Yesterday student activists won arguably the most impressive victory in the more than fifteen fight to end Nike’s sweatshop abuses. The “Just Pay It” campaign, run by the United Students Against Sweatshops, under the leadership of USAS staffer, Rod Palmquist, forced Nike to the bargaining table and got them to do something they have refused to do to date - take financial responsibility for the welfare of Nike’s subcontracted workforce.
At issue was $2.2 million dollars in severance and back pay due to approximately 1,800 Honduran workers who had been producing Nike products for the college bookstore market.
Here is an excerpt from the joint statement released by Nike and the trade union federation (CGT) that was representing the workers.
Nike and CGT are concerned for the workers in Honduras and have agreed to take important steps to support former employees of Hugger and Vision Tex. Through this agreement, Nike will contribute to a workers relief fund of $1.5 million to be administered jointly by CGT, the Solidarity Center, the Worker Rights Consortium and supervised by professor Lance Compa of Cornell University.
As someone who has fought this fight with Nike for more than a decade, I am so very grateful for what USAS and the Honduran workers have accomplished. This is truly a watershed moment. But now is not the time to rest on the laurels of this victory. We must analyze why it worked and develop plans duplicate its success. That is one of the mistakes that was made in the first go-around with Nike on these issues back in the late 90s. We had them on the ropes and we backed off. We cannot afford to do this again.
So, what were the key elements of the “Just Pay It” campaign that created the winning dynamic?
1. USAS picked and froze their target - Nike. This was not a generalized campaign against sweatshops, they did not go after “the industry.” Circumstances created a scenario where they focused on one company (Nike) in one country (Honduras).
2. USAS was clear in their demand - “Just Pay It.” There was no ambiguity to what they wanted from Nike. Workers were owed $2.2 million dollars and they wanted Nike to pay this amount. Because of this clear demand, they were not drawn into the subterfuge of public relations nonsense that Nike has been so successful at promoting over the years (Codes of Conduct, Corporate Social Responsibility, independent monitoring, etc.). Again, the demand was clearly laid on the table, “pay these Nike workers the $2.2 million dollars they are owed.”
3. USAS mobilized at the grassroots level. When Nike refused to meet their demand, the USAS ground forces mobilized workers, students, professors, non-profits, consumers, etc.
4. USAS made it fun and exciting. From small leafleting actions outside Niketowns, to creative demonstrations on college campuses, to bringing Honduran workers to the USA to tell their stories first hand; students had a blast taking on this corporate bully.
5. USAS held universities accountable to their public commitments. Students made excellent use of the foundation that had been laid by the first generation of USASers. If schools had licensing relationships with Nike AND belonged to the Worker Rights Consortium this meant that there was a framework for accountability. In accessing this framework, USAS was able to pressure the University of Wisconsin-Madison and Cornell University to cut ties with Nike over this issue. And had Nike not made the move they did yesterday, I am sure that other schools would have followed suit in the fall.
6. The Honduran workers were willing to fight and were wanting of the collaboration with students and consumers. I believe this was actually the linchpin of this campaign and will be the linchpin of future campaigns. These Nike workers, despite their fears and disappointments, were willing to stand up and fight. When they did, they inspired and empowered students and consumers to join them and the solidarity actions of the students and consumers then re-inspired and re-empowered workers. It was a fluid and symbiotic relationship that ultimately led to victory. Nike workers around the world must learn of this victory and know that there is an army willing to support and work with them when they are ready to fight.
Now that students have led the way, the task is laid before us - we must replicate this victory. Nike must be pressed in multiple factories and in multiple countries. The template has been created and now the work must be done.
Today we won a groundbreaking victory in the fight against Nike’s sweatshop abuses!
Nike announced this morning that they have come to an agreement with the Central General de Trabajadores de Honduras (CGT) and will pay $1,500,000.00 to a fund for monies owed to workers for back pay and severance.
Here is the official joint statement from Nike and CGT.
Nike and CGT Statement
26 July, 2010
Beaverton, Ore. (July 26, 2010) – NIKE, Inc. and the Central General de Trabajadores de Honduras (CGT), representing the former employees of the Nike contract supplier factories Hugger and Vision Tex, have reached an agreement to help improve the lives of workers affected by the Hugger and Vision Tex factory closures in Honduras.
