Nike Inc. CEO Phil Knight won headlines and public acclaim three years ago when he promised to remedy specific human and labor rights abuses in the company's Asian factories. But according to a watchdog agency's stinging new report, the company's rhetoric is still outrunning reality.
San Francisco-based Global Exchange's 115-page report recounts six vows Knight made in a May 12, 1998 speech at the National Press Club, and charges that the Oregon-based athletic apparel corporation has failed to live up to either its words or their spirit.
After three years, a period the report calls ample time to make good on its pledges, "Nike workers in sweatshops abroad still work for wages they and their children can't live on, are forced to work long overtime hours, and face harassment, violent intimidation and firing when they organize to defend their rights or tell journalists about labor abuses in their factories," says Leila Salazar, Global Exchange's corporate accountability organizer. "Over the last three years, Nike has treated this issue as a public relations inconvenience rather than a serious human rights issue."
But Dusty Kidd, Nike's vice president of corporate responsibility, claims that the company has in fact met most of its commitments, and is working toward the others.
For instance, in the wake of revelations in 1997 that workers in one Vietnamese factory were being exposed to toxic fumes at dozens of times the legal limit, Knight promised that all Nike factories would meet the US government's indoor air quality standards. Kidd says Nike factories have reduced use of petroleum-based chemicals by 88 percent since 1995, and while he can't swear no Nike workers are ever exposed, "we're as close to being at that standard or better as we can reasonably expect to be." But Global Exchange points out that Nike warns managers about pending inspections by its own monitors ahead of time, allowing them to minimize toxic fumes when the monitors arrive. Workers claim managers do indeed take such opportunities to mask working conditions.
Knight also promised Nike would include non-governmental organizations in its factory monitoring, with summaries made public. Kidd acknowledges this process has proceeded slowly, but points out that it allowed the monitoring group Verite to visit Nike plants in Mexico, and that Nike made their report public. Global Exchange, however, says that judging from Kidd's own responses to its researchers inquiries, that appears to be the only such inspection that has taken place. Meanwhile, monitors from the Fair Labor Association -- an NGO formed by human rights groups and companies including Nike itself -- won't start their work until this summer or fall "because it's taken a lot longer than we or Phil thought to get the FLA monitoring established," says Kidd.
Nike further pledged it would expand its micro-enterprise loan program to benefit 5,000 families in Vietnam, Indonesia, Pakistan and Thailand, and it has. "Again, did we meet our commitment? Yeah," Kidd says. "I feel pretty happy about it." But at same time, the report charges, Nike has rejected calls to adopt a living wage standard for the 530,000 workers who churn out its products, and continues to pay wages that are often barely adequate for workers to live on, and that sometimes fall below legal minimums. "The company should commit to a living wage before it seeks public relations kudos by funding charitable programs like this," the report charges.
"Nike understands that it still has improvements to make and the company is committed to fulfilling the agenda of ... Phil Knight," says Kidd. "As in every area of Nike's business, 'there is no finish line' and improving the lives and working conditions of the workers who make Nike products is no exception."
That's not enough, says Global Exchange spokesman Jason Mark. "Phil Knight called that speech a watershed event, but the company culture clearly has not changed,'' says Mark. "Granted, things take time, but Nike is dragging their feet to the finish line. They're not sprinting the way an athlete should.''