kidd's comments regarding these initiatives.

- Health and Safety

In May 1998 you committed to ensuring that air quality standards in Nike factories are within the U.S. Occupational Health and Safety Administration's (OSHA) permissible exposure limits for volatile organic compounds (VOCs). While it represents an improvement on the extraordinarily high levels of exposure to toxic gases which have been found in Nike factories in the past, this is far from being a very rigorous standard. Strong corporate lobbying in the US has kept OSHA standards in this area extremely weak - they have hardly changed at all since 1968 and have failed to keep up with the last 30 years of research into the dangers these chemicals can present to workers' health. In particular they fail to take into account the impact on women's health, especially important given that women make up 80% of the workers making your products.

A more appropriate standard would be the US National Institute of Occupational Safety and Health (NIOSH) "Recommended Exposure Levels" (RELs). These exposure levels are based on current scientific research - not research that is more than 30 years out of date, and we would urge Nike to apply this standard.

Our letter noted that the new solvents which Nike is using are completely untested and no-one knows what impact they are having on workers' health. We urge Nike to fund research into these new products to discover whether they are exposing workers to any new hazards so that they can be used in a way that doesn't harm workers health.

Air quality is far from being the only health and safety problem in Nike's suppliers' factories. Previous research has indicated problems with excessive noise and heat, dangerous machinery (leading to loss of fingers and hands) and ergonomic problems. As discussed above, our letter to you in September cited research indicating a dangerous lack of fire safety in one of your suppliers' factories in China. Appendix 3 cites claims by workers at the Lian Thai factory that the electrical wiring is unsafe and that the factory is near a river which frequently floods. On 3 January 2000 the Vietnam Investment Review reported that the country's biggest food poisoning outbreak of 1999 occurred in a Nike factory in southern Vietnam when around 600 workers suffered vomiting and diarrhoea after they ate poisonous mushrooms. Also in January 2000 a number of sports chains in Germany pulled Nike soccer shirts off the shelves following concern that they contained Tributyltin, or TBT. Although Nike subsequently released evidence that the levels of TBT were safe for consumers, we are yet to see any evidence that the levels at which workers are being exposed to TBT are safe. According to Juergen Kundke, a scientist with the German Institute for the Protection of Consumer Health, high levels of exposure to TBT is believed to cause neurological problems, damage the immune system and harm the liver.

Nike has made much of its "MESH" (Management, Environment, Safety and Health) program, but at this stage we only have independent evidence of health and safety improvements in one Nike factory, the Tae Kwang Vina factory in Vietnam. We urge you to put in place regular independent monitoring of all your suppliers' factories by organisations with health and safety expertise (rather than by accounting firms or general purpose auditors) and to make the reports of those monitors public. The results of health surveillance programs should also be made public so that we can know that workers are being protected from known hazards, and to help detect any as-yet unknown hazards of the newer solvents that are being phased in. This would also reveal how many workers have had their health permanently damaged by inadequate safety policies in the past so that those workers can be properly compensated.

We also ask you to ensure that workers themselves receive proper training in health and safety so that they are aware of potential dangers and can be directly involved in effective monitoring of health and safety conditions. As things currently stand we remain extremely concerned about the health and safety of workers making Nike products.

- Nike's evening classes and microloan programs:

Regarding Nike's establishment of evening schools for workers in sportshoe factories and the micro-loan programs to communities in the vicinity of those factories, there is a variety of responses amongst NGOs and labour rights organisations. Some of us see this process as extremely negative, arguing that large transnational corporations like Nike should not be funding education and development schemes because funding education schemes can give companies the power to influence what workers will (and won't) learn and local development schemes can give companies considerable leverage in a local community. Those of us who have been involved in campaigns against mining companies have seen such schemes used to co-opt and silence criticism of companies by indigenous communities (because if they criticise other aspects of the companies' behaviour then the development program may be taken away).

Others of us wonder why Nike wants to fund these programs but won't ensure decent wages are paid and won't support workers' right to organise. They would like to know how much these programs cost and how that compares with how much it would cost to raise the wages of all Nike's suppliers' workers by, for example, $1 a day. Given that Nike indirectly employs more than half a million workers, we imagine that these sort of programs are much cheaper for Nike than ensuring that decent wages are paid, and no doubt they have a great deal of value for your company in public relations terms. Schemes like this would also seem easy to drop once Nike's labour practices are out of the media spotlight, whereas once workers are allowed to have their own unions and are allowed a decent wage, taking that away from them would be very hard indeed.

