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?

###

Jim Keady with Nike workers in Indonesia

A towering blond, 40-year old Jim Keady’s presence is a stark contrast to the group he has fervently defended for the past decade.

Thousands of workers from a Nike plant in Serang, Banten province, have Keady to thank for a victory against their employer, who withheld overtime pay worth nearly $1 million.

Nikomas, a supplier for athletic wear giant Nike, has also promised to create a reporting mechanism for labor-related complaints in coordination with the National Workers Union (SPN).

To Keady, who operates a nongovernmental organization called Team Sweat, this was not the first victory, but it was certainly the most symbolic since Nike had more than 30 suppliers in the country for its footwear and apparel, employing at least 140,000 workers.

When Nike’s sweatshop issues went public in the 1990s, Keady was a semi-professional footballer and coach at St. John University in New York. He was also pursuing a graduate degree in theology.

“In my first class, I started writing a paper about Nike’s labor practices and my professor urged me to find a topic dealing with moral theology and sports,” Keady said. “I started hearing the stories about Nike sweatshop issues in newspapers, so I started doing some research and learned about how Nike was exploiting the poor workers in places like Indonesia, Vietnam, China.”

At about the same time, his university’s athletic department started negotiating a $3.5 million sponsorship contract with Nike.

Believing that Nike’s corporate practices were far from his Catholic religious ideals, he lobbied school officials to reject the contract until he was eventually given an ultimatum: “Wear Nike and drop the issue or get out.”

He said he became the first athlete in the world to say no to Nike because of the sweatshop issue.

In 2000, he moved to a village in Tangerang to live with factory workers for a month and try to survive on the wage that they were paid.

“I slept a thin mat on the floor like workers do, with rats stampeding over my ceiling at night and cockroaches crawling over me,” he said.

After a month of living on what he called a “Nike sweatshop wage,” Keady said he lost 11 kilograms.

“I came to understand, in the most rudimentary of ways, the reality the workers face every day,” he said. “Everything from making decisions, ‘Do I buy a razor and shaving cream or do I eat. If I have a headache, do I buy aspirin or do I buy dinner?’

“And I was just taking care of myself on that wage. When you add kids into the mix [the questions became], ‘Do I send my child to school or do I get an extra kilogram of rice from the market so that we could have a better meal?’

“These are the horrific choices that our workers have to make and they continue to wallow in abject poverty while Nike’s profit has soared.”

And so what Keady initially thought was going to be a few months of advocacy work for employees at Nike plants in Indonesia has turned into a full-time job for the past 12 years.

“I promised the workers that I met, the women and men that are producing the real wealth for Nike, I said, ‘I’m going to go home and tell your stories and I’ll try to advocate for you and see if we can get some changes made.’ ”

Part of what motivated him, he said, was the fact that top Nike executives have seven-figure salaries.

In 2011, Forbes listed Nike chief executive Mark Parker as having an annual compensation of $14.53 million or $43.83 million over five years, making him the 97th highest-paid CEO in the world. Keady said Parker’s compensation package went up 80 percent about a year ago.

“When I think if the CEO is able to have that kind of increase, I think the workers deserve an increase as well. Without them, nobody at Nike is making any money,” he said. “I’ve returned to Indonesia year in and year out to continue to help organize workers and help them to develop their voice so that they can speak up for themselves.”

The hard work is paying off.

Though the Rp 8.1 billion ($907,000) in back wages they won for the 4,437 Serang workers doesn’t sound like much for nearly a year of negotiations, Keady said it was significant.

“It is almost two months of wages. That may not seem significant to Americans or someone living in Jakarta, but for workers that have been living on the edge every month just trying to make ends meet, it’s a big deal,” he said.

“It’s also about moving forward. This jam molor issue [forced overtime] is not going to happen anymore. There’s a new mechanism in place to report it.”

The Associated Press has reported that after years of controversy, Nike in 2005 admitted finding “abusive treatment,” either physical or verbal, in many of its plants. The complaints ranged from work weeks that exceeded 60 hours to being forbidden to go to the restroom.

Keady said that when he first came here, a law that guaranteed two paid off days every month for female workers during menstruation was hardly implemented.

“Back in 2000, for a Nike factory worker to get those days off, they had to go to the factory clinic, pull down their pants and show blood on their underwear to prove they were menstruating. That doesn’t happen anymore,” he said.

“Back then, three different workers from Nikomas were threatened at gunpoint, one threatened at knifepoint and one who was a chairman was beaten in the head with a machete and left to die in the gutter. That level of physical intimidation at factory workers doesn’t happen anymore.”

Keady is currently working on a book and a script for a documentary based on his experience advocating for workers’ rights in Indonesia.

American Jim Keady poses with activists in front of an anti-Nike poster.

More than 4,400 workers in a Serang, Banten, factory that manufactures products for Nike should by now have received up to two years’ worth of overtime pay previously denied to them.

But according to Djoko Haryono from the National Workers Union (SPN), which oversees the agreement with the company, Nikomas, technical issues mean not everyone has been paid.

“I have been informed by Nikomas that all payments have been processed,” Djoko told the Jakarta Globe on Monday.

“But many workers haven’t received their money yet because they haven’t completed the required forms. For others, [the company] is still verifying their overtime hours.”

Nikomas agreed in early January to pay nearly $1 million for almost 600,000 hours of forced overtime after an investigation by SPN and Educating for Justice, a US-based nonprofit that exposes alleged labor abuses by Nike and other companies.

After the investigation, which found that 4,437 workers had been working unpaid overtime for up to two hours a day, six days a week, almost a year of negotiations ensued before the January agreement that was hailed as unprecedented in the country.

Workers should have been paid Rp 13,000 ($1.50) per hour of overtime work.

The payments were to be given in two installments, on Jan. 20 and Feb. 5.

One worker, Siyamah, told the Jakarta Globe via a text message that many of her friends had already received millions of rupiah from the company, but others are still waiting.

“A friend received Rp 5 million. But there are rumors that they are going to take back the money,” she said.

Djoko said he didn’t have exact information yet on how many workers are yet to be paid, but said there were some problems regarding the calculation of overtime hours rendered.

Some workers, he said, did not honestly report the amount of overtime hours they worked, and the management at Nikomas was shocked to see claims of Rp 6 million to Rp 9 million.

There have also been protests from workers who haven’t received anything yet.

“So we are going to work on this issue. We are going to hold an evaluation and monitoring [meeting],” Djoko said.

These problems were first highlighted by Educating for Justice after the deadline for the first installment on Jan 20.

Jim Keady, a director of Educating for Justice, said that a local representative from his organization met with 15 female workers from the factory after the first deadline passed to find out if there were still problems.

He said workers alleged that the survey that was used to determine the amount of overtime they had worked was a sham. “If they were forced to work five overtime hours per week without pay, they were told to report that they only were forced to work 1 to 1.5 hours without pay,” he told the Jakarta Globe in an e-mail.

One worker, according to Keady, claimed that her daughter, who worked three years of overtime without pay, only received around Rp 81,000.

Another worker said she only received Rp 100,000 and still another said she got Rp 45,000.

“These numbers seem to be somewhat off from the average amount of Rp 2 million that workers were to have received,” Keady said.

But Djoko said that workers would not receive the same amount because they would be paid based only on how much overtime they worked.

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.

By Peter Alford
The Australian
January 21, 2012

Anti-sweatshop activist Jim Keady talks to workers at PT SM Global factory. Picture: Revaldi

JIM Keady, anti-sweatshop activist, revolutionary Christian, former semi-pro goalie and continuing soccer nut, first tangled with Nike Inc 14 years ago.

As an assistant coach with St John’s University national championship soccer team — and a graduate theology student — he refused to wear the company’s emblem when the New York Catholic university accepted a $US3.5 million Nike sponsorship.

Keady’s coaching contract wasn’t renewed and his $11m freedom-of-expression lawsuit against Nike and St John’s was thrown out of court in 2000.

But the Swoosh also gained an implacable foe who last week dealt its expensively groomed Corporate Social Responsibility image a nasty blow.

Keady’s lone-hand activism over more than a decade against worker exploitation by Indonesian Nike supplier companies culminated in a ground-breaking agreement for PT Nikomas Gemilang to repay 4437 production workers Rp8.1 billion ($869,100) for almost 600,000 hours of forced, unpaid overtime.

Bambang Wirahyoso, chairman of the National Workers Union that Keady coached through the 11-month Nikomas campaign, described it as “potential shock treatment for Indonesia’s labour movement, the victory precedent”.

Bambang says more than 300,000 Indonesian workers, two-thirds women, are employed by contractors making globally branded footwear and clothing, in a system controversially pioneered by Nike from the 1970s in developing countries.

This week Keady spoke to workers at PT Sinar Timur in Tanggerang west of Jakarta, who told him they’d also been subjected to the practice known as jam molor (time delayed) and bullying. Keady had lived for a month in 2000 in the industrial satellite city with Nike production workers.

