Oxfam Sweats Nike, Adidas, Over Working Conditions in Indonesia

March 11, 2002
Sportswear giants Nike and Adidas-Salomon, already smarting from claims by some worker and human rights groups that their overseas factories are little more than sweatshops, are on the defensive once again.

Sportswear giants Nike and Adidas-Salomon, already smarting from claims by some worker and human rights groups that their overseas factories are little more than sweatshops, are on the defensive once again.

Australia''s Oxfam Community Aid Abroad released the report, "We Are Not Machines," which chronicles the working conditions facing Indonesian Nike and Adidas workers. Eighty percent of the workers are young women, ages 17 to 29. According to Oxfam, most of the workers live in extreme poverty, with full-time wages as low as $2 per day. The report also discusses hazardous working conditions, and some of the indignities experienced by the workers.

"Factory managers abuse and harass us because they think it will increase our productivity," one Nike factory worker said in an interview with the report authors. "They don''t understand that people work better when they are treated in a way that respects their needs. You should do research into that. Maybe then they will stop treating us like machines. All you need to do is turn on a machine and it works automatically. Humans cannot work like that. We are not machines."

The report, released March 7, acknowledges that both companies have made an effort to improve working conditions and safety for the workers at the factories. Measures taken by the companies have reduced the incidence of sexual harassment and workers are now able to take sick leave without fearing they will lose their jobs. That''s not enough, says Oxfam.

"Our feeling is that changes have occurred but they still fall well short of pulling workers out of poverty or providing them with safe conditions or protecting their rights to have unions which we see as the key issues," says Timothy Connor, author of the report.

The report finds that although some pressures on workers have eased slightly, they are still shouted at for working too slowly. Workplace dangers include respiratory illness from inhaling toxic chemicals found in the glue for the shoes and amputations from unguarded cutting machines. The report also noted that workers have good reason to fear that if they join independent unions, they may face dismissal, jail or physical assault.

Because of the low wages and lengthy work hours at the facilities - it is not unusual for some workers to work 60 or more hours a week without being paid overtime - many of the workers send their children to live with friends and relatives, says Andrew Hewett, executive director of Oxfam. "Nike and Adidas workers who want to live with their children are going into debt to meet their families'' basic needs," he adds.

Nike and Adidas-Salomon do not own the factories in Indonesia. The companies contract with the factories, which are mostly owned by Taiwanese and Koreans, to manufacture their products.

Nike responded to the report by acknowledging that efforts to monitor and improve working conditions at its facilities are ongoing, noting, "Nike maintains contract relationships with over 900 factories, representing 700,000 workers in 55 countries around the world. We continue to work to develop a system of management and oversight that emphasizes continual workplace improvement." There are 11 factories in Indonesia producing an average of 50 million pairs of shoes per year.

"We take any concerns raised about factories where Nike product is produced very seriously. Nike is well aware of the issues raised in the report (based on interviews with 35 workers) because we engaged in a transparent assessment of our Indonesia operations with an independent entity, the Global Alliance for Workers and Communities, which involved interviews with 4,000 workers," says a statement from Nike.

The Global Alliance spent 4,000 hours interviewing 4,000 workers in nine factories in Indonesia and Nike claims it has been addressing all issues of non-compliance found through that work. Nike reports quarterly to the Global Alliance on progress around remediation of the issues, which includes the ones raised in "We Are Not Machines."

In addition to addressing the issues of non-compliance, Nike and the management of the factories have begun education for managers and workers on issues of health, harassment, management/worker relations training and life skills development.

"We are pleased the "We are not Machines" report recognizes some of the progress that has been made in these workplaces and believe there is much work that remains to be done…Nike works diligently on any issues of non-compliance no matter how they have been brought to our attention," says Nike''s statement.

In a statement sent to OccupationalHazards.com, David Husselbee, head of Social and Environmental Affairs for Adidas-Salomon, said the company has a code of conduct called the Standards of Engagement (SOE) that requires its suppliers to comply with the code labor standards outlined by organizations such as the United Nation''s International Labour Organisation.

"To ensure that the SOE is a reality in our suppliers'' factories, we have an international team of 30 people who monitor factories and work with suppliers to develop action plans and ensure a process of continuous improvement," says Husselbee. He adds the company is aware of the issues raised in the report, "and are continuously improving workplace conditions."

He said Adidas-Salomon supports the workers'' right to unionize, and includes language in its contracts with manufacturers in Indonesia that it will not tolerate any retaliation against workers who are active in "legal worker organization activities."

Husselbee adds the report draws on occupational safety and health information that is two to three years old "and fails to acknowledge the progress which has been made in improving the air quality in our suppliers'' factories in the last year." He notes the company has reduced nearly by half the amount of volatile organic compounds used in the cement in a pair of Adidas-Salomon shoes, and plans to reduce it again by more than half in the next year.

"The health and safety experts in our team, coming from the oil industry and other heavy industries, work with factories on issues such as fire safety and machinery safety to ensure that accidents are reduced to the only acceptable level - zero," says Husselbee.

He also notes the factories where Adidas-Salomon shoes are manufactured reduced work hours to between 45 and 60 a week, and says the legal minimum wage paid to the workers increased by 30 percent in January 2002. "Factory workers are paid at levels comparable to teachers and university professors," in Indonesia, he says, adding Adidas-Salomon makes sure that workers are paid the legal rate for overtime.

The report "We Are Not Machines" can be found at www.caa.org.au.

by Sandy Smith ([email protected])

About the Author

EHS Today Staff

EHS Today's editorial staff includes:

Dave Blanchard, Editor-in-Chief: During his career Dave has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. In addition, he serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2021), which has been translated into several languages and is currently in its third edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

Adrienne Selko, Senior Editor: In addition to her roles with EHS Today and the Safety Leadership Conference, Adrienne is also a senior editor at IndustryWeek and has written about many topics, with her current focus on workforce development strategies. She is also a senior editor at Material Handling & Logistics. Previously she was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck?, which made the Cleveland Plain Dealer's best sellers list.

Nicole Stempak, Managing Editor:  Nicole Stempak is managing editor of EHS Today and conference content manager of the Safety Leadership Conference.

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