REPORT: Alleged violations of Nike’s Code of Conduct at Nike’s PT Sinar Timur Industrindo factory in Indonesia

January 24th, 2012
Jim Keady with SPN Committee Members at Nike's PT Sinar Timur factory
Jim Keady with SPN Committee Members at Nike’s PT Sinar Timur factory

EFJ/Team Sweat:

I just submitted the following report to Nike CEO, Mark Parker. I will keep you posted as this case moves forward.

Peace,

Jim Keady, Director
Educating for Justice
**********************

Dear Mark,

I am writing with regard to PT Sinar Timur Industrindo, a Nike supplier located at Jalan Raya Serang KM 25,6 Cisereh Tigaraksa Tangerang Banten, Indonesia. PT Sinar Timur Industrindo produces Nike’s injection pylons for Nike’s PT Pratama and PT Nikomas factories. On January 11, 2011, I had a meeting with the local committee of the Serikat Perkerja Nasional (SPN) and approximately twenty-five additional workers from the factory. During this meeting, I documented a number of serious violations of Nike’s Code of Conduct. I have outlined the allegations below, along with a suggested plan of action for each item.

Can you please provide me an acknowledgement that you have received this and also provide details by January 30, 2012 on how you will address each of the items below?

Thank you in advance for your consideration of this matter. I look forward to hearing back from you.

Peace,

Jim Keady, Director
Educating for Justice, Inc.

COMPLAINT: JAM MOLOR
The union reports that, like their colleagues at PT Nikomas, they too have been subjected to the practice of “jam molor” – being forced to work overtime without pay. They shared that this happens regularly at the factory.

DEMAND: JAM MOLOR
Immediately contract AKATIGA Bandung to conduct an investigation into this matter, similar to the investigation they conducted at PT Nikomas. Only this time, unlike the process at Nikomas, please be sure that the management does not conduct an intimidation campaign that pushes workers to lie about the actual amount of overtime hours worked without pay. (I will be submitting you an updated report on the case at Nikomas in the coming days.)

COMPLAINT: LABOR CONTRACTS
The union reports that all of the 4360 workers (count as of mid-December 2011) were on short-term contracts of 1-3 months in duration. It is my understanding that Nike only allows your suppliers to have a relative small percentage of short-term contract workers at your production plants. (Note: Your recent factory disclosure list states that there are only 685 workers at this factory producing Nike products. Can you confirm the accuracy of this number?)

DEMAND: LABOR CONTRACTS
Please confirm the allowable percentage of short-term contract workers at Nike factories. If the percentage of short-term contract workers at PT Sinar Timur Industrindo is, in fact, out of line with Nike’s standards, please require the factory to implement the standard percentage of full-time workers immediately.

COMPLAINT: ARBITRARY DISMISSALS (UNION BUSTING)
The union reports that on December 30, 2011, Mr. Zulkifli, the head of the human resources department at the factory, fired S. Setyabudi (Budi) and Arifudin (Arif) without cause.

On October 24, 2011, SPN committee members from PT Sinar met with the management to bring forth a request of their members. They submitted an oral request that on November 5, 2011, they did not want to work overtime because of the upcoming Muslim holiday on November 6, 2011

On November 1, 2011, they submitted a letter to the management with the same request.

The management did not reply to their written request.

On November 3, 2011, the SPN committee met with the management to get an answer to their letter. The manager from the HR department said, “no problem.” (i.e. The management would meet with the union committee.)

On November 5, 2011, almost the entire management team came to the IP section and during the change of shifts, Mr. Whyi ordered the supervisor (Syukur) to call all the workers back to work. The workers refused.

Then Mr. Whyi accused Arif of being a provocateur of this incident. He said, “You have to take responsibility, you are a provocateur and you have to be arrested.” Arif was then punched by Sarfudin from the SBSI committee. Then Mr. Choi told Mr. Whyi to detain Arif and call the police.

This was the beginning of the management’s anger towards the SPN union.

On November 7, 2011, the management invited the SPN committee to discuss the incident that occurred on November 5, 2011. The management said that the workers refusing overtime on November 5, 2011, had no basis in regulation, so the SPN committee should take responsibility for everything negative that transpired to date.

On November 8, 2011, one of the SPN committee members and a supervisor were demoted based on the allegation that they were “provocateurs.”

On November 28, 2011, the SPN committee members requested contract negotiations about short-term labor contracts. They assert that the current contract is not following the law. The delegation was led by Noviana Putri and included 13 workers. The management refused to negotiate.

