July 14, 2011 in City

Nike faces claims of abuse from workers in Indonesia

Niniek Karmini Associated Press
 
Associated Press photo

A shop attendant stands near Converse shoes on display at a store in Jakarta, Indonesia. Workers making Converse sneakers in Indonesia said supervisors mistreat them and call them dogs and pigs.
(Full-size photo)

Fast facts

Indonesia is Nike’s third-largest manufacturing base, after China and Vietnam, with 140,000 workers at 14 contract factories. Of those, 17,000 produce its Converse line at four factories.

SUKABUMI, Indonesia – Workers making Converse sneakers in Indonesia say supervisors throw shoes at them, slap them in the face and call them dogs and pigs. Nike, the brand’s owner, admits that such abuse has occurred among the contractors that make its hip high-tops but says there was little it could do to stop it.

Dozens of workers interviewed by the Associated Press and a document released by Nike show that the footwear and athletic apparel giant has far to go to meet the standards it set for itself a decade ago to end its reliance on sweatshop labor.

Nike says nearly two-thirds of the factories that make Converse products fail to meet its standards for contract manufacturers but insists it cannot address many of those problems because many factories operate under contracts that were set before Nike bought Converse in 2003.

That does not appear to explain abuses that workers allege at the Pou Chen Group factory in Sukabumi, some 60 miles from Jakarta – it didn’t start making Converse products until four years after Nike bought Converse. One worker there said she was kicked by a supervisor last year after making a mistake while cutting rubber for soles.

“We’re powerless,” said the woman, who like several others interviewed spoke on condition of anonymity out of fear of reprisals. “Our only choice is to stay and suffer, or speak out and be fired.”

The 10,000 mostly female workers at the Taiwanese-operated Pou Chen plant make around 50 cents an hour. That’s enough for food and bunkhouse-type lodging, but little else. Some workers interviewed in March and April described being hit or scratched in the arm. Others said they were fired after filing complaints.

“They throw shoes and other things at us” said a 23-year-old woman in the embroidery division. “They growl and slap us when they get angry.

Mira Agustina, 30, said she was fired in 2009 for taking sick leave, even though she had a doctor’s note.

“It was a horrible job,” she said. “Our bosses pointed their feet at us, calling us names like dog, pig or monkey.” All are major insults to Muslims.

At the PT Amara Footwear factory located just outside Jakarta, where another Taiwanese contractor makes Converse shoes, a supervisor ordered six female workers to stand in the blazing sun after they failed to meet their target of completing 60 dozen pairs of shoes on time.

The company’s own inquiries also found workers at the two factories were subjected to “serious and egregious” physical and verbal abuse, including the punishment of forcing workers to stand in the sun, said Hannah Jones, a Nike executive who oversees the company’s efforts to improve working conditions.

“We do see other issues of that similar nature coming up across the supply chain but not on a frequent level,” she said. “We see issues of working conditions on a less egregious nature across the board.”

Nike, which came under heavy criticism a decade ago for its use of foreign sweatshops and child labor, has taken steps since then to improve conditions at its 1,000 overseas factories. But the progress it has made at factories producing gear with its premier “swoosh” logo is not fully reflected in those making Converse products.

An internal report Nike released to the AP after it inquired about the abuse show that nearly two-thirds of 168 factories making Converse products worldwide fail to meet Nike’s own standards for contract manufacturers.

Twelve are in the most serious category, indicating problems that could range from illegally long work hours to denying access to Nike inspectors. A Nike spokeswoman said the company was not aware of physical abuse occurring at those factories. Another 97 are in a category defined as making no progress in improving problems ranging from isolated verbal harassment to paying less than minimum wage.

Nike blames problems on pre-existing licenses to produce Converse goods that it says prevent the parent company from inspecting factories or introducing its own code of conduct.

It says the situation is further complicated because the license holders themselves usually farm out the production work to a subcontractor. Most of the agreements have come up for renewal in the past five years. But it is only the past two years that it has made a concerted effort to incorporate Converse factories into the monitoring program that applies to Nike factories.

“We have been working every time we can to renew those agreements or change those agreements or to cease those agreements and to ensure that when we do new agreements we get more ability to influence the licensee and their subcontractors much more directly,” Jones said.

Some corporate experts question whether the company is doing all it can.

“I simply find it impossible that a company of the size and market power of Nike is impotent in persuading a local factory in Indonesia or anywhere else in meeting its code of conduct,” said Prakash Sethi, a corporate strategy professor at Baruch College at the City University of New York.

Critics of outsourcing manufacturing to the lowest-cost countries say it keeps prices down but allows apparel, electronics and toy companies to reduce their accountability for the conditions in such factories.

Pou Chen, the largest of the four Converse factories in Indonesia, is located in a hilly city where the minimum wage is well below the national average. Sukabumi can only be reached by car – a five-hour journey across bumpy, winding roads. The plant started making Converse products in 2007.

The Taiwanese contractor said it fired one supervisor after being told workers had spoken to the AP earlier this year.

Nike says the factory is developing programs to teach managers cultural sensitivity and leadership skills.

It says it also is closely monitoring the PT Amara factory.

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