Nike Bounces Back

by Carolyn Wu | 5/10/02 5:00am

Last month, Jim Keady and Leslie Kretzu presented "Starving for the Swoosh" at Dartmouth College. The presentation was about their experiences in Indonesia. They raise some pretty serious issues, albeit from their admittedly Western perspective. Nike encourages the Dartmouth community to keep an open mind and explore both sides of the issues they discuss.

To spark that discussion, we invite you to read a study conducted by graduate students of Dartmouth's own Amos Tuck School of Business (found at www.nikebiz.com/labor/research.shtml) and we would like to offer the following information on Nike's corporate responsibility initiatives in Indonesia and throughout the world.

Mr. Keady claims that the Tuck study "undermines the credibility of the university." Nike suggests that students decide for themselves. The Tuck students, who conducted the research on site in Indonesia and Vietnam, provided the following summary observations:

  1. Given the employment opportunities available in Vietnam and Indonesia, Nike contract factories offer an economically attractive alternative for entry-level workers.

  2. Nike contract factory jobs provide workers a consistent stream of income in contrast to alternatives such as farming or shop keeping.

  3. There are significantly more applicants than jobs available.

Let us be clear: Nike does not operate or condone sweatshops. With 700 contract factories worldwide and approximately 550,000 workers contributing to the success of Nike, we know that human rights, environmental stewardship and good business practices should and can peacefully co-exist.

Through the combination of unsuccessful litigation and a traveling road show, Jim Keady and colleagues have attempted to divert attention and resources away from the serious work of improving both the lives of workers and factory conditions around the world. Ironically, when our record is objectively examined, we stand for the same principles of responsible manufacturing practices and ethical behavior that they passionately advocate.

In our continuous efforts to improve our performance, Nike has done several things during the past three years. We have increased age requirements for employment in Nike contract footwear factories to 18 years of age (16 in apparel) to minimize any use of child labor. These standards meet, or in some cases, exceed certain U.S. and United Nations-based International Labour Organization standards. Nike has increased worker wages (over 40 percent in Indonesia alone since 1998) through our contract partners where regional economic circumstances or university research has dictated such need. We have pushed greater corporate transparency by placing user-friendly information on our web site.

Mr. Keady and Ms. Kretzu are simply wrong in their demeaning generalization of Nike's contract factory employees. As far back as 1996, a team of Washington Post foreign service correspondents chronicled the lives of several Asian Nike contract factory workers, concluding in the article's sub-headline, "Indonesians praise work at Nike factory."

In a quest for still greater information than Nike's own internal monitoring or external journalistic accounts could provide, we engaged in a transparent assessment of our Indonesia operations with an independent organization, the Global Alliance for Workers and Communities. Although some disturbing issues requiring remediation were identified, in over 4,000 interviews with workers at nine factories, a couple of irrefutable facts emerged from the academic-based research. An overwhelming majority of the workers expressed satisfaction with job skills training and recreation services at the factory. A majority of workers also reported satisfaction with their relationship with supervisors and managers. Although the economy has been volatile, independent university studies have shown many workers earn enough to send funds home to relatives and dependents.

An editorial by the Asian Wall Street Journal in March 2001 regarding the Global Alliance study provides further perspective into Nike's efforts in Indonesia saying that, "The truth of the matter is that many corporations are responsible employers that now demonstrate proactive concern for workers making their products. Nike deserves applause for being a leader in standards for others to follow."

On many occasions at some Nike contract factories, one can witness many people in line to apply for a single assembly line vacancy. During the Muslim holidays when factories are closed for 10 days and workers return home or to their villages, the return rates to the factory have been as high as nine out of 10 (taking into account women who have earned enough money at the factory or choose to remain to begin families). Employers (regardless of whether they are in Indonesia or Indiana) who mistreat workers do not usually command such respect or worker return rates.

We also feel the need to address Nike's environmental sustainability efforts. Through our unique "Reuse-A Shoe" collection program, Nike recycles over two million pairs of athletic shoes (any brand) annually and converts them into sports courts for kids to play soccer, basketball, tennis or whatever sport can be supported at that facility. Therefore, the disposal of footwear soles by burning that Mr. Keady discusses in his presentation are either counterfeit or unauthorized.

Having never really been inside a Nike contract factory, the audience heard plenty about what Mr. Keady and Ms. Kretzu are against. Unfortunately, they provide no viable alternatives or employment opportunities for the very people they seek to help. Nike has made a long-term commitment to doing the right thing and improving our business practices. Our record speaks for itself and we encourage your readers to decide for themselves.