Nike briefing, 2003

“Nike... your shoes are full of blood and tears”:

Nike and sweatshop exploitation - a guide for activists

Nike: built on workers’ misery

Nike has a nice image in the British high street. But the giant company looks a bit different to those who slave in factories making Nike clothes and trainers. The thing to remember about Nike – when you watch the skilfully made, trendy adverts, or see top Nike-sponsored athletes perform, or take part in Nike-backed charity-PR events – is that Nike is built on workers’ misery.
Workers in Nike sub-contracting firms across the world are regularly denied a living wage, union rights and safe working conditions. Nike has been caught using child labour.
Nike is bad news.

You have to meet the quota before you can go home. She hit all 15 team leaders in turn from the first one to the fifteenth... The physical pain didn't last long, but the pain I feel in my heart will never disappear.
Thuy and Lap, woman workers at Nike plant, Vietnam, (CBS, October 1996)

One would think that $12.3 billion would be enough money for Nike’s CEO Phil Knight, and that perhaps he would finally stop sucking his wealth off the backs of exploited teenage children who are stripped of their rights and paid pennies an hour making Nike goods in China, Vietnam, Thailand, Indonesia , El Salvador, etc. But greed is a funny thing - it must feed on itself.
National Labor Committee (US)

3,000 Indonesian workers marched through the main streets of Jakarta, criticising the world's top athletic shoemaker Nike for withdrawing orders from their factory.
The workers from a factory owned by PT Dobson carried banners such as 'Nike, your shoes are full of blood and tears' and 'Nike, you're the devil and we're the victims'. A rally co-ordinator said Nike would leave 7,000 workers in the factory jobless by shifting orders to other Indonesian factories and shoe plants in China.
"We just want a proper severance pay. Why can't they leave properly? We haven't got anything from them”, said Abdul Haris, of Doson's labour union. Indonesian press report, August 2002

Nike: a vast, profitable transnational

Phil Knight, Nike Chairman and CEO, said, "Nike's performance during fiscal year 2003 was one for the record books… We surpassed the $10 billion revenue mark and delivered record earnings per share … This year's results are a testament to the strong connection that the Nike brand has with consumers and our ability to drive profitable growth. We are optimistic that the combination of our global brand momentum, superior product offerings and worldwide operating capability will generate continued long-term growth."

Nike’s financial report, June 2003, states:
ï‚· Revenues for the fourth quarter increased 11 percent to $3.0 billion (as against $2.7 billion for the same period last year)
ï‚· Worldwide futures orders (scheduled for delivery between June and November 2003), totalled $4.9 billion, up 4.4 percent
ï‚· For the fiscal year ended May 31, 2003, revenues increased eight percent to $10.7 billion, compared to $9.9 billion in fiscal year 2002. Full year income before accounting change totalled $740.1 million
ï‚· At fiscal year-end, global inventories stood at $1.5 billion, an increase of 10 percent from last year.

Nike is now so vast it has 13,000 direct and indirect suppliers.

Nike in Europe

Quarterly revenues for Nike’s ‘European region’ (which oddly includes the Middle East and Africa) grew 24 percent to $945.3 million. For the full year, European revenues grew 20 percent to $3.2 billion, compared to $2.7 billion last year.
(Nike’s figures, June 2003)

Phil Knight’s wealth

The National Labor Committee (US) comments:
Phil Knight, Nike's founder and CEO, is now worth $12.3 billion.
At the National Labor Committee we sat down one Saturday to try to figure out just how much money $12.3 billion actually is, and what you could do with it. So we phoned a travel agent and said we wanted to fly around the world first class. We were told we could do that for $11,028.
Next, we called the plush Waldorf Astoria Hotel in New York, explaining that we wanted a room with a view and concierge service. We could have that for $399. And we did not want any sort of continental breakfast – rather, we preferred the "power breakfast." The power breakfast at the Waldorf would cost $23, and we could have lunch for $40, and supper for $80.
We figured we should also purchase a new Lincoln Continental, which would cost us $39,660.
ï‚· Phil Knight, with his $12.3 billion, could fly around the world first class every single day;
ï‚· Stay in the plush Waldorf Astoria Hotel every single night and have three full meals a day (remember, no continental breakfast);
ï‚· Buy a brand new Lincoln Continental every week - for the next 1,957 years

Phil Knight’s wealth didn’t come from no-where – it came from the intense exploitation of workers.

Obscene amounts on ‘celebrity endorsement’

He has built Nike's expansion into sport after sport: Carl Lewis on the track; tennis's Jimmy Connors and John McEnroe; Tiger Woods, who led Nike into golf; Ronaldo and the Brazilian national football team; and Michael Jordan, who famously rescued the company.
In 1992 Nike paid Michael Jordan $20m for endorsing their trainers, more than they paid their entire Indonesian workforce.

