An Open Reponse to Nike’s Hannah Jones - Jim Keady breaks down Nike’s PR Spin on Wages

February 8th, 2012

Hannah Jones, Nike VP for Sustainable Business and Innovation

Hannah Jones, Nike VP for Sustainable Business and Innovation

EFJ/Team Sweat:

If you have attended a “Behind the Swoosh: Sweatshops and Social Justice” lecture, you have heard me ask you to write to Nike and request they disclose the wage rates at all their factories and also that they commit to pay their factory workers a living wage.

When Nike writes you back (if they write you back) you get 11 paragraphs of public relations drivel from Hannah Jones, Nike’s VP of Sustainable Business and Innovation.  On first read, Ms. Jones’ missive might convince you (or more likely your business professor or market-fundamentalist father) that Nike is actually doing something with regard to transparency and paying workers decent wages.  They are not.

Below is Ms. Jones’ letter.  I am offering an open response to her so you can see how you have to break down Nike’s PR nonsense and deliver the truth.

Peace,

Jim Keady, Director
Educating for Justice

(Hannah Jones/NIKE) Thank you for your email regarding the conditions for workers in Nike contract factories. We take your concerns very seriously.

Nike has been on a long journey over the past decade to understand the issues and complexities of working with contract factories and how to improve the lives of workers that make Nike product. We have learned a lot along the way and we are a better company for it. But like every other company that sources in a global supply chain, we know that change can be slow and is often challenging to implement across a complex and diverse supply chain.

No Hannah, Nike has NOT been on a long journey to understand the issues.  For more than 15 years, Nike has been confronted with the truth that they are exploiting workers and paying them poverty wages.  Nike’s response during this time has been fairly consistent.  You have denied, deflected, and then dealt begrudgingly with some peripheral labor rights issues. Only in the past year has Nike become moderately responsive on some egregious cases, and to date, you have absolutely refused to engage in any real way on the issue of workers’ wages.

The real journey that Nike has been on is one of perfecting your public relations to convince consumers and the media that you have made strides in addressing labor rights, when in reality, Nike has only made minor reforms and you had to be dragged kicking and screaming for those.  Remember how Nike reacted to calls for disclosure of factory locations?  Nike said it would be devastating and it would give away your edge in the industry.  We pressed you and won and guess what?  Nike is still competitive.  You personally have made appearance after appearance at conferences, touting Nike’s “corporate responsibility” claims, but when you were offered the opportunity to actually go and meet with Nike workers in Indonesia, to hear their stories first-hand, you refused.  Again, this has not been a journey of corporate self-discovery on social responsibility, it has been a journey of managing Nike’s public image in light of the truth about your cutthroat business practices.   

(Hannah Jones/NIKE) With regards to wages, we follow guidelines that are set by law.  We believe contract factory workers should be rewarded with compensation that is fair, competitive and locally relevant.

Ok.  Nike must define “fair” in a dollar amount.  I believe that Nike workers, the people who are the foundation of the Nike success story, should be paid a living wage – that is fair.  In Indonesia, where I do my work, a living wage would be roughly 3X the government minimum wage.  This comes out to about $425 a month.  Pay it. 

The issue of wages, and the definition of a ‘living wage’, is a source of discussion and debate for the footwear and apparel industry.  There is no current definition of a living wage that is commonly accepted, making an industry-wide approach challenging.

No.  It is really not a source of discussion and debate, unless you are Nike.

You say, “there is no current definition of a living wage.”  But Phil Knight, the Chairman and founder of Nike, is on the record saying that Nike factory workers are “absolutely” paid a living wage, “no question about it.”   If there is no definition of a living wage, how can Mr. Knight be absolutely sure that workers are being paid it?  I have repeatedly asked you for clarification on this statement by Mr. Knight and you have refused to provide it.  Why?

You also assert here that Nike is seeking an industry-wide approach on wages.  I am not talking about an industry-wide approach.  I am talking about Nike workers and Nike workers’ wages.  I am quite sure that when Nike is thinking about how to capture market-share, or how to make the next kick-ass commercial, or how they will sign the next big athlete to an endorsement contract – you are not thinking about “industry-wide” approaches.  Nike thinks about Nike and how Nike can make money.  We want you to take this same focused approach to your factory workers.  Don’t worry about anyone else; let’s talk about Nike, Nike factory workers, and Nike workers’ wages.

If Nike is looking for a model on the living wage issue, you certainly can follow the lead of Alta Gracia.  Alta Gracia is making t-shirts and sweatshirts for the college bookstore market and they are paying their workers 3X the minimum wage at their factory in the Dominican Republic.  Alta Gracia didn’t need an industry-wide approach.  They simply asked what a living wage in the area was and they paid it.  You can too – Just Do It.

(Hannah Jones/NIKE) Nike currently requires its suppliers to pay at least the local minimum wage and legally-owed benefits to workers, including any agreements and additional benefits outlined in individual employee contracts or collective bargaining agreements.  We require factories to comply with a standard against which we can audit consistently.

This statement is not consistent with the claim by former Nike Director, Vada Manager.  Mr. Manager is on the record saying that Nike pays workers wages that “far surpass regional or national minimum wages.”  When I have asked you to provide documentation to support Mr. Manager’s claim, you have been noticeably silent.

