Nike publicizes itself as one of the leading industries in corporate responsibility. However, they do not comply with several human rights obligations overseas in countries like Thailand, Pakistan, China, Vietnam and Indonesia. In these countries, production facilities called sweatshops have been running for almost 35 years employing workers as young as 13 years of age. The conditions of these factories are adverse to say the least and deprive workers of the moral human rights they should be entitled to.
Sweatshops are unethical, immoral and demonstrate Nike’s ignorance towards their social responsibilities abroad. Within these facilities, workers endure stressfully long days under undesirable conditions, often with no breaks and very little pay. While this is going on overseas, sponsored athletes are being paid million dollar salaries here in North America. Although Nike’s reputation has been foiled through the tabloids regarding this issue, they have been making a substantial effort to “clean up” production messes in the East.
Nike, as many other companies do, facilitates production in other countries to help grow sales in those particular regions. The main difference between Nike and some of the other companies is that other companies do not support the exploitation of labourers or human rights. Not to suggest that Nike promotes labour exploitation, but they are less strict about these rules than other companies in foreign markets. Impacts on health and safety are a major factor for employees in sweatshops. However, physical and sexual abuse is another serious concern of many of the sweatshop workers.
Most of the sweatshops run by Nike contractors are factories located in relatively small spaces to save on real estate costs. They are often soiled with dirt and kept unheated to save on expenses. Broken glass and dangerous equipment is left on the floors causing potential dangers to any people scattered within the factory. Employees are subject to harassment and violent punishments if work is not being completed as thoroughly and efficiently as the contractors would like. Workers slave under unfavourable conditions for up to 14-hour days often with no breaks.
These employees are paid less than $100 US and work on average over 250 hours per month. “Substandard wages keep factory workers in poverty and force them to work excessive amounts of over time to fulfill their basic needs. Nike refused to acknowledge its responsibility to pay workers a living wage,” said Medea Benjamin of Global Exchange. One case in specific listed a woman in Vietnam who worked 253. 5 hours and was paid $44. 63 US for one months work.
This translates to approximately 17 cents an hour! If a teenager in Canada working at McDonalds making minimum wage ($6. ) worked the same number of hours, he or she would make approximately $1770 (not including deductions or taxes). Since Nike gained a tighter grip on their production facilities in Asia working conditions are starting to improve. In China, one factory provides living quarters and meal plans which are partially paid for by the company as well as a $73 US per month salary. Nike’s SHAPE (Safety, Health, Attitude of Management, People, Environment) Program is a program delegated exclusively to labour-practice enforcement.
Although this is a step in the right direction, it does not pardon or excuse the acts that Nike contractors have enforced on sweatshop workers in the past. Professional athletes like Michael Jordon, Scottie Pippin, Charles Barkley, Ken Griffy Jr. , Sergai Federov, Mats Sundin, Mia Hamm and Tiger Woods are all sponsored by Nike. These talented individuals are highly valued in sports society and are paid accordingly. Salaries of these athletes all exceed $10 M per year. Michael Jordon alone currently earns $40M per year!
Nike endorses these athletes and pays them generous royalties to represent them well. Regardless of whether or not these athletes were sponsored by Nike, they would still earn a substantial salary. These athletes are giving Nike excellent support, but in return Nike is giving them a terrible reputation. By promoting Nike, these athletes are indirectly promoting the appalling acts that Nike contractors have been supporting such as exploitation of labour rights, unhealthy and dangerous working conditions in countries abroad.
If these athletes were to boycott Nike, they would gain much more than they would lose. Although they would lose some sponsorship money, they would gain publicity and probably more sponsors for acting upon good moral and ethical judgement. In turn, this would send a signal to Nike’s upper management indicating to them to clean up their acts concerning sweatshops in Asian countries. With less sponsorship royalties to pay out, Nike will have a significantly greater amount of capital to spend on mending their broken reputation due to events in the East.
It would be in Nike’s best interest to look for the most socially responsible way of acting to correct the misconduct they are responsible for in other countries. On May 12th, 1998, Nike CEO, Phil Knight, made a speech regarding a six-point anti-sweatshop initiative to the National Press Club. Knight responded to the sweatshop accusations of the company’s critics but as of today, we are all still waiting for any of these plans to be implemented. Some of the plans included the adoption of new labour policies on health and safety, child labour and independent monitoring among other issues.
One of the major issues that Knight addressed was education among sweatshop workers. The goal was to expand education programs making free high school equivalency courses available to ALL Nike workers producing footwear. The shocking truth three years later is that less than 2% of these workers have participated in these programs simply because they cannot afford to give up overtime hours to part take in a course. Although another of Nike’s goals was to raise the minimum age for factory workers to 18 for footwear factories and 16 for apparel factories, this will probably not be a likely occurrence.
Since the wages of Nike factory workers are so low, they can barely afford to take care of their children making it likely that these children will be forced into working in these factories at a young age, or have to face poverty. It would be near impossible for Nike’s home management to detect whether or not local managers are enslaving children because they are truly half a world away. This is true for other happenings as well (ie poor air quality/ inadequate living/ working conditions).
Another goal that Knight made public was the administration of Air quality testing through the Occupational Health and Safety Administration (OSHA) in the US. Although this is currently being implemented, rumours state that Nike gives the factory owners advance notice as to when these tests are going to be performed so that the owners can purify the air the day of the test. Knight may not have been entirely truthful to the public. In fact, he “sugar coated” the truth to get the public away from the ordeal of human rights matter in the Asian countries.
By falsely addressing the public, he dug Nike into an even deeper hole regarding the human rights matter. Since September, Nike has been slowly decreasing it’s sales which has subsequently led to downsizing in foreign production facilities. Stocks have also devaluated by 48% according to the 4th quarter of Nike’s 2002 financial statements. Although there is no sure reason to assess the devaluation of Nike’s stock, “anecdotal reports from retailers strongly suggest that awareness of sweatshop abuses is turning consumers away from Nike. ” (International Nike Mobilization – www. leokala. com).
Nike has been under a great deal of pressure to correct the misdoings that have been done regarding production facilities in the East. As Nike is responsible for these plants, their reputation has been tainted with increasing public debate about ethical matters. While Nike still promotes itself as one of the industry leaders in corporate social responsibility, workers in Asia are still forced to work excessively long hours in substandard environments and are not paid enough to meet the basic needs for themselves or their families.
They are faced to a life of poverty and are unfortunate subjects to harassment and violent threats if they make any attempt to form unions or tell journalists about labour abuses in their factories. Phil Knight’s speech regarding Nike’s steps to improving human rights in Asian countries was a step in the right direction for Nike, but it would have been much more effective had Nike fully followed through with these initiatives.