Nike and CGT are concerned for the workers in Honduras and have agreed to take important steps to support former employees of Hugger and Vision Tex. Through this agreement, Nike will contribute to a workers relief fund of $1.5 million to be administered jointly by CGT, the Solidarity Center, the Worker Rights Consortium and supervised by professor Lance Compa of Cornell University.
Nike will also work with its Honduran suppliers to offer vocational training programs and to prioritize hiring of former Hugger and Vision Tex workers as jobs become available over the next two years. Nike will also cover worker’s enrollment in the Honduran Institute of Social Security (IHSS) to obtain health care coverage for a year or until they find new employment, whichever comes first.
Nike and CGT are pleased to have worked together to create a resolution that helps the former Hugger and Vision Tex workers in Honduras to receive needed financial and medical support. Nike and CGT are committed to working together, in conjunction with other stakeholders in Honduras, to develop long-term, sustainable approaches to providing workers with social protection when facing unemployment.
Much of the congratulations for this victory needs to go to the workers in Honduras who did not give up their fight for justice, as well as the United Students Against Sweatshops (www.usas.org) and the Worker Rights Consortium (www.workersrights.org), who supported these workers every step of the way.
This victory proves that we can and will win the fight for justice in Nike’s factories!
By Ana Arias
Posted On: July 18 @ www.justmeans.com
Sometimes the CSR decisions of big corporations are as perplexing as a jigsaw puzzle with missing parts. Why the company would hire a 135-people CSR department, amass a 74-people compliance team and spend approximately $25 million annually on CSR efforts while simultaneously refusing to cough up the $2.2 million owed to Honduran garment workers in legally-mandated severance is beyond comprehension.
According to United Students Against Sweatshops (USAS), who are staging a heavy-duty anti-sweatshop “Just Pay It” campaign against the apparel giant, in January 2009 two of Nike’s factories in Honduras by the names of Vision Tex and Hugger were closed. To boot, Nike failed to pay the 1,800 workers their severance and additional legally required benefits. Each worker is due about $1,300, which the student group says is equivalent a US manufacturing employee losing around $15,000 to $20,000. Seems Nike’s talking out of two sides of its mouth. Shocking, right? It sure doesn’t smell like the kind of CSR home most of us would want to be involved with. To say nothing of the bad rep it creates for legitimate corporate social responsibility programs in ethical organizations.
On one hand, Nike is apparently insisting that they’re not responsible for what occurs in its sub-contracted factories. Yet they claim to be “driven to do not only what is requires by law but what is expected of a leader.” Yikes. I hope ethical CSR leaders cringe as much as the rest of us when we learn of such blatant inconsistencies. And on the other hand, the company’s code of conduct mandates that all of its suppliers comply with the particular country’s manufacturing laws in which they operate, inclusive of legally-mandated severance payments. “In the event a Nike factory closes down, as was the case with both Hugger and Vision Tex,” writes USAS’s International Campaign Coordinator Rod Palmquist, “then the buck stops at Nike’s doorstep.” It sounds to me as if Nike would be a highly qualified candidate we could designate to the Corporate Hall of Shame ballot.
I was glad to learn of progressive community and university leaders who are putting pressure on and affecting Nike’s financial bottom line because of the company’s complete disregard for the Honduran garment workers. In Portland, Nike’s backyard, a panel of community leaders urged Nike to enforce its code of conduct by paying up worker severance immediately. The University of Wisconsin-Madison became the first college in the country to cut its Nike contract over sweatshop abuses in April, causing Nike to lose $1 million in Badger gear yearly sales. Cornell University announced in June that it will let its Nike contract expire by December’s end, unless the company steps up to the plate and pays the workers what they’re owed. Extra kudos to Cornell, as Nike is the exclusive sponsor of the university’s athletics program.
I’ll conclude with a few more figures and a wild but plausible idea to provide more perspective. Last year, Nike’s estimated spend on sponsorships was $260 million and $200 million on advertising. The likes of superstar LeBron James is getting approximately $90 million over a seven-year period, and France and England’s World Cup soccer teams are getting annual amounts of $54 million and $44 million respectively. Now imagine the ripples of positive change that could take place if Nike’s CSR team surprised company executives and the world by taking the company’s $25 million CSR budget and re-allocating $2.2 million of that that budget to pay the Honduran garment workers for the what they’re owed. It’s far-fetched, I know. But Nike could do it if it wanted to.
