00-03-15, Open letter to Nike

Thanks to Tim Conner and his elaborate work on the letter the final letter was sent to Nike.

Open letter to Phil Knight (Nike CEO) from labour rights groups concerned about Nike's labour practices - a detailed response to Nike's claims to have reformed its labour practices.

15 March 2000

Contents:

A. EXECUTIVE SUMMARY

B. THE LETTER

• Our obsession with the past
• Covering all the issues

1: New evidence of labour abuses in Nike factories.

• Compulsory overtime, excessive punishment and extreme verbal abuse - the recent survey of 3,500 Nike Workers by the Urban Community Mission in Jakarta
• Evading responsibility while workers cough up blood on the production line - Nike and the Par Garment Company in Thailand
• Cancelling orders in response to worker activism? - Nike and the PT Tainan I factory in Indonesia
• Three years later, what's changed? Nike and the PT Feng Tay and PT Kukje factories in Indonesia
• Harassing workers who dare to organise - Nike and the Natural Garment Factory in Cambodia
• Only disclosing the addresses of model factories? Nike and the Hung Wah garment factory in China
• No better at home? Nike and the J.H. Design Group in Los Angeles
• Back-breaking quotas - Nike and the Savina factory in Bulgaria
• Working right through the night - Nike and the Lian Thai factory in Thailand

2. Nike's response to the particular cases raised in our last letter

• Nike's allegation that Vietnam Labor Watch is trying to subvert the Vietnamese government
• The workers fired from the Sam Yang factory in Vietnam for telling journalists about violence against workers in their factory
• Attempts to undermine Vietnam Labor Watch
• The case of Haryanto, fired from the Lintas factory in Indonesia for handing out copies of Nike's Code of Conduct and encouraging workers to form their own union
• Harassment, humiliation and repression of workers' right to organise at the Formosa factory in El Salvador
• Use of Indonesian soldiers to provide "security" at the Nikomas Factory in Indonesia
• Hong Kong Christian Industrial Committee and the Asian Monitor Resource Centre research regarding the Sam Yang factory in Vietnam and the Sewon factory in China
• The possibility of Jim Keady and other activists working in Nike factories.
• Decisions by local courts.

3. Nike's response to the broad policy concerns we raised in our last letter

• The right to freedom of association
• Excessive Forced Overtime
• Wages
• Disclosure of factory locations
• Nike and the exploitation of homeworkers in Australia
• Nike's May 1998 initiatives - Health and Safety- Nike's evening classes and microloan programs - Nike's "Rising Tides" program of open forums and academic research
• Independent monitoring of conditions in Nike factories - Nike's involvement in the Fair Labor Association - Nike's involvement in the Global Alliance for Workers and Communities.

Appendix 1

Nike in Thailand - Conditions at the Par Monthinee garment factory in Korat (Interview report) by Karuna Durian and Piya Pangsapa.

Appendix 2

Nike in Cambodia - Report on the Natural Garment Factory by the CambodianLabor Organisation.

Appendix 3

Nike in Thailand - Conditions in the Lian Thai factory (interview report)by Esther de Haan

Open letter to Phil Knight (Nike CEO) from labour rights groups concernedabout Nike's labour practices - a detailed response to Nike's claims tohave reformed its labour practices.

15 March 2000.

A. Executive Summary

In September 1999, 45 organisations from 15 countries delivered an openletter to Nike's Annual Shareholders' Meeting, calling on the company toend labour rights abuses in its suppliers' factories. Phil Knight (Nike'sCEO) and Dusty Kidd (Nike's Director of Labor Practices) sent replies inOctober, denying the allegations of labour abuses and outlining Nike'slabour policies (for copies of these two letters see<http://www.caa.org.au/campaigns/nike/exchange.htm>).

This letter is a reply from 10 of the unions and labour rights groups:Campaign for Labor Rights (US), Centro Nuovo Modello di Sviluppo (Italy),Clean Clothes Campaign (Netherlands), Fair Trade Center (Sweden), Fairwear(Australia), the International Textile Garment and Leather WorkersFederation, Justice. Do It Nike Coalition (US), Nicaragua SolidarityCommittee (US), NikeWatch (Australia) and the Textile, Clothing andFootwear Union of Australia (TCFUA). We believe that Nike's response tothis issue has been dictated by public relations concerns rather than agenuine commitment to protecting workers' human rights and that Nike has sofar deliberately avoided taking steps which would bring abusive managementpractices in its suppliers' factories to an end.

