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Sweaty Sneakers

by Alan Pittman

on NIKE and sweatshops
After Nike CEO Phil Knight angrily withdrew a planned $30 million donation to the University of Oregon, UO President Dave Frohnmayer fell over himself trying to get back on the irascible billionaire's good side.

In interviews, Frohnmayer repeatedly described Nike as a "world leader" in promoting fair labor.

Nike isn't a leader in reforming sweatshops, says Trim Bissell, national coordinator for the Campaign for Labor Rights (CLR). But, he says, the corporation "is a world leader in issuing press releases declaring it's a world leader."

Bissell notes that activists struggled for years to get Nike to even admit that it had any control over working conditions at the 700 third world factories where the $10 billion corporation contracts to make clothes and shoes. It took years more to get the corporation to even give the names of the factories where its products were made. "Any progress they've made, we've dragged them kicking and screaming every inch of the way," says Bissell.

more about Nike's track record
Nike public relations executives have long derided their critics as ignorant or malicious or both. The company says it does far better than its competitors in providing safe and fair working conditions for the half-million third-world factory workers that make its products in factories scattered around the globe.

Nike's Track Record Jeff Ballinger, director of Press for Change and a Nike watchdog for the past decade, dismisses the company's fair labor claims as "a lot of PR spinning."

For example, Nike recently claimed that it had dramatically increased wages at its Indonesian factories. But Ballinger points out the wage increases fell below what was needed to keep up with massive inflation in the country.

The crash of the Indonesian rupiah versus the dollar meant that Indonesian workers went from earning $2.46 a day to about $1 a day, according to Bissell.

Given that exchange rate, Nike's labor costs in Indonesia actually fell by tens of millions of dollars, even with the new wage increases. Knight, who's personally made an estimated $4 billion to $5 billion off Nike's sweatshops, could have afforded to pay his workers more than 13 cents an hour, Bissell and Ballinger say.

In another example, Nike recently said it would replace toxic glues in its factories with water-soluble adhesives. Labor rights groups had said for years that poorly ventilated factories thick with toluene fumes were putting the company's young women workers at high risk of liver, kidney and central nervous system damage as well as birth defects.

At first, Nike vehemently denied the toxic air charges. But a leaked report from the corporation's accountant Ernst & Young revealed that Chinese workers at one plant were exposed to carcinogens that exceeded local legal standards by 177 times. More than three-fourths of the factory's workers suffered from respiratory problems.

Nike is now trying to take PR credit for clearing the air in its factories, but Ballinger says "it's something they never should have done in the first place."

In a new PR thrust, Nike has also started posting internal audit reports of its factories on its web site. But Ballinger says the reports are "bogus" and "laughable." The reports aren't independent inspections, don't even reveal the identity of the specific plants inspected, and are completely unverifiable, he says. Also, the reports focus on nit-picking regulatory details such as failure to post regulations, but ignore larger issues such as whether or not the workers have been harassed or fired for trying to unionize or for failing to meet harsh production quotas.

In recent independent studies of Nike factories, researchers found workers still have "lots of complaints," Ballinger says.

In April, a coalition of fair labor groups released a report documenting ongoing labor abuses at Nike contract factories in Indonesia, Thailand, Cambodia, and China. A survey of 3,500 workers producing for Nike in Indonesia found serious labor abuses. Punishment for minor infractions included pulling workers' ears, slapping, fining, and forcing workers to stand in the sun or run laps around the factory.

The report found forced overtime in Nike's Chinese factories. Some work weeks were as long as 12 hours a day for seven days in a row. Other interviews with workers in Thailand, Cambodia and Indonesia revealed anti-union crackdowns, low pay and extreme exhaustion from brutal production quotas.

Nike issued a press release denouncing the latest research by labor monitors as "simply not credible." The corporation claimed "no one can dispute" its leadership for fair labor.

More spin than actual reforms
Nike's spin on its sweatshops in third-world dictatorships has long claimed that the corporation isn't exploiting workers, but helping foster economic development that will lead to better living standards and a move to democracy. In its 1996 annual report Nike described itself as "U.S. foreign policy in action."

But Ballinger and Bissell say Nike has opened factories in dictatorships to maximize profits with cheap labor and government suppression. They point to a letter last year by a Nike executive to the Vietnamese dictatorship as an example of the corporation's true views of democracy. Nike Vice President Joseph Ha wrote that fair labor activists at the company's factories and abroad are attacking Nike as "the first step for their political goal, which is to create a so-called democratic society on the U.S. model."

A broad spectrum of human rights groups denounced the letter as anti-democratic and authoritarian, and Nike PR people appeared to back away from Ha's claims. But Bissell says Ha was not disciplined by the company. Thirty years ago, Nike pioneered the corporate model of seeking out the world's lowest-wage dictatorships to produce products, says Bissell. "It was Nike that set the standard. They created this mode of corporation -- the virtual corporation that produces image instead of shoes."

Nike first set up shop in Taiwan and South Korea. But soon left for cheaper labor. "When these countries started to democratize, Nike put on its running shoes," Bissell says.

Nike is now in the process of moving its factories from Vietnam and Indonesia to even cheaper labor and harsher dictators in China. The April report by fair labor activists reported that Nike has increased its sneaker production in China from 10 percent to 40 percent in recent years. In China, the corporation can exploit labor for as little as 11 cents an hour and enjoy the support of a repressive government, the report notes. The Chinese will insure little information leaks out about bad working conditions at Nike factories, and the dictatorship has a history of severe repression of independent unions including torturing and imprisoning workers' rights activists, according to the report.

Years of pressure by student and fair labor activists have had an impact on Nike, Ballinger says. The corporation has found from marketing research and falling sales that the brand name it has spent hundreds of millions of dollars to create is now soiled by its sweatshops.

But the corporation has reacted more with spin than with actual reforms, fair labor activists charge. The corporation's new director of labor practices is a former corporate PR executive, they note.

The new Worker Rights Consortium has great promise for using pro-labor sweatshop monitoring to increase pressure on Nike in the media and on campuses to reform, Ballinger says. But after a decade trying to push the Swoosh in the right direction, he says he doesn't expect quick results.

"The progress is so glacial," Ballinger says. "I don't see this company turning around any time soon."

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Albion Monitor July 24, 2000 (

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