Vol. VI, Bulletin No. 4. March 8, 2001
Enough! One Nike Scandal Too Many
Repeated Findings of Worker Rights Abuses Raise a Basic Question:
Does Today's Subcontracting System Inevitably Breed Sweatshops?
"A key to progress [in eradicating sweatshops] is to hold brand-name companies accountable for the labor practices of their subcontractors." That's a sound principle laid down by the Washington Post in a February 2 editorial titled "How to Battle Sweatshops." But how can that principle be implemented?
As a model to be followed, the Post praised the recent activities of U.S. non-governmental groups for having "successfully pressured Nike into sticking up for abused workers in Mexico." Unfortunately, the Post's optimism may be premature. Management at the South Korean-owned Kuk Dong factory in Mexico has shown signs of still resisting worker efforts to form an independent union.
Then, later in February, another Nike sweatshop scandal surfaced, this one in Indonesia. "Report says Nike workers face abuse in Indonesia," said the headline of a Reuter news story. But that was nothing new, not really. Nike has been in Indonesia for about 13 years now, and during that period substantially the same headline applied to the same labor abuses committed and disclosed over and over and over again in its factories.
There is one thing new this time: the embarrassing revelations came from a group that Nike itself helped found and which it finances (with $7.8 million), the Global Alliance for Workers and Communities.
Harassment and Other Forms of Abuse in All Nine Factories Surveyed
Global Alliance conducted one-on-one interviews with 4,000 workers employed in nine of the 30 factories that produce footwear, apparel, and athletic equipment for Nike in Indonesia. A major finding, highlighted in many news reports, dealt with "various forms of harassment and abuse at all nine factories." Specifically:
At a press conference releasing the Global Alliance report, Maria Eitel, a Nike vice president, called these and other abuses disturbing. "No person should be subjected to some of the things described by the factory workers," she said, and announced a "remediation plan" that included independent audits to ensure compliance with its code of conduct (which Nike adopted nine years ago).
- 30% of the workers reported having personally experienced verbal abuse.
- 7.8% reported sexual comments by line supervisors.
- 2.4% reported incidents of sexual touching.
- five signatures were required in one factory for approval of sick leave.
'Remediation Plans' Invoked Time After Time
This is not the first time that Nike announced a remediation plan, and most likely it won't be the last. What's going on here?
Human Rights for Workers has often criticized Nike's failures. See the November 9, 1996, issue, for example, with its articles "Warning to Nike Workers: Do It--Or Else" and "Where Is the Outrage?"
Five years ago, in an address to the National Press Club, Nike Chairman Philip H. Knight, reacting to a torrent of negative publicity, announced that Nike would, among other things, improve the health conditions and expand the monitoring of labor practices in its plants. The thrust of his message was that Nike takes responsibility for the labor practices of its many contractor-operated factories across the world.
Was he serious? Let's assume he was. Then a more fundamental question follows. Was he assuming a responsibility that neither Nike nor any other foreign corporation can truly fulfill when it subcontracts production to countries like China, Indonesia, and Vietnam? In other words, is the law of the jungle endemic to today's global production in certain industries in certain countries?
Evil Triumphs Because Even Good Men and Women Do Nothing
The answer must be Yes, if the experience of Nike, Reebok, and some other global companies addicted to subcontracting means anything. Greed plays a role, and so does a corporate culture stubbornly resistant to change. But the diffused system of subcontracting breeds irresponsibility. Irresponsibility toward the weak and vulnerable (that's what most workers are in many countries). And irresponsibility by the strong, including:
Because of these sets of irresponsible men and women, the system is not working. It's fashionable to blame the breakdown on abstract factors--competition, the "law" of comparative advantage, whatever. But human beings run the system. Some of them are smart enough to know how to fix it. And among the smart ones, surely some have the courage to transcend the status quo and to join with like-minded peers in a common cause. It's long past time for them to do so.
