TITLE: Nike Report Cites Violations In Indonesian Plants

AUTHOR: Shu Shin Luh

PUB: Asian Wall Street Journal

DATE: February 21, 2001

Limited access to medical care, fondling of assembly-line workers by factory managers and forced overtime are widespread among Nike Inc.'s Indonesian contract factories, according to a candid report funded by the international sporting-goods giant to be released today. Workers in one Jakarta factory told researchers from the nonprofit organization Global Alliance that female job candidates were asked to trade sexual favors to gain employment. At another factory, a manager threw a book at a worker when she was slow to bring materials to the sewing division. And most of the 4,004 factory workers interviewed feel coerced to work overtime even though Indonesian law says it should be voluntary. Nike, which has been accused of buying from ill-managed sweatshops and being evasive in its responses to criticism, plans to ask for independent verification of the problems raised by the report. The company also is promising to make it easier for workers to report abuses. The report, a third in a series, set out to learn more about factory workers' aspirations in their careers and family life. But in the course of interviews with workers Global Alliance researchers uncovered compliance violations. The report was solely funded by Nike's $7.8 million research grant to Global Alliance. Both Nike and Global Alliance officials reiterated that the group isn't a monitoring organization. Global Alliance's reports on Thai and Vietnamese workers in Nike contract factories released last year came under fire from labor activists world-wide who criticized the group for focusing on soft issues such as education and skills training instead of investigating compliance violations such as harassment and overtime abuses. In the past, critics saw Nike's relationship with Global Alliance more as a salve to public opinion than an effort to improve working conditions. "They had taken the most important issues, the questions about current workplace conditions, off the table," said Dara O'Rourke, a professor at the Massachusetts Institute of Technology and one of Nike's harshest critics. "We weren't sure what it was or what Nike gets out of it if it didn't do monitoring." "It's good that they added in compliance issues," Mr. O'Rourke added. For this report, Global Alliance conducted hour-long interviews with 6% of the 53,810 workers at nine factories including seven footwear factories, a sports-equipment factory and an apparel factory. Nike buys goods from 35 factories in Indonesia. It doesn't own a stake in these factories. Workers' and factories' participation in the survey were voluntary. Dusty Kidd, Nike's vice president for corporate responsibility, said the factories surveyed tended to be ones already attentive to workplace conditions and employee health issues. Even so, 56% of the 4,004 workers interviewed on factory sites told researchers they witnessed supervisors abusing their co-workers verbally. And 15.7% of workers said they observed sexual touching. Another 13.7% said they saw physical abuse. In one factory, managers punished tardy workers by making them clean toilets or run around the factory grounds. Physical abuse tends to escalate, workers told researchers, when managers are under pressure to meet production goals. According to the report, workers also said they believed two deaths in two factories were work-related and tied to the denial of medical attention. Most factories have on-site health clinics. However, close to 90% of interviewed workers expressed concern about these facilities, saying they believed medication wasn't always available. Workers also said it was difficult to get time off to visit the clinics. Many women said they couldn't get the two-day menstrual leave to which they are entitled under Indonesian labor laws. While the findings came as no surprise to Nike, Mr. Kidd said they were "troubling. No worker should be subject to some of the working conditions reported in this assessment. . . . But we now have a baseline to work with." In a 40-page response to Global Alliance's report, Nike said it plans to ask one of the monitoring groups accredited by the Fair Labor Association, a U.S.-based consortium of labor activists, corporations and government officials brought together by the White House, to independently verify incidents of compliance violations. A grievance process should be in place to allow workers to file complaints without fear of retribution. Some factories in Indonesia, Mr. Kidd said, already have this forum. Compliance issues are easier to monitor at footwear factories where Nike is often the sole contractor, said Tammy Rodriguez, Nike's senior corporate responsibility manager in Indonesia. At apparel factories, Nike is often one of half a dozen contractors, giving it less leverage to implement change. Five years ago, Nike began taking steps globally to improve the work environment, shifting footwear manufacturing from petroleum-based solvents to safer water- and detergent-based processes. Other changes have been put in place, Mr. Kidd said, partly because of the negative publicity the company received. Mr. Kidd's department was formed in 1996. It hired a health management firm to address health concerns with factory clinics. Nike has six full-time staffers in Indonesia who investigate compliance issues. However, Ms. Rodriguez acknowledged it is almost impossible to monitor each worker in every factory every day. Critics who slammed Nike's past evasiveness in disclosing workplace conditions haven't seen the report yet, but from what they have been told they cautiously commended Nike for its transparency. Still, they worry that the public has no tools to hold Nike accountable for its promises to improve. Global Alliance "can't make Nike do anything because they're not a monitoring organization," said Bama Athreya, deputy director of the International Labor Rights Fund, which sits on the FLA board with Nike. "Why not invite local NGOs (nongovernmental organizations) trained in monitoring to come in and do a code of conduct investigation?" But both Nike and Global Alliance say their relationship is a productive one. "We look at other dimensions of workers' needs," said Kevin Quigley, Global Alliance's executive director. "While it's hard for an environment with harassment to have any kind of developmental program, we want to go beyond just compliance. There are many organizations that already do monitoring." END top