From the beginning Nike has been prepared to take a gamble on sporting bad boys others would not touch: Ian Wright, Eric Cantona and Andre Agassi. It was a strategy that began with Ilie Nastase, the original tennis bad boy. The Romanian had the quality that Nike realises it can market: attitude.

In 1998 Nike signed a $17m (£11m) annual deal with Brazilian football team. In 2000 Nike signed a £303m, 13 year deal with Manchester United giving it rights to all of United's merchandise. Tiger Woods’ five-year deal is worth $100million.
Most recently LeBron James, an 18 year-old US high school basketball star signed a seven-year $90m deal with Nike.

Nike’s advertising is also enormously wasteful. For example, they spent $3m on a Terry Gilliam-directed epic in cages on a ship, for the 2002 World Cup. (Guardian, June 2003)

Nike and Dope (added, June 04)

With the Olympics looming on the horizon, the world's biggest sportswear company now faces the alarming prospect of seeing two of its global icons, Tim Montgomery and Marion Jones, being denied the opportunity to compete in Athens, jeopardising a multi-million dollar advertising campaign.

To Nike, Jones is its poster girl, a figure instantly recognisable around the world and to whom it pays $3m (£1.64m) a year to endorse its products.

The importance to Nike in building its image by associating with glamorous sportsmen and women is reflected in its yearly endorsement budget, for which it sets aside $1.36bn a year. That means that when the status of its athletes is threatened it tends to pull the gloves on and come out fighting. If the American authorities try to prevent Jones from competing in Athens, they are likely to find her sponsor joining her in battle. Jones has denied ever taking performance-enhancing drugs.

… the company has a record of standing by athletes involved in doping scandals.

In 1992 when Germany's Katrin Krabbe, the world 100 and 200 metres champion, tested positive for steroids Nike continued to support her financially before she was eventually banned for four years.

Similarly, when in 1997 it was revealed America's middle-distance queen, Mary Slaney, had tested positive for the male hormone testosterone, Nike continued to back her despite the fact she was banned and stripped of the silver medal she had won in the 1500m at the world indoor championships.

In Britain it has also stood by the Manchester United and England defender Rio Ferdinand after he was banned for eight months when he failed to turn up for a random out-of-competition test. He was in the first 12 months of a three-year deal with Nike worth a reputed annual £270,000.

It had planned to use Jones in adverts around the world during the run-up to the games alongside those of Britain's Paula Radcliffe, the world marathon record holder who the company also sponsors.

Jones's attempt four years ago to win five Olympic gold medals captivated the world and her story earned millions of column inches for Nike around the globe. It believed her attractiveness on this occasion would be greatly increased by becoming a mother last year.
(June 10, 2004. The Guardian)

Nike: developing an empire

1971: Nike, named after the Greek goddess of winged victory, is founded. The swoosh is designed by Portland University design student Carolyn Davidson, who is later paid in shares
1974: Jimmy Connors wins Wimbledon wearing waffle Nikes
1984: Carl Lewis and Nike dominate the LA Olympics
1985: Knight signs basketball rookie Michael Jordan
1987: Nike launches Air Max
1988: Nike adman says "you guys just do it" at a meeting. Their slogan is born
1997: Nike's rookie golfer Tiger Woods wins the Masters by a record 12 strokes
(Guardian, June 2003)

Nike Prices

Nike's own pricing documents show that workers in the Dominican Republic are paid just eight cents for every $22.99 Nike shirt they sew, meaning their wages amount to a stunning 3/10ths of one percent of the retail price of the sweatshirt! Also, Nike sneakers made in China by young women paid 20 cents an hour arrive in the U.S. with a total customs value of $14.61. That $14.61 includes every conceivable expense - the materials, labour, shipping, and the profit to Nike's contractor in China. Nike then turns around and sells the sneakers in the U.S. for $135, which represents a 924 percent mark-up! Now we know where and how Phil Knight gets his billions, and how the global sweatshop economy operates
(National Labor Committee)

An Indonesian worker in a sports shoe factory will take home 0.4% (40 cents) of the $100 paid for the shoes in a US store.
The brand name takes 33% of the cost; the factory gets 12% (the 0.4% workers’ wages comes out of this amount), transport and tax come to 5%, and the rest, 50%, goes to the store.
(Clean Clothes Campaign)

Nike: taking advantage of dictatorship

Nike has consistently moved production of its sneakers to wherever wages are lowest and workers' human rights are most brutally repressed. In 1990 more than half of Nike's sneakers were made in South Korea. As South Korea became a democracy and South Korean workers fought for wage increases, Nike shifted production to Indonesia and China. As Indonesia moved towards democracy in 1997-98, Nike started to reduce production there, moving that production to Vietnam and China. According to Nike's 2001 Annual report, in the 2001 fiscal year 40% of Nike's shoes were made in China, 31% in Indonesia and 13% each in Thailand and Vietnam. Only 1% each were made in Italy, South Korea and Taiwan.
(Landrum, N. (2000), A Quantitative and Qualitative Examination of the Dynamics of Nike and Reebok Storytelling as Strategy, Dissertation Thesis, New Mexico State University, New Mexico.)