That sealed his commitment to a cause he now propagates through the Team Sweat campaign, funded mostly by fees from his “Behind the Swoosh” campus lecture tours back home.

“I am a one man operation on an $US80,000-a-year budget to take care of everything, going up against a $US20 billion corporation.”

Keady accuses supplier companies of wage-cheating, union-busting and routine bullying and Nike of refusing to take responsibility for workers in a system it created.

But that isn’t just Nike, he readily concedes. Many global footwear and clothing brands use Indonesian contract factories.

Nikomas’s massive footwear plant in Banten employs 60,000 people and runs production lines for adidas and Puma as well as Nike, and Keady says drily: “I really have a hard time believing this only impacts 4437 workers.”

He focuses on Nike, however, as it’s the biggest, with more than 30 per cent of the global athletic footwear market; because Indonesia is Nike’s largest supplier after China and Vietnam, and because Indonesian workers have freedom to organise.

“If I tried to do in China or Vietnam what I do here, I would be deported — at best,” says Keady. And when something like the Nikomas settlement happens to Nike “it sends shockwaves through the rest of the industry”.

The company has worked intensively to neutralise its “sweatshop” image, by corporate social responsibility programs and by requiring contractors to accept its stiffened codes of conduct and “leadership standard”.

In the recent case, Nike emphasised its role in investigating the allegations and in pressing PT Nikomas’s Taiwanese owner to reimburse workers and improve local management standards. Nike insists, however, that it cannot continuously and comprehensively monitor contract factories it does not own or manage.

The Weekend Australian asked if the company was examining its other 42 Indonesian suppliers for the malpractices found at Nikomas. We received a copy of Nike’s response to similar questions from an Indonesian magazine, which did not, however, answer our query.

Keady says he doesn’t talk much about the influence of his liberation theology Christianity on his work. “But I believe that if this guy, Jesus the revolutionary, were around in 2012 he might be in places like Tanggerang in the slums with the workers. So that’s what drives me.”

Team Sweat:

I spent this afternoon meeting with Bambang Wirahoso, the Chairman of the Serikat Pekerja Nasional (SPN) – a trade union that represents tens of thousands of Nike factory workers in Indonesia. Our discussion centered on the case of forced overtime without pay at Nike’s PT Nikomas factory.

(CLICK HERE to learn more about the background on this case.)

I am now proud to report that following almost a year of investigation and negotiation, 4,437 Nike factory workers will be paid $1 million dollars for overtime they were forced to do without payment. The settlement between SPN and the factory management reflects 593,468 of unpaid overtime hours that workers put in sewing Nike sneakers at the plant during the past two years.

Workers will receive the money they are owed in two installments – the first on January 20th and the second on February 5th. And while workers are pleased with the result, in reality they are owed millions of dollars more. The practice of forcing workers to do overtime without pay was actually happening for 18 years, but Indonesian law only allows redress for the past two years.

Pak Bambang and I both agreed that the significance of this victory could go well beyond the Nike workers at Nikomas. This has the potential to send shockwaves through the Indonesian labor movement. Now that a precedent has been established, Bambang and the leadership at SPN are gearing up to take on the fight for the Adidas and Puma workers at Nikomas who also have been subjected to forced overtime without pay.

My friends, this is justice served. It took eleven months of hard work and we had to fight through denials and outright lies by the factory management, but the workers persevered and we won. We really won. We should savor this victory, but it is important to know that we have only just begun.

Peace,

Jim Keady

GIVE THE GIFT OF FAIR TRADE!
Team Sweat:

Still in the hunt for that perfect gift for the Holidays?

Why not get someone you love an EFJ Fair Trade T-Shirt?

This is a gift that just keeps on giving.  When you pick up one of our famous fair trade shirts…

* You are supporting workers in the USA (Lifewear) and the Dominican Republic (Alta Gracia) who produced the shirts and are getting paid living wages and have good union contracts in place.

* You are supporting workers in Indonesia and advocates in the USA who are fighting for living wages and union contracts.

* You are getting a friend or family member a REALLY cool shirt!

CLICK HERE TO GET YOUR SHIRT(S) NOW!

If you place your order by December 19th, I will do everything in my power to make sure that it gets to you by December 24th.*

Thanks in advance for your support!

Peace,

Jim Keady

* If your shirt is not in stock or if you are outside of the United States, the order may not arrive by December 24th.

Below is a letter from Siti Nurrofiqoh, the Chairperson of Bangkit Labour Union (Serikat Buruh Bangkit or SBB).  This union represents workers at Nike’s SM Global factory.  I am sharing the letter with you as I received it.  There are some spelling and grammatical errors, but I wanted you to read it as I did.

Peace, Jim Keady

Jim Keady meeting with Nike workers from the Serikat Buruh Bangkit

Dear Mr. Keady,

I am pleased to introduce myself, Siti Nurrofiqoh, the Chairperson of Bangkit Labour Union (Serikat Buruh Bangkit or SBB). At present we have ten bases in ten factories and one of them is PT SM Global.

First of all, let me convey our sincere appreciation for the all the invaluable efforts that you have been doing in connecting the labour with Nike including your meeting yesterday with unions in Tangerang. My sincere apology for not being able to attend the meeting yesterday.

Secondly, we would like to confirm that the issues you have raised in your e-mail to Nike are true.  For your information, our labour union has been trying to do the legal action since 2008 by reporting the issues to the relevant and authorized government institutions for the company to fulfil the rights of the labour (we keep all the related documents).  Unfortunately, no change was made by the factory.  Instead, the union officials received pressure, repeated rotation of their positions, downgraded, and be blamed by the management of the factory in front of all the workers saying that the factory will be closed as a result of the action of union officials.  Those are the fact of their efforts to do character assassination, create confrontation among union officials and the workers and violation to the freedom of establishing a union by making the union officials as the public enemy for the workers.

For your information, in previous similar case when the factory was reprimanded for the first time, the management announced the same information – blaming the officials and not admitting the violation and did not want to correct the mistakes.  Instead, the workers were requested to sign a pre-arranged statement stating that they were in good condition, have no problem, and will not demanding anything.

On 25 August 2011, the management repeated their similar actions. On that day, while the workers will take holiday for celebrating religious day, they were made anxious in a meeting with Mr. Jung who said that the factory will be closed.  The closing was due to the report of the labour union causing reprimand by Nike to the factory, and that Nike had cancelled their order as a result of this. Mr. Jung said that after Idul Fitri holiday, the worker will be put on holiday. Those who were considered undisciplined will be laid off (we have no clue the definition of “undisciplined”).

As a labour union, I believe that the reprimand from Nike is not intended to close the factory which will surely provoke suffering for the labours.  During the years, the labours are treated very unfairly as the factory has been practising no compliant procedure to Nike ethical code, in addition to continuous exploitation to achieve certain standard of quality and quota of quantity. Thus, it is very unfair for the labours and union if the reprimand is used by the management to clean their hand by sacrificing and blaming the union.

Once again, I greatly appreciate and thankful to you who has perfectly raised the issues and facts occurred in PT SM Global as well as submitted them to Nike. Me and my team will be ready to provide more information, evidence, and documents to complement our report on unfair treatment to the labours including the latest threat on the closing of the factory.

Looking forward to future collaboration, I remain,

Sincerely yours,

Fiqoh

Serikat Buruh Bangkit

For many, the Nike sweatshop issue is not breaking news.  The plight of Nike’s overseas workers has been covered by reporters, academics and activists for many years.  In this time, Nike has done well to manage the public relations backlash and Catholic schools have been a key component in their game to convince consumers that “Nike fixed their sweatshop problem.”  While Nike has made modest strides at addressing some abuses (the use of toxic glues, sexual harassment, physical abuse, etc.) they have absolutely refused to deal with the key demand that has consistently been pressed by Nike’s overseas workers and those who advocate in solidarity with them - workers want to be paid a living wage.

On the issue of a living wage, Catholic Social Teaching is quite clear.  Pope Leo XIII’s encyclical, Rerum Novarum, states “that the remuneration must be enough to support the wage earner in reasonable and frugal comfort.” (#34)   The U.S. Catholic Bishop’s Pastoral, Economic Justice for All, tells us that “the way power is distributed in a free market economy frequently gives employers greater bargaining power than employees in the negotiation of labor contracts.  Such unequal power may press workers into a choice between an inadequate wage and no wage at all.  But justice, not charity, demands certain minimum guarantees.  The provision of wages and other benefits sufficient to support a family in dignity is a basic necessity to prevent this exploitation of workers.” (#103)  And Pope John Paul II, in his encyclical, Laborem Exercens, exorts “Hence in every case a just wage is the concrete means of verifying the justice of the whole socioeconomic system and, in any case, of checking that it is functioning justly.  It is not the only means of checking, but it is a particularly important one and in a sense the key means.” (#19)

Having spent so many years documenting the spending power of Nike’s workers, I can tell you with authority that their wages certainly do not meet the benchmark of a living wage as set forth by Catholic Social Teaching.  If you question this, I encourage you to CLICK HERE and watch a clip from my most recent round of spending power research for Nike’s workers in Indonesia.

