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CAA/OXFAM Australia
January 27, 2003
Davos - Thousands of workers in Asian factories that supply multinationals including Nike, Adidas and Levis have been thrown into unemployment and denied their entitled severance pay, according to Australian development agency Oxfam Community Aid Abroad (Oxfam Australia).
These claims were made today at the Public Eye on Davos conference in Switzerland. The conference, hosted by an international coalition of NGOs and coordinated by the Berne Declaration, is running parallel to the World Economic Forum in Davos. The conference organisers are calling for binding international regulation of corporate activities.
Joining Tim Connor of Oxfam Community Aid Abroad on a conference panel were Yeheskiel Prabowo of the Indonesian Textile, Garment and Leather Worker's Union (TSK) and Ida Mustari, a worker from the PT Doson factory in Indonesia. The Doson factory closed in September 2002 when Nike, the factory's sole customer, cut its orders. The 7,000 workers from the factory
are yet to receive their legal entitlements.
"We are concerned that just as free and democratic unions are starting to emerge in Indonesia and to campaign for better working conditions, foreign investors like Nike are reducing their investment and moving to countries where union rights are not respected", said Mr. Prabowo.
Last month Oxfam Community Aid Abroad met with workers from the Bed and Bath Prestige factory, a Thai factory which supplied companies including Nike, Adidas and Levis. In October 2002 the owner closed the factory and disappeared, owing workers back pay and severance pay. Nike, Adidas, Levis and the other buyers have refused to pay for workers' entitlements.
Workers in the Bed and Bath Prestige factory described working up to 110 hours per week. Employees reported that the factory owner made amphetamines freely available in factory drink containers during peak times. They said that almost all workers took them, as it was the only way they could work the hours demanded of them.
"Transnational corporations like Nike could provide stable, long-term, decently paid jobs", said Tim Connor, Oxfam Community Aid Abroad’s NikeWatch Coordinator. "They could maintain investment in countries that seek to protect workers' rights. Instead, the practice of contracting out production by companies such as Nike, Adidas and Levis puts factory owners in competition with each other to reduce costs, increase flexibility and speed up production. That pressure translates into poor working conditions."
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The Jakarta Post
January 10, 2003
Police fired two warning shots into the air to disperse a rally of some 1,000 former workers of PT Doson Indonesia, a company that produces shoes for Nike, in Tangerang.
The workers responded to police by throwing shoes at the officers, but there was no violence, reports said.
While thousands of workers took to the streets in Jakarta and other cities to protest the fuel price hike, about 1,000 of the 6,890 former workers of PT Doson held a 20-kilometer-long march to fight for their severance pay.
Braving intense heat, the workers, mostly women, started walking at 9 a.m. from the company's factory on Jl. Raya Legok to the offices of the Social Affairs Agency on Jl. Windu Karya.
Several protesters took turns making speeches, which caused severe traffic jams in the area. They also blocked an access road to the Jakarta-Merak toll road heading to Karawaci. Motorists heading to Legok and Lippo Karawaci from Jl. Imam Bonjol were also hampered by the rally.
When the protesters arrived at the Jl. Teuku Umar-Jl. Imam Bonjol intersection at 1 p.m., police officers told them to take Jl. Teuku Umar. The police fired the two warning shots when the workers refused to obey them, demanding instead to use Jl. Imam Bonjol. Some workers then threw their shoes at the officers before heeding their order.
The protesters urged both the administration of the Tangerang regency and Banten province to help settle the dispute with the company owners over their missing severance pay. They said they were in desperate need of money, especially since life had become harder without work.
"We took the legal route to fight for our severance pay, but that did not settle the problem, so now we are taking the political route," Joko Haryono, the former chairman of the company's labor union, told The Jakarta Post.
PT Doson Indonesia, a Korean company, said it was forced to close its factory in September 2002, due to the end of its supply contract with Nike.
The workers took the case to court, but no settlement has been reached yet.
The protesters arrived at the office of the Manpower Agency on Jl. Perintis Kemerdekaan at 1:30p.m., but the office was quiet so they continued onward to the office of the Social Affairs Agency.
Joko said that they would stay outside the office until a settlement was reached.
The head of the agency, TB Mh. Chudori S, who met the workers, said that the protesters asked him to arrange a meeting with the regent.