On December 2, 2011, the SPN committee made a second request for contract negotiations about short-term contracts. But the management again refused saying SPN had no right to bargain with them.

On December 2, 2011, the SPN committee made a third request for a meeting with the management.

After three requests were refused, on December 3, 2011, the SPN committee asked for the Manpower Agency in Tangerang to mediate between the management and the workers’ delegation.

On December 20, 2011, the mediation was conducted by the Manpower Agency, but the agency said this issue should be solved in-house through negotiations by the management and the union.

On December 24, 2011, SPN sent a letter to request negotiations with the management. The meeting was confirmed for that day and then rescheduled for December 26, 2011.

On December 26, 2011, the scheduled meeting did not occur and the SPN committee sent an additional letter to request negotiations. The management did not respond.

On December 30, 2011, Mr. Zulkifli, the head of the human resources department at the factory, fired Budi and Arif without cause.

In relation to this chronology, the SPN committee reports that approximately 40 SPN union members have been dismissed without cause.

DEMAND: ARBITRARY DISMISSALS (UNION BUSTING)
Please have Setyabudi, Arifudin and the approximately 40 SPN union members who were dismissed without cause, reinstated immediately. The union can provide you with a list of these workers. If for some reason any of these workers will not be reinstated, please provide documentation as to the performance or disciplinary reasons for which they were terminated.

COMPLAINT: MEALS
The union reports that the quality of food that is served at the factory is terrible. One worker reported that one day he had to pick maggots out the rice that was served. He was disgusted, but he was so hungry that he ate the rice and got back to work. The union also reports that on many occasions they are not provided with adequate amounts of food. (Ex. If they are supposed to be given two eggs with lunch, they are only given one.) The union also reports that on many days, the food is not ready when their lunch break begins and they do not have enough time to eat their meal. Finally, the union reports that the meal allowance per worker is Rp.3.000 and that this amount is completely inadequate.

DEMAND: MEALS
Immediately demand that Mr. Choi develop and implement a plan of action to address the quality of the food; the amounts of food provided to workers so that it is in accordance with what workers have been promised; improving the timing of the meal being served to maximize the time workers have for their lunch break; and increase the meal allowance to at least Rp9.000 per worker (a simple meal of rice, vegetables and a piece of chicken at a local warteg costs Rp12.000).

COMPLAINT: BATHROOMS
The union reports that there are an inadequate number of bathrooms at the factory, resulting in long lines and very dirty conditions. The union also reports that Mr. Choi, the director of the factory, regularly enters both the men’s and the women’s room and bangs workers’ legs under the stalls with a bamboo pole in an attempt to hurry them along with their “business” and get them back on the production line.

DEMAND: BATHROOMS
Immediately demand that Mr. Choi develop and implement a plan of action to triple the amount of toilets at the factory; triple the amount of times that the toilets are cleaned each day; cease and desist with his practice of rousing workers with his bamboo pole while they are using the toilets.

COMPLAINT: WAGE INCREASE
The union reports that their current basic monthly wage of Rp.1.285.000 ($141) only covers their living expenses for half of the month. The workers shared that they are forced to live on credit for the other half of the month.

DEMAND: WAGE INCREASE
Immediately contract the Trade Union Rights Center to conduct an independent assessment of cost of living expenses for workers in this area. If the results of this assessment show that workers’ wages are not in line with meeting these basic expenses, workers must be given raises by Nike to meet the standard. This would bring the reality of workers’ wages in line with Nike’s public claim that workers are “Absolutely” paid a living wage, “no question about it.” (Nike Chairman, Phil Knight) And that workers wages “far surpass the regional or national minimum wages.” (Former Nike Director, Vada Manager)

COMPLAINT: BACK WAGES
The union reports that S. Setyabudi and Arifudin were not paid at all for their work in December 2011.

DEMAND: BACK WAGES
Immediately pay Setyabudi and Arifudin the money they are owed for their work from December 2011.

COMPLAINT: FREEDOM OF ASSOCIATION
The union reports that workers are systematically discouraged from freely associating and discussing union matters at the factory.

DEMAND: FREEDOM OF ASSOCIATION
Immediately conduct a training session for Mr. Choi and his management team about Nike workers’ right to freely associate. Also create and implement a mechanism by which workers can file complaints with Nike USA if their freedom to associate is violated by the management at the factory.

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