- the Korean, Taiwanese, and Hong Kong business people who own most of those shoe and apparel plants;
- the political leaders of Indonesia and other countries who should regulate those plants;
- the political leaders of importing countries who wash their hands of the recurring scandals;
- the executives and shareholders of the American companies that buy sweatshop products; and
- the executives and shareholders of the American and other Western retail stores that sell those products.
Millionaires Blast Plans To Aid Millionaires
Normally, business people organize to promote the interests of business people, often in opposition to the interests of working people. That's the way of the world. But it's not the way of a new organization called Responsible Wealth, whose supporters include more than 500 millionaires, billionaires, and small business owners who are "concerned about deepening economic inequality," as a press release of theirs says.
Responsible Wealth went public one day last month with an ad on the op-ed page of the New York Times. The ad did not mention the Bush administration's plan to abolish the inheritance tax (also called the estate tax, or the "death tax"), but the target was clear. "If the estate tax is eliminated," the ad said in big type, "someone else will pay: YOU." The partial explanation:"Repealing the estate tax would enrich the heirs of America's millionaires and billionaires, while hurting families who struggle to make ends meet. The billions of dollars in lost state and federal revenues will inevitably be made up either by increasing taxes on those less able to pay or by cutting Social Security, Medicare, environmental protection, and other government programs so important to our nation's continued well being."Leading the list of the ad's affluent signers was William H. Gates Sr., father of Microsoft's Bill Gates, followed closely by Steven C. Rockefeller, David Rockefeller Jr., and George Soros. One supporter did not sign the ad: Warren E. Buffett, the investor who ranks fourth on the Forbes magazine list of the richest Americans. In an interview with the Times, Buffett explained that he felt the ad did not go far enough in defending "the critical role" that the estate tax played in promoting economic growth by helping build a society in which success is based on merit rather than inheritance."We have come closer to a true meritocracy than anywhere else around the world," Buffet told the Times. "You have mobility so people with talents can be put to the best use. Without the estate tax, you in effect will have an aristocracy of wealth, which means you pass down the ability to command the resources of the nation based on heredity rather than merit."Supporting Not Just a Minimum Wage But a 'Living Wage'
Responsible Wealth is not a single-issue endeavor. Its remarkable Website makes that very clear. Among the issues treated there:
FYI: An article by Edward N. Wolff, professor of economics at New York University, in the February 12 issue of the American Prospect, doesn't deal with the estate tax but does explain how (in the words of its title) "The Rich Get Richer--And Why the Poor Don't." For example: "As [U.S.] workers' wages have stagnated, economic inequality has worsened. In 1974 the richest 5% of American families earned 14.8% of total U.S. income; by 1998 their share had risen to 20.7%."
- A "Living Wage Covenant," in which an employer is urged to pledge, among other things, to "publicly support living wage ordinances in my locality."
- An initiative in which Responsible Wealth members and other shareholders of AT&T promoted two resolutions at the company's shareholder meeting last year: one to freeze executive pay during times of significant downsizing, the other to have the company report on the size of its "corporate welfare," such as direct government subsidies, tax credits, and below-market financing (the pay freeze got 7% of the vote; corporate welfare, 5%.)
Reflections: Present at ORIT's Creation
An inter-American labor meeting next month in Washington, D.C., will bring back some vivid memories for me. The Inter-American Regional Organization of Workers (ORIT) will celebrate its 50th anniversary at a congress that meets here April 23 to 26. As a reporter, I attended the turbulent meeting in Mexico City where some 200 delegates founded ORIT in January 1951.
The AFL-CIO is hosting this year's ORIT congress. In 1951, when the AFL and CIO were still separate but edging toward a merger, I covered ORIT's first congress for both the CIO News and the AFL Weekly News Service, as well as for the Labor Press Association and for Work, a monthly in Chicago, where I had a full-time job with the Catholic Labor Alliance.
