When Phil Knight and the rest of the top officials at Nike were given the 1997 reports regarding the human rights and labor violations being committed in their Asian factories, it was very clear that they were going to have to take swift action to remedy the situation. The fact was that "shoes and clothing are only the secondary products of the fashion industry. What [Nike] primarily sells is image. For Nike to have its image associated with sweatshops in Asia was more than an embarrassment; the revelations threatened sales" (Sweatshop Agreement, Part 1). The shoe and apparel producer could not afford to continue to see its name dragged through the mud. Sales were dropping and Nike was being portrayed in the media as a company who was willing to exploit workers and deprive them of the basic wage needed to sustain themselves in an effort to expand profits.Phil Knight officially responded to his critics on May 18, 1998. His speech was the result of intense internal discussion about what actions needed to be taken to improve conditions in the overseas factories. What they came up with were several new "laws" that Nike factories throughout the world were to be required to obey.The first initiative was to stop the use of a toxic adhesive called toulene. Toulene has been found to cause harmful effects among workers who are not properly guarded from the poison and the fumes that it emitts. In its place Nike researchers created a water-based adhesive which has no such side effects. While the safe adhesive is not perfect for use in all shoes (especially plastic soled cleated shoes), Knight assured the public that Nike would continue its research and by the end of the 1998 calendar year would have all Nike factories meeting United States Occupational Safety and Health Administration (OSHA) standards in indoor air quality. To assure this, Nike stated that it will conduct indoor air testing of all footwear factories and follow-up testing where required. These tests will culminate in a final report made by an independent non-government organization (NGO). Each factory will be given three months from the date the final report was made to make corrections to bring the air quality levels to those set forth by the OSHA.
The second initiative raised the minimum age of all footwear factories to 18 and raised the minimum age of apparel and equipment factories to 16. Current workers of legal age in countries where the standard is lower than Nike’s new minimums were not to be affected. Knight was quoted as saying, "Nike has zero tolerance for underage labor. And I really do have to add this: There has never been a time in Nike’s history where child labor has been a problem. And I also say that it really hasn’t been a problem in the shoe industry as a whole" (Knight Speech 5/12/98).
In addition, Knight announced an expansion of education programs in the factories, including middle and high school equivalency course availability for all workers in Nike footwear factories. Workers will be offered free classes during non-working hours, and factories will be encouraged to raise the pay of workers who complete the regimen. By 2002, Nike will only be ordering from footwear factories that offer some form of after-hours education to qualified workers.
Finally, Phil Knight added that Nike will increase support of its Micro Enterprise Loan Program to a thousand families each in the nations of Indonesia, Pakistan, Vietnam, and Thailand. This program provides loans to women who wish to create small businesses. Knight’s goal was to provide capital for more than five thousand businesses before June of 1999. Unemployed women who can run small businesses that boost their family’s economic well being as well as contribute to the community’s overall development are the focus of this program.
Human rights organizations trumpeted Nike’s initiatives as "an important victory for workers around the world and consumers who have mobilized in protest of unfair labor practices" (Global Exchange’s Public Response...). However, there are definitely loopholes within the policies that concern many. While human rights groups such as Global Exchange applauded Nike’s initiative to allow non-governmental organizations to inspect the factories and make summaries of the findings public, they question which NGO’s Nike plans to grant accessibility. Also questioned was exactly how much information Nike is going to release in its "summaries."
The education programs which Nike announced it was expanding also came under fire from Global Exchange. It seems as if Nike’s programs are more geared towards office workers in the factory and not the factory workers themselves. In addition, due to rampant overtime work and family obligations, the low-paid workers have virtually no "non-working hours" in which to attend the classes and study for the exams. The issue of overtime work must be remedied before these educational programs can be properly implemented.
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