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International Herald Tribune: Nike Hones Its Image on Rights in Asia

by Philip SegalInternational Herald Tribune
June 26th, 1998

Harsh Saini, Nike Inc.'s Asian troubleshooter and spin doctor, has a tough job on her hands. Human rights organizations continue to accuse the athletic- equipment maker of underpaying most of its 500,000 subcontracted Asian workers and of locking independent monitors out of its factories. Meanwhile, Miss Saini is left to talk up her company's free night-school program for 600 people.

Until recently, Nike had been living a public relations nightmare, lampooned in the ''Doonesbury'' comic strip, which regularly features ferocious factory management and miserable, underpaid workers at factories in Vietnam. Like plants in Indonesia, the factories in Vietnam are not owned by Nike but are contracted to make the bulk of its athletic shoes.

When the negative publicity got too shrill, the Nike chairman, Phil Knight, snapped into action in May, announcing a series of reforms on working conditions, and pressing company executives like Miss Saini to talk up Nike's good works. But the human rights groups credited with pushing Mr. Knight to respond are withholding their applause for the moment. Nike has yet to announce how independent monitoring of Asian factories will work, and is standing by its assertion that its pay levels are fair.

Whether the announced reforms are ''window dressing or substantial, we'll have to wait and see,'' said Joshua Karliner, executive director of the Transnational Resource and Action Center, a nonprofit group that often criticizes conditions at U.S. factories overseas. ''The big question is: Nike said nongovernmental organizations should participate in monitoring. What kind of participation that means is still up in the air.''

So, despite a dearth of substantial changes to announce, Miss Saini presses ahead, jetting around Asia to spread the good word on Nike. As the company's corporate and social responsibility manager for Asia, she is both the Nike spokesperson and the person in charge of making sure that Nike's subcontractors adhere to the company's labor and pay standards. Miss Saini, no stranger to corporate controversy, was hired away last year from Body Shop International PLC, an iconoclastic international cosmetics retailer.

Part of her job, she said in a telephone interview, is to supervise the creation of several education programs, in which 540 Nike workers in Indonesia will be able to study for elementary or high school equivalency degrees once their workdays are finished, all at Nike's expense. Similar programs are set to begin in Vietnam and China. Complaints against Nike surfaced more than a year ago as the company posted big profits and reports filtered out of Asia of forced overtime, workers humiliated by foremen at factories for not wearing the right shoes to work, and women too intimidated by their supervisors to ask for sick leave. Miss Saini is dismissive of the negative reports. ''Most of the information is incorrect,'' she said. ''They're not serious studies that have been carried out,'' adding that independent groups ''were setting up stalls and talking to passersby.'' She said the company was still working on ways to monitor factories and was determining who would be allowed on monitoring teams. ''It really depends on what group we're working with and what they feel is the best way of monitoring,'' she said. The groups have insisted on unfettered access to the factories.

The criticism of Nike is not unanimous. While the New York-based Interfaith Center on Corporate Responsibility has called for a more professional report on pay to be done, it says that Nike is ''moving in the right direction,'' according to Reverend David Schilling of the center.

''Clearly, the air quality issue is very important to Nike - they've made substantial strides,'' in switching from oil-based to water-based adhesives in their Asian factories, he said.

As for pay, Miss Saini stood by a study Nike commissioned from Dartmouth College's Amos Tuck School that concluded that factory workers in Indonesia and Vietnam were paid more than enough to live on and were able to generate savings.

She said that Nike was proud that in March it raised its Indonesian wages to 15 percent above the national minimum. Nike workers in Indonesia now make a base wage of 172,500 rupiah ($11.75) per month. Unfortunately, the rupiah has depreciated severely since March.

At the time of the raise, the Interfaith Center found during a trip to Indonesia that ''basic commodities, like rice, cooking oil and sugar, have tripled in price. Powdered milk, which took a day's wages at the minimum wage level to buy before the crisis, now takes approximately 10 days' wages and therefore is out of reach for most Indonesians.''

On pay, ''the issue isn't how many cents, the issue is will their wages translate into buying commodities to lead a sustained, healthy life,'' said Mr. Schilling. He described Nike's minimum wage rise in Indonesia in April as ''a small step.'' Human rights organizations argue that workers in Asia should make at least $3 a day to cover basic food, housing and clothing needs. The Dartmouth study reported that the average annual income of a Nike worker in Vietnam is $384, or just over $1.48 per day assuming a five-day workweek.

Human rights groups say the Dartmouth study is shoddily done and contradicts its own data.

The Transnational Center said that at one Nike factory, 12 out of 37 workers reported pay below their province's legal minimum wage of $35 per month. The Dartmouth team ''apparently did not find this violation of Vietnamese law relevant or interesting enough to merit comment in the main report,'' said the Transnational Center.

One of the biggest drawbacks of the Dartmouth study cited by critics was that in figuring out whether Nike workers could get by on their salaries, it did not talk to any employees in Vietnam. Instead, it compiled a consumption profile in a small series of interviews with randomly chosen households.

The Dartmouth report also conflicts with one conducted earlier in 1997 by the Washington-based Vietnam Labor Watch. In March of last year, after interviewing Nike workers, the group reported that with a daily wage of $1.60 and three meals a day costing $2.10, several women interviewed said ''they literally have to make a daily decision between eating a balanced meal or paying rent for the single rooms that most of them rent out.''





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