I still have the faded clipping from the January, 22, 1951, issue of the CIO News. It's a full-page story headed "Free Western Hemisphere Trade Unions Unite" by Bob Senser. In the opening paragraphs, I quote Jacob Potofsky of the Clothing Workers, head of the CIO delegation, as calling the congress a historic success for creating a "magnificent temple of labor power" representing some 70 million workers in the Americas. A photograph shows William Doherty of the AFL Letter Carriers sitting at a table surrounded by CIO delegates.
The Struggle To Keep Out a Peronist Confederation
George Meany, then AFL secretary-treasurer, played a key role in a prolonged fight, on and off the congress floor, to keep Argentina's General Confederation of Labor (CGT) out of ORIT. Meany likened the Argentine organization to "Hitler's labor front and the so-called trade unions of Soviet Russia." President Fidel Valasquez of Mexico's CTM, who chaired the congress, praised the Peronist-controlled CGT as a "glorious institution," and fought vigorously but unsuccessfully to gain the CGT's entry.
An episode not in the CIO News article: I remember catching up with an angry Meany after one stormy session, and his telling me and an AP reporter, "We're walking out." But overnight lobbying turned the tide against the CGT. The next morning Meany said that the AP story had misquoted him.
ORIT was, and is, the regional organization of the International Confederation of Free Trade Unions (ICFTU). J. H. Oldenbroek, then the ICFTU's general secretary, attended the Mexico City congress, and my story has quotes from him saying that the labor movements throughout the Americas are "determined to exterminate totalitarian influence, whether Stalinist, Peronist, or Falangist," and that ORIT "will be of incalculable strength" in that struggle. He had it right.
'Our Challenges Have Never Been Greater'
In a statement saluting ORIT on its 50th anniversary, the AFL-CIO executive council last month called the Inter-American regional organization "a bulwark against all dictatorships" over the past five decades. Today, said the AFL-CIO leaders, "the challenges facing democratic unions have never been greater." Their statement listed these challenges in particular:
In closing, the AFL-CIO leaders declared: "We pledge our hands and hearts to support ORIT as it faces the challenges of the new millennium."
- "Union members are targets of violence and political repression throughout Latin America.
- "The international financial institutions have imposed austerity programs which drastically increase the burden of debt on the majority, while their labor market policies--privatization, deregulation, and 'flexibilization' of labor law--have increased unemployment, destroyed social safety nets, and forced millions into poverty.
- "The proposed Free Trade Agreement of the Americas [FTAA] threatens to grant even more rights to corporations while doing nothing to protect workers or the environment."
Diary: A Grandchild Is Born, Praise the Lord
How awesome the birth of a child! Any child, but particularly the birth of your own grandchild, a granddaughter who looks up at you as you cuddle her in your arms not long after she is born.
My wife and I helped welcome Mai Han Senser, the daughter of Thuy and Kelly Senser, into the world on the afternoon of February 27. Mai (pronounced my), Vietnamese for white cherry blossom, naturally was sleepy, but not shy about peering at cameras. Our son Thuy has already posted shots of her on his Website. They were taken within hours of her birth. More pictures of this brand-new citizen of Reston, Virginia., will follow.
* * *The other day the mail brought a query from the Carnegie Council on Ethics and International Affairs. Was I interested in renewing my (free) subscription to their quarterly Human Rights Dialogue? Of course, and I checked the appropriate box on the postage-paid reply form accordingly.
That form also had a long list of ethics-related international issues, with corresponding boxes to check. I counted 46 issues, ranging alphabetically from arms trade/proliferation to women/gender issues. Wow. I could check almost every one of them. As I pondered my choices, it struck me that the card was sending me a warning signal: cut down on your huge field of interests. I finally put check marks in just nine of the little boxes. This was less than it seems, since a number of the categories--corporate governance, corporate social responsibility, global economy, global governance, and international trade--overlap.
There aren't enough hours in the day to do all that I want to do. But, above all, I have to save time to read to Mai at least two or three times a week.
Human Rights for Workers: Bulletin No. VI-4, March 8, 2001
Robert A. Senser, editor
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