(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 ofHuman Rights. For many of us it is also our highest priority in terms ofaddressing 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. Thiscommitment is in Nike's own code and in the Apparel Industry Partnershipcode 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 contractswith suppliers who have a history of suppressing unions and Nike hasencouraged them to locate their factories in countries where the right toorganise 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 theirfactory. 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, employeesshall: (i)not be required to work more than the lesser of: (a) 48 hours perweek and 12 hours of overtime, or (b) the limit on regular and overtimehours allowed by the law of the country of manufacture or, where the lawsof such country do not limit the hours of work, the regular work week insuch country plus 12 hours overtime, and (ii) be entitled to at least oneday off in every seven day period.

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

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

Workers in Nike factories in Indonesia are being required to work muchlonger than this. The survey conducted by the Urban Community MissionJakarta (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 workhours 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 arethreatened with dismissal if they refuse overtime and management ensuresthat transport home is not available until overtime is completed (seeAppendix 1). As indicated elsewhere in this letter there is also evidenceof excessive forced overtime in the Hung Wah factory in China, the Natural Garment Factory in Cambodia (see Appendix 2) and the Lian Thai factory inThailand (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 ourproducts are paid a fair wage, accompanied by an appropriate package ofbenefits".

We do not believe this. We recognise that there is considerable debateregarding 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 thatat the very least a decent wage for a standard (i.e. not includingovertime) working week should be adequate to provide for the basic needs (nutritious food, drinking water, decent shelter, clothing, basichealthcare, basic education, transport) for the worker herself and a smallnumber 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 falla long way short of this. When Julia Pleites was working in the Formosafactory in El Salvador she could afford to buy milk for her daughter onlyonce 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 anutritious diet. According to that research, a worker who bought food fromthe 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 onlyrequires 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 yoursportshoe factories in Indonesia above the regional legal minimum wagelevels 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 onlycovers 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 surveyconducted by the US Department of Labor for the White House ApparelIndustry Partnership (AIP), and will be using it to guide your thinking oncompensation issues. While we hope that you do take this study veryseriously, we find it odd that you are using this as evidence of Nike'scommitment to paying decent wages. We understand from press reports thatthe union and NGO members of the AIP pushed hard for the AIP Code toinclude a requirement that living wages be paid, but the companies involvedin the AIP refused to accept this. Commissioning the DOL study was acompromise which falls well short of a commitment to pay decent wages.

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

Disclosure of factory locations

Nike has disclosed the addresses of suppliers providing clothing bearingthe logos of ten US Universities. Although (according to Nike's website)production for all US colleges represents less than 1% of Nike'sproduction, this is a small step forward. As discussed above, when such asmall percentage of factory addresses is involved it raises concerns thatNike may only be releasing the addresses of model factories. We urge you tobecome part of a monitoring and verification system which involvesregularly releasing the addresses of (and levels of orders from) ALL yoursuppliers, so that concerned organisations can make contact with workersand 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 tosmall factories and subcontractors who in turn send much of the work tohomeworkers. These workers (predominantly recently arrived migrant women)often work under extremely exploitative arrangements, and the issue is thesubject of an ongoing campaign.

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

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

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

The Homeworkers Code has been agreed to by more than 112 companies inAustralia, including Nike's main competitors, Reebok and Adidas. It isironic that while Nike has vigorously promoted the Fair Labor Associationin the US on the basis that codes should be adopted on an industry widebasis, in Australia your company has refused to sign a code which hasgained acceptance right across the industry. We suspect that the differentsystems of monitoring have influenced Nike's attitude. In contrast to theFLA system which allows Nike to choose which (accredited) monitor inspectsits factories, the Homeworkers' code allows the local union (the TCFUA) toensure that Australian workers are not exploited while producing Nikeclothes.

The TCFUA has initiated legal proceedings against Nike in the AustralianFederal Court for alleged breaches of the Clothing Award. Nike could settlethe matter by agreeing to comply with the award and signing the code. Werecognise Nike has the right to defend itself but believe that ultimatelyNike's efforts and resources would be better directed towards maintainingthe standards to which the majority of the industry in Australia haveagreed to abide.

Nike's May 1998 Initiatives

Mr. Kidd's letter opens by discussing Nike's implementation of theinitiatives you announced to the National Press Club in 1998. It isimportant to recognise that these initiatives never addressed a number ofkey issues. In particular they failed to address freedom of association andthe adequacy of wages, concerns which we have indicated above arepriorities. Nonetheless we do want to respond to Mr. Kidd's commentsregarding these initiatives.

- Health and Safety

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

A more appropriate standard would be the US National Institute ofOccupational 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 Niketo apply this standard.