It is because of the lack of action on paying a living wage that Catholic schools are so important in Nike’s public relations war.  Think of it like this.  Let’s say you are an alumnus from St. Joseph’s University, the Jesuit school where I did my undergraduate degree.  And let’s say that you are somewhat aware of the Nike sweatshop issue.  Then you see this picture.

Without saying a word, this image makes the statement to you that, “Nike must have cleaned up their act.”  Why?  Because, you think, “there is no way that a Catholic, Jesuit, university would ever do business with Nike if they were still paying their workers poverty wages.”  This image tells people that Catholic schools like St. Joseph’s University are behind Nike 100%.  It tells people that Catholic schools are so much in support of Nike that we are willing to allow our student athletes to advertise their products to the masses.  It tells people that Nike must be paying their workers living wages, if they weren’t, why would this Catholic school allow itself to be used by Nike as a marketing tool?

I can tell you why our Catholic schools allow it to happen.

First, many are of the belief that Nike has fixed these problems because Nike has lied and they got a few Catholic schools on board with them.  Once this happened, the domino effect took place - administrators think, “if these other Catholic schools have done these endorsement deals, Nike must be ok” and they act without exercising the hermeneutic of suspicion.

Second, if administrators are aware of Nike’s violations of Catholic Social Teaching, rather than standing up and being a voice for the voiceless, they adopt the herd mentality noted above (”everyone else is doing it”) and/or they cave to pressure from Athletic Directors, Business Managers, Board Members and powerful alumni and donors to go with the flow.

If by chance, administrators are willing to take on the issue, many times the schools want an easy out.  They ask, “Ok, if we do not wear Nike, who should we wear?”  This is not the question we should be asking as a Catholic school! This struggle for justice is not about who YOU should or shouldn’t be wearing.  It is about the WORKERS.  It is about taking the preferential option for the poor.  It is about working in solidarity with our brothers and sisters in these factories to bring Nike to a point where they pay workers a living wage.  The question we should all be asking at our Catholic schools is, “If Nike is violating Catholic Social Teaching and they are not paying workers a living wage, what can we do to change that?”

Here is a short list.

1. If your teams are currently wearing Nike products, immediately make a public and provocative statement and cover up every Nike logo with a patch.  This may violate the terms of your contract with Nike and may cost you whatever Nike is giving to you.  So be it.  At times, the Gospel demands radical action and with it, painful consequences.  For individual athletes, if your school is not willing to take this action collectively, do it yourself.  You may be the spark that lights the flame of revolution.

Using St. Joseph’s University as an example, the Nike logos could be covered with something like this.

2. Take every penny of money that has been given to your high school or university from Nike and give it to Catholic Relief Services, Jesuit Refugee Services, etc.and make a public statement as to why you are doing this.

3. Engage Nike publicly on the issue of a living wage for their factory workers.  Write them open letters.  Hold on-campus prayer services.  Send delegations to the Nike campus to meet with Nike executives.  Hold press conferences announcing all these actions…

Why must we do these things?  Because we are Catholics.  And because we are called by our Catholic faith, in the words of Pope Paul VI, “to carry forward the work of Christ himself under the lead of the befriending Spirit.  And Christ entered this world to give witness to the truth, to rescue and not to sit in judgement, to serve and to be served.”

In 2011, you were part of Team Sweat and you made a difference.

Because of three extremely successful research/organizing trips to Indonesia in February, June and September, we had an explosion of exciting activity this year and it could not have happened without you.

Here is what your support helped us accomplish:

* We successfully fought to get Karyana, the union chairman at Nike’s PT Chang Shin factory, back to work after he was illegally fired in an attempt by the management to break the newly formed union at the plant.

* We successfully fought to get the management at Nike’s PT Nikomas factory to admit that forced overtime and wage cheating is, in fact, happening.  After pushing for months through the management’s outright denials and their campaign of intimidation of the union leaders that bravely shared the information with us, we were sent the following on September 9, 2011.

“We deeply regret that the company’s preliminary investigation found merit to the allegations, and we take responsibility for the actions made by some of our supervisors/managers.  Our first priority is to protect the rights of our employees and take decisive action to rectify their grievances.”

To address this case, Nike and the factory initially suggested to the union that they allow the Fair Labor Association to do the assessment of forced overtime and the amount of wages cheated.  Nike sits on the board of the Fair Labor Association, something the union had no knowledge of.  We worked with the union to press for a truly independent third party and together we won that as well.  The assessment is now being conducted by the Akatiga Social Research Institute.  This case is potentially worth millions and millions of dollars in back wages to Nike workers at PT Nikomas.  We now wait to see the results of the assessment.

* We are currently preparing reports to present to Nike on two additional factories in Indonesia where workers have been cheated of severance pay and back wages.

* We successfully fought to stop the dumping and burning of Nike shoe rubber in an Indonesian village.  After publishing a report on the dumping and burning of shoe rubber from Nike’s PT ADIS factory, our Indonesian based team returned to the site two months after the fact and it was cleaned up and to date, no new incidents have occurred at this site.

* We conducted more than a dozen small and large group trainings in Indonesia for Nike workers, union leaders and labor-friendly NGOs.  The focus of the majority of these trainings was on the concept of a living wage vs. the minimum wage and on the ideals of fair trade.

* We took part in a panel discussion on the state of labor in Indonesia for the Jakarta Foreign Correspondents Club.  The JFCC is a non-profit organization for international journalists in Indonesia.  The event was attended by more than thirty journalists, staff from Indonesian-based NGOs, and staff from embassies and consulates from a number of countries.

* We met with and have continued to dialogue with the Indonesian Minister of Manpower about the living and working conditions for Nike’s workers in Indonesia.  We are in ongoing discussion about serving the Minister in an official capacity as a special adviser on US affairs and are currently planning a week-long training for Ministry of Manpower staff which we hope to make happen during December 2011.

* We brought our grassroots education program, “Behind the Swoosh: Sweatshops and Social Justice” to almost 40 schools in the United States and Indonesia.  Through these events, we educated thousands of students about our work and our goal to make Nike fair trade.  One of the high points of this year’s education campaign was presenting the keynote address at the Ignatian Family Teach-In for Justice in Washington, DC.  This was an event that brought together more than 1,200 students from Jesuit high schools and colleges from across the nation.  The feedback from this event has been overwhelmingly positive and we look forward to visiting a number of Jesuit schools in 2012 as a result.

* We increased our online supporter base to more than 13,000 people via www.teamsweat.org and www.facebook.com/teamsweat.  Our supporter base now includes people from the United States, Indonesia, Canada, the United Kingdom, the Philippines, Australia, Austria, Malaysia, Germany, Singapore, Japan, France, Italy, Spain, India, New Zealand, Hong Kong, the Netherlands and Turkey.

* We worked with the Associated Press, The Oregonian and the BBC to publish stories on Nike’s labor abuses, some of which circled the globe.  We also self-published dozens of articles, reports and videos on the Huffington Post, on www.teamsweat.org, and on www.facebook.com/teamsweat.

* We submitted a short list of demands to every member of the Nike Board of Directors for consideration at their November meeting.  The list included a request for wage disclosure at all of Nike’s partner factories; a request to have Hannah Jones, Nike VP of Corporate Responsibility, join a Team Sweat research trip to Indonesia in January; and a request to give a 90-minute presentation to members of the Nike Board, as well as the Corporate Responsibility and Sourcing divisions.

Yes!  We got all this done and none of it would have happened without you!

Can you help us keep the momentum going in 2012?

All of the successes listed above hinge on having first person contact with Nike workers.  To ensure that we continue this first person contact, we have planned for and budgeted $18,000 to fund three research trips to Indonesia in 2012.  This amount covers travel, accommodations, staff, meetings, filming, photography, etc.

Can you give Team Sweat an early Christmas gift of $20, $40, $60, $80, $100.. to make 2012 an even more effective year of advocacy in our fight to Make Nike Fair Trade?

You can make a secure donation online right now by clicking DONATE NOW!

If you would rather mail a check, you can make it payable to Educating for Justice and send it to:

Educating for Justice
1201 Third Avenue, Suite A
Spring Lake, NJ 07762

Thanks in advance for your contribution and your ongoing support of Team Sweat!
Peace,

Jim Keady

I have been offered the unique opportunity to present the Nike Board of Directors with a letter for their consideration.  The letter below was submitted yesterday to Ms. Sonya Durkin-Jones, Nike’s Director of Sustainable Manufacturing and Sourcing and will be given to all of the members of the board for their November meeting.   In the spirit of transparency, I am sharing it with you here and I will keep you informed of how Nike responds in the coming weeks.

Peace, Jim Keady

To:                                    Board of Directors, Nike Inc.

From:                                Jim Keady, Director, Educating for Justice Inc.

