Nike's cover-up campaign

Wednesday, September 20, 2000


Nike is the world market leader in sports shoes. Its profits amounted to US$965 million in 1999. This huge figure in part flows from the sales generated from the vast volume of advertising Nike subjects the planet to. But mostly, Nike's profit margins are huge because it thoroughly exploits its workers.

Nike factory workers in the Third World receive as little as US$1.25 for 15-hour working days.

Nike is notorious for manufacturing in countries that restrict the right of workers to organise. Community Aid Abroad-Oxfam Australia (CAA/Oxfam) recently released a report as part of the NikeWatch campaign. Like Cutting Bamboo: Nike and Indonesian Workers' Right to Freedom of Association documents the exploitation and abuse of human rights Nike workers in Indonesia suffer. The report was compiled from interviews conducted in April and May.

Nike workers around the world are paid the bare legal minimum working wage, with the one exception: Indonesia. The official minimum wage of an Indonesian worker is US$33.65 a month; Nike says it pays its workers there US$35.30 a month.

But this small increase does not mean that Nike workers have a sustainable income. The Indonesian government itself estimates that the official minimum wage amounts to only 80% of what is needed to cover the minimum physical needs of one adult worker. Indonesian humanitarian and workers' organisations argue that the government significantly underestimates living costs.

Nike has argued that productivity bonuses push its workers' wages above the minimum subsistence level. However, Nike has refused to publish details of these bonuses so that they can be independently verified.

Even if Nike is sincere about the bonuses, they would cover only the needs of one adult worker. The needs of the workers' children and other dependents would not be met. It is thus clear that Nike factory workers exist well below the poverty line.

Jim Keady is a former professional soccer player who lost his job as assistant soccer coach at St. John's University in New York in 1998 because of his public protests against the university's relationship with Nike. He spent August in Indonesia trying to live on the before-overtime wages of Indonesian workers who make Nike shoes. He went hungry.

In Indonesia, Nike has a long history of restricting workers' rights to organise in independent unions for better wages and conditions. During the Suharto era, independent unions were outlawed. All workers were automatically members of the tame government-sponsored SPSI trade union.

Nike collaborated closely with the Suharto dictatorship and the armed forces to quell industrial disputes. In 1996, for example, a union organiser who organised a strike was sacked by Nike and then detained and tortured for seven days by the military.

The fall of Suharto in 1998 brought with it the legalisation of independent trade unions. Nike factories are now usually covered by both government and independent unions.

Like 'cutting bamboo'

Interviews with Nike workers in the CAA/Oxfam report reveal the persecution faced by those who join independent unions rather than the SPSI or the SP TSK (a post-Suharto split-off from the more discredited SPSI, also known as SPSI reformasi; few workers feel that the SP TSK has reformed much).

Many workers said they were afraid to make complaints to the SP TSK because in the past factory supervisors have been informed. Workers who make complaints are often intimidated. At one Nike factory visited by the report's compiler, the leader of the SP TSK branch was the factory supervisor.

Factories also commonly employ preman (hired thugs) to assault troublesome union officials and to break strikes and picket lines. In 1995, a union organiser in a Nike factory resigned after thugs came to his house and stabbed him in the face, arms and shoulders. Death threats have been made to other independent union organisers.

One worker from the PT Adis factory in Balaraja, West Java, described the mistreatment suffered by members of the independent union SPBS as being "like cutting bamboo". "Every month the number of workers who join SPBS grows and also every month [the number of SPBS members] are reduced at the same time because the management dismisses members", the worker said.

Workers are encouraged by management to consider the independent unions as illegitimate or even illegal organisations and to fear that people who join could face arrest.

Those involved in independent trade unions are told that they will never get promotions as long as they remain in the union. They are routinely threatened with the sack and often forced to work extra jobs without any increase in pay. Officials of the SP TSK, however, are typically provided with promotions, pay rises and office space in an attempt to separate these elected leaders from the workers they are supposed to represent.

Forced overtime is rife in the Nike factories. Some workers toil up to 70 hours a week, from 7am to 10pm, Monday to Friday. Workers are expected to work a half-day on Saturday and occasionally even on Sunday.

