Labor Group: Nike Not Living up to Promises

Three years ago, Nike chairman Phil Knight stood before the National Press Club and told the world he was so tired of labor-rights groups criticizing the athletic shoe company he founded that he was going to personally make sure conditions improved at Nike factories around the world.

Knight has fallen short of his promises — far short, in some cases, according to a 105-page report released by the Global Exchange.

"During the last three years, Nike has continued to treat the sweatshop issue as a public-relations inconvenience rather than as a serious human rights matter," said Leila Salazar, corporate accountability director for the San Francisco-based labor-rights organization.

Six Promises Made by Knight

Knight discounted the report, and said Nike has done more than any other corporation in the shoe-and-clothing industry to make sure workers are treated fairly. Knight said, the company has promoted globalization of its workforce as a way to lift wages in many countries.

"I think we've made significant strides, and I'm proud of what the company's done over the last three years," Knight told The Associated Press. "It may take a while longer, but I do think it will be understood that Nike is a good citizen in all the countries that it operates in."

The report by the Global Exchange cited six promises Knight made during a May 12, 1998 speech at the National Press Club in Washington, D.C.:

All Nike shoe factories would meet U.S. Occupational Health and Safety Administration indoor air quality standards.

The minimum age would be raised to 18 for Nike shoe factories, 16 for clothing factories.

Nike would include nongovernmental organizations, or NGOs, in factory monitoring, and the company would make inspection results public.

Nike would expand its worker education program, making free high-school equivalency courses available.

A micro-enterprise loan program would be expanded to benefit 4,000 families in Vietnam, Indonesia, Pakistan and Thailand.

Research and forums on responsible business practices would be funded at four universities.

Knight: Bound to Be Problems

But the report concluded that "the projects Knight announced have been of little benefit to Nike workers," or "have helped only a tiny minority, or else have no relevance to Nike factories at all."

The report said that "Nike workers are still forced to work excessive hours in high pressure work environments, are not paid enough to meet the most basic needs of their children, and are subject to harassment, dismissal and violent intimidation if they try to form unions or tell journalists about labor abuses in their factories."

Knight said there might have been isolated cases of poor management, but "I don't think that's ever been typical of Nike factories."

During an interview, Knight and two top managers noted that Nike has contracts with factories that employ at least 500,000 workers in more than 50 countries, so there are bound to be problems, including cultural differences that shape management practices.

Jason Mark, spokesman for Global Exchange, said the key to solving many of those problems would be paying a "living wage" that allowed workers to save money, raise a family and move up to their society's middle class.

"Nike says they can't find a formula because it's different for every country," Mark said. "It's an assumption that's convenient for them because it allows them to pay lower wages."

In Agreement on One Point

Dusty Kidd, vice president of corporate responsibility for Nike, said economic need is important, "but we've yet to really understand how you can predicate a worker's pay based solely on need and not on productivity."

"You've got to have productivity figured into how you pay people, or you just don't make a product at a price you can sell and make a profit," Kidd added.

The Global Exchange report agreed with Knight on one point: Nike has improved health and safety conditions at its plants.

But the labor-rights group urged Knight to make some new promises, including higher wages, independent factory monitoring and support for unions.

Mark, the Global Exchange spokesman, also said that stronger regulation is needed for multinational corporations, whether it is based on U.S. law or international law.

"In the absence of U.S. government regulation on multinational corporations, the only thing that's left is for citizens to police corporations, and/or for the corporations to police themselves," Mark said. "And we don't believe the corporations are policing themselves."