How much are workers paid in Nike contract factories?

In the great majority of Nike contract factories full-time wages are equal to or slightly above the local legal minimum wage. In the industrial zones of China, Vietnam, Thailand and Indonesia the legal minimum is well below what is needed to meet the basic needs of a small family.
In Indonesia, as of July 2001 entry-level full-time wages in Nike contract factories in West Java were equal to or slightly above the legal minimum of Rp. 17,000 ($2) per day. Research paid for by Nike itself and released by the Global Alliance for Workers and Communities in February 2001 indicated that many Indonesian Nike workers are distressed because they cannot afford to have their children with them and must leave them with relatives in their home villages. Research conducted by Oxfam Community Aid Abroad in July 2001 confirmed that the majority of Indonesian Nike workers who are parents are forced by their financial circumstances to live apart from their children. Workers whose home villages are within a few hundred kilometres of their factory are usually able to see their children once a month. Workers from more distant villages are only able to see their children three or four times a year.
(Oxfam Community Aid Abroad/NikeWatch)

Health and safety

In 1997 Nike was severely embarrassed when the New York Times reported that workers in the gluing section of a Nike contract factory in Vietnam were being exposed to the toxic gas Toluene at more than one hundred times the Vietnamese legal limit. Toluene can cause nervous system malfunction and has been linked to an increased chance of miscarriage. Nike has since replaced the petroleum based glues and solvents with new 'water-based' ones which are significantly less toxic.
Although the new 'water-based' glues and solvents are less toxic than those used previously, they still contain toxins that can be dangerous to workers' health. In July 2001 NikeWatch co-ordinator Tim Connor interviewed an Indonesian Nike worker involved in applying the new glues who was having serious respiratory problems, including bouts when she found it extremely painful to breathe. She claimed that many other workers in her glue line had similar health problems and that the factory medical clinic had been unable to help them. (Oxfam Community Aid Abroad/NikeWatch)

Nike’s so-called ‘monitoring program’

Nike has employed staff with a background in public relations to manage its factory monitoring program, and they have put in place a scheme which looks good on paper but which in practice achieves very little.
Nike's main monitoring program involves the auditing firm PriceWaterhouseCoopers visiting each factory once each year. Nike calls this independent monitoring, but it is more accurate to call it company-controlled monitoring. PriceWaterhouseCoopers (PwC) have been selected by Nike, implement a monitoring program designed by Nike, and report their findings to Nike on a confidential basis. In October 2000 MIT professor Dara O'Rourke released a report on PwC’s monitoring methods based on a detailed observational study of PwC factory audits in China and Korea. The PwC monitors he observed failed to note violations of overtime laws, barriers to freedom of association and use of hazardous chemicals. They also advised factory owners of how they could use a technical loophole to evade laws regarding payment for overtime.
(Oxfam Community Aid Abroad/NikeWatch)

Nike is also a member of the Fair Labor Association (FLA). The FLA was set up in 1995 by the Clinton administration. It is a PR front for big business. There have been big battles on US campuses, for example, for a better monitoring process capable of keeping real tabs on companies like Nike. The US student movement have formed a new organisation (Code), in competition to the FLA, called the WRC (Workers’ Rights Consortium).
Nike and Phil Knight have attempted to stop the progress of the WRC by, for example, withdrawing sponsorship from colleges which join the WRC code (see Case Study 1, below)

Nike sets up radical-sounding PR front

Nike has also teamed up with the GAP (another company which has been heavily criticised for using sweatshops) and the International Youth Foundation to form an ethical-sounding organisation, the Global Alliance for Workers and Communities. The Global Alliance represents an attempt by Nike and the GAP to shift the focus of the debate away from campaigners' demands for decent wages and independent monitoring of factory conditions. The Alliance is at this stage only working with 21 of Nike's 700+ contract factories and by its own admission is not monitoring whether human rights and labour standards are maintained in these factories. Instead they are conducting a program of "assessment, training and development".
Doesn't Nike's "Transparency 101" initiative mean that the company's monitoring program is now transparent? No. Around the world more than 700 factories produce Nike shoes and clothes. Nike has so far released summaries of the kinds of problems that PriceWaterhouseCoopers' (PwC) has found in 78 of those factories, but has only released the full PwC reports for 11 factories. The company will not say why it won't release the full PwC reports for all 700 factories.
(Oxfam Community Aid Abroad/NikeWatch)

