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Spotlight on Nike |
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[Prepatory meeting] [Session1]
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Nike, the sports shoe company, has adopted its own code of conduct. Nike says that its business is based on "trust, teamwork, honest and mutual respect" and it expects its business partners to operate on the same principles. Its code includes respect for local regulations on minimum wages, child labour, health and safety, worker insurance, equal opportunity, the environment and other conditions. With the spotlight still on it, in October 1996 Nike set up a special Labour Practices Department to show its "ongoing commitment to have products made only in the best working conditions in the sports and fitness industry".
Almost all of the 90 million shoes that Nike sells every year world-wide are produced by 75 000 workers in Asia, mostly young women, all working for sub-contractors.
In spite of the companys code, in Indonesia it was found that four of the six factories producing Nike shoes did not even pay the country's daily minimum wage of US$1,20. Sadisah was a Nike production worker in Indonesia until she was sacked in 1992 for helping to organise her fellow workers. Sadisah said "Our company did not pay minimum wages, nor did it meet other regulations such as a ban on wage deductions for meals". At least three of the contractors were using child labour.
A US union researcher working in Indonesia said, "We perhaps naively thought that Nike would treat its workers better than local firms. In fact the arrival of Nike and other shoe industry TNCs made matters worse by turning the minimum wage into the maximum available".
When asked about strikes and military harassment in its supplier factories, Nike's manager in Indonesia said, "I don't know that I need to know". The US union researcher concluded, "Nike's code of conduct contradicts its strategy in Asia of setting contractors in competition with each other to keep costs down".
Nike is against any independent monitoring of its code. But monitoring will happen anyway. Indonesian campaigners have formed the Sports Shoe Workers Council to report on Nikes practices there.
A pair of shoes selling in the USA for US$150 has a direct labour cost of only US$4.90. With such a margin Nike profits in 1995-96 alone were US$553.2 million. In contrast to the poverty wages paid to Asian workers, Nike pays the Olympic champion runner Michael Jordan US$20 million a year to promote its products.
Nike Chief Philip Knight is one of the worlds richest men. In a letter to Nike shareholders in 1996 he said that the reason for Nike moving into such a repressive country as Indonesia was because the US State Department asked them to. He quoted a US State Department official as saying, "Nikes presence in that part of the world is American foreign policy in action".
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