In a move that could radically alter the rules of the global economy, a factory in the Dominican Republic backed by the United Students Against Sweatshops is producing t-shirts and sweatshirts at the same prices as Nike and Adidas, while also paying workers a living wage. Knights Apparel has already passed Nike as the top college supplier, defying experts who have long argued that Nike’s sweatshop wages made it impossible for those paying workers fairly to compete.
Knight’s success comes after more than a decade of painstaking work by college anti-sweatshop activists, whose creation of the Workers Rights Consortium built a market for living wage alternatives to sweatshop goods. The students’ success is also the latest example of the power of “positive” boycotts, currently used by UNITE HERE to steer guests to union hotels through INMEX and earlier by the United Farm Workers to offer consumers alternatives to Gallo wine.
Having studied the proliferation of sweatshops since writing a book about Nike’s labor practices in the late 1990’s, I know the sheer number of experts arguing that the global “race to the bottom” is inevitable and beyond the power of activists to change. Fortunately, student anti-sweatshop activists ignored these claims, and have now defied the conventional wisdom.
Students Defy Stereotypes
The story of Knights Apparel is really two stories, with the nuts and bolts of the company’s creation and business plan covered in the July 18New York Times. The story not covered was the long battle by college students to rewrite the rules of the global economy, as they sought to accomplish what most economists and pundits said was impossible.
The struggle began in the late 1990’s, as students responded to revelations that the clothing with collegiate logos sold in their campus stores were made in sweatshops. Campus anti-sweatshop groups soon formed, and soon won agreements from administrators not to sell sweatshop goods so long as alternatives were available.
Creating these “no-sweat” alternatives was the tricky point. The students addressed this by attempting to beat the capitalists at their own game: they created a Workers Rights Consortium that would help to create a sufficient market for no-sweat goods to support their manufacture.
In other words, the students used the “Field of Dreams” approach. They told manufacturers that if they created apparel and paid a living wage, business and sales would come.
And Knight’s Apparel has turned the students dream into reality. Its product will be on over 260 campuses by September, and over 400 by winter quarter.
The company’s shirts will sell for the same price as those made by Nike and Adidas, whose goods are typically made in places like Bangladesh (15 cent minimum wage) or China (85 cents). In contrast, workers are paid $2.83 per hour at the Alta Gracia factory in the Dominican Republic (whose minimum is 85 cents) that makes Knight’s Apparel.
That’s what possible when you don’t have folks like Nike’s Phil Knight making tens of millions of dollars annually off the poverty of third-world workers.
Perhaps as surprising as this outcome is the fact that it took place over more than a decade, as the movement continued as key student activists graduated and myriad other causes and issues emerged. Students are not typically associated with long-term campaigns for this very reason, which makes the success of United Students Against Sweatshops that much more impressive.
The Power of “Positive” Boycotts
In addition to defying the belief that apparel companies cannot survive by paying a living wage, the students also showed the power of shaping consumer behavior by providing positive alternatives.
Back in the 1990s, the students faced a choice. They could relentlessly urge students to avoid sweatshop apparel without providing “no sweat” alternatives, or they could help build a market for the latter.
Recognizing that students were going to buy clothes with their college logo, the students wisely chose the latter strategy. And Knights Apparel has finally made this no sweat alternative a reality.
It is the same “positive” boycott strategy that UNITE HERE uses with its INMEX program. The union knows that people need to stay in hotels, so rather than simply tell them which to avoid the program promotes hotels where visitors should stay.
During the UFW grape boycott, consumers were so focused on only buying union grapes that growers clamored to get the union thunderbird on its packages. The UFW could also readily promote alternative wines to Gallo, which helped the effectiveness of that boycott.
Global Impact
While the success of “no sweat” clothing in the collegiate submarket will not entirely rewrite the rules of the global economy, it does provide a roadmap for other market sub-groups. For example, there are thousands of organizations that sell apparel with their logo, and Knight’s Apparel now provides a viable no sweat option.
As unions, religious organizations and community groups turn to producers paying living wages, it will spur the development of additional factories, expanding the market beyond the t-shirts and sweatshirts sold on college campuses. And now that Knight’s Apparel has created a model for collegiate clothing manufacturing, pressure might build for similar alternatives elsewhere in the apparel industry.