"We do not have the authority to handle this case. They came to the wrong place," he told The Jakarta Post after the meeting, adding that they should have gone instead to the Manpower Agency.
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The Jakarta Post
January 15, 2003
The recent protest involving only about 3,000 workers in Jakarta, instead of the threatened 25,000 people, is further proof of how weak the labor movement in Indonesia is, and of its failure so far to harness its potentially powerful political leverage, say labor experts.
The fragmented labor movement is seen as one of the main contributing factors to the failure of the protest, according to former manpower minister Bomer Pasaribu.
"Unions in Indonesia are similar to political parties. There are too many of them, but only a few of them have clear programs to fight for their common goals," Bomer told The Jakarta Post on Monday.
Official records show that there are more than 60 registered national labor union federations, 140 labor unions and some 11,000 company-level unions.
Those unions have an estimated combined membership of 11 million workers.
The huge membership claimed by labor unions could become a powerful political force if they united to fight for their common interests. "Unfortunately, these unions are divided based on ethnic group, religion and political affiliation. Not to mention the various organizational, managerial and leadership problems that also affect them," said Bomer, who is also the chairman of the Center for Labor and Development Studies (CLDS).
Another factor, according to labor expert Tutur Suwito, is the low social awareness of workers. Consequently, they will join rallies or protests only if the issues directly affect them individually.
"Many workers decided not to join the recent protests (against the price hikes) as they had yet to feel the effects of the hikes," said the former chairman of the Jakarta Labor Institute (IPJ).
"If the price hikes cause their company to lay them off, it is only then that they will react to the hikes. It has always been like that with other issues. Instead of proposing programs that could improve their welfare, workers impulsively react to existing policies," added Tutur.
Weak leadership is also responsible for the unions' failure to mobilize large crowds to protest the recent price hikes.
Many unions in Indonesia were founded, and later managed, by non-governmental organization (NGO) activists, such as Dita Indah Sari and Muchtar Pakpahan.
This, sometimes, inadvertently results in the workers being too dependent upon their activist patrons, thus impairing the capacity-building process among the workers themselves.
This weak leadership is also the result of the long history of oppression instituted by former president Soeharto, who allowed only government-sanctioned unions to exist.
This New Order oppression has impaired the labor movement's ability to groom potential leaders from among the ranks of workers, and also significantly increased the workers' distrust of unions.
The labor movement has grown significantly since the fall of Soeharto, and, in fact, several labors unions, according to Bomer, have shown their ability to pursue a clear agenda and mobilize their members in doing so.
"Labor unions in state-owned companies are far better than those in private firms. They are more capable of mobilizing their members and are less tainted by particular political interests," he said.
In order to empower labor unions, Bomer stressed the need for an improved labor law, especially after the implementation of regional autonomy.
In addition, Bomer suggested the establishment of an equal and meaningful bipartite relationship between workers and employers, and a tripartite relationship involving the government, so as to facilitate negotiations to resolve disputes.
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The Jakarta Post
February 20, 2003
The International Labor Organization (ILO) called on the Indonesian government to work more seriously to uphold workers' rights to freedom of association as Indonesian workers have to face hurdles in exercising their rights.
The director of the ILO office in Jakarta, Alan J. Boulton said on Wednesday that Indonesia had yet to find effective institutions and processes for the workers to promote their rights freely and without any disruption.
A preliminary survey from ILO entitled Freedom of Association and Collective Bargaining: A Study of Indonesian Experience 1998-2003, showed that Indonesian workers still have to endure harsh treatment when fighting for their rights.
The survey shows that there have been actions taken by employers to curtail the implementation of the right to establish trade unions.
The tactics used by employers include dismissal of union activists, demotion, and moving union activists to other work places.
The reports also revealed that in the event of a dispute between workers and employers, the management would call in military personnel to back them up in the negotiation process, which unions see as an intimidatory practice.
Another method to deter unionism is the use of criminal charges against workers involved in trade unions.
There have been cases in which union activists have been detained and charged for violating Criminal Code (KUHP) Article 335 prohibiting "unsatisfactory conduct toward another". Most workers perceive this article as open to multifarious interpretation.
