Global Policy Forum

Five years ago, Nike's image was badly tarnished by exposes of its record of widespread labor abuses in its overseas shoe manufacturing plants. Under pressure to clean up the company's image -- if not its practices -- in 1997 Nike made a public commitment, through the Fair Labor Association, to respect the right to freedom of association as enshrined in Article 23 of the Universal Declaration of Human Rights. In July 2000, Nike CEO Phillip Knight reiterated that commitment through his high profile support for the UN's Global Compact. Our research, which covers the period since 1997, raises serious doubts as to whether Nike has lived up to this commitment. We look at Nike's record in several Asian countries and Mexico and find that these rights violations persist.

China -- No Independent Unions

Some 40% of all Nike shoes are made in China1, where the authoritarian system allows no civil society organizations or unions to exist without government permission2. Any independent unions are implicitly outlawed and attempts at genuine union organizing are harshly repressed. Under the National Security Law, workers who attempt to form unions can be detained and imprisoned or sent to forced labor camps.

Nike has 59 factory suppliers in China3, including the giant Yue Yuen shoe factory complex in Dongguan, which employs more than 40,000 workers. There has been a long history of union repression in Chinese factories producing for Nike. A 1997 report by the Hong Kong Christian Industrial Committee and the Asia Monitor Resource Center indicates that those factories either had management controlled unions, or no union at all. In the Wellco factory in Dongguan there were separate wildcat strikes in 1997, and the factory responded by instantly firing all the striking workers.4

Nike has been actively involved in lobbying Washington against using trade policy to pressure China to respect workers' rights. During the Clinton Administration's first term in office, Nike was part of a coalition of transnational corporations that successfully dissuaded Clinton from acting on his election promise to link trade with China to human rights improvements5. In 2000, Nike executives made donations to David Dreier, the Republican whip involved in the successful push for China to be given Permanent Normal Trade Relations6. In addition, despite repeated requests from labor rights groups, Nike refuses to make public statements calling on the Chinese Government to allow workers to form unions in Nike contract factories.

Indonesia -- Repression of Union Rights

Nike has taken one positive step to support the right to freedom of association in Indonesia. In September 1998 a worker named Haryanto, (like many Indonesians, he has only one name), was fired from the PT Lintas factory for organizing activity. On his return to Indonesia from a US speaking tour organized by human rights groups, Nike arranged for him to return to work and has ensured an end to harassment and threats against him personally. However other unionists at his factory continue to suffer discrimination.

Haryanto's case seems to be the exception. A September 2000 report by Oxfam-Community Aid Abroad documented extensive repression of union rights at three Nike contract factories in Indonesia, including death threats, harassment and discrimination against union organizers.

On the day the report was released Nike promised to investigate, but the company has since ignored enquiries as to whether this investigation took place. Meanwhile union organizers in Nike contract factories in Indonesia continue to be harassed and threatened.

Nike's operations in Indonesia take place against a backdrop of political repression. Under the brutal Suharto regime, which came to an end in 1998, the Indonesian military was notorious for harassing, intimidating and, in some cases, imprisoning workers who attempted to assert their right to form unions. Unfortunately the security forces continue to be a strong political force in Indonesia and continue to repress workers rights. In April 2000 soldiers worked closely with factory management at the giant Nikomas Gemilang factory in Serang to threaten violence against workers involved in organizing a demonstration for better pay. Nikomas Gemilang produces sneakers for both Nike and Adidas.

Julianto, a worker (who also has only one name) at Nikomas Gemilang, described the threats made by against him after he helped organize a December 1999 protest at the factory. "I was called away from my work and taken into an office and there were two managers and a soldier from the Indonesian army there," he told human rights workers on a trip to Australia.

"They shouted at me and slammed the table. They told me that we had to disband the workers committee. I told them that we did not want to. And they said 'if you organize another demonstration we will take you to the police or you will be visited by hired thugs.' The same thing happened to my friends," Julianto added.

Thailand -- Union Organizers Fired and Blacklisted

In December 2000, a major report by Junya Yimprasert, Coordinator of the Thai Labour Campaign and Wellesley College professor Christopher Candland, shed some light on the previously unknown working conditions in Nike contract factories in Thailand. According to Yimprasert and Candland, there are no unions in the entire Thai sport shoe sector because factory owners have crushed all attempts by workers to organize:

The Saha Union group is infamous in Thailand for its virulent anti-union activities. Several groups of workers in the Saha Union group who attempted to organize a union were dismissed as soon as the company learned of their intention to form unions.

Many workers in the footwear industry become terribly frightened when asked about union activities. In one interview with Bangkok Rubber Group workers, workers pretended that they did not know what a union was, and became afraid to talk to us. Later, they told us of their experience of seeing fellow workers dismissed and blacklisted for attempting to organize a union.

There is also considerable repression of union rights by Nike clothing contractors in Thailand, although unions do exist in some of these garment factories. A worker from the Par Garment factory in Rangsit, told Belgian National Television of numerous obstacles to union organizing. "It was difficult; when we met, there were cameras watching us," he said. "They prevented us from communicating with each other, they didn't let us talk together, they put us in different groups at work, they forbade us to talk7."

