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 Cambodian Labor 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 concerned about Nike's labour practices - a detailed response to Nike's claims to have reformed its labour practices.

15 March 2000.

A. Executive Summary

In September 1999, 45 organisations from 15 countries delivered an open letter to Nike's Annual Shareholders' Meeting, calling on the company to end labour rights abuses in its suppliers' factories. Phil Knight (Nike's CEO) and Dusty Kidd (Nike's Director of Labor Practices) sent replies in October, denying the allegations of labour abuses and outlining Nike's labour 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 Workers Federation, Justice. Do It Nike Coalition (US), Nicaragua Solidarity Committee (US), NikeWatch (Australia) and the Textile, Clothing and Footwear Union of Australia (TCFUA). We believe that Nike's response to this issue has been dictated by public relations concerns rather than a genuine commitment to protecting workers' human rights and that Nike has so far deliberately avoided taking steps which would bring abusive management practices in its suppliers' factories to an end.

New Evidence of Nike sweatshops

Further examples of sweatshop conditions in Nike contract factories have come to light since our initial letter was delivered to Nike in September. Perhaps the most significant new evidence comes from the recent survey of 3,500 Nike Workers by the Urban Community Mission in Jakarta. Completed in October 1999, this survey found that excessive compulsory overtime, humiliating sanctions and extreme verbal abuse are still common in Nike contract factories in Indonesia. Examples of the verbal abuse include the Indonesian equivalent of phrases like "Fuck You!", "You Whore!" and "You Dog!". Examples of mistreatment include wage deductions, having their ears pulled, being pinched or slapped on the buttock, being forced to run around the factory yards or having to stand for hours in factory yards in the tropical heat (being "dried in the sun"). The report is available on Campaign for Labor Rights' Website at http://www.summersault.com/~agj/clr/alerts/crueltreatmentworkingfornikeinind onesia.html.

Labour abuses in factories producing for Nike in Bulgaria, China, Cambodia, Indonesia, Thailand and the USA have also recently been documented. Each of these 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 working week,
• are commonly still being required to work well in excess of 60 hours per week in stressful, pressured and sometimes dangerous conditions
• are commonly subject to discrimination and dismissal if they try to form unions.

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 the Vietnamese government.

In January 1999 Nike Vice President Joseph Ha sent a letter to Vietnamese Officials falsely suggesting that Thuyen Nguyen of Vietnam Labor Watch has a secret agenda to overthrow the Vietnamese government. The letter was published in the official Vietnamese Press and since then it has been politically dangerous for Vietnamese citizens to pass on information about conditions in Nike factories to Vietnam Labor Watch. We reject Nike's characterisation of Ha's letter as "the private correspondence of one employee". We call on Nike to provide evidence that the company genuinely tried to undo the damage the letter has done to attempts to monitor conditions in Nike contract factories in Vietnam.

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

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

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

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

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

Members of the Indonesian army are frequently employed as "security" in factories in Indonesia during periods of industrial unrest to prevent industrial action. In September 1999 a US student delegation observed Indonesian soldiers stationed at the Nikomas factory at a time when wage negotiations were being conducted. Following the publicity the issue received the soldiers were replaced by non-military security (police and security guards) who were playing an appropriate role. Subsequently however, during peaceful strike action by workers at PT Nikomas, police from Brimob (an armed police brigade) equipped with guns entered the factory and together with factory security guards and hired civilians they threatened and provoked workers. We repeat our call for Nike to ensure that Indonesia's armed forces are never called in to prevent or interfere with peaceful industrial action.

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

This case represents Nike's only positive response to the issues raised in our letter. Haryanto was fired on 16 September 1998. On December 24 1999, following a hard-fought campaign for his reinstatement, Haryanto returned to work at PT Lintas. This is the first time in the history of this campaign that Nike has agreed to the reinstatement of a worker who had been fired for standing up for his or her rights. As such it is extremely welcome news and we hope it signals the beginning of a change in Nike's approach 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 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 able to form their own organisations and bargain collectively it would be far more difficult to exploit them.

Unfortunately Nike's stated commitment to protecting this right has proved meaningless. As far as we are aware (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. Our initial letter in September called on Nike to take a number of concrete steps to help make it possible for democratic workers' organisations to develop and operate in Nike contract factories. Nike ignored these proposals.

Excessive Forced Overtime

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

Wages

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

Workers in Nike contract factories tell us that their wages 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 daughter and her mother (who was also working). A report on her case is available on the National Labor Committee's website at http://www.nlcnet.org/nike/julia.htm. Research by the Interfaith Centre for Corporate Responsibility indicates that a Nike worker in Vietnam 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. Wages for a standard week in factories producing Nike sportshoes in Jakarta do not cover what the Jakarta Post (22 Feb. 2000) says is needed to meet the subsistence needs of one worker. Indonesian garment workers producing for Nike are paid even less.

Disclosure of factory locations

Nike has disclosed the addresses of suppliers providing clothing bearing the logos of ten US Universities. Although production for all US colleges represents less than 1% of Nike's production, this is a small step forward. However, when such a small percentage of suppliers is involved it raises concerns that Nike may be directing production for those universities into model factories. This letter cites a report by the Hong Kong Christian Industrial 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 and verification 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 by more than 112 companies producing apparel in Australia, including Nike's main competitors, Reebok and Adidas. Nike refuses to sign on the basis that it does not allow suppliers to use homeworkers and hence "see(s) no value in signing onto a standard for a system we do not use". Nike is well aware that other companies who have a policy against homework have freely agreed to sign the Code so that their policy can be independently verified. In contrast, Nike continues to stonewall in the face of a long-running and creative campaign urging the company to sign.

Nike's May 1998 Initiatives:

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

- Health and Safety

In that speech Knight committed to ensuring that air quality standards in Nike factories are within the U.S. Occupational Health and Safety Administration (OSHA) permissible exposure limits for volatile organic compounds. While they represent an improvement on the extraordinarily high levels of exposure to toxic gases which have been found in Nike factories in the past, vigorous corporate lobbying in the US has kept OSHA standards in this area extremely weak and they do not reflect the last 30 years of research into the hazards which these gases pose. A more appropriate standard would be the US National Institute of Occupational Safety and Health "Recommended Exposure Levels" and we urge Nike to apply that standard. We also call on Nike to put in place regular independent monitoring of all suppliers' factories by organisations with health and safety expertise and to make the results of this monitoring available to the 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 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 Nike in public relations terms.

Independent monitoring of conditions in Nike factories

Nike is describing its monitoring system, 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 is extremely valuable for Nike to be able to point to so many different programs. Unfortunately adding a number of inadequate programs together does not produce a credible monitoring system.

In many countries in which Nikes are made it can be dangerous for workers to make criticisms of factory conditions. 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.

Phil Knight's 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 being made public. Almost two years later no reports on whether labour standards are being respected in Nike's suppliers' factories have been forthcoming, summaries or otherwise.

Monitoring by PriceWaterhouseCoopers

Nike claims that every contract factory is monitored once each year by PriceWaterhouseCoopers. We question whether 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, those making Nike apparel usually know nothing about any monitoring (or any code of conduct). Workers in shoe factories generally report that "men in suits from America" 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 know that anyone who varies from that script will be dismissed.

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

Under the FLA agreement Nike itself will be able to choose which (FLA accredited) organisation will assess Nike's monitoring program. We do not believe that an organisation selected and paid for by Nike can be regarded as independent. Only 10% of Nike's factories will be subject to this sort of "independent" assessment 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.

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

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

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. 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, Nike's suppliers' factories will remain sweatshops and Nike will continue to attract the condemnation of the international human rights community. 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.

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