Activists have long argued that another type of apparel world was possible. Now students have helped make this socially responsible alternative a reality.
Re-posted from The Daily at the University of Washington
Activists Continue to Pressure Emmert with Open Letter
By Tiffany Vu
July 21, 2010
Several campus labor-advocacy groups have published an open letter to President Mark Emmert, asking him to pledge not to renew the UW’s licensing contract with Nike.
The Presidential Advisory Committee on Trademarks and Licensing (ACTL) unanimously recommended in early June that Emmert allow the contract to expire in December, saying that Nike had violated the UW’s Code of Conduct for licensees.
The dispute stems from allegations that Nike has failed to compensate workers from two closed Honduran factories, Hugger de Honduras and Vision Tex, both of which were subcontracted to produce licensed college apparel for Nike.
Signers include several members of the UW’s faculty, ASUW officials, campus groups such as the Student Labor Action Project (SLAP), United Students Against Sweatshops (USAS), and local labor groups, such as the King County Labor Council and Washington State Fair Trade Coalition. City- and state-level officials, such as Seattle City Councilman Nick Licata and State Representative Maralyn Chase, have also signed the letter.
“We showed them the facts, asked them where they stood, and they said, ‘Of course we support workers’ rights,’” senior SLAP member Matt Reed said. “It’s a clear-cut issue — the only controversy is that the University of Washington is failing to take a stand.”
The University of Washington is one of several schools facing the question of whether to continue granting licensing rights to Nike based on the Honduras case. The University of Wisconsin—Madison ended its contract with Nike in April, while Cornell University has notified Nike of its intention to allow their contract to expire at the end of the year.
In the wake of the decisions at UW—Madison and Cornell, other collegiate institutions, such as New York University, Rutgers University and the University of California system, have been reported to be reconsidering their contracts with Nike.
The letter emphasizes that, like Cornell, the UW can end its $1 million licensing contract, which allows Nike to sell products branded with the UW’s logos, without ending its $32 million athletic contract that helps finance the school’s sports programs.
Reed said that Emmert had been aware of the situation as early as April 2009 and created the ACTL for the purpose of determining the appropriate course of action for the university. However, Reed expressed disappointment with Emmert’s lack of action on the case and doubted that it would change.
“I’ve lost almost all confidence that President Emmert will make the right decision,” Reed said. “I hope he realizes the importance of this, that by leaving this issue unresolved or passing it on, it’ll look poorly on his past activism.”
Associate Vice President Norm Arkans said that Emmert would base his decision on the “merits of the situation.”
“We understand that a lot of people, including the university, are concerned about conditions under which trademarks are made,” Arkans said. “That’s why the university has taken steps in the past to deal with manufacturers and ensure that workers get what’s due [to] them.”
Arkans also emphasized that Interim President Phyllis Wise, whose appointment to Nike’s Board of Directors last year was a point of controversy, would have no part in any decision-making with regards to contracts with Nike.
“Another senior university official will be given the authority to make business decisions with Nike,” Arkans said, though he was not able to identify the official. “Whatever happens in the future with Nike when she’s interim president, it won’t be her.”
Debra Glassman, a business professor and member of the ACTL, hoped that the UW would join other schools in pressuring Nike to improve its labor standards by choosing to end its contract with Nike, much like what happened when it joined numerous other schools in cancelling its contract with Russell Athletic in 2009.
“Individually, we’re a very small part of Nike’s business,” Glassman said. “It’s definitely the hope of the ACTL that many schools will take similar actions, because together we can have an impact.”
At press time, President Emmert was on vacation and could not be reached for comment.
Are you interested in bringing my “Behind the Swoosh: Sweatshops and Social Justice” program to your school or community this year?
I have shared “Behind the Swoosh: Sweatshops and Social Justice,” on more than 450 campuses in 41 states and in three different countries and it is shaping up to be another busy year for me. With the latest developments at the University of WI-Madison and Cornell University – both cut contracts with Nike this year over the sweatshop issue – many schools are interested in getting the most up-to-date information and analysis on this topic.
If you would like more information or if you are interested in hosting my program, email me back and I will connect you with my booking agent to discuss available dates, fees, etc. If you have any questions, please do not hesitate to ask.