Indonesian workers are entitled by law to 12 days of annual leave. Factory management, in collaboration with the SP TSK, commonly intimidates workers out of taking this leave.

Working conditions in Nike factories are extremely hazardous. Many workers are exposed to toxic chemicals. Before 1997-98, Nike used petroleum-based glue which contained the chemical toluene. A prolonged exposure to toluene vapour causes miscarriages.

CAA/Oxfam also reported that management told workers that if they cause too much trouble, Nike will close the factory and move to another country. With Indonesia's unemployment rate at around 35%, this threat makes many workers afraid to insist on their rights.

Nike's spin doctors

Due to the growing international campaign against Nike's exploitative practices in Indonesia and elsewhere, Nike has sought to rebuild its image.

According to Nike's spin doctors, critics are outdated and don't recognise the progress Nike has made. Nike has reformed itself, they claim. Nike really does care and now "works very closely with our factory partners in ensuring that workers are paid appropriately, treated fairly, and that their rights are protected at all times", they say.

Nike's major (and highly publicised) program designed to protect its workers' rights is a study undertaken annually by PriceWaterhouseCoopers. However, workers who have been interviewed under the program report that their confidentiality has not been kept. Factory owners are easily able to discover and persecute workers who have been interviewed. It is unsurprising, therefore, that the study has uncovered little dissatisfaction among its work force.

Another public relations stunt Nike has begun is "Transparency 101". Its success is difficult to gauge because Nike has refused to release details of how workers were selected to be interviewed, how much time was spent interviewing them, what questions were asked, or whether confidentiality is kept. Not one of the resulting "action plans" released involves respecting union rights.

A further program trumpeted by Nike is the provision of medical clinics at all its factories. According to the CAA/Oxfam report, however, these clinics are more about repressing workers than providing health care.

Any female worker claiming menstruation leave must first go through a humiliating examination at these clinics. This alone is enough to dissuade most women from taking the menstruation leave they are entitled to. Those who do apply often have to argue their case with the factory doctors.

Revealingly, Nike has refused to allow any thorough independent monitoring of its human rights record. The Workers' Rights Consortium (WRC) is an organisation established in the United States by student activists, supported by academics, trade unions and labour rights organisations. Fifty US universities are affiliated to the WRC. Nike has refused to continue negotiations with the WRC over labour rights standards; WRC has launched an international campaign to expose Nike.

In April, Nike chief executive Philip Knight retaliated by cancelling a US$30 million donation to the University of Oregon (a WRC affiliate). Knight declared, "The university inserted itself into the new global economy where I make my living [but it] inserted itself on the wrong side".

Knight, obviously concerned that his living was under threat, was forced last year to increase his salary and annual bonus to $2.54 million, up from $2 million in the previous fiscal year.


Nike has sought to discredit human rights activists, publishing a document on its web site attacking Jim Keady for self-promotion! The site includes interviews with supposed Indonesian factory workers who marvel at the "continuous improvement" in their working conditions and appreciate Nike's "regular fire drills [that] are fun and refreshing for the workers".

In Australia, Nike has refused to sign the Homeworkers Code of Practice, initiated by the FairWear campaign and the Textiles, Clothing and Footwear Union. Nike argues that it won't sign the code because all wages paid to its workers comply with Australian law. But this raises the obvious question: if Nike complies with the Homeworkers Code of Practice, what is stopping it from signing it?

Tim Connor from NikeWatch told Green Left Weekly that Nike has not stopped its abuse of workers' rights. "Nike claims to have reformed as a result of criticism", said Connor, "but the reality is that any reforms Nike has undertaken have been minor, ineffective and grudging".

NikeWatch is demanding that Nike:

  • work with international unions and human rights organisations to set up a genuinely independent factory monitoring program;

  • make the monitoring reports public;

  • establish a confidential complaint mechanism, overseen by an independent body, which can be accessed by workers; and

  • make public the addresses of all factories producing for Nike and the levels of orders from each factory.

[Jim Keady's day by day account of his attempt to live in Indonesia on a Nike factory worker's wage can be viewed at <>. Community Aid Abroad-Oxfam Australia's NikeWatch campaign site is located at <>.]