In 1997 Par Garment, a Nike supplier, attempted to crush the union by shutting the factory down and moving production to other factories of their own that were non-union. Workers picketed the factory and prevented it from being sold. Combined with international solidarity, this created enough pressure for the government to step in and broker a deal and the factory reopened. Nike which had shifted it's orders to other factories during the labor dispute, refused to restart its orders at Par Garment. Many workers lost their jobs, the factory blamed the union for driving Nike away and the union organizers were fired and blacklisted. According to international labor activists, if Nike were committed to protecting workers rights it would have allowed the union that workers had fought so hard for to continue by maintaining its orders and insisting that union organizers not be fired.

Harassment at the Natural Garment factory in Cambodia

A September 1999 report by the Cambodian Labor Organization (CLO), in a report on the Natural Garment Factory in Phnom Penh, concluded that "...Nike is failing to take any pro-active steps to monitor or enforce compliance with its much-touted code of conduct, which provides that workers have the right to freely associate." The report describes the harassment of the union president and union treasurer during the period from April to July 1999, when the factory was producing for Nike.

In March 2000 labor rights groups raised the case with Nike8. They called on the company to ensure that the union treasurer was reinstated and that all harassment of union organizers at the factory brought to an end. Nike made no response to this request.

Nike and Kuk Dong factory in Mexico

Events at the Kuk Dong factory in Puebla, Mexico, have received perhaps more scrutiny than all of Nike's other 700 suppliers put together. Despite the well-organized, resource-intensive and high-profile campaign around the Korean-owned Kuk Dong, Nike's response has been mixed at best. They contracted the factory in December 1999, shortly after it signed an illegal contract with the pro-management CROC union, which has intimidated workers and attempted to suppress their right to form an independent union.

In March 2000 Kuk Dong began producing college licensed sweatshirts for Nike, bearing logos from several US universities including Michigan, North Carolina, Oregon, Arizona and Indiana. Martin Austermuhle of Penn State University accompanied the accounting firm PricewaterhouseCoopers on an audit of Kuk Dong for Nike. He recommend that workers receive training in union rights as they "seemed scared to exercise those rights due to fear of dismissal." Nike ignored this recommendation.

In January of 2001 several hundred Kuk Dong workers held a two and a half day strike to demand better wages and working conditions. Riot Police and CROC members attacked some 300 workers guarding the factory and beat them with clubs. US students held protests in support of the Kuk Dong workers and the labor dispute make headlines in the United States. After considerable public pressure, Nike asked Kuk Dong to rehire a number of workers who had been fired for involvement in strike. A number of other independent union organizers are still being locked out of the factory, however, and the CROC continues to harass and threaten workers who are trying to get a genuine independent union established at the factory.

Conclusion

Nike is the highest profile of the some 50 companies that joined Secretary General Kofi Annan at the July 26, 2000 launch of the Global Compact. Its inclusion in the Compact was controversial to say the least, as the company had by then become a symbol for sweatshop abuses. And while the company claims to have cleaned up its act, reports from workers and independent monitors show that labor violations -- especially of the right to organize -- are still endemic to Nike's overseas operations.

By standing with Nike CEO Phil Knight by his side at the Global Compact launch, Kofi Annan appeared to accept at face value Nike's promises to do better, and their pledge to abide by UN principles, including the right to free association. Given that Nike has not kept this pledge, the Secretary General would best uphold the integrity of the United Nations by asking Nike to leave the Global Compact until it has proven it is adhering to the Compact principles.

Footnotes

1. 'Sweatshops Behind the Swoosh. A Report on recent investigations of working conditions in Nike contractor plants in Asia," Union of Needle Trade, Industrial and Textile Employees (UNITE), Washington, accessed 7/24/00
2. 'China, including Hong Kong and Macao," Amnesty International Annual Report 2000, accessed 4/20/01
3. Nike web site, Portland, accessed 6/6/00
4. 'Working Conditions in Sports Shoe Factories in China - Making Shoes for Nike and Reebok,' Asia Monitor Resource Centre and Honk Kong Christian Industrial Committee, Hong Kong, accessed 7/25/99
5. 'Mandarins and Moguls Unite for China's Most -Favored Nation Initiative,' Center for Media and Democracy, accessed 7/7/98
6. Devick, n. and Bruyns, E. 2000. Code of Conduct (Television documentary), RtBF (Belgian National Broadcaster), OXFAM Belgium, Brussels
7. Bissell, T., Gesualdi, F., Haan, E.d., Curr, P., Bjurling, K, Kearny, N., Copeland, L., Gould, B., Connor, T. and Delaney, A. 2000. 'Open letter to Phil Knight (NIKE CEO) from labor rights groups concerned about Nike's labor practices- a detailed response to Nike's claims to have reformed its labor practices, NikeWatch website, Sydney, accessed 5 June 2000
8. UNITE op. cit.