Nike: broken promises

18 May 2001 - radio station KPFA (Berkeley):
"Three years ago, Nike chairman Phil Knight stood before the National Press Club and said that he was so tired of labour-rights groups criticising the athletic shoe company he founded that he would personally make sure conditions improved at Nike factories around the world.
“Among his promises: all Nike shoe factories would meet US Occupational Health and Safety Administration indoor air quality standards; the minimum age would be raised to 18 for Nike shoe factories, 16 for clothing factories; Nike would include non-governmental organisations in factory monitoring; the company would make inspection results public.
“But according to a 105-page report released by Global Exchange (by Tim Conner, University of Newcastle, Australia), Nike has failed to meet Knight's promises. Global Exchange concludes that Nike workers still work for wages they can't live on, are forced to work long overtime hours, and face harassment, violent intimidation, and firing when they organise to defend their rights or tell journalists about labour conditions in their factories.”

Case study 1. Nike PR and Nike reality in Vietnam

Part A (2001, Source: Boycott Nike)

You have to meet the quota before you can go home. She hit all 15 team leaders in turn from the first one to the fifteenth... The physical pain didn't last long, but the pain I feel in my heart will never disappear.
The above statements were made by Thuy and Lap, woman workers at Nike plant in Vietnam, and reported by CBS in October 1996. However disturbing those comments might have been, they turned out to be but a scratch on the surface of a far more horrendous reality - confirmed, quantified, and fully documented by a Vietnam Labour Watch report (1997).

Reports of physical abuse, sexual abuse, salary below minimum wage rates and a debilitating quota systems have been confirmed by CBS News, the New York Times, USA Today, Wall Street Journal, AP, Reuters as well as other non-profit organisations.
In 1998, Phil Knight promised to change Nike's labour practices in Asia. We observed a few improvements, but much of Phil Knight's plan of actions were nothing but empty promises.
In 1999, Thuy & Lap were fired for talking to reporter. Thuy is now working in another factory in Dong Nai. Lap is still unemployed.

Nike continues to treat its ‘labour problem’ as a matter public relations. Nike's factory wages are still the lowest among foreign-owned factories in Vietnam. Many studies have confirmed that Nike does not pay its Asian workers enough to live on. Nike factories continue to abuse its workers and violate their labour rights. Nike did made changes. Nike has staffed up its PR department to go on a charm-offensive to seduce the public, to create confusion among concerned people about the reality of Nike sweatshops and to sow doubts about anti-sweatshop activists. Nike public stance has become much more sophisticated than five years ago. It's no longer simply refusing to acknowledge the labour question. It now tries hard to look like a responsible citizen; it has put out more Nike-funded "studies" & propped up Nike-funded organisations to be apologists for the Nike globalisation agenda. Nike funded the Global Alliance for $10 million and got numerous feel-good articles from Global Alliance studies of Asian workers.
Nike also continues to use the Fair Labor Association (FLA) as a quasi-stamp of approval for its labour policy even though in reality the FLA is still a non-functioning organisation. The FLA has not even monitor a single factory yet, despite numerous press releases promising actions.
Behind closed-doors, however, Nike continues its goal to sabotage any labour organisation that stands in its way. To derail co-operation between US labour groups & Vietnam labour organisations, Nike sent a "private" letter to a high-level Vietnam government official accusing US labour activists of harbouring a secret agenda to change the government in Vietnam. To stop the momentum of the Workers Right Consortium (WRC), Phil Knight's retracted his donation to the University of Oregon because the school has joined the WRC, a labour group whose agenda competes with Nike-sponsored monitoring body, the FLA. Nike also threatened to stop funding for universities that joined the WRC.

Part B

CBS News 48 Hours reported the following:
Minimum wage
Workers at VN Nike shoe manufacturing plants make on 20 cents an hour or $1.60 per day. The workers told Vietnam Labor Watch that the cost of three meals per day in Cu Chi is about $2. Many of them skipped meals or receive extra financial assistance from their families. During the first three months of employment, all workers received $37 per month which is below the minimum wage of $45 per month in Vietnam.
Nike also claims that the workers are paid a lower wage because Vietnamese law allows for a training wage less than the minimum wage. Viet Nam's legal code, however, specifies that the training wage can be paid only for a "trial-period" of 6 days, (under Article 32 of the Labor Code of June 23 1994 and Article 5 (2) of Decree 198-CP of Dec 31, 1994).