We got a very positive bit of news this week, about a new clothing factory opening in the Dominican Republic town of Villa Altagracia. The clothing industry is notorious for its exploitation of some of the world’s poorest people, paying workers starvation wages, treating them like criminals, and making them live in perpetual fear of losing their only means of survival.
This new factory will allow its workers to join unions, and pay them a “living wage” that is more than three times the national average for garment workers in that country. The clothing will primarily be sports wear with college logos, aimed at American university students. The brand will be named after the workers’ home, Alta Gracia, and will be run by a now-socially conscious clothing company called Knights Apparel. The NY Times article above gives concrete examples of the way that this new factory is having a positive impact on people’s lives.
What brings this story home to me is the factory’s history (not mentioned much in the article). The factory used to be owned by a company called BJ&B, which also made college clothing for big corporations like Nike and Reebok. It was discovered that the factory was grossly abusing and exploiting their workers, who then start fighting for their right to unionize and receive better treatment. This campaign received the support of many major social justice organizations in the United States, and the workers won. They formed a union and fought for better contracts with better wages.
And then the contracts started to dry up.
I attended a conference for United Students Against Sweatshops, where a dozen workers from factories in a dozen countries came and spoke to us about their working conditions and their struggles. A Dominican worker told us how Nike and Reebok were no longer buying clothing from the BJ&B factory, and the workers were losing their jobs, and were on the verge of losing everything they had fought for. It was a terrible feeling, that even when you win, you lose. At that conference, we realized that it wasn’t enough to fight for these workers’ right to unionize, we now had to fight for big corporations to continue doing business with unionized factories. We had won a major victory, but we had to continue fighting for it to make a difference.
So now, years later, that same BJ&B factory is now owned by a company that is determined to treat their employees with respect, and pay them wages which will allow them to actually plan for a better future, not just feed their children and pay the rent. But while this is a major victory, we have to realize that victories can easily turn into defeats, that successes can become failures.
If we actually care about a new way of doing business, where workers are treated fairly, and businessmen don’t run away and look for the next impoverished people to exploit, we have to push for this, and keep pushing. We have to encourage people to buy from socially responsible companies like this. We have to push companies to imitate the beneficial model of Knights Apparel and Alta Gracia. If we don’t, this attempt could fail, and big companies everywhere could use it as evidence that their model–the one in which people are used, abused and thrown away—is the only one that “works”.
Tuesday morning at 9:30am (U.S. EST), Jim Keady, founder of Team Sweat, will be attending the annual meeting of TIAA-CREF. TIAA-CREF currently owns about a quarter of a billion dollars in Nike stock, making them one of Nike’s largest institutional investors in the world. Given this, Team Sweat believes that they have a moral responsibility to hold Nike accountable for the well being of Nike’s factory workers.
DO YOU WANT TO JOIN JIM KEADY IN TAKING ACTION TOMORROW?
1. YOU can send a personal message to TC CEO Roger W. Ferguson at RWFerguson@tiaa-cref.org and send a copy to trustees@tiaa-cref.org. We have provided sample copy immediately below, with more details in the release.
2. YOU can have even more impact if you also call 800-842-2733 or 212-490-9000 and ask for CEO Roger Ferguson. You most likely will have to leave a recorded message.
3. YOU can cut and paste the press release below and send it to any media contacts you have and/or you can make it a note on your Facebook page and share it with your friends.
SAMPLE EMAIL/PHONE SCRIPT
“I am concerned that TIAA-CREF is a major investor in Wal-Mart, Nike, Coca-Cola, and Costco in Mexico, companies that are involved in ongoing human and labor rights abuses, as well as other irresponsible corporate behavior. I want TIAA-CREF to put these corporations on notice that if they do not clean up their bad practices, TIAA-CREF will find other companies in which to invest. TIAA-CREF needs to either get more aggressive with these companies to improve their practices or to divest from their stock.”
PRESS RELEASE
FOR IMMEDIATE RELEASE
NO KILL DATE
CONTACTS
Pat Clark: 718-852-2808; stopkillercoke@aol.com
Jim Keady 732-988-7322, info@teamsweat.org.