New Evidence of Nike sweatshops

Further examples of sweatshop conditions in Nike contract factories havecome to light since our initial letter was delivered to Nike in September.Perhaps the most significant new evidence comes from the recent survey of3,500 Nike Workers by the Urban Community Mission in Jakarta. Completed inOctober 1999, this survey found that excessive compulsory overtime,humiliating sanctions and extreme verbal abuse are still common in Nikecontract factories in Indonesia. Examples of the verbal abuse include theIndonesian equivalent of phrases like "Fuck You!", "You Whore!" and "YouDog!". Examples of mistreatment include wage deductions, having their earspulled, being pinched or slapped on the buttock, being forced to run aroundthe factory yards or having to stand for hours in factory yards in thetropical heat (being "dried in the sun"). The report is available onCampaign for Labor Rights' Website at http://www.summersault.com/~agj/clr/alerts/crueltreatmentwo
rkingfornikeinindonesia.html.

Labour abuses in factories producing for Nike in Bulgaria, China, Cambodia,Indonesia, Thailand and the USA have also recently been documented. Each ofthese cases are summarised in this letter. They demonstrate that workers making Nike shoes and clothes:

• are still being paid at below subsistence levels for a standard workingweek,
• are commonly still being required to work well in excess of 60 hours perweek in stressful, pressured and sometimes dangerous conditions
• are commonly subject to discrimination and dismissal if they try to formunions.

Nike's Response to the Cases Raised in our Initial Letter Nike denied almost every point we made in our September letter. We take issue with these denials:

Nike's allegation that Vietnam Labor Watch is trying to subvert theVietnamese government.

In January 1999 Nike Vice President Joseph Ha sent a letter to VietnameseOfficials falsely suggesting that Thuyen Nguyen of Vietnam Labor Watch hasa secret agenda to overthrow the Vietnamese government. The letter waspublished in the official Vietnamese Press and since then it has beenpolitically dangerous for Vietnamese citizens to pass on information aboutconditions in Nike factories to Vietnam Labor Watch. We reject Nike'scharacterisation of Ha's letter as "the private correspondence of oneemployee". We call on Nike to provide evidence that the company genuinelytried to undo the damage the letter has done to attempts to monitorconditions in Nike contract factories in Vietnam.

Workers fired from the Sam Yang factory in Vietnam for telling journalistsabout violence against workers in their factory.

Three workers, Ms Hong, Ms Chi and Ms Nguyen, were interviewed aboutconditions in the Sam Yang factory by US sports channel ESPN in 1998. Allthree subsequently lost their jobs. They believe that this was aspunishment for telling the ESPN journalists about labour abuses at SamYang. Nike claims that Ms Hong and Ms Chi resigned voluntarily and that aninternal investigation by Nike staff of Ms Nguyen's case has establishedthat she was fired fairly. Nike will not even make available the report ofthat investigation. We call on the company to reinstate these workers.

Harassment, humiliation and repression of workers' right to organise at theFormosa factory in El Salvador

In July 1999 the independent monitoring agency Verite was commissioned byAdidas, which also sources from Formosa, to investigate conditions there.Verite found evidence of systematic humiliation, verbal abuse and vigorousrepression of workers' right to organise. Cases like this demonstrate thatNike's "comprehensive monitoring system" is an abject failure. Nike'sletter back to us ignored our call for the company to clearly communicateto the workers at Formosa Nike's unequivocal support for their right toform a union. We repeat that call.

Use of Indonesian soldiers to provide "security" at the Nikomas Factory inIndonesia

Members of the Indonesian army are frequently employed as "security" infactories in Indonesia during periods of industrial unrest to preventindustrial action. In September 1999 a US student delegation observedIndonesian soldiers stationed at the Nikomas factory at a time when wagenegotiations were being conducted. Following the publicity the issuereceived the soldiers were replaced by non-military security (police andsecurity guards) who were playing an appropriate role. Subsequentlyhowever, during peaceful strike action by workers at PT Nikomas, policefrom Brimob (an armed police brigade) equipped with guns entered thefactory and together with factory security guards and hired civilians theythreatened and provoked workers. We repeat our call for Nike to ensure thatIndonesia's armed forces are never called in to prevent or interfere withpeaceful industrial action.