Corporal Punishment
15 Vietnamese women told CBS News that they were hit over the head by their supervisor for poor sewing. 2 were sent to the hospital afterward.
45 women were forced by their supervisors to kneel down with their hands up in the air for 25 minutes. On Nov. 26, 1996, 100 workers at the Pouchen factory, a Nike site in Dong Nai, were forced to stand in the sun for half an hour for spilling a tray of fruit on an altar which three Taiwanese supervisors were using. One employee (Nguyen Minh Tri) walked out after 18 minutes, and was then formally fired. Mr. Nguyen Minh Tri was reinstated after intervention by local labour federation officials. Mr. Tri, however, has declined to work for Pouchen.
On International Women’s Day, March 8, 1997, 56 women at the Nike factory, Pouchen were forced to run around the factory grounds. 12 of them fainted and were taken to the hospital by their friends.

Sexual Abuse
A Nike plant supervisor fled Vietnam after he was accused of sexually molesting several women workers. Nike claims that the supervisor was fired and sent back to Korea, but at the shareholder meeting on Sept 16, 1996, Nike CEO Phil Knight further insulted these women, by claiming that the supervisor was just trying to wake them up and must have touched the wrong places. Nike also did not try to have the supervisor stay in Vietnam to face criminal charges. The government of Vietnam later instigated extradition procedures against the supervisor.
Women workers have complained to Vietnam Labor Watch about frequent sexual harassment from foreign supervisors. Even in broad daylight, in front of other workers, these supervisors try to touch, rub or grab their buttocks or chests.

Forced Overtime
Women workers told CBS News that they are forced to work overtime to meet a daily quota which is set unrealistically high. Most workers at VN Nike plants are forced to work 600+ hours of overtime per year -- well above the VN legal limit of 200 hours per year. If they do not accept the forced overtime, they will get a warning and after three warnings they will get fired. Based on our analysis of pay-stubs, Nike factory workers are working 26 to 27 days per month plus 40 to 65 hours of overtime. We found months when workers were forced to work over 100 hours of overtime per month. We recognise that Vietnam is a poor country but there must be a level of corporate decency for a US corporation operating in Vietnam.

Inhumane Working Conditions
Workers cannot go to the toilet more than once per 8-hour shift and they cannot drink water more than twice per shift.
It is a common occurrence for workers to faint from exhaustion, heat, fumes and poor nutrition during their shifts.
Health care is inadequate. At the Sam Yang factory, with 6000 employees, one doctor works only two hours a day but the factory operates 20 hours a day. Night shift employees do not have any on-site medical emergency services.

Case study 2. Nike in Sri Lanka. (August 2003)

Garment workers in Sri Lanka have faced extreme intimidation and death threats while attempting to set up the first trade union in a free trade zone.
In July, members of the Free Trade Zone Workers Union (FTZWU) at the Jaqalanka garment factory organised a ballot for trade union recognition. The factory in the Katunayake Free Trade Zone, close to Colombo airport, produces garments for major brands such as Nike.

Tie Asia, which supports the FTZWU through leadership training and advocacy, claims that workers faced threats, intimidation and harassment from management in the lead up to the ballot on 9 July. Under Sri Lankan labour law, 40% of workers must vote for recognition of a union.
Tie Asia argues that due to management's intimidation tactics only 17 workers voted in the ballot. In short, workers were too scared to exercise their rights and the union has not been recognised.
This is an extremely important case that needs international support, not only because the workers at Jaqalanka are being denied their basic rights, but because the FTZWU is using this case to show the European Union that the right to freedom of association does not exist in the free trade zones of Sri Lanka. The results of this case will have implications for the whole of the garment sector in Sri Lanka. As trade talks continue between Sri Lanka and the EU over the new "Generalised System of Preferences" (GSP), the FTZWU is working hard to highlight current violations and ensure that when the GSP is approved there will be provisions for the improvement of the basic right to freedom of association.
Workers rights will only be improved when they have the right to core labour standards such as the freedom of association and the right to bargain collectively.

Tie Asia’s website: www.tieasia.org/Jaqalanka.htm Visit Tie Asia’s site for model protest letters
(Source: War on Want)

Case Study 3. Indonesia (NikeWages report, May 2001)

The Indonesian Nike workers we talked to want three main things:

1. A raise.
At the time we did our research, the workers were receiving Rp 300,000-325,000 as a basic monthly wage. There has since been an increase in the legal basic minimum wage in the region to Rp 440,000 per month, due in large part to the tremendous efforts of local Indonesian organisers and workers (many of whom work in factories producing for Nike). Though this minor wage increase is beneficial, workers still cannot meet their basic human needs.
Every worker we spoke with stated that in order to meet their essential minimum needs they would need Rp 700,000 per month at the very least as a basic wage, not including transportation allowances, attendance bonuses, overtime pay, etc. At the currency exchange rate on 5/20/01 ($1 = Rp 11, 390), Rp 700,000 would be $61.46, making the wage increase $22.82 per month, or $0.76 per day, per worker. The workers also stated that with the prices of basic goods as they were in August, Rp 1,400,000 per month would allow them to meet their essential needs as defined by the United Nations’ Universal Declaration of Human Rights (food, clothing, housing, medical care, education, and some savings).