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

Air quality is far from being the only health and safety problem in Nike'ssuppliers' factories. Previous research has indicated problems withexcessive noise and heat, dangerous machinery (leading to loss of fingersand hands) and ergonomic problems. As discussed above, our letter to you inSeptember cited research indicating a dangerous lack of fire safety in oneof your suppliers' factories in China. Appendix 3 cites claims by workersat the Lian Thai factory that the electrical wiring is unsafe and that thefactory is near a river which frequently floods. On 3 January 2000 theVietnam Investment Review reported that the country's biggest foodpoisoning outbreak of 1999 occurred in a Nike factory in southern Vietnamwhen around 600 workers suffered vomiting and diarrhoea after they atepoisonous mushrooms. Also in January 2000 a number of sports chains inGermany pulled Nike soccer shirts off the shelves following concern thatthey contained Tributyltin, or TBT. Although Nike subsequently releasedevidence that the levels of TBT were safe for consumers, we are yet to seeany evidence that the levels at which workers are being exposed to TBT aresafe. According to Juergen Kundke, a scientist with the German Institutefor the Protection of Consumer Health, high levels of exposure to TBT isbelieved to cause neurological problems, damage the immune system and harmthe liver.

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

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

- Nike's evening classes and microloan programs:

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

Others of us wonder why Nike wants to fund these programs but won't ensuredecent wages are paid and won't support workers' right to organise. Theywould like to know how much these programs cost and how that compares withhow much it would cost to raise the wages of all Nike's suppliers' workersby, for example, $1 a day. Given that Nike indirectly employs more thanhalf a million workers, we imagine that these sort of programs are muchcheaper for Nike than ensuring that decent wages are paid, and no doubtthey 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 practicesare out of the media spotlight, whereas once workers are allowed to havetheir own unions and are allowed a decent wage, taking that away from themwould be very hard indeed.

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

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

As well as holding open forums, Phil Knight's May 1998 speech indicatedthat Nike would be funding university research into "global manufacturingand responsible business practices such as independent monitoring andhealth issues", and that Nike would "begin by funding four programs inUnited States universities in the 1998-99 academic year". We have heardnothing about these four programs, nor anything about any other academicresearch which Nike intends to fund. We would very much like to know whichacademics are conducting this research and what issues they are considering.

Mr. Kidd's letter indicates that Nike will be holding open forums on womenand 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 inthat discussion". Of course this is a crucial issue and we would be veryinterested to know how we might contribute to these forums. Please let usknow 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 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 must be extremely valuable for Nike to beable to point to so many different programs. Unfortunately putting a numberof inadequate monitoring programs together does not result in a rigorousand credible system.

Workers in Nike contract factories in Indonesia, Vietnam, China, Thailandand El Salvador have repeatedly made it clear to us and to otherorganisations that it can be dangerous for them to make criticisms offactory conditions. With the very high levels of unemployment which haveresulted from the Asian economic crisis workers have good reason to fearunemployment and those who are perceived to be "troublemakers" are usuallythe first to be "let go" when the factory is laying off workers. For thisreason we have argued that worker interviews should be conductedanonymously, away from the factory premises and with the involvement oforganisations committed to earning 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.

Your speech in May 1998 stated that Nike was "working hard to put intoeffect" a monitoring system involving non-government organisations, withsummaries of that monitoring made public. Most of us have strong misgivingsabout "summaries" being released - why not release the reports in full? Inany case almost two years after you made that speech no reports on whetherlabour standards are being respected in your suppliers' factories have beenforthcoming, 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 Associationand the child labour monitoring program for soccer ball production inSialkot in Pakistan (all of which we will consider below) the only "NGO"mentioned which seems to be involved in monitoring labour standards in yoursuppliers' factories is the University of Economics in Ho Chi Minh Citywhich Nike claims is conducting "focus groups" with workers. Nike hasreleased no reports (or summaries) of this monitoring and as such we haveno way of knowing how workers are being selected, what issues they areasked about, whether they would have any reason to trust that theircomments remain confidential and whether any problems this monitoring hasidentified have been fixed. Unless and until Nike is willing to releasethis sort of information there is no way of knowing what, if anything, thismonitoring achieves.

We are not in a position to comment on the child labour monitoring programfor soccer ball production in Sialkot, but we note that it is a verylimited program in that it only applies to the monitoring of one labourstandard 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 operatingsystem, Nike has agreed to allow oversight of our independent monitoring offactories (which in our current model has global monitoring of everyfactory once each year, performed by PriceWaterhouseCoopers)".

Regarding the monitoring by PriceWaterhouseCoopers, as you know many of usdo not believe an accounting firm is an appropriate organisation to win thetrust of workers in order to discover what is happening in a factory. Inour meetings with workers, in most cases those making Nike clothing knownothing about any monitoring (or any code of conduct). Workers in shoefactories often report that "men in suits" have visited. Before they arrivefactory managers identify which workers will be allowed to speak to themand what they will be allowed to say. Workers in those factories know thatanyone who varies from that script will be dismissed. In those very fewcases we are aware of where Nike workers have felt confident to honestlytell Nike's monitors about problems in their factory those workers complainthat nothing has happened as a result of them giving this information. Weurge you to publicly release PriceWaterhouseCooper's monitoring reports.Consumers and workers have a right to this information so that they canassess for themselves whether this monitoring is adequate and whether anyproblems it identifies are rectified.

