Sweaty Sneakers

After Nike CEO Phil Knight angrily withdrew a planned $30 million donation to the University of Oregon, UO President Dave Frohnmayer fell over himself trying to get back on the irascible billionaire's good side.

In interviews, Frohnmayer repeatedly described Nike as a "world leader" in promoting fair labor.

Nike isn't a leader in reforming sweatshops, says Trim Bissell, national coordinator for the Campaign for Labor Rights (CLR). But, he says, the corporation "is a world leader in issuing press releases declaring it's a world leader."

Bissell notes that activists struggled for years to get Nike to even admit that it had any control over working conditions at the 700 third world factories where the $10 billion corporation contracts to make clothes and shoes. It took years more to get the corporation to even give the names of the factories where its products were made. "Any progress they've made, we've dragged them kicking and screaming every inch of the way," says Bissell.

Nike public relations executives have long derided their critics as ignorant or malicious or both. The company says it does far better than its competitors in providing safe and fair working conditions for the half-million third-world factory workers that make its products in factories scattered around the globe.

Jeff Ballinger, director of Press for Change and a Nike watchdog for the past decade, dismisses the company's fair labor claims as "a lot of PR spinning."

For example, Nike recently claimed that it had dramatically increased wages at its Indonesian factories. But Ballinger points out the wage increases fell below what was needed to keep up with massive inflation in the country.

The crash of the Indonesian rupiah versus the dollar meant that Indonesian workers went from earning $2.46 a day to about $1 a day, according to Bissell.

Given that exchange rate, Nike's labor costs in Indonesia actually fell by tens of millions of dollars, even with the new wage increases. Knight, who's personally made an estimated $4 billion to $5 billion off Nike's sweatshops, could have afforded to pay his workers more than 13 cents an hour, Bissell and Ballinger say.

In another example, Nike recently said it would replace toxic glues in its factories with water-soluble adhesives. Labor rights groups had said for years that poorly ventilated factories thick with toluene fumes were putting the company's young women workers at high risk of liver, kidney and central nervous system damage as well as birth defects.

At first, Nike vehemently denied the toxic air charges. But a leaked report from the corporation's accountant Ernst & Young revealed that Chinese workers at one plant were exposed to carcinogens that exceeded local legal standards by 177 times. More than three-fourths of the factory's workers suffered from respiratory problems.

Nike is now trying to take PR credit for clearing the air in its factories, but Ballinger says "it's something they never should have done in the first place."

In a new PR thrust, Nike has also started posting internal audit reports of its factories on its web site. But Ballinger says the reports are "bogus" and "laughable." The reports aren't independent inspections, don't even reveal the identity of the specific plants inspected, and are completely unverifiable, he says. Also, the reports focus on nit-picking regulatory details such as failure to post regulations, but ignore larger issues such as whether or not the workers have been harassed or fired for trying to unionize or for failing to meet harsh production quotas.

In recent independent studies of Nike factories, researchers found workers still have "lots of complaints," Ballinger says.

In April, a coalition of fair labor groups released a report documenting ongoing labor abuses at Nike contract factories in Indonesia, Thailand, Cambodia, and China. A survey of 3,500 workers producing for Nike in Indonesia found serious labor abuses. Punishment for minor infractions included pulling workers' ears, slapping, fining, and forcing workers to stand in the sun or run laps around the factory.