Labor Group: Nike Not Living up to Promises

ByABC News

B E A V E R T O N, Ore., May 21, 2001 -- 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 somecases, according to a 105-page report released by the GlobalExchange.

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

Six Promises Made by Knight

Knight discounted the report, and said Nike has done more thanany other corporation in the shoe-and-clothing industry to makesure workers are treated fairly. Knight said, the company haspromoted globalization of its workforce as a way to lift wages inmany countries.

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

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

All Nike shoe factories would meet U.S. Occupational Health andSafety 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, infactory monitoring, and the company would make inspection resultspublic.

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

A micro-enterprise loan program would be expanded to benefit4,000 families in Vietnam, Indonesia, Pakistan and Thailand.

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

Knight: Bound to Be Problems

But the report concluded that "the projects Knight announcedhave been of little benefit to Nike workers," or "have helpedonly a tiny minority, or else have no relevance to Nike factoriesat all."

The report said that "Nike workers are still forced to workexcessive hours in high pressure work environments, are not paidenough to meet the most basic needs of their children, and aresubject to harassment, dismissal and violent intimidation if theytry to form unions or tell journalists about labor abuses in theirfactories."

Knight said there might have been isolated cases of poormanagement, but "I don't think that's ever been typical of Nikefactories."

During an interview, Knight and two top managers noted that Nikehas contracts with factories that employ at least 500,000 workersin 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 tosolving many of those problems would be paying a "living wage"that allowed workers to save money, raise a family and move up totheir society's middle class.

"Nike says they can't find a formula because it's different forevery country," Mark said. "It's an assumption that's convenientfor 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 reallyunderstand how you can predicate a worker's pay based solely onneed and not on productivity."

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

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

But the labor-rights group urged Knight to make some newpromises, including higher wages, independent factory monitoringand support for unions.

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

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

ABC News Live

ABC News Live

24/7 coverage of breaking news and live events