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

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

The FLA monitoring agreement allows Nike to choose which organisation will"independently" monitor its factories (provided that organisation has beenaccredited by the FLA). Most of us believe that organisations selected andpaid for by Nike will have an incentive to be less than rigorous in theirmonitoring so that they can keep the contract. In particular we areconcerned that such monitors will have very little motivation to ensurethat workers are aware of their right to organise and are able to exercisethat right. In any case only 10% of Nike's factories will be subject tothis sort of monitoring each year, and Nike will have considerable say overwhich 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. The FLA will release regional summaries ofwhat this "independent" monitoring discovers, but that will give us nobasis on which to judge how rigorous it is.

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

Nike's involvement in the Global Alliance for Workers and CommunitiesIt is hard for us not to be cynical about the Global Alliance. Many of ushave been calling for many years for Nike to involve local organisationswith expertise in labour rights in checking that international labourstandards are respected. In response Nike has teamed up with Mattel(another company that has repeatedly been found to have its products madein appalling conditions); the World Bank (which, according to research bythe International Labour Rights Fund, has itself failed to ensure thatlabour rights are protected in the projects it funds); and theInternational Youth Foundation (which in so far as we are aware has noorganisational history of involvement in labour rights at all) to form thisAlliance. 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 ofmonitoring would be attractive to Nike. The Alliance does not have anystandards against which it "monitors" factory conditions. We have made itclear that we have considerable reservations regarding the Fair LaborAssociation, but at least the FLA has a code which includes some importantlabour standards, including the right of workers to organise. If it becomesclear to the FLA, as it is clear to us, that Nike is refusing to maintainthose standards, then the FLA can refuse to certify Nike. The GlobalAlliance 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 ) claimsthat rather than imposing an external standard the Alliance will try andfind out from workers' themselves what they believe are the key workplaceissues. To this end the Alliance will involve "local non-governmentalorganizations, 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 interviewswithout fear of retribution then this research might well expose problemsin the workplace. Nothing in the information which the Global Alliance hasmade available gives us confidence that it will create a space in whichworkers 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 theinvolvement of project teams set up in each factory. These teams (in thosefactories which don't have unions) include two representatives frommanagement, a supervisor, and five to seven workers. No information isgiven about how the workers are selected. If there is managementinvolvement in this selection we have every reason to suspect they wouldchoose workers who they knew they could trust not to "cause trouble". Thereport's indication that the project teams insisted that interviews beconducted inside the factory further enhances our concerns that thoseworkers selected to be on the Project Teams might be protecting theinterests of factory owners rather than those of workers.

The way in which workers are selected is not the only aspect of theAlliance's operations which is being kept secret. Thus far it has notreleased information regarding who is paying for the Alliance's activities,the names of the factories which have been "monitored", copies of thequestions which workers are being asked, any information about what workershave said in response, or anything about what changes their comments willlead to. The Alliance's website declares that it wants to be "heldaccountable" for its performance but without this information it isimpossible for anyone to either properly assess the Alliance's approach orto conduct independent research to assess what it has achieved inparticular factories. Until this information is available any claims ofaccountability are meaningless.

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

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

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

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.

Our last letter ended by calling on you take a number of practical steps toend the exploitation of workers who make your company's products. To ourgreat disappointment your letter back to us either refused or ignoredalmost all of those requests. We want to restate what we said in conclusionto that letter. Until workers producing Nike products are allowed thefreedom to tell the world about the conditions they are working under andthe right to join together in unions and negotiate for their own welfare,your suppliers' factories will remain sweatshops and Nike will continue toattract 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
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Francesco Gesualdi, Coordinator
Centro Nuovo Modello di Sviluppo
Vecchiano (PI),Italy
http://www.citinv.it/org/CNMS/index.php?view=article&id=5l
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Esther de Haan
Clean Clothes Campaign
Amsterdam, Netherlands
http://www.cleanclothes.org
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Pamela Curr,Coordinator
Fairwear Campaign
Melbourne, Australia
http://vic.uca.org.au/fairwear/main_page.htm
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Kristina Bjurling
Fair Trade Center
Stockholm, Sweden
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Neil Kearney, General Secretary
International Textile, Garment and Leather Workers' Federation
Brussels, Belgium
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Liz Copeland, Coordinator
Justice. Do It Nike Coalition
Portland, Oregon, USA.
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Bruce Gould, Chairperson
Labor Rights Task Force, Nicaragua Solidarity Committee
Chicago, USA
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Tim Connor, Coordinator
NikeWatch Campaign,
Sydney, Australia
http://www.caa.org.au/campaigns/nike
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Annie Delaney
Textile, Clothing and Footwear Union of Australia (TCFUA)
Melbourne, Australia
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* 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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