ILO, however, applauded Indonesia for making substantial progress in implementing the organizations convention regarding workers' freedom of association.
In the wake of the ratification of ILO Convention No. 87 on the right to unionize, workers in the country have indeed enjoyed freedom of association as proven by the rapid growth of trade unions.
Earlier, the Minister of Manpower and Transmigration, Jacob Nuwa Wea said that there were 215 trade unions at the national level comprising of a number of high-profile ones such as All Indonesia Worker's Union Federation (FSPSI) and Indonesian Prosperity Trade Union (SBSI).
"In addition to that, at the provincial, district, and plant levels there are 931, 2877, and 15,762 unions established respectively," Nuwa Wea said at a seminar on the implementation of the ILO convention.
Under the authoritarian rule of then president Soeharto, workers in the country were forced to join state-sponsored trade unions. The regime banned all trade unions established without the government's consent, and perceived them as illegal entities.
In a bid to uphold workers fundamental rights as enshrined in the ILO convention, the organization has embarked on programs to provide technical assistance for the Indonesian government.
"The Indonesian government with assistance from ILO, helps trade unions to develop their own resources, so that they can truly represent workers in the bargaining process," Boulton remarked.
The three-day seminar is also focusing on finding ways to eradicate the use of child labor in developing countries.
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Associated Press
January 10, 2003
WASHINGTON -- Sneaker maker Nike Inc. won the chance Friday to fight for its image at the Supreme Court.
The court said it will use an appeal by the popular apparel and tennis shoe company to decide how much constitutional protection company executives have when they fend off allegations that they run sweatshops or make dangerous products.
Although the case addresses a relatively mundane free-speech issue, it provides a revealing look at the public relations machines behind big companies -- and may determine what people can do when they think they've been misled by corporate spin.
For more than two decades the Supreme Court has struggled to define commercial speech, which gets less protection under the First Amendment than other types of speech like political expression. The justices have sent conflicting signals in a series of cases.
A huge coalition of companies, public relations executives and newspapers and television stations had urged the court to try again to straighten out the confusion. The justices will hear arguments this spring in the latest case. The court has already debated a dozen commercial speech cases in the past decade.
The case arises from a campaign by Nike to defend its wages, treatment of workers and health and safety conditions at Asian plants where workers make tennis shoes and athletic wear.
The company was sued by a San Francisco activist who contends the company lied about how much the employees earned and how they were treated.
A sharply split California Supreme Court ruled that the company could be sued under a state consumer protection law because its defense campaign was commercial speech.
The case has not gone to trial. The high court will decide if it will, and if others like it can follow.
Some 30 news organizations, including ABC, CBS, NBC and top newspaper chains, argued in court filings that reporters will not be able to get company executives to talk freely about the safety of products, racial discrimination or environmental concerns about their industry, because of the fear of the lawsuits.
The result will be ``inhibiting the media's ability to compare both viewpoints in order to ferret out the truth,'' the groups said.
The U.S. Chamber of Commerce, represented by former special prosecutor Kenneth Starr, said the California test is ``breathtakingly broad and deeply menacing to our system of free expression'' He said the court should give companies more protection. ``A contrary conclusion would leave First Amendment freedoms hanging by too slender a thread,'' Starr wrote.
Nonsense, argued lawyer Paul Hoeber, representing the California man who sued.
"Rather than chilling protected speech, the decision will deter false or misleading commercial speech,'' he told justices in filings.
Hoeber said Nike put false statements about its labor practices in a pamphlet distributed to reporters, in press releases, on the Internet, in letters to organizations, and in a letter to the editor.
"These documents were devoted almost entirely to praising and promoting Nike and its manufacturing practices and were replete with references to the athletic shoes it was trying to sell,'' wrote Hoeber, whose client is Marc Kasky.
Nike hired a high-powered team of lawyers in its Supreme Court appeal, including Harvard professor Laurence H. Tribe and former U.S. Solicitor General Walter Dellinger. They argued that if the court doesn't intervene, more companies will be sued for things said in public debate.
"It is this ongoing threat, this Sword of Damocles, that works a forbidden chill of protected speech as long as this court permits it to hang,'' they wrote.
I commercial speech cases, there is no First Amendment protection if it can be proved that information was false or misleading. In other types of free-speech cases, people who file suit must prove either negligence or actual malice.
