Vietnam-Nike Fact Sheet

From Thuyen, Nike in Vietnam Action Group.
13 November, 1996

This fact-sheet is also available on http://www.saigon.com/~nike. Please continue to put pressure on Nike. Nike is slowly changing. It has agreed to talk to many NGOs including our group.

Regards,
Thuyen.
Nike in Vietnam Action Group.

This fact sheet is based on the research of several people. We received a response from Nike after sending letters expressing our outrage over the CBS revelations. Nike claims that CBS News was not accurate in its investigative report. To check our information, we contacted people in Vietnam -- Vietnamese as well as American lawyers practicing there. As documented below, we found that Nike is in violation of several Vietnamese laws and its own code of conduct.

Minimum wage

Workers at VN Nike shoe manufacturing plants make on average 20 cents per hour. Team Leaders at VN Nike plants make only $42 per month, below the Vietnam minimum wage of $45. Regular workers make even less.

Nike claims that the above $45 minimum wage figure applies only to Saigon and not to Cu Chi, where the Nike factory is located. We checked Viet Nam's legal code with the help of several practicing lawyers in Viet Nam. Effective July 01, 1996, the legal minimum wage for foreign-invested ventures in all locations which are administratively part of Ho Chi Minh City is $45 per month. This includes all of Cu Chi district.

Nike also claims that the workers are paid a lower wage because Vietnamese law allows for a training wage less than the minimum wage. Viet Nam's legal code, however, specifies that the training wage can be paid only for a "trial-period" of 30 days, (under Article 32 of the Labor Code of June 23 1994 and Article 5 (2) of Decree 198-CP of Dec 31, 1994). According to Cu Chi officials, many workers at the Nike factories are paid the training wage for 90 days.

So Nike is in Triple violation of Vietnam Law, violating the provisions regarding minimum wage, Article 3 of Decree 197-CP of December 31, 1994, Section II. (1.) of Circular 11/LDTBXH-TT of May 03 1996, as well as provisions regarding labor contracts, Article 28 of the Labor Code and Article 5 (4.) of Decree 198-CP in addition to the above-cited provisions relating to the "trial period"

Physical Abuse

15 Vietnamese women told CBS News that they were hit over the head by their supervisor for poor sewing. 2 were sent to the hospital afterward.

45 women were forced by their supervisors to kneel down with their hands up in the air for 25 minutes.

Nike claims that it disciplined these supervisors immediately. But at the shareholder meeting on Sept 16, 1996, Nike CEO Phil Knight minimized the first incident, stating incorrectly that only one worker was struck -- on the arm

Sexual Abuse

A Nike plant supervisor fled Vietnam after he was accused of sexually molesting several women workers.

Nike claims that the supervisor was fired and sent back to Korea -- i.e., Nike did not try to have the supervisor stay in Vietnam to face criminal charges. The governement of Vietnam later instigated extradition procedures against the supervisor.

Forced Overtime

Women workers told CBS News that they are forced to work overtime to meet a daily quota which is set unrealisticly high. Most workers at VN Nike plants are forced to work 600+ hours of overtime per year -- well above the VN legal limit of 200 hours per year.

Article 69 of VN Labor Law stipulates that "The labor user and the laborer may agree to work overtime, but not for more than four hours a day, 200 hours a year". Forced overtime at Nike factories in Vietnam is a clear violation of this Article.

Nike is in control of its subcontractors

Nike dictates the price per shoe and even the cost of operation to its subcontractors forcing them to set high quotas for their workers and to pay low wages. A British NGO estimates that the labor cost involved in making one pair of Nike shoes is only $3, yet this may sell for $100 in the US (Christian Aid, 1995). Nike can afford to give some of this profit margin back to its factory workers.

Nike is not investing in the 3rd World

Despite Nike's claims of being responsible for the economic development of Japan, Taiwan and Korea. Nike's corporate practices are good indicators that the company is only interested in exploiting low wages in third world countries. Just like the colonial masters of the 19th century, Nike's main interest is to take profits out of these poor nations by exploiting workers.

Nike is not investing in the 3rd World through worker training or human resource investment but has continually shifted its operation to the country with a lower wage. In the 1980s, Nike produced 90% of its shoes in Taiwan and Korea. Nike has left these countries due to increases in the local minimum wage. Nike now makes most its shoes and apparel products in China, Indonesia, Vietnam and Pakistan.

Import figures for training shoes to UK (in thousands of pounds), showing shifts in the location of production in Asia.