Re:                                    Workers wages, Hannah Jones, CSR Division

Date:                                October 28, 2011

To the Members of the Board:

I am writing you on behalf of Team Sweat – the international coalition of factory workers, consumers, investors, and athletes who would like to see Nike become a fair trade company.  There are a myriad of issues that I could bring to your attention in this memo, but I will limit myself to three.

#1 WAGES FOR NIKE FACTORY WORKERS

One of the main goals of our campaign is for Nike factory workers to be paid a living wage.  As an example, the current wage for a Nike factory worker in Tangerang, Indonesia is 1.285.000 rupiah per month.  This wage would have to be increased by 300% to bring these Nike workers up to a living wage.  This may sound impossible, but it is not.  The Alta Gracia brand (www.altagraciaapparel.com) currently pays their factory workers 338% of the minimum wage.  If they can do it, so can Nike.Are you aware that in an interview with PBS, Mr. Knight is on the record stating that Nike factory workers are already “absolutely” paid a living wage, “no question about it”?

How does Mr. Knight define a living wage and where is the data upon which he is basing his assertion?

For more than two years I have requested that Nike disclose wage rates at all of your factories around the world so that I might have the raw data to analyze and discuss with you.  To date, Nike has not honored this request.

This seems in contradiction to Nike’s public commitment to transparency set forth in the 2005-2006 Nike Corporate Social Responsibility Report. The report states that:

“Transparency is the first step towards open-source approaches to problem solving.”

In light of the above, I am requesting the following from the Board of Directors.1.    Please publicly disclose the wage rates at all of Nike’s production plants around the world by December 15, 2011.

2.    Please send me Mr. Knight’s definition of a living wage by December 15, 2011.

3.    If the fact of the matter is that Mr. Knight misspoke in stating that Nike factory workers are “absolutely” paid a living wage, “no question about it,” then please issue a public retraction of his statement by December 15, 2011.

#2 DO YOU KNOW WHO HANNAH JONES IS?

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 Hannah Jones, Nike’s Vice President for Sustainable Business and Innovation.

Ms. Jones is the leader of your corporate social responsibility efforts and yet she is unknown to any labor leaders or rank and file workers in a country that is home to more than 30 Nike factories, 140,000 Nike workers and 23% 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 Ms. Jones discusses at the many conferences she speaks at around the nation.  Perhaps Ms. Jones 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 CSR division?

In light of the above, I am requesting the following from the Board of Directors.

1.    Please mandate that Ms. Jones accompany me to Indonesia from January 9-17, 2012 to meet with workers and labor leaders there. This would be similar to the trip that Caitlin Morris, Nike’s former Director of Innovation and Sustainable Business took with me in 2009.  Please let me know if Ms. Jones will be joining me by December 15, 2011 so that preparations can begin in good faith.

2.    If Ms. Jones does make this trip, I also request that our meetings with workers, visits to the factories, etc. be transparent via our being joined by a reporter from the Associated Press.

#3 WHAT EXACTLY DOES YOUR CSR STAFF DO?

As I understand, Nike currently employs approximately 120 people with corporate social responsibility as their primary function or a significant part of their workload.  Nike also spends approximately $30 million dollars annually on corporate social responsibility efforts.Given the work I have done and continue to do Indonesia, and the ongoing violations of Nike’s Code of Conduct and violations of Indonesian law that I find, I am consistently left wondering, “What are you paying these people to do?”

In the past 12 months alone I have alerted Nike to the following:

-       A union busting case at a Nike shoe factory;

-       Wage cheating and forced overtime at a Nike shoe factory;

-       Severance pay issues at a Nike apparel factory;

-       Dumping and burning of scrap shoe rubber from two separate Nike shoe factories;

-       Verbal and physical abuse at a Nike shoe factory.

I am also currently preparing three new cases that need attention and I will soon be sending them to Sonya Durkin-Jones, Nike’s Director of Sustainable Manufacturing and Sourcing.

I am one person, with a budget of about $100,000 for my entire organization and activities.  I also have limited access to workers and factories and at times hostile interference from your local management teams.  Despite this, I am able to find the things that I do.  Again, you have 120 people, a $30 million dollar a year budget, and all the access and cooperation you want or need.  Why do I keep finding what I find? Again, I am left wondering, “What are you paying your CSR people to actually do?”

To give you a sense of the work that I do, work that I believe should be done by Nike’s CSR division, I am providing a recent report (see attached) on the forced overtime/wage cheating case at Nike’s PT Nikomas factory. I documented this case back in February 2011 and we are now finally getting closer to resolution.

In light of the above, I am requesting the following from the Board of Directors.

1.    I would the opportunity to make a 90-minute presentation to the Corporate Responsibility Committee of the Board, as well as the entire CSR and Sourcing Divisions.  I would like to make this presentation at Nike’s Headquarters prior to December 31, 2011.  I also request that this presentation be open to the media.

In conclusion, I would like to thank you for taking the time to read the information I have provided and I look forward to hearing back from you on the requests I have made.  If you have any follow up questions or would like to discuss anything in greater detail, please feel free to call me at 732.988.7322 or email me at jim@educatingforjustice.org.

I look forward to hearing back from you.

Peace,

Jim Keady, Director

Educating for Justice, Inc.

ATTACHMENT

VICTORY AT NIKE’S PT NIKOMAS FACTORY: A LESSON IN PERSISTENCE

On February 22, 2011 I sent an open letter to Nike CEO, Mark Parker detailing allegations of forced overtime and wage cheating at Nike’s PT Nikomas factory in Serang, Indonesia.  I told Mr. Parker that the union leaders at this Nike factory had shared with me that workers were being forced to work overtime off the clock, a practice known as the “jam molor” (hour of delay).

I noted I my report that there were thousands of workers being impacted by this practice, a practice that was a violation of Indonesian law and Nike’s Code of Conduct.  I also noted that this practice had gone on for years unreported and that a quick calculation of the wages owed to workers could be worth tens of millions of dollars.

On February 23, 2001 I received an email from Caitlin Morris, Nike’s former Director of Sustainability and Innovation.  She wrote:

“Thank you for bringing these serious allegations to our attention.  Nike’s Sustainable Manufacturing and Sourcing team are following up in Indonesia with key stakeholders to better understand the situation.  A member of the SMS team will provide you with an update once we’ve had a chance to complete our own investigation.”

On February 28, 2011 I received a phone call from Edward Chang, Director of Sustainable Manufacturing at Pou Chen Nike Division (The Pou Chen group runs PT Nikomas).  Mr. Chang seemed genuinely interested in exploring this issue and we had a lengthy conversation and follow up email exchange.

However, any potential progress I thought might have been made with Mr. Chang was thwarted by what occurred next.

On March 1, 2011 I received an email from Mr. Mike Chen, the Senior Manager at Nikomas.   Mr. Chen’s letter was a bullet point refutation of the information I had shared with Nike USA.  Mr. Chen claimed that:

* There are 23,500 Nike factory workers at PT Nikomas and they produce 1.5 million pairs of Nike shoes per month.  (I was told there were only 18,000 Nike workers.  I was surprised to learn there were more.)

* The daily shifts for workers are 6:30am-2:30pm, 7am-3:00pm, and 7:30am-3:00pm (I think he meant 3:30pm on the end time of that last shift.  This was challenging my statement that the workers’ daily shift was from 7:00am-3:00pm)

* Nikomas’ time clock system shows that their annual overtime hours average 1.5 to 2 hours per day in the peak season and that they do not have workers work over the legal limits for overtime.

* Nikomas has 6,633 sewing workers (I was told there were 13,000.  Again, I was thankful for the correction) and that none of these workers are forced to work overtime, stating, “This does not occur at PT Nikomas.”

* He challenged my claim that workers could be owed up to $5.4 million dollars in overtime wages for last year alone, stating, “These allegations are incorrect. We have not received these allegations from our union or workers.”

Nikomas has a procedure in place that would prevent the forced overtime that I claimed to document.

* He challenged my wage calculation for the fourth hour of overtime, the “jam molor,” stating, “there is no fourth hour (of) overtime.”

* He challenged my claim that workers are being forced to work the “jam molor” six days a week stating, “We would like to advise you that this does not occur at PT Nikomas.”

* He challenged my claim that I was told this information by the leadership from the factory trade union and that this practice of “jam molor” had been happening for 18 years, stating, “This is an incorrect statement. We abide by government labor law, PT. Nikomas’ CBA (Collective Bargaining Agreements) and Nike CLS (Code Leadership Standards). Any issues that arise are investigated and resolved as soon as possible.”

On March 7, 2011 I received a letter from the district Chairman of the Serikat Perkerja Nasional, (SPN) the union representing workers at the factory.  His letter basically stated that all the information I had in my report was incorrect and that the union leadership could not confirm any of the data that I had shared with Nike.  This was despite the fact that he and his colleagues shared all this information with me in a videotaped meeting.  This was disappointing, but understandable, given the dynamics of pressure and fear that permeate these factories.  As I later learned, not surprisingly, the union leaders had been met with significant pressure and intimidation from the factory management for telling me about this.  The management felt that it could have been taken care of “in house” and that there was no need to go to Nike USA with the case.

