Nike Campaign Update

November 25, 1997

I was on the road for two weeks and then returned to a backlog of work. During that short period, it seemed as though a few years' worth of events happened in the Nike campaign. In this alert, I will summarize some of the most important recent events.

- Trim Bissell, National Coordinator

Campaign for Labor Rights

Asian currency crashing

The economies of several Asian countries are taking a nosedive. Among the first to do so was Indonesia, where corruption sapped much of the country's wealth and has made investment a high-stakes gamble. In the last several weeks, the legal minimum wage has dropped from the equivalent of $2.46 U.S. a day to the equivalent of $1.57 or less per day. In the balance, this is probably good news for Nike, which stands to gain more from what it saves in labor costs than what it stands to lose in sales to its Asian market. The precipitous collapse of so many economies undermines the claims of free-trade apologists (such as Nike) who have been holding up these "Asian tigers" as models for the rest of the world and who have touted Nike sweatshops as the path to prosperity in the Global South.

Secret Ernst and Young report leaked:

On October 31, a United Nations consultant announced that he had obtained a confidential report written by Nike's own auditor from a "disgruntled employee." This is the first time that any of Ernst and Young's secret reports to Nike has been made public. The report details a number of problems at one of Nike's factories in Vietnam, including: long hours of forced overtime at low wages and exposure to dangerous chemicals at up to 177 times the level allowed by law.

Star athlete endorser criticizes Nike:

For the first time, one of Nike's highly-compensated star endorsers has criticized the company's labor practices in Asia. Reggie White, of the Greenbay Packers, also pointed out that "They'd rather hire the cheap labor than hire the kid in the neighborhood who is buying their shoes. There are people who need jobs here."

Congressional sign-on letter to Nike:

Bernie Sanders (I-VT) and Marcy Kaptur (D-OH) are among more than 50 members of the U.S. House of Representatives who signed a letter to Nike CEO Philip Knight, asking the company to clean up its labor practices in Asia. They also called upon Nike to open one complete sneaker factory in the United States.

Congressional delegation planned:

Rep. Bernie Sanders of Vermont is now planning to help lead a Congressional delegation to check out conditions in Nike's Asian factories. In accepting Nike's invitation to conduct a first-hand inspection, Sanders expects to demonstrate that Andrew Young missed the real story when he toured Nike factories under the tutelage of Nike management, using translators supplied by the company.

Sports writers criticize Nike:

In several newspapers, from the New York Times to the San Francisco Chronicle, sports writers have been taking Nike to task in recent weeks for its sweatshop practices in Asia. These columnists also have criticized Nike's star endorsers for their failure to stand up to the sweatshop issue. The credit for some of this recent increase in press coverage on Nike goes to Communication Works, a press agency established by Global Exchange.

Dartmouth report a no-show:

Nike has yet to release the Dartmouth report. This is simply a class project by some MBA students at Dartmouth. With great fanfare, Nike announced its summary of the report on October 16. The report supposedly claims that Nike workers in Asia have telephones, VCRs and motorbikes and still can send extra income to relatives. A bastian of conservatism, Dartmouth is notorious for such "studies." An earlier report from Dartmouth faculty claiming that Disney workers in Haiti are well paid was thoroughly discredited by other researchers. More than a month later, the Dartmouth Nike report has yet to make its way onto the Nike web site nor have copies been available to those requesting them.

Nike sales sliding:

A recent series in the Oregonian (Portland, OR) indicates that Nike rapidly is losing its market edge. The company has cut ties with several of its Asian factories. Other cutbacks are expected as sales slip. Retailers report that consumer concern about sweatshop abuses is one reason for Nike's decline. Nike is paying for the price for its refusal to negotiate with human rights critics.

Japan considering charges against Nike:

Japanese officials recently raided Nike offices in Japan, looking for documents to substantiate reports that Nike has been violating anti-trust laws. According to reports, as demand for Nike shoes has slipped in Japan, the company has illegally coerced merchants into keeping Nike shoe prices at the same levels they reached during times of high demand.

Campus protests spreading:

The campus movement against Nike sweatshop practices is spreading and intensifying, and especially on campuses where Nike has multi-billion contracts with the athletic department. Nike PR flacks continue to race from campus to campus, trying (without success) to put out the fires. Campaign for Labor Rights will soon be posting another alert especially for campus activists.

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