Others of us have no opinion about the micro-loan programs at all, except that they have nothing to do with working conditions in Nike's suppliers' factories and are not relevant to the debate about whether conditions in those factories are decent. Regarding the after-work education programs, we believe that the decision about whether these services are needed, whether they are more important than other initiatives (such as paying decent wages) and how they should be provided, should be made in consultation with workers themselves, and that this will only be possible when Nike starts ensuring that workers are allowed to exercise their right to freedom of association.

Nike's "Rising Tides"program of open forums and academic research

As well as holding open forums, Phil Knight's May 1998 speech indicated that Nike would be funding university research into "global manufacturing and responsible business practices such as independent monitoring and health issues", and that Nike would "begin by funding four programs in United States universities in the 1998-99 academic year". We have heard nothing about these four programs, nor anything about any other academic research which Nike intends to fund. We would very much like to know which academics are conducting this research and what issues they are considering.

Mr. Kidd's letter indicates that Nike will be holding open forums on women and their rights in the workplace, and states "if any of you have interest, please let Nike know and we will ensure you are involved in some manner in that discussion". Of course this is a crucial issue and we would be very interested to know how we might contribute to these forums. Please let us know more about them and how we might participate.

Independent monitoring of conditions in Nike factories

Nike is describing its monitoring program, involving site visits by Nike staff, "independent" monitoring by PriceWaterhouseCoopers, oversight of this monitoring by the Fair Labor Association and factory research by the Global Alliance, as one of the most comprehensive of any company. Certainly in a public relations sense it must be extremely valuable for Nike to be able to point to so many different programs. Unfortunately putting a number of inadequate monitoring programs together does not result in a rigorous and credible system.

Workers in Nike contract factories in Indonesia, Vietnam, China, Thailand and El Salvador have repeatedly made it clear to us and to other organisations that it can be dangerous for them to make criticisms of factory conditions. With the very high levels of unemployment which have resulted from the Asian economic crisis workers have good reason to fear unemployment and those who are perceived to be "troublemakers" are usually the first to be "let go" when the factory is laying off workers. For this reason we have argued that worker interviews should be conducted anonymously, away from the factory premises and with the involvement of organisations committed to earning workers' trust.

Transparency is our other key concern. Unless information about how a monitoring program is conducted and what it discovers is made public then there is no basis on which to judge its effectiveness and no reason to have any confidence in it.

Your speech in May 1998 stated that Nike was "working hard to put into effect" a monitoring system involving non-government organisations, with summaries of that monitoring made public. Most of us have strong misgivings about "summaries" being released - why not release the reports in full? In any case almost two years after you made that speech no reports on whether labour standards are being respected in your suppliers' factories have been forthcoming, summaries or otherwise.

On your website a whole page is devoted to Nike's relationships with NGOs. Apart from involvement in the Global Alliance, the Fair Labor Association and the child labour monitoring program for soccer ball production in Sialkot in Pakistan (all of which we will consider below) the only "NGO" mentioned which seems to be involved in monitoring labour standards in your suppliers' factories is the University of Economics in Ho Chi Minh City which Nike claims is conducting "focus groups" with workers. Nike has released no reports (or summaries) of this monitoring and as such we have no way of knowing how workers are being selected, what issues they are asked about, whether they would have any reason to trust that their comments remain confidential and whether any problems this monitoring has identified have been fixed. Unless and until Nike is willing to release this sort of information there is no way of knowing what, if anything, this monitoring achieves.

We are not in a position to comment on the child labour monitoring program for soccer ball production in Sialkot, but we note that it is a very limited program in that it only applies to the monitoring of one labour standard in the manufacture of one type of product in one geographical area.

Nike's involvement in the Fair Labor Association (FLA)

Mr. Kidd wrote "…as the Fair Labor Association (FLA) becomes an operating system, Nike has agreed to allow oversight of our independent monitoring of factories (which in our current model has global monitoring of every factory once each year, performed by PriceWaterhouseCoopers)".