Companies like Microsoft Corp., ExxonMobil Corp., and Pfizer Inc. also filed arguments on behalf of the Oregon-based Nike.
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PR Week
December 16 2002
Rare is the court decision that has the power to create credibility for an entire profession. Yet that is precisely what happened in May when the California Supreme Court ruled in the Nike case that PR has the same obligation to truth as advertising.
Sad is the professional society that doesn't recognize a gift when it sees it. Yet that is precisely what happened when the PRSA and other industry groups filed an amicus brief with the US Supreme Court to overturn the decision and permit corporations to play loose with their facts. For an industry long burdened by doubts and innuendo about the credibility of its practitioners, this was breathtakingly shortsighted.
Despite the PRSA's claims, Kasky vs. Nike is not about freedom of speech; it's about where the line is drawn between the two well-established categories of speech: noncommercial and commercial. There's a big difference. The Supreme Court has long held that noncommercial speech (a.k.a. political speech), even when it's inaccurate, enjoys First Amendment protections, making it difficult for those claiming damages to receive relief. Advertising and other forms of commercial speech, intended to boost sales and profits, are
held to a higher standard, with "truth in advertising" laws requiring advertisers to prove the accuracy of their statements.
There's no dispute about how the Nike case landed on the Supreme Court's doorstep. Nike has long been accused of using sweatshop labor. To counter these criticisms, Nike publicized a study that concluded the charges were untrue. Activist Marc Kasky sued Nike for false advertising, claiming its PR efforts misled the public about its working conditions. Rather than defend its claims, Nike said its statements were about its labor practices, not its products, and were therefore noncommercial speech.
Nike won initially, but the California Supreme Court reversed the decision, ruling Nike's PR campaign was commercial speech because it was made by the company, communicated to current and potential customers, and was designed to make the company more acceptable to the buying public. Nike appealed to the US Supreme Court, which has not yet decided whether to hear the case. If it doesn't take up the matter, the California ruling stands.
The court noted that the speech was commercial even though the subject wasn't specifically about products. It said companies recognize that social issues such as labor conditions contribute to the public's perception of a company and its willingness to buy its products. Can anyone disagree?
Is honesty a burden PR people can't bear? Of course not, particularly since it's what all PRSA members pledge to do when they join the organization. The Code of Ethics' Core Principle reads, "Protecting and advancing the free flow of accurate and truthful information is essential to
serving the public interest and contributing to informed decision making in a democratic society."
Assuming the decision is upheld, the practical implications are obvious, easy to live up to, and a benefit to solo practitioners, agencies, and clients. Everyone wins - even the public. It says the factual statements we choose to make in press releases, bylined articles, speeches, and such
will have to be truthful. This is exactly the same standard Nike and every other California advertiser already lives up to when they run ads.
And what of the amicus brief? It's a whiny legal tantrum that does more to highlight the weaknesses of the appeal than bolster it. It argues that corporations won't be able to defend themselves against activist charges if they have to vouch for the accuracy of their own statements (I'm not making this up!).
This was addressed by the California Supreme Court. It said corporations should be held to a higher standard than their critics because they can be expected to be more knowledgeable about their own operations, and have far greater resources to conduct research and learn the facts. Who better to be able to know whether Nike is running sweatshops than Nike?
As the nation recoils from scandal and moves toward full disclosure, transparency, and pro-forma reporting reforms, let's hope the Supreme Court doesn't take a step back and sanction misleading statements and half-truths. The PRSA should stop running interference for big-money interests. PR professionals, our clients, and the public need the Nike decision.
Jeff Seideman is president of the Boston Chapter of the PRSA, and has been elected to the board of directors of the national society for 2003, and is president of ImageTech Communications.
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January 23, 2003
New Report Highlights U.S. Multinationals' Shameful Human Rights, Environmental and Labor Records
Washington, DC: As world business and political leaders gather in Davos, Switzerland for the 33rd annual World Economic Forum (WEF), a coalition of environmental, development, labor and human rights groups today released a joint report entitled "International Right to Know: Empowering Communities Through Corporate Transparency."