At The Annual CREF Meeting, Shareholders Call on TIAA-CREF to Walk its Talk on Social Responsibility
(July 14, 2010 – New York) TIAA-CREF, the nation’s largest pension system and self-proclaimed leader in corporate social responsibility, has come under fire from a coalition of academics and activists who are questioning TIAA-CREF’s commitment on a range of social responsibility issues.
“TIAA-CREF’s tagline is ‘financial services for the greater good,’ but it seems like the only good they are concerned about is the bottom line,” said James Keady, Director of Educating for Justice and long-time active member of the coalition that is attempting to hold TIAA-CREF publicly accountable on these issues.
Coalition reps will be at the upcoming CREF annual meeting on Tuesday, July 20, 9:30 AM, at TIAA-CREF’s NYC headquarters and they plan to publicly pressure the group to stop outsourcing jobs overseas; to stop firing whistle-blowers; to stop investing in sweatshops; and to stop paying its CEO 10 million dollars a year.
“After years of member lobbying, TIAA-CREF finally agreed to talk to some of the companies we have focused on,” said Keady. “Unfortunately, TIAA-CREF’s method of ‘quiet diplomacy’ over the past five years has not led to any substantive changes.”
The coalition believes that TIAA-CREF can and should do more. Its Policy Statement on Corporate Governance reads, “While quiet diplomacy remains our core strategy…the TIAA-CREF engagement program involves many different activities and initiatives, including engaging in public dialogue and commentary… engaging in collective action with other investors… seeking regulatory or legislative relief… commencing or supporting litigation.” “It is time for TIAA-CREF to get aggressive with these companies.”
Posted on StateCollege.com
July 15, 2010 7:25 AM
by Adam Smeltz
Penn State has urged apparel company Nike (NKE) “to play a positive role in assisting” workers who were laid off from two factories in Honduras, university spokesman Geoff Rushton said Wednesday.
The two factories, known Hugger De Honduras and Vision Tex, served as subcontractors for Nike and manufactured Penn State-branded goods, among other branded products, according to the Worker Rights Consortium.
Both factories closed about 16 months ago, but it’s not clear that workers there have received the roughly $2 million that they are owed in mandated severance pay, according to an article posted at www.insidehighered.com.
Already, two universities — Cornell and the University of Wisconsin at Madison — have decided to end their Nike licensing agreements as a result of the matter, Inside Higher Ed reported.
Like Penn State, the University of Wisconsin is a Big Ten school. Both have had substantial agreements with Nike for years.
“While Nike has offered training and vocational programs, the company insists the (workers’ severance) payments are the responsibility of the subcontractors” in Honduras, the Inside Higher Ed article reads. “That position, however, runs afoul of many university codes of conduct — including Cornell’s, which holds licensees responsible for the actions of subcontractors, … .”
Rushton said Wednesday that he was looking into Penn State’s licensing code of conduct and how it might apply to the Nike situation in Honduras.
“Penn State is continuing to monitor the issue and receive updates from the Fair Labor Association, Worker Rights Consortium and the Collegiate Licensing Company, our licensing agent,” Rushton wrote in an e-mail message. “We have also spoken with Nike representatives directly.
“We are continuing to encourage Nike to work with the WRC, FLA, worker representation and others to resolve these issues in the best interest of the workers,” Rushton wrote.
He said he understands that Nike contracted two factories, Anvil and New Holland, “which in turn subcontracted Vision Tex and Hugger factories in Honduras.”
Nike indicated that it made full payment to Anvil and New Holland, Rushton wrote. Anvil and New Holland indicated “they had paid Vision Tex and Hugger in full,” he went on.
Rushton said he believes Nike has had ongoing discussions with representatives of the workers who lost their jobs.
Penn State-branded merchandise is manufactured in dozens of factories around the world, according to a Worker Rights Consortium database. The Washington, D.C.-based group, of which Penn State is a member, monitors working conditions globally to combat sweatshops and preserve workers’ rights.
StateCollege.com will post additional details in this developing story as they become available.
Jim Keady has spent times living with workers of PT ADIS Dimension, a footwear factory, and found out that they have lived in an appalling condition.
Keady said that the company, one of 37 Nike’s subcontractors in Balaraja, Tangerang, conducts incineration of waste from rubber shoes in a nearby location without considering its impact on the environment.
The practice exposed workers living nearby to emitting toxins from the incineration.
