Workers at factories contracted by Nike in Indonesia often suffer verbal and sexual abuse and complain of forced overtime and poor health care, says a report released on Thursday that was funded by the world's leading athletic shoe and clothing maker.
The nonprofit Baltimore-based Global Alliance for Workers and Communities, of which Nike Inc. is a founding member, uncovered a string of problems in its study of workers at nine Indonesian factories used by the company.
Before the report had even been released, image-conscious Nike announced on Wednesday it had put a remediation plan in place to improve conditions in all 30 factories it uses in Indonesia.
Along with several other leading U.S. brand names, Nike has come under fire in recent years for poor conditions in some of the factories it uses. The company contracts work to factories employing more than half a million workers in 55 countries.
Speaking at a joint news conference on Thursday with the Global Alliance, Nike vice president Maria Eitel said the report's findings were disturbing.
"Let me get straight to the point. No person should be subjected to some of the things described by the factory workers," said Eitel. "It's not very comfortable for us to sit here with these kids of uncomfortable results."
Last year, Nike pulled out of its contract with a factory in Cambodia after it investigated a news report that child laborers were being used to make their products.
"It is always the move of last resort because people lose their jobs," said Eitel. But she stressed that Nike would not work with factories that did not abide by its rules.
Many of the 4,450 Indonesian workers polled and interviewed complained about factory health clinics and difficulties getting sick leave. In one factory, workers said they had to get signatures from five people before taking sick leave.
In several cases, workers reported collapsing before supervisors would allow them access to clinics. Six workers reported two deaths in two factories and said those involved were denied sick leave and medical help.
However, the report said further investigation showed the deaths did not occur in the factories and Nike found they had been given access to health care.
In all of the factories, workers reported experiencing or observing harassment and abuse, with 30 percent saying they had been verbally abused directly. Nearly 8 percent of workers reported receiving unwanted sexual comments and 2.5 percent said they had suffered "unwanted sexual touching." Some reported incidents of sexual favors demanded by employers at two factories, but the report said these were not verified.
Reports of physical abuse by a supervisor or manager, such as throwing objects, hitting or pushing, ranged from one percent in one factory to 14 percent in another.
While workers said they were paid above the regional minimum wage, over half said their basic monthly salaries did not meet cost-of-living increases in Indonesia. In addition, women reportedly received slightly lower salaries on average.
The issue of overtime was brought up. Workers said while working more hours was voluntary, in practice they were pressed to sign a statement agreeing to work longer hours.
Nike addressed five areas in its "remediation plan", including independent audits to ensure workers are paid the proper wage and ensure compliance with its "code of conduct".
The company said it would address harassment issues and give training to managers and factory workers using a credible local resource. From now on, all factories would report the death of any worker, regardless of the cause or location.
The Global Alliance was formed in 1999 and its members include Nike, Gap and the World Bank, as well as several private foundations.
Massachusetts Institute of Technology professor Dara O'Rourke said what amazed him was how many problems had been uncovered during the factory interviews and that workers were willing to take such risks by being surveyed.
O'Rourke, who has been a sharp critic of the footwear industry, said the problem is not just Nike's. "You go to any of these factories and you'll see all the brands. You can see Reebok, the Gap, New Balance, Tommy Hilfiger. They all use the same factories. They're just hiding behind Nike," he said.