2. The right to form independent unions and for factory management to bargain with these unions in good faith.
The right to form independent trade unions is a right that is guaranteed by Indonesian law, U.S. law, the United Nations’ Universal Declaration of Human Rights, the United Nations’ International Convention on Economic, Social, and Cultural Rights, the International Labour Organisation, the Catholic Church, and countless other international organisations.
The right to form independent unions is also guaranteed by Nike's Code of Conduct. The reality is that workers who attempt to organise and form independent unions are consistently threatened, intimidated and in some cases brutalised.
If independent unions are not recognised, or are prohibited from forming, workers cannot fight for their rights guaranteed to them by the organisations mentioned above. If independent unions are prohibited from forming, wage levels will not rise. Keeping wages at superficially low levels is of paramount importance for developing countries that are trying to attract foreign investment dollars from companies like Nike. Nike takes advantage of this reality and perpetuates the "race to the bottom" for the world’s cheapest labour.
Look at the tags on your clothing, shoes, children’s toys, electronics, and everyday items. It is no coincidence that the majority of these goods are now made in countries where independent reporting consistently documents that labour, environmental and human rights are not respected.

3. Truly independent monitors that are in no way connected to the Nike Corporation.
In order to ensure that Nike is not in violation of local or international labour and environmental standards or its own code of conduct, it is critical that local and international NGOs have access to Nike’s subcontracted factories and factory records, and can interview workers both in and outside of the factory.
Nike claims in their Public Relations materials that they do employ "independent" monitors to audit their factories, specifically, PriceWaterhouseCoopers and the Fair Labor Association. However, workers and labour rights activists do not consider these organisations to be truly independent because in the case of PriceWaterhouseCoopers, the Nike Corporation pays them and in the case of the Fair Labor Association, Nike is a founder and board member. Both of these efforts have been described by critical activists as "whitewashes".
In our research, we had found PricewaterhouseCoopers monitoring of Nike’s factories to be flawed at best. For a recent detailed academic evaluation of PricewaterhouseCoopers substandard monitoring in Indonesia, read, "Monitoring the Monitors", written by Dara O’Rourke, Assistant Professor of Environmental Policy from MIT.

http://www.nikewages.org

Case Study 4. Nike in Thailand, 2002

Letter from Bed and Bath Prestige Ltd of Bangkok, Thailand to UN Officials, 9 December 2002

We, the workers of Bed and Bath Prestige are requesting of officials from the United Nations to call on the Government of Thailand to involve itself in our case and end our suffering.
Our company, Bed and Bath Prestige, was a highly profitable enterprise operating almost a decade. Bed and Bath produced children's apparel for such corporate giants as Nike, Levi's, Adidas and Reebok. The management and shareholders of Bed and Bath grew very wealthy over the years from our labour. Then, on October 10, 2002 suddenly and without notice our factory was shut down. This was done in violation of Thai law and international standards in that we were not paid any compensation, nor were we paid our wages for the last period of operations. Bed and Bath, Nike, Adidas and others have profited off of our labour without paying us our salaries or our compensation. This is unjust!

Since October 10, we who number almost 400 workers have been protesting peacefully outside the Ministry of Labour. We have marched on the Nike offices as well as the US Embassy here in Bangkok. The police have issued an arrest warrant for our two principles bosses, Mr Chaiyaphat Photikamjorn and Ms. Uayporn Songpornprasert, but efforts to locate these two have been very poor and totally unproductive. National and international authorities have claimed "sympathy" for our plight, but have done nothing to help us. They wish we would simply go away, but we cannot and will not let this injustice stand.

We have a very clear-cut legal case. We are entitled to our back wages and our compensation. If we were in wealthy or prominent positions the Government of Thailand and the police would have resolved this situation immediately. But we belong to the poor and invisible class of workers whose rights are so often violated and who are too often forgotten by our Government and international authorities. We ask the United Nations and other international bodies to call on the Government of Thailand, Nike, Levi's, Reebok and Adidas to help us.