The case of Haryanto, fired from the P.T. Lintas factory in Indonesia forhanding out copies of Nike's Code of Conduct and encouraging workers tojoin an independent union.

This case represents Nike's only positive response to the issues raised inour letter. Haryanto was fired on 16 September 1998. On December 24 1999,following a hard-fought campaign for his reinstatement, Haryanto returnedto work at PT Lintas. This is the first time in the history of thiscampaign that Nike has agreed to the reinstatement of a worker who had beenfired for standing up for his or her rights. As such it is extremelywelcome news and we hope it signals the beginning of a change in Nike'sapproach to this issue.

Nike's Response to the Broad Policy Concerns Raised In Our Initial Letter:

The right of workers to organise

We believe that other problems in Nike factories - physical and verbalabuse, unsustainably low wages, inadequate health and safety, long workinghours - are all inextricably linked to the repression of this fundamentalfreedom. If workers were able to form their own organisations and bargaincollectively it would be far more difficult to exploit them.

Unfortunately Nike's stated commitment to protecting this right has provedmeaningless. As far as we are aware (and we would very much like to seeevidence indicating otherwise) only a tiny percentage of Nike's contractfactories have democratically elected unions and the great majority ofthese are not being allowed to function properly. Our initial letter inSeptember called on Nike to take a number of concrete steps to help make itpossible for democratic workers' organisations to develop and operate inNike contract factories. Nike ignored these proposals.

Excessive Forced Overtime

Despite Nike's stated commitments in this area, non-governmentorganisations have recently collected evidence of numerous examples of Nikecontract factories in Indonesia, China and Thailand in which workers areregularly being required to work between 60 and 80 hours per week.

Wages

We reject Nike's claim that workers in its contract factories are beingpaid a fair wage. We believe that at the very least a decent wage for astandard 40 hour week should be adequate to provide for the basic needs forthe worker herself and a small number of dependents and allow for somediscretionary income and some money for saving.

Workers in Nike contract factories tell us that their wages fall a long wayshort of this. When Julia Pleites was working in the Formosa factory in ElSalvador she could afford to buy milk for her daughter only once everymonth, even though she was working 12 hours a day and living in one tinyroom with her daughter and her mother (who was also working). A report onher case is available on the National Labor Committee's website athttp://www.nlcnet.org/nike/julia.htm. Research by the Interfaith Centre forCorporate Responsibility indicates that a Nike worker in Vietnam who boughtfood from the cheapest market would still have to work for more than a dayto be able to afford to buy one kilogram of chicken and for half a day tobuy a dozen eggs. Wages for a standard week in factories producing Nikesportshoes in Jakarta do not cover what the Jakarta Post (22 Feb. 2000)says is needed to meet the subsistence needs of one worker. Indonesiangarment workers producing for Nike are paid even less.

Disclosure of factory locations

Nike has disclosed the addresses of suppliers providing clothing bearingthe logos of ten US Universities. Although production for all US collegesrepresents less than 1% of Nike's production, this is a small step forward.However, when such a small percentage of suppliers is involved it raisesconcerns that Nike may be directing production for those universities intomodel factories. This letter cites a report by the Hong Kong ChristianIndustrial Committee which argues that this is in fact what Nike is doing.We urge Nike to remove such concerns by becoming part of a monitoring andverification system which involves regularly releasing the addresses of(and levels of orders from) ALL its suppliers.

Nike and the exploitation of Homeworkers in Australia

The Code for the protection of the rights of Homeworkers has been signed bymore than 112 companies producing apparel in Australia, including Nike'smain competitors, Reebok and Adidas. Nike refuses to sign on the basis thatit does not allow suppliers to use homeworkers and hence "see(s) no valuein signing onto a standard for a system we do not use". Nike is well awarethat other companies who have a policy against homework have freely agreedto sign the Code so that their policy can be independently verified. Incontrast, Nike continues to stonewall in the face of a long-running andcreative campaign urging the company to sign.

Nike's May 1998 Initiatives:

Nike has made much of the initiatives that CEO Phil Knight announced to theUS National Press Club in 1998.

