Nike is one of the largest sports apparel companies in the world with most of its apparel being made in 3rd world countries for a song and then sold in the 1st world for huge mark-ups.
Recently, the Chancellor of the University of Wisconsin, Madison, Carolyn "Biddy" Martin put Nike on notice giving it 4 months to clear up problems of reported worker rights abuses at subcontractor factories in Honduras.
From a press release issued by the university:
At issue is the treatment of workers at two apparel factories, Hugger de Honduras and Vision Tex. Both factories, at which it is believed that collegiately licensed apparel was produced, were shut down without notice in January.
Since then, their owners have allegedly failed to pay workers a combined total of more than $2 million in legally mandated severance and back wages. Nike is a UW-Madison licensee.
Employees are reportedly owed an average of $1,000 per person, a significant sum in the country, according to the Workers Rights Consortium, the university’s independent labor monitoring organization.
To begin to address the issue, on Nov. 3, Martin was the first college president to write to the corporation asking for a detailed remediation plan.
Nike is a university licensee with sales generating almost $50,000 a year in income to U.W-Madison. Nike, when it entered into the licensee agreement, agreed to a code of conduct that stipulated its responsibilities in dealing with workers, factories, subcontractors and suppliers.
The Workers Rights Consortium in October, 2009 issued more details on the Honduran plants and Nike’s role in them:
The WRC found that both Hugger and Vision Tex shut down on January 19, 2009 without prior warning and did not pay workers legally mandated terminal compensation. In the case of Vision Tex, additionally we found that employees were not paid for their last week of work. The total amount owed to the workers of Hugger at the time of closure was $2,030,359.85, while the total amount owed to the employees of Vision Tex was $571,895.62. The workers of the two plants have since been able to generate fifteen percent and twenty-one percent, respectively, of the compensation owed to them through the liquidation of the physical assets of the factories. That liquidation process is now effectively over. The workers of Hugger are still owed $1,725,805.87; the workers of Vision Tex are still owed $450,459.49.
…WRC has recommended to Nike that it ask its contractors – which were the factories’ primary direct buyers prior to their closure – to provide the funds necessary to make the workers whole. The contractors are New Holland Lingerie (at Vision Tex) and Anvil Knitwear and Haddad Apparel Group (at Hugger). All three companies are based in the United States.
Nike is obligated under university codes of conduct to ensure that labor rights violations by its contractors are remedied.
…Nike has indicated that it has discussed the matter with its business partners. However, this has not led to progress on remediation; the violations remain outstanding. It bears noting that in communications with the WRC and at least one affiliate university, Nike has downplayed its role in the facilities, suggesting that its production was not substantial in either plant and that its responsibility for addressing the violations is therefore diminished. As detailed herein, the WRC has found, contrary to Nike’s assertions, that Nike was the dominant brand produced for a substantial period of time at both facilities.
Perhaps even more troubling to Nike is the information that Chancellor Martin is seeking to build a coalition of other Big 10 universities and peer institutions as well as the Workers Rights Consortium and the Collegiate Licensing Company on workers rights issues. Says Chancellor Martin:
"I think in order to be effective, it’s necessary to get other schools involved, and I know there are other campuses considering and researching what’s going on."
Wisconsin-Madison alone has more than 40,000 students and with the other 10 Big Ten schools, mostly mega-land grant institutions (the conference actually has 11 schools) the numbers are large enough to put big pressure on companies like Nike: over 350,000 students who are lifelong consumers of athletic products.
Such tactics have worked in the past:
UW-Madison and student activists on campus played a key role in persuading Russell Athletic–one of the nation’s leading sportswear companies–on Nov. 17 to rehire 1,200 workers in Honduras who had lost their jobs when Russell shuttered its factory shortly after workers unionized. In that instance, UW-Madison was one of nearly 100 colleges and universities which ended apparel deals with Russell–forcing the company to change its ways if it wanted to get back into profitable collegiate apparel-making business.
Dawn Crim, a special assistant to Chancellor Martin, believes that it has "become clear" that Nike is working to resolve the situation. But not all are convinced or happy with the 4 month deadline. Jan Van Tol, a UW-Madison senior and member of the university’s Labor Licensing Committee said:
"We are very disappointed with the Chancellor’s response. Not only has she given Nike an absurdly long timeline, but she’s also set the bar very low. Let’s be clear: Nike could pay its debts tomorrow–it simply doesn’t want to. That’s why giving them four months just to ‘make’ progress is so bizarre."
Van Tol also pointed out Nike already has had 11 months to clean up its act.