The report documents the irresponsible environmental, labor and human rights practices committed by ExxonMobil, Nike, McDonald's, Unocal, Doe Run, Freeport McMoRan and Newmont Mining. Some of the practices described in the report:
- 90 percent of children in La Oroya, Peru, the site of a lead smeltering
facility owned by St. Louis-based Doe Run, have blood-lead levels above
acceptable levels, and 20 percent have levels so high they should
require hospitalization.
- A Chinese manufacturer of McDonald's Happy Meal toys employs 13 year olds to work 16-hour days for $3 a day.
Guided by the theme of "Building Trust," this year's WEF will be looking at ways to restore confidence in business after a turbulent year of one corporate scandal after another. The International Right to Know (IRTK) coalition is calling on American businesses to demonstrate their leadership and commitment to building trust by disclosing the same kind of information
for their operations abroad that is required here in the United States.
Restoring trust in corporate America means U.S. companies must not only provide accurate financial information, they must also disclose information concerning their environmental, labor and human rights practices. Disclosure would allow investors and consumers to make educated choices - choices that are based on a factual and comprehensive portrayal of a
company's business activities - both here at home and abroad.
For the full report, go to: http://www.irtk.org/irtkreport.pdf
Contact:
Colleen Freeman, Friends of the Earth, 202 783 7400 x121
Zack Roth, Sierra Club, 202 675 6279
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Associated Press
Feb. 19, 2003
BEAVERTON, Ore. - Nike Inc. is under investigation by the Florida attorney general's office for allegedly fixing the retail price of shoes and clothing, the company said.
Beaverton-based Nike received a notice of a civil investigation in January "in regard to issues of pricing of products at retail," spokesman Vada Manager said Tuesday.
Nike denies the allegations and is "cooperating fully," Manager said.
Major sporting goods retailers are being asked by Florida's attorney general whether Nike withheld items because its most expensive shoes, such as the top Air Jordan and Shox lines, weren't being sold at prices the company considered suitable.
Sports Authority Inc. received a letter dated Jan. 3 from the attorney general requesting information, said Frank Bubb, the company's general counsel. He declined to provide further details.
JoAnn Carrin, spokeswoman for Attorney General Charlie Crist, confirmed the existence of an investigation Tuesday afternoon to the Tallahassee Democrat but said she could not comment on any details.
Last year, Nike said it would halt shipments of Air Jordan and Shox to Foot Locker Inc., its biggest U.S. customer and retailer, because of a pricing dispute.
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BBC
Feb. 22, 2003
The owner of a clothes factory in American Samoa has been convicted of what prosecutors called "modern-day slavery". Kil Soo Lee was found guilty of abusing workers from Vietnam and China and other crimes including money laundering and extortion.
During his trial, he was accused of ordering beatings for disobedient employees, starving workers or threatening them with deportation if they complained.
Two factory managers were cleared of similar charges during the trial, held in Hawaii as the territory of American Samoa has no federal judge. Lou deBaca of the US Department of Justice said: "Kil Soo Lee has exploited over 200 Vietnamese and Chinese people in what amounted to nothing less than modern-day slavery."
Lee owns the Daweoosa Samoa company which made clothes for the JC Penney chain as well as other retailers before it closed.
He faces sentences of up to 20 years for each of 11 counts of involuntary servitude and a maximum of 10 years for each of the other charges.
He was cleared of bribery charges and three counts of involuntary servitude.
He is scheduled to be sentenced in June.
Witnesses challenged
Prosecutors said workers paid thousands of dollars to gain employment at the factory in the US territory.
But once there, they were effectively enslaved.
Defence lawyers had challenged the credibility of prosecution witnesses, saying their statements were full of discrepancies and lies.
Two of Lee's managers, Virginia Solia'i and Robert Atimalala, were found innocent of all charges.
Two other employees had earlier pleaded guilty to charges of involuntary
servitude.
US Attorney General John Ashcroft issued a statement welcoming the guilty verdict as a victory in the largest human trafficking case investigated by the FBI and prosecuted by the Department of Justice.
"Human trafficking is more than just a serious violation of the law; it is an affront to human dignity," he said.
"Today's conviction demonstrates that the Department of Justice is firmly committed to ensuring that those who traffic in human lives are aggressively investigated, swiftly prosecuted and firmly punished."
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