- Health and Safety

In that speech Knight committed to ensuring that air quality standards inNike factories are within the U.S. Occupational Health and SafetyAdministration (OSHA) permissible exposure limits for volatile organiccompounds. While they represent an improvement on the extraordinarily highlevels of exposure to toxic gases which have been found in Nike factoriesin the past, vigorous corporate lobbying in the US has kept OSHA standardsin this area extremely weak and they do not reflect the last 30 years ofresearch into the hazards which these gases pose. A more appropriatestandard would be the US National Institute of Occupational Safety andHealth "Recommended Exposure Levels" and we urge Nike to apply thatstandard. We also call on Nike to put in place regular independentmonitoring of all suppliers' factories by organisations with health andsafety expertise and to make the results of this monitoring available tothe public.

- Nike's evening classes for workers and microloan programs for local people:We would like to know how much these programs cost and how that compareswith 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 morethan half a million workers, we imagine that these sort of programs aremuch cheaper for Nike than ensuring that decent wages are paid, and nodoubt they have a great deal of value for Nike in public relations terms.

Independent monitoring of conditions in Nike factories

Nike is describing its monitoring system, involving site visits by Nikestaff, "independent" monitoring by PriceWaterhouseCoopers, oversight ofthis monitoring by the Fair Labor Association and factory research by theGlobal Alliance, as one of the most comprehensive of any company. Certainlyin a public relations sense it is extremely valuable for Nike to be able topoint to so many different programs. Unfortunately adding a number ofinadequate programs together does not produce a credible monitoring system.

In many countries in which Nikes are made it can be dangerous for workersto make criticisms of factory conditions. For this reason we have arguedthat worker interviews should be conducted anonymously, away from thefactory premises and with the involvement of organisations committed toearning workers' trust.

Transparency is our other key concern. Unless information about how amonitoring program is conducted and what it discovers is made public thenthere is no basis on which to judge its effectiveness and no reason to haveany confidence in it.

Phil Knight's speech in May 1998 stated that Nike was "working hard to putinto effect" a monitoring system involving non-government organisations,with summaries of that monitoring being made public. Almost two years laterno reports on whether labour standards are being respected in Nike'ssuppliers' factories have been forthcoming, summaries or otherwise.

Monitoring by PriceWaterhouseCoopers

Nike claims that every contract factory is monitored once each year byPriceWaterhouseCoopers. We question whether an accounting firm is anappropriate organisation to win the trust of workers in order to discoverwhat is happening in a factory. In our meetings with workers, those makingNike apparel usually know nothing about any monitoring (or any code ofconduct). Workers in shoe factories generally report that "men in suitsfrom America" have visited. Before they arrive factory managers identifywhich workers will be allowed to speak to them and what they will beallowed to say. Workers know that anyone who varies from that script willbe dismissed.

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

Under the FLA agreement Nike itself will be able to choose which (FLAaccredited) organisation will assess Nike's monitoring program. We do notbelieve that an organisation selected and paid for by Nike can be regardedas independent. Only 10% of Nike's factories will be subject to this sortof "independent" assessment each year and Nike will have considerable sayover which factories are visited and when. The public will not even be toldwhich factories have been monitored, let alone be allowed to see theindividual monitoring reports.

Nike's involvement in the Global Alliance for Workers and CommunitiesThe "Global Alliance for Workers and Communities" is a partnership betweenNike, the World Bank and the International Youth Foundation. The Alliancewill not report on whether any particular standards are being met in Nikecontract factories. It provides Nike with the public relations credibilityof "monitoring" without having to protect workers human rights.

Once again there is a complete lack of transparency. No information hasbeen released regarding which factories are being "monitored", whatquestions workers are being asked, what workers have said in response, orwhat changes their comments will lead to. Without this information it isimpossible for anyone to either properly assess the Alliance's approach orto conduct independent research regarding what it has achieved inparticular factories.

We again call on Nike to put in place a credible, independent, rigorous andpublicly accountable system for checking labour standards, involvingindividuals and organisations committed to earning workers' trust. Untilworkers producing Nike products are allowed the freedom to tell the worldabout the conditions they are working under and the right to join togetherin unions and negotiate for their own welfare, Nike's suppliers' factorieswill remain sweatshops and Nike will continue to attract the condemnationof the international human rights community.Open letter to Phil Knight (Nike CEO) from labour rights groups concernedabout Nike's labour practices - a detailed response to Nike's claims tohave reformed its labour practices.

(next)