“Nike signed agreements with organizations protecting the environment. But it is not monitoring. If their subcontractors don’t respect it there are no penalties.” Keady said.
The unlawful incineration process is not the only criticism Team Sweat leveled against to the Nike. The not-for-profit organization denounces what it considered “an exploitation of workers” in developing countries including Vietnam or Indonesia.
In Indonesia, the highest minimum wage is Rp 1.1 million (US $120) but according to Keady this is not enough to secure a decent life.
After their rent, charges and cost of transportation, workers only take home Rp 700,000 ($77), says Keady.
To make matters worse for workers, they have to pay the cost of drinking water and two additional meals per day and child care, he said.
Keady explains that basic items such as soap, toothpaste or hygienic pads for women are hardly affordable with this amount.
Workers can’t save money and some even have to send their children back to the village so that they can live with relatives. This way they spend less.
With the amount of money, there is no way workers will have a chance to improve their lives and escape the cycle of poverty. Team Sweat’s research concluded that it would take Rp. 3 million per month for workers to meet their basic needs — which means three times higher than the existing wages.
Nike made $19 billion in revenue in 2009 with a 10 percent net profit margin. It is the world’s number one brand of athletic footwear and apparel.
Keady has talked to a number of Indonesian workers and persuaded them to build a unionized worker movement. But it is hard to make the workers organize if they face pressure at work.
“Nike exploits their fear,” he says. “It knows that their employees are desperate for work,” he said.
Keady knows a lot about workers’ woes as he has lived with the workers of a Nike’s subcontractors and lived off the same amount of money they receive, around $125 a month. He lost 25 pounds, and learned first hand that the living conditions are beyond what he could deal with.
Back in the States, Keady shared his experience at dozens of universities. What started as a limited tour turned out to be endless journey now that he is still on the road. Eventually his campaign, with the help of other NGOs, was enough to pressure Nike to make changes in some of its policies.
Team Sweat hopes that campaign against Nike bad practices could now be rekindled with the arrival of the soccer World Cup. “People should know the origin of the jerseys and shoes worn by their favorite players,” says Keady.
Nike and its contractors employ 800,000 workers in 1,000 factories across 52 countries. Indonesia is the firm’s third-largest manufacturing site after China and Vietnam, Keady said.
Responding to Keady’s accusation, a company spokesman said issues such as salary for workers in its disparate production chain are best dealt with “by negotiations between workers, labor representatives, the employer and the government”.
Erin Dobson, Nike’s senior manager for global public affairs, was quoted by the Los Angeles Times which published a story on Keady on Wednesday as saying that the company participated in efforts to improve the overall workers’ welfare.
“We believe there is ample room for innovation in this area,” she said, “And that progress must occur throughout the industry, and at the governmental level, not only in Nike’s supply chain.”
She said Nike’s code of conduct mandates that the company pay the minimum legal wage in each country, which in Indonesia is $122 a month, one of Asia’s lowest.
The Nike representative in Indonesia did not return a call from The Jakarta Post for this story.
In the past, Nike has repeatedly denied claims regarding labor issues in Indonesia.
The pension fund, TIAA-CREF, currently owns approximately $230,000,000.00 in Nike stock and to date, they have done nothing significant in terms of pressuring Nike to pay living wages, negotiate union contracts, and clean up their environmental damage in the countries where Nike products are made. TC has also placed Nike in their “social choice for social change” account, which is a signal to their investors that they believe that Nike is “socially responsible.” Clearly the facts show that Nike is anything but socially responsible.
That is why on Tuesday, July 20th at 9:30am - when TC holds their annual meeting of participants at 730 Third Avenue, New York, NY 10017 - TEAM SWEAT will be there!
We will be asking the TC Board of Directors to take the following actions:
* TC should make a formal request to Nike to pay the $2.6 million dollars in back wages and severance owed to 1,700 Honduran Nike workers. If Nike refuses to pay, we will recommend that TC divests some of its holdings with Nike. This would be in line with similar actions take by the University of Wisconsin-Madison and Cornell University, who recently cut their contracts with Nike over this issue.
* TC should make a formal request to Nike to create a pilot project in which Nike would take part in tri-party collective bargaining with a Nike shoe factory in Indonesia. The result of this bargaining would be legally-binding and enforceable labor agreement that was signed by Nike, the factory management and the trade union at the plant.