Over the course of the next few months I received messages weekly, sometimes daily, from rank and file workers that this issue of forced, unpaid overtime, the “jam molor” was indeed happening at PT Nikomas.  I also learned from my contacts that my reporting the issue to Nike USA and the actions of the Nikomas management and the local union leadership were causing quite a stir.

Because of this, I made great efforts to speak with the local union leadership, but to no avail. They were scared and they were dealing with some serious pressure from the factory management.  And, as far as I could determine, they were getting no help from Nike to alleviate this pressure.  In fact, I never heard anything from Nike on this matter beyond the initial email from Caitlin Morris on February 23, 2011.

In June 2011 I returned to Indonesia and was able to meet with some of the district level leaders from SPN.  During our discussion on June 18, 2011 I was told that in response to my February report, the district level leadership had conducted their own research.  They concluded that the allegations I had reported to Nike in February were true and that the matter was now going to be addressed by the national leadership of SPN.

On June 30, 2011 I sent an email to Catlin Morris at Nike USA about a number of issues I had unearthed during my visit to Indonesia, most importantly the situation at PT Nikomas.  I wrote:

I am writing to follow up on your email of February 23, 2011 (below).  Has Nike’s SMS team researched the “jam molor” (forced overtime) issue at PT Nikomas?  If so, what were the findings of your team?  In my recent visit to Indonesia I have been brought to believe that the allegations I presented Nike with on this issue back in February were accurate.  I have also been notified by Pak Bambang, the Chairman of SPN’s national committee (the union representing the majority of Nike’s Nikomas workers) that they have just commenced their own investigation into this matter.

On June 30, 2011 I received a reply from Caitlin Morris. Nowhere in the email did she discuss the situation at Nikomas or answer any of the questions I had raised about the situation at Nikomas.  She did share with me information on two other cases and she let me know that she was moving to a new position at Nike and that further inquires on these issues should be sent to Sonya Durkin-Jones, Director of Issues Management.

On July 12, 2011 I wrote to Ms. Durkin-Jones.

I assume you are aware of the forced overtime (“jam molor”) issue at PT Nikomas.  On February 23, 2011, Caitlin wrote me saying… “Thank you for bringing these serious allegations to our attention.  Nike’s Sustainable Manufacturing and Sourcing team are following up in Indonesia with key stakeholders to better understand the situation.  A member of the SMS team will provide you with an update once we’ve had a chance to complete our own investigation.”

On June 30, 2011 I wrote Caitlin and said, “Has Nike’s SMS team researched the “jam molor” (forced overtime) issue at PT Nikomas?  If so, what were the findings of your team?  In my recent visit to Indonesia I have been brought to believe that the allegations I presented Nike with on this issue back in February were accurate.  I have also been notified by Pak Bambang, the Chairman of SPN’s national committee (the union representing the majority of Nike’s Nikomas workers) that they have just commenced their own investigation into this matter.”An answer by Caitlin to this June 30th follow up about the situation at PT Nikomas was noticeably absent from her email of July 8th.  Can you please answer these questions for me with regard to PT Nikomas and the forced overtime allegations?

Later that day, Ms. Durkin-Jones wrote me back.

I will regroup with the Nike field teams on your outstanding questions… and get back to you this week.

On July 17, 2011 I received the following from Ms. Durkin-Jones.

Finally, I would like to provide you with an update on PT Nikomas and allegations of forced overtime there.  Since our last update, we have communicated with the local union who had no recent complaints of such activity. However, our subsequent follow-up with district level union members has revealed information we feel needs further attention. We will be working with PT Nikomas management, the Trade Union and our local teams to address any findings.

On August 10, 2011 I sent Ms. Durkin-Jones the following.

With regard to the situation at PT Nikomas, what is the information that the district level union members shared with you?  I have been reading posts on worker forums as recent as Sunday about the continuation of forced overtime.  I did see one post that mentioned Nike’s new “home on time” policy.  Can you please verify if this is an actual policy and if it is, can you please share the details?  Also, if the allegations of forced overtime at Nikomas are accurate, what measures will Nike take to ensure that your workers are justly compensated for the hours they worked off the clock?

On August 11, 2011 I received the following from Ms. Durkin-Jones.

We do not have a “home on time” policy, but it is absolutely Nike policy that all workers in our contracted supply chain are paid for all time worked and choose whether or not to do overtime. Following the allegations of unpaid overtime at PT Nikomas, we are currently in the final stages of dialogue with the Pou Chen Group about the findings from the joint Trade Union-Nike investigation and I hope to come back to you in the near future with our findings.

I returned to Indonesia in September and on September 6, 2011, I met with Bambang Wirayhoso, the national chairman of SPN, as well as a number of the top national officers of the union.During our meeting I was told that on July 25-26, 2011, Nike, in collaboration with the SPN national union, sent two teams to PT Nikomas.  One team was sent in officially and a second team was sent in undercover.  It was reported to me that both of these teams found that the forced overtime was in fact happening.  They also found that workers were being forced to pay bribes to gain employment and that supervisors were verbally abusive to workers.

Now it was an established fact that Nike workers were cheated out of millions of dollars in overtime pay (potentially tens of millions).

On September 8, 2011, the national leadership of SPN met with the local management at Nikomas to discuss how to resolve the case and get these Nike workers the justice they deserve.

On September 13, 2011 I received a letter from Mr. Bruce Shih, the Director of PT Nikomas.  The letter stated in part:

As you are aware, we recently were informed of numerous complaints from employees at our PT Nikomas Gemilang IY plant regarding unfair labor practices, which include charges such as abusive language and behavior, as well as grievances associated with overtime pay.  We take such allegations seriously and launched an investigation into these reports.  To ensure objectivity, we also employed a third party to conduct an independent audit of labor practices at the manufacturing plant.

We deeply regret that the company’s preliminary investigation found merit to the allegations and we take responsibility for the actions made by some of our supervisors/managers.  Our first priority is to protect the rights of our employees and take decisive action to rectify their grievances.

Finally!

Mr. Shih then went on to list the points of the remediation plan, which included:

* Corrective Action: Implement code of conduct with zero tolerance for non-adherence to policies;

* Overtime: Commissioned a third party to evaluate overtime situation. Based on third party’s finding, the plant is committed to working with the Union to resolve the overtime discrepancy issue in accordance with Indonesian Labor Law;

* Training: Implement training programs for the local management team that include cultural sensitivity, respectful supervisory skills, team leadership and human resource management;

* Task Force: Develop a task force to rectify grievances, create a more robust grievance procedure, and update other human resource practices where appropriate;

* Third Party Review: Engage a third party accredited by the Fair Labor Association (FLA) to review plans, conduct employee satisfaction surveys, and report on results;

* Communication: Communicate these plans to employees and customers.

On September 14, 2011 I received an email from Sonya Durkin-Jones stating:

At Nike, we feel that the decisive actions taken by Pou Chen at their PT Nikomas Gemilang IY plant clearly demonstrate how seriously they are taking the recent allegations of worker abuse.  Nike commends the plant on their action plan and efforts to correct inadequacies in current policies designed to protect the rights of workers in their factories… We will continue to monitor and support their efforts to remediate the situation.

On September 30, 2011 I sent an email to Mr. Shih (Nikomas), and I copied Ms. Durkin-Jones and Pak Bambang (SPN).Mr. Shih,

I am writing to thank you for your letter of September 13th and I am happy that things are now moving in the right direction with regard to addressing the violations of workers’ rights at PT Nikomas.  I do have one question and one concern with regard to the items you listed in your plan of action.

You stated that you “Commissioned a third party to evaluate overtime situation.  Based on third party’s finding, the plant is committed to working with the Union to resolve the overtime discrepancy issue in accordance with Indonesian Labor Law.”   Can you please tell me who the third party is that was chose to evaluate the overtime situation?

You also stated that you have committed to engaging “a third party, accredited by the Fair Labor Assocation (FLA) to review plans, conduct employee satisfaction surveys, and report on results.”

I must state emphatically that I hope that the leadership at SPN will reconsider agreeing to this point and that you will allow a TRULY independent organization to provide a third party for oversight.  The Fair Labor Association is NOT an independent body.  The FLA was an offshoot of the Apparel Industry Partnership and both groups have been dominated and controlled by the major brands, including Nike.  If the FLA were truly functioning in way that they (and Nike) claim, it would not have taken me to unearth the jam molor issue at PT Nikomas.  I could go on at length on this matter, and I will if you need more information, but simply stated, I do not trust the Fair Labor Association in this or any capacity and I will strongly encourage SPN to renegotiate this point.

In closing, I want to reiterate that I am very happy that we are making progress on this matter and I look forward to hearing back from you soon.Peace, JWK

To date, I have not received a reply.