Regarding the monitoring by PriceWaterhouseCoopers, as you know many of us do not believe an accounting firm is an appropriate organisation to win the trust of workers in order to discover what is happening in a factory. In our meetings with workers, in most cases those making Nike clothing know nothing about any monitoring (or any code of conduct). Workers in shoe factories often report that "men in suits" have visited. Before they arrive factory managers identify which workers will be allowed to speak to them and what they will be allowed to say. Workers in those factories know that anyone who varies from that script will be dismissed. In those very few cases we are aware of where Nike workers have felt confident to honestly tell Nike's monitors about problems in their factory those workers complain that nothing has happened as a result of them giving this information. We urge you to publicly release PriceWaterhouseCooper's monitoring reports. Consumers and workers have a right to this information so that they can assess for themselves whether this monitoring is adequate and whether any problems it identifies are rectified.

Regarding the FLA it is important to note that after several years of negotiations the unions and religious groups involved found the final agreement (between the companies and the four remaining NGOs) unacceptable and pulled out of the process. This suggests to us that Nike and the other companies spent those negotiations fighting for the weakest code and form of monitoring that they could get.

The AIP Code which the FLA will monitor currently has no requirement regarding the payment of a living wage - companies need only pay the legal minimum wage which, as we pointed out above, is usually a long way short of a fair wage.

The FLA monitoring agreement allows Nike to choose which organisation will "independently" monitor its factories (provided that organisation has been accredited by the FLA). Most of us believe that organisations selected and paid for by Nike will have an incentive to be less than rigorous in their monitoring so that they can keep the contract. In particular we are concerned that such monitors will have very little motivation to ensure that workers are aware of their right to organise and are able to exercise that right. In any case only 10% of Nike's factories will be subject to this sort of monitoring each year, and Nike will have considerable say over which factories are visited and when. The public will not even be told which factories have been monitored, let alone be allowed to see the individual monitoring reports. The FLA will release regional summaries of what this "independent" monitoring discovers, but that will give us no basis on which to judge how rigorous it is.

Just as importantly, there is nothing in the AIP code or the FLA agreement which prevents companies like Nike from cutting orders from factories where workers are trying to organise and moving that production to other, non-unionised, suppliers. Already we have seen another company involved in the FLA, Philips Van Heusen (PVH), close down its only unionised factory (and the only factory in Guatamala's apparel-for-export sector with a collective bargaining agreement), Camisas Modernas. It took a hard fought six year international campaign to get the union at Camisas Modernas recognised and a collective bargaining agreement signed. Although it is supposed to protect workers' right to freedom of association, as currently formulated the FLA agreement provided no redress for the workers at Camisas Modernas and will provide no protection to workers in Nike contract factories who suffer the same fate.

Nike's involvement in the Global Alliance for Workers and Communities It is hard for us not to be cynical about the Global Alliance. Many of us have been calling for many years for Nike to involve local organisations with expertise in labour rights in checking that international labour standards are respected. In response Nike has teamed up with Mattel (another company that has repeatedly been found to have its products made in appalling conditions); the World Bank (which, according to research by the International Labour Rights Fund, has itself failed to ensure that labour rights are protected in the projects it funds); and the International Youth Foundation (which in so far as we are aware has no organisational history of involvement in labour rights at all) to form this Alliance. Evidently Mattel has subsequently pulled out of the project, leaving Nike as the only company involved.

Nike is vigorously promoting the Global Alliance as part of a "comprehensive monitoring program". It is not hard to see why this sort of monitoring would be attractive to Nike. The Alliance does not have any standards against which it "monitors" factory conditions. We have made it clear that we have considerable reservations regarding the Fair Labor Association, but at least the FLA has a code which includes some important labour standards, including the right of workers to organise. If it becomes clear to the FLA, as it is clear to us, that Nike is refusing to maintain those standards, then the FLA can refuse to certify Nike. The Global Alliance provides Nike with the public relations credibility of "monitoring" without having to ensure that any labour standards are met.

Nike's website (refer http://www.nikebiz.com/labor/pr_allia.shtml ) claims that rather than imposing an external standard the Alliance will try and find out from workers' themselves what they believe are the key workplace issues. To this end the Alliance will involve "local non-governmental organizations, employees and their representatives to conduct surveys, focus groups and individual interviews" with workers.

If workers were able to freely voice their concerns in these interviews without fear of retribution then this research might well expose problems in the workplace. Nothing in the information which the Global Alliance has made available gives us confidence that it will create a space in which workers will be safely able to tell the truth. The Alliance's first report (refer http://www.theglobalalliance.com/content/fall_99_progress_report.cfm ) on its work in Thailand indicates that the project relies heavily on the involvement of project teams set up in each factory. These teams (in those factories which don't have unions) include two representatives from management, a supervisor, and five to seven workers. No information is given about how the workers are selected. If there is management involvement in this selection we have every reason to suspect they would choose workers who they knew they could trust not to "cause trouble". The report's indication that the project teams insisted that interviews be conducted inside the factory further enhances our concerns that those workers selected to be on the Project Teams might be protecting the interests of factory owners rather than those of workers.