The Government of Thailand makes claims about the equal treatment of all before and under the law. The corporations we produce for, particularly NIKE, spend millions in P.R campaigns bragging of their respect for workers and just working conditions. In our case this has been a sham. Our working conditions were atrocious. Our drinking water was laced with amphetamines and overtime was routinely forced on us around the clock, all in the name of more and more production while we saw little in return. Now, that Bed and Bath has shut down the law of the country has not been followed.

The law as pertains to back wages and compensation when a business shuts down in Thailand is very clear. The Shareholders and Board of Directors who grew so wealthy off of our labour continue to operate as shareholders and officials in other Bangkok companies, often producing for the same corporate clients as Bed and Bath! How can this stand when they have not met their responsibilities to us?

We call on you of the United Nations to intervene with the Government of Thailand as well as Nike and others to correct this unjust situation and prove that the law of Thailand and international law applies to all.

Sincerely, The workers of Bed and Bath Prestige Co, Ltd. Bangkok, Thailand

Case Study 5. Nike in Mexico (Maquila Solidarity reports, 2002)

Update 6

Mexmode workers win wage increase, Nike agrees to stay April 10, 2002

On April 1, workers at the Mexmode garment factory in Atlixco, Mexico reached a settlement that provides a significant increase in their wages and benefits. The Mexmode plant produces sweatshirts for Nike and Reebok, and licensed Nike sweatshirts for a number of US universities that have adopted No Sweat purchasing policies. Last September, the workers achieved a precedent-setting victory by winning the only independent union with a signed collective agreement in Mexico's over 3,500 maquiladoras.
The new contract signed by management and the independent union, SITEMEX, includes a 10% increase in wages, a 5% increase in benefits and an attendance bonus. In total, a sewer at Mexmode who is not late, absent or on leave will now be taking home up to 40% more money every week. The new total represents a survival wage level for a single person and provides limited economic support for a worker's household, according to calculations done by the workers themselves.

Nike Confirms New Orders from Mexmode
Also on April 1, Nike announced its decision to continue sourcing from the Mexmode factory. This follows an international solidarity campaign during which Nike received over 6,000 letters from 17 different countries, all urging the company not to cut and run from the factory. According to the recent Nike statement, "We are pleased to announce that we have placed an order at Mexmode for 65,000 units of fleece apparel. Production is set to begin in early April. Additional orders will follow shortly"

Update 5. December 12, 2001

Sportswear Giant Promises to Place Orders with Unionised Factory

The Mexmode, formerly Kukdong, garment factory in Atlixco, Mexico. The factory produces sweatshirts for Nike and Reebok, and licensed Nike sweatshirts for a number of US universities that have adopted No Sweat purchasing policies.
If Nike keeps its promise to resume placing orders with the factory, possibly in the spring of this year, the workers‚ achievement of the only independent union with a signed collective agreement in a Mexican maquiladora factory will be secure. The proof of Nike’s commitment to not cut and run from the factory now that the workers have won an independent union will be the timeliness and volume of orders it places with the factory. Nike campaigners around the world will be watching.

The victory is all the more important because Mexmode workers were successful in replacing the CROC, a corrupt "official" union affiliated with Mexico’s historical ruling party, the PRI, with an independent, democratic union, SITEMEX.

International Solidarity Crucial
The victory is the product of a difficult nine-month struggle by the workers for their right to be represented by the union of their choice. It could not have been possible without the coordinated support provided by the Workers Support Centre (CAT) in Mexico, Students Against Sweatshops groups at universities across the US and Canada, labour organizations including the AFL-CIO and CLC.

The Kukdong campaign was also an important test of the effectiveness of No Sweat licensing and purchasing policies that have been adopted by over 200 US and Canadian universities. These policies require suppliers of university licensed and/or bulk-purchased apparel and other products to ensure that those products are made under humane working conditions. Many of these policies also require suppliers to publicly disclose the locations of manufacturing facilities and to accept independent monitoring of factory conditions.

In the Kukdong case, students were able to use the economic power of their universities as institutional buyers to pressure for the reinstatement of hundreds of workers fired for participating in a job action. Public monitoring reports from the Worker Rights Consortium, Verité, and Mexican labour lawyer Arturo Alcalde confirmed that the right to freedom of association was being violated, and increased the pressure on the companies to resolve the dispute.

The combined efforts of students, university administrations, unions and labour rights organizations created sufficient democratic space for the workers to organize and win their independent union, and brought sufficient pressure on Nike to win a commitment to resume sourcing from the factory.

Ultimately, however, it was the courage and determination of the Kukdong workers -- the vast majority of whom are young, indigenous women -- that made this precedent-setting victory possible.

Update 4. September 25, 2001

Workers at the Kuk Dong factory in Atlixco, Puebla, Mexico have finally won their independent union and a signed collective agreement. This is a precedent-setting victory that could open the door to worker organising in Mexico’s maquiladora sector where, to date, independent unions have not been tolerated.

