NIKE WITHDRAWS FROM 4 INDONESIAN FACTORIES

Nike announced on September 22 that it had severed ties with four Indonesian-based factories because they failed to adhere to the company's requirements for wages and working conditions.

ANALYSIS: We have no way to verify Nike's motivation for this pull-out. This is one more illustration of why there needs to be independent external monitoring by local human rights and religious organizations. If there were adequate monitoring, we would know the basis for Nike's departure and we would know whether Nike tried to work with those factories to get them to improve their labor practices. As it stands, we have only Nike's claims about its motivation for leaving the four factories in Indonesia. Nike can never clear its name as long as it uses only monitors who are beholden to the company and whose reports to Nike are kept secret.

We are not trying to drive Nike out of any factories where the company currently produces -- quite the contrary! We believe that, once a company is producing someplace, it has an obligation to do right by those workers and not to cut-and-run for the sake of expediency. We urge Nike to work with its contractors to improve labor conditions -- and to cut contracts only as a last resort. (We make an exception to this policy in the case of international boycotts against investment in particular countries, such as the Burma boycott. All transnationals are urged to put their operations out of Burma. As far as we know, Nike has no production in Burma.)

Nike claims that it severed ties with four Indonesian factories because of concerns about their labor practices. However, consider that Nike continues to do business with -- and is increasing its production in -- Chinese factories which are probably even more repressive and where wages are even lower than in the Indonesian factories.

One has to suspect that labor concerns were just a cover for Nike to shift more of its operations out of Indonesia and into China -- for lower wages and less scrutiny by human rights groups. Consider this: Earlier this year, when Indonesia raised its minimum wage by 20 cents a day to $2.46 a day, a Nike spokesperson stated that Indonesia "may be pricing itself out of the market." Isn't it more likely, then, that Nike is making good on its threat to start pulling out of Indonesia than that the company is making good on its often-broken promises to clean up its act?

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