"It is my sincere belief that Nike is doing a good job in the application of its Code of Conduct. But Nike can and should do better."That's how a leading human rights advocate, Andrew Young, summarized his 75-page report on the labor practices of 12 Nike factories in China, Indonesia, and Vietnam. Nike highlighted his summary (omitting the words "in the application of its Code of Conduct") in full-page newspaper ads that appeared in June.
Some worker rights advocates soon criticized the report as too soft on Nike. But it is not a a whitewash.
Apart from the brief quote cited above, Nike's ad did not summarize the substance of the report. Rather, it provided details on how to obtain a complete copy: by calling 1-800-501-6295 or accessing Nike's Web site at www.nike.com/report. The report is far more nuanced than Young's two-sentence summary suggests. Careful reading reveals that his investigation
Young and his colleagues (in GoodWorks International) obviously crafted their report so that the negatives it covers could serve a positive purpose: winning over Nike to the idea of doing much better. In that sense, the Young report is less about what is doing wrong than about what it can and should do right in the future.
A major example of accentuating the positive is in the report's section on monitoring. There it praises the monitoring system that Nike has in place (its audits revealed conditions showing that "Nike contractors were running far less than perfect factories"). Then Young himself indicates that all is not well with the present system: "There still needs to be an additional level of 'monitoring' and a better way for an individual worker to file a complaint or grievance within the factory."
Elsewhere, the report also has this "finding" (defined as a "statement of fact based on what we know"):
"There should be a better system or process in place in these factories that would allow an individual worker to file a complaint or grievance and know that it will be investigated and that [it] will not leave the worker vulnerable to retribution by factory management."The report carefully avoids making the practical case for a grievance system, but pushes the idea strongly in two of its six recommendations, and even adds a related recommendation on the need for worker representation, without using the word "union":
"Nike should take pro-active steps to promote the development of 'worker representatives' in the factories who can effectively represent the workers' individual and cumulative interests."In its lengthy response (also available on the Web), Nike commits itself to (among other things) requiring contract factories to "redouble efforts to assure that workers truly have a voice in workplace issues" and to experiment with a system of ombudsmen. Empty rhetoric? As some critics hastened to point out, Nike has fallen short of some promises in the past. But its previous commitments were not as clear and firm as those it has made to Young. There is now a significant baseline against which Nike's future performance can be measured by worker rights monitors and by Nike own management.
The Study's Limitations, Some by Design
Like Nike's labor policies, Young's report has its limitations, and some of them are acknowledged, directly or indirectly, in the report itself. A major omission is that under his agreement with Nike, Young's study did not cover "compensation and cost-of-living issues." Why not? Because: "Understanding what is a 'fair wage' in a foreign country is a very complicated process."
Well, yes, but it is a simple process to take a random sample of (say) a dozen payslips of ordinary workers and compare the figures with the minimum wage set by a foreign country. There is embarrassing documentation from all three countries visited by Young and his team that some shoe factories, including some of Nike's, pay below the established minimum wage. Of course, this subject is highly sensitive, so much so that even the International Labor Organization, to its discredit, does not rate the right to a minimum wage (much less to a living wage) as a "core labor right."
By design, the report neglects other sensitive subjects, such the widespread exposure of shoe workers to extremely toxic glue solvents (e.g., benzene). Are Nike workers exposed to these poisons? Yes, according to evidence collected by some non-governmental organizations. The problem of excessive overtime, imposed far beyond the limits of the law and Nike's own code of conduct, was also not on GoodWork's agenda.
In a strange statement about the qualifications of his own team, Young writes: "We do not claim to be labor practices 'experts'." Moreover, by his own calculation, during the six-month study, his team spent only "60 to 70 hours wandering the factory floors and talking randomly with workers" (or no more than 48 hours, according to data provided elsewhere in the report).
Criticism of Young's 'Management-Conducted Tour'
In a letter to the New York Times (published 6/30/97) Thuyen Nguyen, a business executive who as head of Vietnam Labor Watch has monitored Nike's practices in Vietnam, sharply criticizes Young for basing his findings on management-conducted tours using only Nike interpreters during "only 10 days visiting factories in China, Vietnam, and Indonesia." That is one of the milder criticisms made by worker rights advocates.
Despite its shortcomings, however, Young's report might fulfil a strong hope behind it: that it will "encourage [Nike] to do better and that Nike's progress on these issues might be emulated by others in the industry." The report does add a range of pressures on Nike to do better--not only for the benefit of the 350,000 Nike workers in Asia but also for the broader cause of worker rights in the shoe and apparel industry and even beyond.
Young's broader message can easily be overlooked, or read simply as rationalization rebutting Nike's critics. Young writes:
"Minimal global wages and standards are desperately needed....[But] meaningful reform can only be achieved through national law or international standards that enforce a 'level playing field'. The bottom line is that a national economy cannot be transformed one factory at a time or even one industry at a time. Instead, these economic reforms and improvements will only come when there are international trade agreements and understandings in place which support global standards."[Italics added.]Although Nike does not own the factories where its products are made, "it has enormous leverage" over them, Young points out. Correct. And nowadays Nike agrees. Further, Nike also has great leverage over the practices in its own industry. And Nike proudly emphasizes that it was the first company to join the Apparel Industry Partnership, a newly organized coalition of firms pledged to combat sweatshops (for background on the Partnership, see a new article of mine, "To Combat Sweatshops," which is attached at code.htm).
If Not Nike, Who Else Will Lead?
Despite much greater public awareness, the struggle for worker rights in the global economy is stymied by national and international bureaucracies of various types. The most powerful opposition comes from powerful employer organizations, including those of the United States. Realistically, a breakthrough in the present stalemate (even in the International Labor Organization) is very unlikely without some responsible leadership from the employers' side.
Might Nike provide that leadership? Don't hold your breath. Still, in other times and places, employers have stepped forward with historic innovations that benefitted workers, business, and society. Henry Ford was one such American leader in his generation. In ours, is there no influential American employer with the courage and conscience to take similar leadership on the global level?
Nike has the stature to do so, if it were to carry out its own words with unbounded verve. As Young points out at the end of his report, Nike's headquarters in Beaverton, Oregon, has a sign that reads: "There is no finish line." And Nike's code of conduct says:
"We are driven to do not only what is required but what is expected of a leader."That sentence from its code leads off Nike response to Andrew Young's report. If Nike's CEO, Phil Knight, fully lives up to that drive and its high expectations, he and Nike would make history. Obviously, it is still a dream that Nike will move to seize that opportunity, but Andrew Young's report tries to nudge it along.
Robert A. Senser
Editor, Human Rights for Workers
(Send e-mail to firstname.lastname@example.org)
Bulletin No. II-11: July 12, 1997