CONCLUSIONS

1.    It is clear from this case that we cannot currently trust Nike, the factories or the Fair Labor Association to monitor these kinds of issues.  If they were effective in their monitoring, they would have unearthed this issue well before I did.  Nike has a Corporate Responsibility division of 120 employees with a budget of $30,000,000.00 and complete open access to every Nike factory.  I am a one-man operation with a $100,000 a year budget and limited access to Nike’s factories and management teams.

2.    It is clear that we cannot trust Nike or the factories to provide us with honest information at the outset.  It was only after pushing this issue and working with the district level and national level union that real traction was gained to get Nike and the factory to admit to the truth about the allegations.

3.    While the admission by the factory and Nike that they “found merit to the allegations” and that they will “take decisive action to rectify their grievances” is a victory in itself, this case will not be truly won until a check is written and these Nike workers receive the money they have been cheated out of for years.

Below is a detailed reporting of the recent victory we won at Nike’s PT Nikomas factory in Serang, Indonesia on the issue of “jam molor” (unpaid, forced overtime).  This was an eight month long fight and there is still work to be done, but we can and should celebrate what we have accomplished thus far.

Please check out the report and share it.  I think this is a particularly good piece for college students to share with their business professors.

Peace, Jim Keady

Jim Keady meeting with union leaders from PT Nikomas

REPORT: NIKE’S PT NIKOMAS FACTORY AND “JAM MOLOR”

On February 22, 2011 I sent an open letter to Nike CEO, Mark Parker detailing allegations of forced overtime and wage cheating at Nike’s PT Nikomas factory in Serang, Indonesia.  I told Mr. Parker that the union leaders at this Nike factory had shared with me that workers were being forced to work overtime off the clock, a practice known as the “jam molor” (hour of delay).

I noted I my report that there were thousands of workers being impacted by this practice, a practice that was a violation of Indonesian law and Nike’s Code of Conduct.  I also noted that this practice had gone on for years unreported and that a quick calculation of the wages owed to workers could be worth tens of millions of dollars.

On February 23, 2001 I received an email from Caitlin Morris, Nike’s former Director of Sustainability and Innovation.  She wrote:

“Thank you for bringing these serious allegations to our attention.  Nike’s Sustainable Manufacturing and Sourcing team are following up in Indonesia with key stakeholders to better understand the situation.  A member of the SMS team will provide you with an update once we’ve had a chance to complete our own investigation.”

On February 28, 2011 I received a phone call from Edward Chang, Director of Sustainable Manufacturing at Pou Chen Nike Division (The Pou Chen group runs PT Nikomas).  Mr. Chang seemed genuinely interested in exploring this issue and we had a lengthy conversation and follow up email exchange.

However, any potential progress I thought might have been made with Mr. Chang was thwarted by what occurred next.

On March 1, 2011 I received an email from Mr. Mike Chen, the Senior Manager at Nikomas.   Mr. Chen’s letter was a bullet point refutation of the information I had shared with Nike USA.  Mr. Chen claimed that:

• There are 23,500 Nike factory workers at PT Nikomas and they produce 1.5 million pairs of Nike shoes per month.  (I was told there were only 18,000 Nike workers.  I was surprised to learn there were more.)

• The daily shifts for workers are 6:30am-2:30pm, 7am-3:00pm, and 7:30am-3:00pm (I think he meant 3:30pm on the end time of that last shift.  This was challenging my statement that the workers’ daily shift was from 7:00am-3:00pm)

• Nikomas’ time clock system shows that their annual overtime hours average 1.5 to 2 hours per day in the peak season and that they do not have workers work over the legal limits for overtime.

• Nikomas has a procedure in place that would prevent the forced overtime that I claimed to document.

• Nikomas has 6,633 sewing workers (I was told there were 13,000.  Again, I was thankful for the correction) and that none of these workers are forced to work overtime, stating, “This does not occur at PT Nikomas.”

• He challenged my wage calculation for the fourth hour of overtime, the “jam molor,” stating, “there is no fourth hour (of) overtime.”

• He challenged my claim that workers are being forced to work the “jam molor” six days a week stating, “We would like to advise you that this does not occur at PT Nikomas.”

• He challenged my claim that workers could be owed up to $5.4 million dollars in overtime wages for last year alone, stating, “These allegations are incorrect. We have not received these allegations from our union or workers.”

• He challenged my claim that I was told this information by the leadership from the factory trade union and that this practice of “jam molor” had been happening for 18 years, stating, “This is an incorrect statement. We abide by government labor law, PT. Nikomas’ CBA (Collective Bargaining Agreements) and Nike CLS (Code Leadership Standards). Any issues that arise are investigated and resolved as soon as possible.”

On March 7, 2011 I received a letter from the district Chairman of the Serikat Perkerja Nasional, (SPN) the union representing workers at the factory.  His letter basically stated that all the information I had in my report was incorrect and that the union leadership could not confirm any of the data that I had shared with Nike.  This was despite the fact that he and his colleagues shared all this information with me in a videotaped meeting.  This was disappointing, but understandable, given the dynamics of pressure and fear that permeate these factories.  As I later learned, not surprisingly, the union leaders had been met with significant pressure and intimidation from the factory management for telling me about this.  The management felt that it could have been taken care of “in house” and that there was no need to go to Nike USA with the case.

Over the course of the next few months I received messages weekly, sometimes daily, from rank and file workers that this issue of forced, unpaid overtime, the “jam molor” was indeed happening at PT Nikomas.  I also learned from my contacts that my reporting the issue to Nike USA and the actions of the Nikomas management and the local union leadership were causing quite a stir.

Because of this, I made great efforts to speak with the local union leadership, but to no avail.  They were scared and they were dealing with some serious pressure from the factory management.  And, as far as I could determine, they were getting no help from Nike to alleviate this pressure.  In fact, I never heard anything from Nike on this matter beyond the initial email from Caitlin Morris on February 23, 2011.

In June 2011 I returned to Indonesia and was able to meet with some of the district level leaders from SPN.  During our discussion on June 18, 2011 I was told that in response to my February report, the district level leadership had conducted their own research.  They concluded that the allegations I had reported to Nike in February were true and that the matter was now going to be addressed by the national leadership of SPN.

On June 30, 2011 I sent an email to Catlin Morris at Nike USA about a number of issues I had unearthed during my visit to Indonesia, most importantly the situation at PT Nikomas.  I wrote:

I am writing to follow up on your email of February 23, 2011 (below).  Has Nike’s SMS team researched the “jam molor” (forced overtime) issue at PT Nikomas?  If so, what were the findings of your team?  In my recent visit to Indonesia I have been brought to believe that the allegations I presented Nike with on this issue back in February were accurate.  I have also been notified by Pak Bambang, the Chairman of SPN’s national committee (the union representing the majority of Nike’s Nikomas workers) that they have just commenced their own investigation into this matter.

On June 30, 2011 I received a reply from Caitlin Morris.  Nowhere in the email did she discuss the situation at Nikomas or answer any of the questions I had raised about the situation at Nikomas.  She did share with me information on two other cases and she let me know that she was moving to a new position at Nike and that further inquires on these issues should be sent to Sonya Durkin-Jones, Director of Issues Management.

On July 12, 2011 I wrote to Ms. Durkin-Jones.

I assume you are aware of the forced overtime (“jam molor”) issue at PT Nikomas.  On February 23, 2011, Caitlin wrote me saying… “Thank you for bringing these serious allegations to our attention.  Nike’s Sustainable Manufacturing and Sourcing team are following up in Indonesia with key stakeholders to better understand the situation.  A member of the SMS team will provide you with an update once we’ve had a chance to complete our own investigation.”

On June 30, 2011 I wrote Caitlin and said, “Has Nike’s SMS team researched the “jam molor” (forced overtime) issue at PT Nikomas?  If so, what were the findings of your team?  In my recent visit to Indonesia I have been brought to believe that the allegations I presented Nike with on this issue back in February were accurate.  I have also been notified by Pak Bambang, the Chairman of SPN’s national committee (the union representing the majority of Nike’s Nikomas workers) that they have just commenced their own investigation into this matter.”

An answer by Caitlin to this June 30th follow up about the situation at PT Nikomas was noticeably absent from her email of July 8th.  Can you please answer these questions for me with regard to PT Nikomas and the forced overtime allegations?

Later that day, Ms. Durkin-Jones wrote me back.

I will regroup with the Nike field teams on your outstanding questions… and get back to you this week.

On July 17, 2011 I received the following from Ms. Durkin-Jones.

Finally, I would like to provide you with an update on PT Nikomas and allegations of forced overtime there.  Since our last update, we have communicated with the local union who had no recent complaints of such activity. However, our subsequent follow-up with district level union members has revealed information we feel needs further attention. We will be working with PT Nikomas management, the Trade Union and our local teams to address any findings.

On August 10, 2011 I sent Ms. Durkin-Jones the following.

