Nike is one of the largest, most popular and profitable shoe and clothing companies in the world. This is why it is a wonder that the reality for many workers overseas making Nike shoes and clothing is far less rosy. Workers are paid wages insufficient to meet their basic needs, they are not allowed to organize independent unions, and often face health and safety hazards. Nike publicizes itself as one of the leaders of corporate responsibility. However, they do not comply with several human rights obligations overseas in countries like Thailand, Pakistan, China, Vietnam and Indonesia.
In these countries, production facilities called sweatshops have been running for almost 35 years employing workers as young as 13 years of age. The conditions of these factories are adverse to say the least and deprive workers of the moral human rights they should be entitled to. Sweatshops are unethical, immoral and demonstrate Nike’s ignorance towards their social responsibilities abroad. Within these facilities, workers endure stressfully long days under undesirable conditions, often with no breaks and very little pay.
All the while this is going on overseas, and sponsored athletes are being paid million dollar salaries here in North America. Although Nike’s reputation has been foiled through the tabloids regarding this issue, they have been making a substantial effort to “clean up” their production messes in the East. Should Nike be held responsible for working conditions in foreign factories that it does not own, but where subcontractors make products for Nike? A subcontractor is defined as an individual or company hired by a general or prime contractor to perform a specific task as part of the overall project (brainydictionary. om).
It is actually Nike, not the subcontractors that ultimately set the pace of production as well as the wages of the workers. If a subcontractor wants to stay in business, he must accept the timeline set by Nike and accept the price Nike is willing to pay (sweatshop. org). Thus, although Nike does not own foreign factories, it still has a moral responsibility for working conditions in its subcontracting chain. Because as the definition states, a Nike product should be thought of as an “overall product” no matter who is working on it.
What labor standards regarding safety, working conditions, overtime, and the like, should Nike hold foreign factories to: those prevailing in that country, or those prevailing in the United States? If Nike holds foreign factories to those labor standards prevailing in the US, the investment will be unprofitable, thereby denying them the ability to build factories in foreign countries that have a great need for jobs. On the other hand, if Nike would adhere to the local standards the working conditions in some of the third world areas would be horrible.
To solve this problem Nike should set up its own generally accepted moral standards based on local ones, therefore finding a medium to the situation based on where the plant is located. An income of $2. 28 a day, the base pay of Nike factory workers in Indonesia, is double the daily income of about half the working population. Half of all adults in Indonesia are farmers, who receive less than $1 a day. Given this, is it correct to criticize Nike for the low pay rates of its subcontractors in Indonesia?
Although the base pay in Indonesia is double the daily income of about half the working population, Nike should still be concerned that its workers are making too little because of where they live. Farmers are able to provide food for their families because of where they live and the product they produce (food), while the living costs are much higher for the Nike plant worker, who is living in the city. So even though workers in Nike factory can earn $2. 28 a day; it is still not enough for a small family’s daily food spending.
Could Nike have handled the negative publicity over sweatshops better? What might it have done differently, not just from a public relations perspective but also from a policy perspective? Yes, Nike could have handled the negative publicity over sweatshops better. That depends on the fact that it has to do it from a policy perspective, but not from a public relations perspective. However, “During the last three years Nike has continued to treat the sweatshop issue as a public relations inconvenience rather than as a serious human rights matter”(sweatshopwatch. rg).
Nike could have changed its policy regarding to child labor, working conditions, and base pay a long time ago. Do you think Nike needs to change its current policy? If so, how? Should Nike make changes even if they hinder the ability of the company to compete? Nike needs to change its current policy on the following aspects: It need to adopt a wage standard that meets workers’ basic needs and specifically work on labor issues to ensure working conditions and safety. It needs to ensure workers are free to form independent unions in all their supply factories.
Also, Nike should adopt a genuinely independent and transparent monitoring system for its factories. Nike also needs to understand the impact of international differences; they should increase the proportion of local management and then improve the effective communication. Even if the above changes hinder the ability of the company to compete, Nike should still make changes because these changes can bring Nike a better image, therefore the ability to compete in the long run.
Is the WRC right to argue that the FLA is a tool of industry? Yes, WRC is right to argue that the FLA is a tool of industry. The standards and means of enforcement indicate that FLA is seriously flawed on two fronts: its standards are too weak to guarantee real improvements in workers’ lives and its monitoring system is not transparent nor sufficiently independent enough for the companies to be credible. If sweatshops are a global problem, what might be a global solution to this problem?
Global solution might be as follows: – Launch an international law to ensure that consumer products sold are made under human working conditions. – Set up an independent international monitoring system, which applies the same standard globally. – Use consumer rights as a possible strategy to force companies to improve working conditions, solve child labor problem and increase the base pay. The ethical dilemma that was created by different trade association in this case was that Nike hired subcontractors in developing countries like Vietnam etc. o produce its products. The issue was that the government of these countries didn’t enforce any labor laws or human right laws and therefore sweatshops were legal. The ethical aspect of this case was if Nike should be held responsible for its subcontractors. The host countries of Nike’s sweatshops didn’t enforce any laws because they were glad that a big company like Nike comes in to their country and increases their income and their job capacity.
If the countries, Nike was doing business with, would have put laws on minimum wage, overtime pay etc. , it probably wouldn’t have been profitable for Nike to hire a subcontractor there. In my opinion the main problem of Sweatshops is that there are no international laws regarding labor rights, worker safety etc. Because of the fact that global business is increasing, and the world is moving towards a global economy, unified laws for labor and worker rights should be formed. The world trade organization or a similar establishment can do this.
As I stated earlier a more transparent monitoring system for companies like Nike needs to be enforced. This case shows that American companies have to realize that even though they might think that they are doing the economy of the world a favor, they are really just doing an in-service to the population of those countries that are not ready for industrialization. Globalization of manufacturing plants is harmful to countries where there are no regulations and if they are to operate there they must be forced to comply with international labor laws.