The way in which workers are selected is not the only aspect of the Alliance's operations which is being kept secret. Thus far it has not released information regarding who is paying for the Alliance's activities, the names of the factories which have been "monitored", copies of the questions which workers are being asked, any information about what workers have said in response, or anything about what changes their comments will lead to. The Alliance's website declares that it wants to be "held accountable" for its performance but without this information it is impossible for anyone to either properly assess the Alliance's approach or to conduct independent research to assess what it has achieved in particular factories. Until this information is available any claims of accountability are meaningless.

We are particularly concerned about the relationship between the Alliance's activities and workers' right to freedom of association. In the Alliance's first report Simon Zadek (from the Alliance's Operating Council) implied that factory managers he spoke to in Thailand were opposed to free trade unions, but gave no indication of what, if anything, the Alliance will do about this. The Alliance's report indicated that where trade unions were already in place union officials would be involved in some form in the Project Teams but carefully avoided the question of how many of the factories involved in the Alliance in Thailand were unionised.

There is a simple reason for this. There are no unions in any sportshoe factory in Thailand. The sector has brutally repressed all attempts workers have made to organise. The last unionised sportshoe factory in Thailand was closed in 1996 on the pretext that it was unsafe. Those workers who were not involved in the union were given jobs in other factories. The union officials were blacklisted. There are unions in some apparel factories producing for Nike in Thailand but union members have suffered considerable discrimination and the unions have not been allowed to function as per the ILO conventions.

We believe that if the Global Alliance was truly interested in increasing workers' power (as its public relations material claims) then it would be working with local and international unions to ensure that workers are aware of their right to organise, are able to access training and support in organising should they want it, and are not discriminated against or fired if they try to do so.

We again call on Nike to put in place a credible, independent, rigorous and publicly accountable system for checking labour standards, involving individuals and organisations committed to earning workers' trust.

Our last letter ended by calling on you take a number of practical steps to end the exploitation of workers who make your company's products. To our great disappointment your letter back to us either refused or ignored almost all of those requests. We want to restate what we said in conclusion to that letter. Until workers producing Nike products are allowed the freedom to tell the world about the conditions they are working under and the right to join together in unions and negotiate for their own welfare, your suppliers' factories will remain sweatshops and Nike will continue to attract the condemnation of the international human rights community.

Sincerely,

Trim Bissell, National Coordinator
Campaign for Labor Rights
Washington DC, USA
http://www.summersault.com/~agj/clr
<clr@igc.apc.org>

Francesco Gesualdi, Coordinator
Centro Nuovo Modello di Sviluppo
Vecchiano (PI),Italy
http://www.citinv.it/org/CNMS/index.html
<coord@cnms.it>

Esther de Haan
Clean Clothes Campaign
Amsterdam, Netherlands
http://www.cleanclothes.org
<info@cleanclothes.org>

Pamela Curr,Coordinator
Fairwear Campaign
Melbourne, Australia
http://vic.uca.org.au/fairwear/main_page.htm
<fairwear@vic.uca.org.au>

Kristina Bjurling
Fair Trade Center
Stockholm, Sweden
<info@fairtradecenter.a.se>

Neil Kearney, General Secretary
International Textile, Garment and Leather Workers' Federation
Brussels, Belgium
<ITGLWF@compuserve.com>

Liz Copeland, Coordinator
Justice. Do It Nike Coalition
Portland, Oregon, USA.
<lizland@teleport.com>

Bruce Gould, Chairperson
Labor Rights Task Force, Nicaragua Solidarity Committee
Chicago, USA
<bcgould@enteract.com>

Tim Connor, Coordinator
NikeWatch Campaign,
Sydney, Australia
http://www.caa.org.au/campaigns/nike
timc@sydney.caa.org.au

Annie Delaney
Textile, Clothing and Footwear Union of Australia (TCFUA)
Melbourne, Australia
<tcfvic@magna.com.au>

* NB - All currency exchange estimates in this letter and in the Appendices were made using the Universal Currency Converter (TM) on 23 February 2000 (refer http://www.xe.net/ucc/ ).
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