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Nike is simultaneously one of the most loved and reviled corporations on the planet. Its marketing genius and product placement has convinced millions around the world that forking up hundreds of dollars for its products is not somehow theft. Unfortunately, while Nike enjoys great economic success, the same cannot be said about its workers. Earlier this month, workers at a Taiwanese shoe factory in Vietnam went on strike, demanding higher salaries to help cope with inflation.
The pricing price of food stuff around the world has pushed many into poverty. The food crisis does not only hurt the poor but also the middle class, who feel the crunch more acutely. Strikes are becoming more frequent in Vietnam, where consumer prices have risen more than 16 percent year-on-year in the first quarter of 2008. This is the true face of change. While the corporate responsibility movement has had tangible results, real change in the developing world will accelerate with strikes and workers demanding more rights.
Like many multinational corporations, Nike does not make its own shoes. Instead, it contracts manufacturing out. Why? The obvious reason is that it is much cheaper. The better reason, at least from a corporate perspective, is that by not taking responsibility over the means of production, Nike than can absolve itself from blame when workers are mistreated. Very convenient
Jeff Ballinger ‘s CounterPunch article offers a good explanation of what exactly is occurring in Vietnam.
The current strike wave in Vietnam can be traced to a seemingly benign statement by Adidas officials last year, attempting to explain a sharp increase in profitability. Since the German shoe giant’s acquisition of the Reebok brand, it gained new leverage over supplier factories. This predatory relationship with the mainly Taiwanese and S. Korean sports shoe manufacturers collided with a rising rate of inflation, bringing the near-subsistence wage to a level workers would not tolerate.
The largest indirect employer of Vietnamese workers is the Nike brand. Last December, the company told producers of a U.S. television documentary that there had recently been 10 strikes in its 35 supplier factories; since that time, 31,000 more contract-workers have launched strikes–one over forced overtime and the other for higher pay. Indeed, fully 85% of strikes in Vietnam have taken place in foreign-investment factories producing for export, according to government figures.
The documentary aired by CNBC went on to quote observers averring that Nike was the corporate-responsibility “gold standard” amongst shoe and apparel companies. How to explain this paradox? A good bit of the problem is related to how the “sweatshop” story has been (mis)reported over the last decade.
When Hannah Jones, the top CSR person at Nike had to deal with the wages question, she merely scolded the CNBC reporter for asking: “there is no magic wand” and, “we don’t think there’s anything, you know, that you can suddenly do overnight like flipping the switch and artificially hiking wages in factories.”
The truth of the matter is that this former BBC staffer almost never has to deal with the media and it is extremely rare for the company to be asked about wages paid to its 900,000 mostly-Asian contract employees; the triumph of PR/Corporate Social Responsibility is “re-defining ‘success.'” For example, Nike won an award last month for producing the “best CSR report,” according to a recent “news” story.
Indeed, Ms. Jones spends her days holding court, so to speak, as THE top global practitioner in the burgeoning CSR field, addressing audiences all over the world on corporate citizenship, the triple bottom line, incentivizing suppliers and creating systemic changes. She’s a rock star in the PR/CSR biz. With such a strike wave going on, one would think that Ms. Jones would be more earnest–rather than patronizing and dismissive. (And non-responsive, it must be said.)
The documentary team left the real story on the cutting-room floor–brave workers standing up to brutal bosses in a system with no tolerance for independent unions. They had interviewed workers sacked–and jailed overnight – for leading the forced overtime strike but did not use it in the nine-minute segment on Nike’s Vietnam suppliers.
A few months ago on the day before I arrived in Vietnam to talk with workers, four leaders of the banned “United Workers & Farmers Organisation” were convicted of “posting to a reactionary web-site, abusing democracy and spreading distorted information to undermine the state”–the UFWO founder, Doan Van Dien, received a 4-year sentence.
At the factory which had a strike in April, twenty were forced to resign (meaning that they do not receive severance pay) and four were detained by security forces for passing out leaflets urging workers to hold out for the 20% raise they demanded instead of accepting a Party-run union agreement with management providing only 10%.
There could be many more disciplined for leading the resistance; the only information that I have comes from these two factories. Hopefully, the more courageous bloggers in that part of the world will soon begin to act as a conduit for information about fired activists and we can begin some cross-border solidarity efforts.
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