With regard to the situation at PT Nikomas, what is the information that the district level union members shared with you?  I have been reading posts on worker forums as recent as Sunday about the continuation of forced overtime.  I did see one post that mentioned Nike’s new “home on time” policy.  Can you please verify if this is an actual policy and if it is, can you please share the details?  Also, if the allegations of forced overtime at Nikomas are accurate, what measures will Nike take to ensure that your workers are justly compensated for the hours they worked off the clock?

On August 11, 2011 I received the following from Ms. Durkin-Jones.

We do not have a “home on time” policy, but it is absolutely Nike policy that all workers in our contracted supply chain are paid for all time worked and choose whether or not to do overtime. Following the allegations of unpaid overtime at PT Nikomas, we are currently in the final stages of dialogue with the Pou Chen Group about the findings from the joint Trade Union-Nike investigation and I hope to come back to you in the near future with our findings.

I returned to Indonesia in September and on September 6, 2011, I met with Bambang Wirayhoso, the national chairman of SPN, as well as a number of the top national officers of the union.

During our meeting I was told that on July 25-26, 2011, Nike, in collaboration with the SPN national union, sent two teams to PT Nikomas.  One team was sent in officially and a second team was sent in undercover.  It was reported to me that both of these teams found that the forced overtime was in fact happening.  They also found that workers were being forced to pay bribes to gain employment and that supervisors were verbally abusive to workers.

Now it was an established fact that Nike workers were cheated out of millions of dollars in overtime pay (potentially tens of millions).

On September 8, 2011, the national leadership of SPN met with the local management at Nikomas to discuss how to resolve the case and get these Nike workers the justice they deserve.

On September 13, 2011 I received a letter from Mr. Bruce Shih, the Director of PT Nikomas.  The letter stated in part:

As you are aware, we recently were informed of numerous complaints from employees at our PT Nikomas Gemilang IY plant regarding unfair labor practices, which include charges such as abusive language and behavior, as well as grievances associated with overtime pay.  We take such allegations seriously and launched an investigation into these reports.  To ensure objectivity, we also employed a third party to conduct an independent audit of labor practices at the manufacturing plant.

We deeply regret that the company’s preliminary investigation found merit to the allegations and we take responsibility for the actions made by some of our supervisors/managers.  Our first priority is to protect the rights of our employees and take decisive action to rectify their grievances.

Finally!

Mr. Shih then went on to list the points of the remediation plan, which included:

• Corrective Action: Implement code of conduct with zero tolerance for non-adherence to policies;

• Overtime: Commissioned a third party to evaluate overtime situation. Based on third party’s finding, the plant is committed to working with the Union to resolve the overtime discrepancy issue in accordance with Indonesian Labor Law;

• Training: Implement training programs for the local management team that include cultural sensitivity, respectful supervisory skills, team leadership and human resource management;

• Task Force: Develop a task force to rectify grievances, create a more robust grievance procedure, and update other human resource practices where appropriate;

• Third Party Review: Engage a third party accredited by the Fair Labor Association (FLA) to review plans, conduct employee satisfaction surveys, and report on results;

• Communication: Communicate these plans to employees and customers.

On September 14, 2011 I received an email from Sonya Durkin-Jones stating:

At Nike, we feel that the decisive actions taken by Pou Chen at their PT Nikomas Gemilang IY plant clearly demonstrate how seriously they are taking the recent allegations of worker abuse.  Nike commends the plant on their action plan and efforts to correct inadequacies in current policies designed to protect the rights of workers in their factories…  We will continue to monitor and support their efforts to remediate the situation.

On September 30, 2011 I sent an email to Mr. Shih (Nikomas), and I copied Ms. Durkin-Jones and Pak Bambang (SPN).

Mr. Shih,

I am writing to thank you for your letter of September 13th and I am happy that things are now moving in the right direction with regard to addressing the violations of workers’ rights at PT Nikomas.  I do have one question and one concern with regard to the items you listed in your plan of action.

You stated that you “Commissioned a third party to evaluate overtime situation.  Based on third party’s finding, the plant is committed to working with the Union to resolve the overtime discrepancy issue in accordance with Indonesian Labor Law.”

Can you please tell me who the third party is that was chose to evaluate the overtime situation?

You also stated that you have committed to engaging “a third party, accredited by the Fair Labor Assocation (FLA) to review plans, conduct employee satisfaction surveys, and report on results.”

I must state emphatically that I hope that the leadership at SPN will reconsider agreeing to this point and that you will allow a TRULY independent organization to provide a third party for oversight.  The Fair Labor Association is NOT an independent body.  The FLA was an offshoot of the Apparel Industry Partnership and both groups have been dominated and controlled by the major brands, including Nike.  If the FLA were truly functioning in way that they (and Nike) claim, it would not have taken me to unearth the jam molor issue at PT Nikomas.  I could go on at length on this matter, and I will if you need more information, but simply stated, I do not trust the Fair Labor Association in this or any capacity and I will strongly encourage SPN to renegotiate this point.

In closing, I want to reiterate that I am very happy that we are making progress on this matter and I look forward to hearing back from you soon.

Peace, JWK

To date, I have not received a reply.

CONCLUSIONS

1. It is clear from this case that we cannot trust Nike, the factories or the Fair Labor Association to monitor these kinds of issues.  If they were effective in their monitoring, they would have unearthed this issue well before I did.  Nike has a Corporate Responsibility division of 120 employees with a budget of $30,000,000.00 and complete open access to every Nike factory.  I am a one-man operation with a $100,000 a year budget and limited access to Nike’s factories and management teams.
2. It is clear that we cannot trust Nike or the factories to provide us with honest information at the outset.  It was only after pushing this issue and working with the district level and national level union that real traction was gained to get Nike and the factory to admit to the truth about the allegations.
3. While the admission by the factory and Nike that they “found merit to the allegations” and that they will “take decisive action to rectify their grievances” is a victory in itself, this case will not be truly won until a check is written and these Nike workers receive the money they have been cheated out of for years.

Hey Nike Workers!

Did you know that last year was a good year for Nike CEO, Mark Parker?  Yes, it was a VERY good year.

The April 10, 2011 edition of the NY Times reported that Mr. Parker’s total compensation for fiscal year 2010 was $13,118,834.00.

If we divide that number by 365 days, that means that Mr. Parker averaged $35,942.00 in pay per day in 2010.

He was paid $35,942 per day and he never had to work a hot press or operate a sewing machine to meet the production targets.  He was paid $35,942 per day and he was never screamed at by his supervisors to meet the production targets.  He was paid $35,942 per day and he never had to throw his exhausted body on a thin mat on a cement floor after working a full shift, plus overtime, to meet the production targets.

Is that fair?

Do you know how Mr. Parker makes his millions of dollars each year?

He sells Nike shoes, Nike apparel and Nike equipment.

And who makes all the Nike shoes, Nike apparel and Nike equipment?

That’s right, you do!

I would say that makes you very important to Nike.  Do you see how without you and your hard work, Nike can make no money?

Do you feel like Nike pays you like you are very important?

They sure pay Mr. Parker like he’s important.

The $13,118,834.00 compensation that Mr. Parker made in 2010 was an 84% increase from what he made the year before.  An 84% increase is a lot of money!

The basic wage for a Nike worker in Tangerang was 1.243.000RP in 2010.  Could you imagine if Nike workers wages increased 84% like Mr. Parker’s?

Now is the time for Nike workers to fight to Make Nike Fairtrade and get yourselves the wages you deserve!

Peace, Jim Keady

I spent the early part of today on the hunt for Nike scrap shoe rubber.  For those of you familiar with my work, you know that I have been engaging Nike on this issue for more than a decade.  For years, scrap shoe rubber from Nike factories in Indonesia was being dumped and burned in villages, releasing horrible toxins into the air, soil and water table.  In 2009, Nike created their “Footwear Waste Management System” that was to be put in place at all of their shoe factories.  Within months of the system being put in place, I was given a tour of three footwear facilities and shown how it was being implemented.  I took a “we’ll see” approach.  Needless to say, I found scrap shoe rubber being dumped and burned within six months of my factory tours.  You can see the pictures of the burning Nike rubber here: http://www.huffingtonpost.com/jim-keady/the-dumping-and-burning-o_b_643763.html

In 2008, Nike also announced their “Considered Design” initiative.  Mark Parker, CEO of Nike Inc., made bold statements about the significance of Considered Design.  He said, “I see unlimited possibility with Considered and the potential for us to be a game changer. It is helping us to be a better, more responsible, more profitable company. I envision a time when all our products are closed loop using sustainable, low carbon design.”

If you look on Nike’s website, they share the following about Considered Design.

Considered Design is Nike’s ongoing commitment to design without compromise – either to performance or the planet. It is a continually progressing standard, applied every day to everything we do.

As an ever-evolving standard for both innovation and sustainability, it’s applied every day and to everything we do. By continually raising that standard, we envision a future where the shoes you wear today become the shoes, shirts or equipment you use tomorrow. This “closed loop” manufacturing process, where nothing is wasted and everything is kept in play, is not just wishful thinking, it’s the future.