On September 21, the new collective agreement was signed by the company, which has changed its name to Mex Mode, and the independent union, now known as SITEMEX. That same day the contract was filed with the Puebla Conciliation and Arbitration Board, and the union was granted its legal registration. Of the 450 workers currently employed at the factory, 399 signed the application for the independent union.

The workers had formerly been "represented" by the FROC-CROC, an "official" labour federation linked to the Puebla State government and Mexico‚s historical ruling party, the PRI. On August 31, an agreement was reached between all parties involved in the dispute recognizing the independent union and terminating the "protection contract" between the company and the FROC-CROC.

The victory is the product of a difficult nine-month struggle by the workers for their right to be represented by the union of their choice.

BACKGROUND ON KUK DONG STRUGGLE. June 30, 2001

On March 18, 2001 a group of workers at the Kuk Dong garment factory in Atlixco, Mexico met to form an independent union, SITEKIM. Their brave decision represents the first step toward winning the right to represent the 800 workers at the Nike supply factory and to bargain collectively on their behalf.
The meeting would not have been possible without the support of Nike campaign activists, university students and concerned consumers in the US, Canada and around the world. The campaign successfully pressured Nike to facilitate the reinstatement of hundreds of workers who had been locked out, illegally fired and pressured to resign for participating in a work stoppage.

On January 9, 800 workers at the Kuk Dong factory staged a work stoppage to protest the illegal firing of five workers and the forced resignations of 20 others who had complained about low wages (US$32 for a 50-hour week) and rotten food served in the factory cafeteria, and had requested a copy of the collective agreement. The striking workers demanded that the company reinstate the fired workers and respect their right to organize an independent union.
The workers are currently "represented" by the FROC-CROC, a union federation controlled by the historical ruling party of Mexico, the PRI. Workers complain that the FROC-CROC was brought in by the company without the workers' consent, and that it negotiated a "protection contract" with their employer at a time when only a handful of workers had been hired. Workers did not learn of this contract until long after it had been signed.

On January 12, 300 state police in full riot gear attacked 300 workers who were guarding the factory. The workers, who put their hands in the air and retreated to the factory gates, were hit, pulled, pushed and insulted by the police. Fifteen workers ended up in the hospital, and two were kept overnight. One of them was in serious condition from blows to the head. Two strike leaders were violently kidnapped by the police, but were later released.

The police had apparently been ordered to remove the strikers by the PRI state governor. As well, Rene Sanchez Juarez, the local leader of the FROC-CROC, was reportedly at the scene of the police attack, pointing out strike leaders to the police.

Faced with protests locally and increasing pressure on Nike from student, labour and solidarity groups in the US, Canada and Europe, Kuk Dong management agreed to allow strikers to return to their jobs with no reprisals. On January 17, management violated the agreement by refusing entry to the factory to several independent union supporters. Others union supporters who succeeded in entering the plant were picked out by representatives of the "official" union, reported to security guards and told to leave, or told they would have to resign "voluntarily."

On February 5-7, the US non-profit code monitoring organization Verité carried out an audit on Nike’s behalf to determine Kuk Dong’s compliance with the Nike code of conduct. The Verité report confirms most of the findings of investigations by the Worker Rights Consortium (WRC) and, including the fact that the CROC signed a collective agreement with the company at a time when only a handful of workers had been hired and without the consent of the workers.

According to the Verité report, "18 of 29 workers interviewed reported that the factory does not permit workers to form and join unions of their choice." It goes on to say: "Most workers at the factory either do not want the CROC as their union or want no union. Only a small number of workers reported that they were satisfied with the CROC." The report recommends that Nike and Kuk Dong ensure that a free and fair union representation election by secret ballot vote be held at the earliest possible date.

Although Nike has responded to pressure by helping to facilitate the return to work of over half the workers who participated in the work stoppage, the Kuk Dong workers‚ struggle is far from over.

On June 20, the workers‚ initial request for legal registration of their independent union was rejected by the local conciliation and arbitration board.

The CROC is the same union that recruited thugs to threaten and intimidate workers at the Duro factory in Rio Bravo, who were also seeking an independent union. In that recuento, on March 2, workers were denied a secret ballot vote and forced to verbally declare their vote in front of management, leaders of the CROC and the hired thugs. Not surprisingly, only four workers at Duro dared to publicly declare their support for the independent union.

For that reason, it is extremely important that Mexican government be pressured to quickly grant the legal registration to the independent union, SITEKIM, and that both Nike and the Mexican government be pressured to ensure that any future union representation vote is by secret ballot in a secure, neutral location.