I have also asked Nike to disclose wage rates at your factories around the world.  You have claimed, in your letter to me in April 2009, that Nike does not have this data to disclose.  How can you be sure that your factories are paying at least the minimum wage if you do not have any data on wages?  I will tell you how.  You are lying.   Nike has the data.  You just do not want to disclose it, because then consumers would see how pitiful Nike’s poverty wages are. 

(Hannah Jones/NIKE) Beyond just meeting minimum requirements, Nike believes that a responsibly competitive industry that invests in its workforce will bring about locally-relevant wage increases for workers over the long term.  And we’re acting on that belief by partnering with factories in piloting an education program which combines initiatives such as Lean and Human Resource Management to enable factories to control costs and experience first hand how investing in workers improves product quality and grows their business.  Even in areas where labor is in abundant supply, factories with high levels of productivity, efficiency and stable orders tend to provide benefits to workers that are beyond legal requirements.

Here again, you are trying to deflect and make this an “industry” issue.  It is not.  I am talking about Nike.  That is all.  I want Nike to pay your workers a living wage. 

(Hannah Jones/NIKE) There continues to be an active debate about how to best ensure that workers’ basic needs are met.  Nike believes that local wage-setting is best done by negotiations between workers, labor representatives, the employer and the government. Because the success of this process varies by country, Nike increasingly sees the need for further regional and global discussions about the degree to which wages across the industry are meeting worker’s needs.

No, there is not an active debate, well, unless you are Nike.  Hannah, when you negotiated your salary, did you feel the need to include the government and to have regional and global discussions to determine what was fair?  I doubt it.  My guess is that you knew what you wanted and you asked Nike for it.  This is what Nike’s factory workers want.  They want to negotiate directly with Nike.

You are responsible to negotiate.  You said above that the responsibility lies with workers, labor representatives, EMPLOYERS and government.  Nike is the employer of these workers.  Nike is on the record saying that “those workers, we should consider them Nike employees, so that is our responsibility.”  (Former Nike VP, Dusty Kidd)  If Nike factory workers, are, as Nike claims, “Nike employees,” then Nike needs to start acting like it and bargain with them in good faith and pay them a living wage.

(Hannah Jones/NIKE) Beyond this, we are exploring ways to partner with local non-governmental organizations in order to assess the community development needs in targeted factory communities.  We aim to determine whether Nike, in collaboration with others, might play a role in helping to tackle significant challenges that will further enable factory communities to thrive.  Our belief is that wages can go even further if significant obstacles, such as access to health care and clean water, are removed for contract factory workers and their communities.

We are not discussing community needs.  We are discussing wages.  While helping the communities that host Nike factories is admirable, it has nothing to do with paying your workers a living wage.  Stop trying to deflect attention from the wage issue. 

(Hannah Jones/NIKE) We believe there is ample room for innovation in this area, and that progress must occur throughout the industry, not only in Nike’s supply chain.  In the meantime, we are committed to deepening our understanding of workers’ challenges and exploring different mechanisms for improving their welfare through new industry collaboration, public policy advocacy and other efforts aimed at positively impacting workers’ ability to save and thrive.

I agree that progress must occur, although I am not too sure how innovative it must be.  It is actually fairly simple.  Pay your workers in Indonesia 3X the government minimum wage.

(Hannah Jones/NIKE) We are convinced that collaboration and transparency is key to meaningful change to improve the lives of workers, not just for Nike but across the industry. We have made positive strides over the past 10 years of working on these issues, and we will continue to put workers at the heart of our efforts in this area.

As for workers being at the heart of your efforts, I think you are being disingenuous here Hannah.

During my September 2011 visit to Indonesia I had a range of meetings with NGO leaders, as well as union leaders and rank and file workers from Nike’s factories.  One of the questions that I asked during most of my meetings was, “Do you know who Hannah Jones is?”  The consistent response was, “No.”  Now if I only asked the rank and file workers this question, their response would be disappointing, but possibly understandable.  However, I also asked this question of the following people:

Bambang Wirahyoso, President of the Serikat Pekerja Nasional

Djoko Heriyono, Chairman of Field Advocacy for the Serikat Perkerja Nasional

Sucipto, Secretary General of the Gabungan Serikat Pekerja Merdeka Indonesia

Kores Tabunan, Director of Jakarta Legal Aid-Ikadin

Simon Field, Chief Technical Advisor for Better Work Indonesia (ILO)

Michiko Miyamoto, Deputy Director, International Labor Organization – Jakarta

Soeharjono, Program Officer for Workers Activities, International Labor Organization – Jakarta

Not one person that I spoke with has ever heard of you.

Hannah, you are the leader of Nike’s corporate social responsibility efforts and yet you are unknown to any labor leaders or rank and file workers in a country that is home to more 43 Nike factories, 160,000 Nike workers and 24% of Nike’s global footwear production.  Indonesia is also the country where activists like myself have focused our collective efforts for almost 20 years.

The fact that “Hannah Jones” is not a household name among workers, union leaders and local labor rights activists is wrong.  I believe it shows a complete disrespect for Nike’s workers in Indonesia and it calls into question whether or not Nike is truly committed to any of the initiatives that you discuss at the many conferences you speak at around the nation.  Perhaps you could spend a little less time speaking at conferences and a little more time out in the field meeting with the people who are the reason for the creation of Nike’s Corporate Responsibility division?

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