To reflect our commitment, Nike has established company-wide targets for Considered Design.  By 2011 all Nike footwear newly developed, coming out of U.S. headquarters will meet or exceed Considered Design baseline standards.

In implementing the Considered Design program, Nike made the following commitment on waste reduction.

At Nike, waste is any product or material used in the supply chain that does not ultimately end up in somebody’s closet.  Considered design seeks ways to prevent the initial creation of waste, and where unavoidable, find ways to recycle and reuse.

Well…  Here is what I found today.

Speaking with Nike apparel workers

Today I met with workers who are producing apparel for Nike – “jackets worn by soccer coaches” as I was told.  Of course this hit close to home and I thought of the dozens and dozens of coaching friends of mine who don those jackets during the fall and winter months.  The women I spoke with are employed at a production plant with approximately 4,000 workers.  They work Monday to Friday, sometimes Saturday.  Their workday starts at 7am and officially ends at 4pm, but there is usually 2 hours of overtime everyday.  They are given one meal at the factory, but the quality is always bad and workers consistently complain.  There are buses provided for transportation, but the bus routes do not run to some areas and workers are not given transportation allowances.

One of the workers I spoke with explained her job on the production line.  Hour after hour, she sews closed the seams of jackets and then sews the standard black and red Nike label into the lower inside of the jacket liners.  She has been doing this tedious work for eight years now.  Three years ago, her production quota was 40 pieces per hour.  It is now 60 pieces per hour.  I asked her how she gets 20 more pieces done – “I just work faster.”  I asked her if it is difficult to meet the target and if she felt any stress.  “Stress cannot describe what I feel,” she replied.

I asked her if she knew who was responsible for setting the production targets.  She said, “the management.”  I told her, “No.  It is Nike.”  I told her that Nike places the order, that Nike sets the delivery date, and that Nike sets the price.  She sat for a moment and took in this new information.  I could see the wheels in motion in her mind behind a distant look she had in her eyes.  When she spoke, she said, “Now I understand the cycle of oppression.  Nike puts pressure on the management, the management puts pressure on the supervisors, and the supervisors put pressure on us.”  I smiled and quietly replied, “Yes, that is the cycle.”

Now for her part in helping Nike generate more than $20,000,000,000.00 in annual revenues, she is paid the minimum wage, Rp.1.280.000 ($150) per month.  She told me it is not nearly enough for her to meet her basic needs.  “We would need three times the minimum wage to have a decent life,” she shared.

I have heard this lament before from workers, hundreds of times.  When I do, it always makes me remember the public statements of Nike Chairman, Phil Knight and former Nike Director, Vada Manager.  Knight was asked by a reporter from PBS if he felt that his factory workers were making a living wage, “Absolutely,” he opined, “no question about it.”  Mr. Manager is on the record saying, “We (Nike) have a code that applies globally and that provides for wages that far surpass regional or national minimums.”

Workers absolutely making living wages.

Workers making wages that far surpass the minimum wage.

As the Indonesians would say…  “Bohong!”  (a big lie)

And thus, the fight continues.

Peace, Jim Keady

Pak Bambang, Chairman SPN

Today I met with the Chairman and Officers from the Serikat Pekerja Nasional (SPN).  The SPN trade union represents tens of thousands of workers from seven of Nike’s Indonesian factories.  The majority of our discussion focused on the issue of forced overtime (jam molor) at PT Nikomas, Nike’s largest shoe factory in Indonesia.

I documented this violation of Nike’s Code of Conduct and Indonesian labor law back in February 2011.  You can read my initial report at:

In response to the publishing of my February report, the management at Nikomas put significant pressure on the union leaders at the factory.  This pressure led to the factory union sending me a letter to retract the information they had initially shared with me.  The management at Nikomas also sent me a letter saying that all of the facts I had published were incorrect and that there was no forced overtime at PT Nikomas.

When I visited Indonesia in June 2011, I followed up on this case with the district level leadership from SPN.  They had conducted their own investigation in response to my report.  In my discussion with them, they corroborated the facts that I document in February.

I shared this fact with Nike and was told by Nike USA that they would follow up on the case.

Today during my meeting with the SPN leadership, I was told that on July 25-26th, Nike, in collaboration with the SPN national union, sent two teams to PT Nikomas.  One team was sent in officially and a second team was sent in undercover.  It was reported to me that both of these teams found that the forced overtime was in fact happening.  They also found that workers were being forced to pay bribes to gain employment and that supervisors were verbally abusive to workers.

It is now an established fact that Nike workers were cheated out of millions of dollars in overtime pay (potentially tens of millions).  On Thursday of this week, the national leadership of SPN will be meeting with the local management to discuss how to resolve the case and get these Nike workers the justice they deserve.

I have also been told by Nike USA that they will be share their official report on this matter with me by the end of this week.

I will update you further when new information on this case emerges.

Peace, Jim Keady

Team Sweat:

I want to share with you an example of the type of advocacy I do on behalf of Nike’s Indonesian workers. It is this kind of engagement with Nike over the years that has won us victories small and large. Since this is an ongoing case and the workers do not yet want to go public, I have changed the name of the factory and the union in the copy below. What you will read is a letter I sent to Nike CEO, Mark Parker on August 23rd. I have already heard back from Nike in response to this letter and I was assured that I would receive their official position on this matter not too soon after the Labor Day holiday.

Peace, Jim Keady

——————–

Dear Mark,

I am writing with regard to “Factory A”, an apparel factory in Indonesia that has produced Nike products. This factory is not on your May 2011 factory disclosure list, but it was on your April 2008 list and as far as I have been able to determine, it is still producing Nike products.

On Wednesday, June 15, 2011 I met with representatives from the union at “Factory A.” The allegations they shared with me about the conduct of the management at the factory as well as the conduct of Nike’s CSR team are somewhat disturbing. I had previously met with these union representatives in June 2009 along with members of Nike’s CSR team (this was the trip on which Caitlin Morris accompanied me).

Here are the facts as the union officials gave them to me:

* After the June 2009 meeting, “Yani”, a member of Nike’s CSR staff in Indonesia, did a site visit to “Factory A” to see if Nike’s Code of Conduct was being adhered to.

* During “Yani’s” visit, the union officials reported the following violations to her: management engaging in union busting; management yelling at workers on the production lines (calling workers names like “dog”); management throwing materials at workers; and management not paying workers for overtime hours worked.

* The union officials report that after “Yani’s” visit, Nike USA pulled the orders from “Factory A.”

* The union officials report that in response to this, the management told the workers that this happened because the union reported violations to Nike. The management made an announcement to the all production line workers, saying, “We are no longer producing for Nike, because (the union) talked too much to the buyer.”

* A member of the union called “Yani” to discuss this. When “Yani” answered, she said, “Sorry, you have the wrong number.”

* The union officials report that in November 2010, Nike reinstated orders at the factory.

* The union officials report that “Factory A” is currently producing tracksuits for Nike. The minimum daily production target is 1,100 pieces per line. There are five lines at the factory with 100 operators on each line.

* If the operators do not meet the daily production target, the line has to stay to meet the target. Almost everyday, one or two of the lines cannot meet the target. The operators on these lines stay for a minimum of 30 minutes to one hour and they are not being paid for the extra time they are working.

* The union officials report that since January 2010 until today, workers are having insurance and pension payments deducted from their paychecks, but the money is not being paid to the insurance company to cover their policy, nor is it going to their pension plans.

* The union officials are particularly concerned about union busting. The management recognizes the existence of the union, but they have no office at the factory. When the union asks to sit at the bargaining table, management refuses. When they are invited to trainings, they are given permission, but no payment for the day.

* If women are taking their menstrual leave, they are not being paid as guaranteed by law.

In light of these allegations I have the following questions:

1. Is “Factory A” currently producing tracksuits for Nike as the union alleges? If they are, why is the factory not on the May 2011 factory disclosure list?

2. Are the facts about “Yani’s” visit to the factory, Nike pulling orders, and the management blaming workers accurate? If these facts are accurate, how do you plan on gathering information in the future? These workers trusted the process that Nike provided (I was there to witness the beginning of this process) only to be penalized for their honesty by having orders cut and by being publicly chastised by the management.

3. If workers have been cheated of wages for overtime hours worked, what will Nike do to ensure that they are paid the monies they are owed and guarantee that this overtime wage cheating does not happen in the future?

4. If one or more production lines at the factory are not meeting the daily production targets, it seems clear that the source of the problem is in Beaverton with your sourcing team and the unrealistic demands they are placing on the factory. What actions will be taken to address this?

5. Can Nike intervene to help the union get an office at the factory to conduct their activities?

6. If women workers have not been paid as they should during their menstrual leave, what will Nike do to ensure that they are paid the monies they are owed and guarantee that this lack of payment does not happen in the future?

I thank you for taking the time to read this report and I request a written response to the questions above by Monday, September 5, 2011.

Peace, JWK