* TC should make a formal request to Nike to pay for an independent assessment of the environmental damage done by the burning of scrap shoe rubber in Indonesian villages for the past 20 years.
If you would like to attend the TIAA-CREF annual meeting and take part in pressuring them to hold Nike accountable, please email Jim Keady at jim@educatingforjustice.org no later than July 10th as arrangements will need to be made to get member proxies so you can enter the meeting.
Inside Higher Ed (www.insidehighered.com)
Another One Bites the Dust
July 2, 2010
And then there were two.
Absent “significant progress” toward the resolution of an ongoing labor dispute in Honduras, Cornell University will follow the University of Wisconsin at Madison’s lead and end its licensing agreement with Nike. The decision, issued by President David Skorton in an internal letter Monday, is being heralded by anti-sweatshop activists as a significant victory in a battle over Nike’s refusal to pay severance to displaced workers in its supply chain.
“I have made the decision to allow the licensing agreement to run through its expiration date of December 31, 2010, at which point I will allow our agreement to expire unless significant progress is made,” Skorton wrote the university’s Licensing Oversight Committee, which recommended the contract be severed. “I am doing this to allow Nike time to accelerate discussions I understand are underway between the company and union representatives acting on behalf of the displaced workers and to become more assertive in its efforts to remediate the Codes of Conduct violations.”
As the second institution – and the only Ivy League university – to take a stand on the labor issue, Cornell’s move is sure to escalate pressure on a company that has been increasingly under fire since the closures of two Honduran factories 16 months ago. At issue is an estimated $2 million in legally mandated severance owed to workers at two Nike supplier factories, Hugger de Honduras and Vision Tex, in Honduras.
While Nike has offered training and vocational programs, the company insists the payments are the responsibility of the subcontractors. That position, however, runs afoul of many university codes of conduct – including Cornell’s, which holds licensees responsible for the actions of subcontractors, the university’s oversight committee maintains.
In response to Cornell’s decision, Nike issued a statement suggesting the company is working to resolve the issue.
“Nike is very concerned for the affected workers of Vision Tex and Hugger and continues discussions with key stakeholders on this matter,” the statement reads. “In addition, we are in direct discussions with Cornell on our ongoing efforts in support of the workers in Honduras.”
Jack Mahoney, national organizer for United Students Against Sweatshops, said the Cornell decision was the product of an intense campaign on the campus, including a visit by displaced Honduran workers who shared their stories with administrators, faculty and students.
“I think this latest step by Cornell in conjunction with what happened at Wisconsin clearly is going to matter and give Nike some incentive to resolve this issue,” Mahoney said.
Moreover, past campaigns – such as one against Russell Athletic – have shown that once a few universities take a stand, others often follow.
“We’re going to have now both Wisconsin – a large important public school – and Cornell – an important Ivy – both setting a tone,” Mahoney said. “I think that really helps us on other campuses where students are having these conversations with administrators and want to point to the way that other universities are taking the lead on this.”
Conversations about pulling out of Nike contracts are already occurring on many other campuses. The University of Washington’s Advisory Committee on Trademarks and Licensing, for instance, has recommended Washington sever its contract if Nike doesn’t resolve the labor dispute. No decision on the contract has been made, however, a university spokesman said Thursday.
In addition to potentially pressuring other universities to follow its lead, Cornell is calling on the Collegiate Licensing Company – an agent that assists many universities with Nike contract negotiations – to urge Nike to resolve the labor dispute.
While Cornell’s licensing agreement with Nike would end Dec. 31 absent satisfactory progress from the company, the expiration would not impact an additional agreement the university has with the company for providing athletic apparel to sports teams, a university spokesman said Thursday.
Casey Sweeney, president of the Cornell Organization for Labor Action, said she believed the broad student support for pressuring Nike helped inform Skorton’s ultimate decision. More than 30 organizations endorsed the campaign, including the Student-Athlete Advisory Council, which has representatives from all of the university’s 36 team sports.
“I think it just is a testament to the wide range of support we were able to gather,” Sweeney said. “It was really nice to see in our community there are certain values we uphold across the community. For [the Student-Athlete Advisory Council] to feel as passionate about it as we were, was exciting.”
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