Indonesian Nike plant shut after protests

JAKARTA, April 26 (Reuter) - An Indonesian plant producing shoes for U.S. athletic-wear maker Nike Inc shut down for the weekend following protests over wages by thousands of workers, a plant official said on Saturday.

Local newspapers said workers on Friday had ransacked an office and damaged cars in a two-hour protest following the failure of PT Hardaya Aneka Shoes Industri to immediately implement a pay rise.

The company is under contract to Nike.

"Things have returned to normal here, but the plant is closed for today and Sunday. The workers will return to work on Monday because the problems have been settled," the plant official told Reuters.

The official, who declined to give his name, refused to give further details, but said Saturday was normally a working day at the plant at Tangerang on Jakarta's outskirts.

There were no reports of arrests and police declined to comment.

Media Indonesia newspaper said the two-hour protest on Friday was sparked by PT Hardaya Aneka Shoes' failure to implement a pay agreement reached after 10,000 workers staged a walk-out on Tuesday.

Newspapers had said the dispute began when the company, faced with a minimum wage increase, included an attendance allowance of 16,000 rupiah ($6.60) in the monthly minimum wage of 172,500 rupiah ($70.80), meaning the workers saw no actual wage increase.

The move prompted angry workers to march from the plant to the local district parliament in protest.

In January, the government raised the minimum wage in all 27 provinces by an average of 10.07 percent effective from April 1. The minimum wage varies across the country, with workers in Jakarta guaranteed a minimum of 172,500 rupiah ($70.80).

After meetings with union representatives and manpower department officials, the company said it had agreed it would pay the basic minimum monthly wage, excluding allowances for attendance, overtime, transport, holiday pay and meals.

Indonesia, with a population of 200 million, has long sold itself to foreign investors as a good place for labour-intensive industries because of its low wage costs.

($1 =2,435 rupiah)

Indonesian Workers Protest Nike

Saturday, April 26, 1997 8:50 am EDT

JAKARTA, Indonesia (AP) -- About 4,000 workers at a factory making Nike shoes burned cars and ransacked offices in their second protest this week for better pay, news reports said today.

Two women workers were hospitalized after Friday's protest at a factory in Tangerang, a busy industrial center just west of Jakarta, the newspaper Republika reported. The factory is run by Nike contractor PT Hardaya Aneka Shoe Industry.

The workers said the company had failed to pay the new government-mandated minimum wage of $2.50 a day, which took effect April 1.

``They are ignoring the rights of the workers to get a decent salary,'' said Jusuf Makatita, a local union leader.

The company claimed it is paying the higher wages.

In southern Vietnam, meanwhile, about 3,000 workers unhappy with their contract staged a one-day walkout at a Nike factory in one of the largest strikes in the country's recent history.

It was the second strike at the factory in less than a month.

There was no apparent connection between the rampage in Indonesia and the strike in Vietnam.

In Tangerang, protesters burned two cars, one of which belonged to a government labor official, and smashed windows, doors and furniture at the factory, according to news reports.

A security guard was beaten when he tried to stop the vandalism, Republika said. Several police officers and soldiers were treated for minor injuries inflicted by the mob.

On Tuesday, some 13,000 company employees held a six-mile-long protest march to demand higher wages.

Indonesia, which allows only one government-controlled labor union, has been accused of holding down wages in order to attract foreign investment. Independent labor organizers have been arrested, beaten and sometimes killed.

The government acknowledges that its minimum wage is sufficient to pay for only about 90 percent of a single person's living expenses.

Nike, headquartered in Beaverton, Ore., and its competitor Reebok have denied accusations that they pay Indonesian workers too little and tolerate poor working conditions and other abuses at Indonesian factories run by contractors.

Both companies have taken foreign reporters on tours of the factories, which appeared clean and orderly. Nike refused to let the U.S. civil rights leader Jesse Jackson visit a factory in another town near Jakarta in July.

In Cu Chi, just outside Ho Chi Minh City, workers at the South Korean-owned Sam Yang Co. walked out Friday after being told by management they would be fired if they didn't sign a new binding contract, according to the state-run Labor newspaper.

The employees returned to their jobs today, and union and management representatives were meeting to discuss a settlement.

The employees are demanding higher wages, a safer working environment, more holidays and an annual bonus for Vietnam's lunar new year. Sam Yang's employees earn about $40 per month -- well above the national average -- but they say they deserve more to compensate for the demands placed on them.

Nike representatives in Asia failed to return repeated telephone calls. Numerous earlier requests to visit Nike factories in Vietnam have been ignored.

Labor activists claim that Nike's factories in Vietnam exploit and abuse workers, sexually harass female employees and use corporal punishment for disciplinary purposes.

Copyright 1997 The Associated Press

Vietnam: Staff At Nike Inc. Contractor Strike Over Wages

"Managers of the South Korean firm, Samyang Corp., reportedly locked employees in the factory cafeteria for three hours when they attempted to contact local trade union officers."

Hanoi (DJ) -- Approximately 3,000 employees at a South Korean company producing shoes in Vietnam for U.S. footwear giant Nike Inc. (nke) staged a one-day strike Friday to protest their salaries and working conditions.

Managers of the South Korean firm, Samyang Corp., reportedly locked employees in the factory cafeteria for three hours when they attempted to contact local trade union officers.

Saturday, officials from Samyang, the union representing factory employees, and the Ho Chi Minh City Labor Department are meeting in an attempt to resolve a continuing dispute about the labor contract at the plant, worker and management representatives said.

The workers were striking largely because Samyang hasn't yet honored a promise to lift salaries to $50 a month, according to a report Saturday in the official newspaper Lao Dong (Labor).

Currently, workers receive 470,000 dong a month (about $40), the newspaper said.

Additionally, factory staff are angry that their contract doesn't have clear provisions concerning vacations, bonuses at the lunar new year and extra pay for work in potentially hazardous parts of the plant, Lao Dong said.

The Labor Confederation, an umbrella union organization for Ho Chi Minh City, has repeatedly asked Samyang to improve staff employment terms, but the company has refused, a Confederation official said in a telephone interview.

He spoke on condition of anonymity.

A Samyang official, who also declined to be identified, confirmed the strike had been motivated by salary and other contract issues but declined to give further details.

According to Lao Dong, the Friday strike began after Samyang officials threatened to dismiss workers unless they signed the disputed contract.

Samyang managers locked employees into different parts of the factory, including the cafeteria, at two different points during the job action, the newspaper said.

Samyang, which is one of five companies producing footwear for Nike in Vietnam, has had a history of difficult labor relations. In March, 250 employees staged a brief strike over their conditions and contract. And in 1996, in an incident infamous locally, a Samyang technician was convicted for beating a group of employees on their heads with a half-made sports shoe.

Officials from Nike couldn't immediately be reached for comment.

The latest episode at Samyang occurs at a time when Nike is under scrutiny for the practices of some of its contractors in Vietnam.