Close Look at Factory for Nikes

TANGERANG, Indonesia
July 30, 2000 
  In this age of cynicism and alienation, Americans are more likely to become actively involved in local issues than in faraway affairs. Think globally, act locally? Nah, how can one make much of a difference?

Kusniah, age 21, and Tumarni, 22, can tell you.

As the two women took a lunch break from their jobs making outsoles for Nike athletic shoes in the huge Astra Graphia factory in this Javanese town, they talked about how much they like their jobs.

”It’s nice working here,” Tumarni (many Indonesians have only one name)
said through an interpreter. ”They take care of our welfare and working

”It’s nice here,” agreed Kusniah. ”They take care of everything.”

”Here” is a factory that could have been a ”sweatshop” if it were not
for American public pressure on Nike to improve wages and working conditions for the Third World workers who make its shoes.

As American manufacturers faced with high wages and poor labor supply in this country look overseas for plentiful, willing and — by U.S. standards
— cheap labor, there has become almost an assumption of ”sweatshop” pay and conditions.

Particularly among those whose simplistic politics require a corporate
demon. A writer for the weekly paper Isthmus last week wrote blithely about ”Nike Sweatshops” in Indonesia and tied them to ”U.S.-sanctioned despots or U.S.-sponsored violence.”

I came to Tangerang to see for myself. As part of a delegation of editors
organized by the Pew Fellowships in International Journalism, we were free to choose any factory to visit and any employees to interview, and we used our own interpreter.

Nike, in fact, owns no factories in Indonesia, but instead contracts with 27
factories owned by a variety of Indonesian and other Asian investors.

Nike does impose on these contractors its own code of conduct: ”A safe and healthy workplace, free from harassment or abuse; fair and full
compensation, including all benefits mandated by law; recognition of freedom of association and collective bargaining; pay and promotion based solely on your ability to do your job; safe limits on total hours or consecutive days that you can be required to work.”

The requirements, given to each employee on laminated cards, are monitored by Nike officials on site and checked annually by the international accounting firm PricewaterhouseCoopers.

The average take-home pay for a Nike-contract worker in Indonesia is $ 786 a year, which doesn’t sound like much from a U.S. perspective but which, within the Indonesian economy, is almost twice the $ 408 minimum wage and substantially above the $ 509 average income nationally. A dollar goes a very long way in Indonesia.

In addition, the workers get social security benefits, free health care,
uniforms, at least one free meal a day and a holiday bonus higher than the
government mandate of one month’s salary. One factory provides free housing for 13,000 workers.

During my visit to Indonesia, Nike began requiring its contract factories to
begin offering free, after-working-hours education to their workers, with
recommended pay increases for graduates.

The factory in Tangerang, with 5,355 workers, is modern and clean, better
than some I have seen in the United States. Its managers brag about improved indoor air quality and the replacement of smelly and possibly toxic solvent-based adhesives with water-based adhesives.

As a result of all this, in a country with an economic crisis, 30 percent
unemployment and 60 percent of the people living below the poverty line,
jobs here are very desirable. ”Tons of people are waiting at the gate every
morning,” hoping jobs will open up, a factory spokesman said.

Kusniah and Tumarni consider themselves very lucky. They said that without these jobs they would be working in the rice paddies like their parents or scrapping by as vendors in the informal economy.

They are represented by a union, and two union officials said the jobs here
are ”much better” than the women would find elsewhere in the Indonesian

The union representatives privately asked me the reason for our visit, and I
explained the public concern in the U.S. about Third World ”sweatshops,”
the role of the press in informing the public and the resulting pressure on
big companies like Nike. They urged us to come back any time.

In fact, the Nike representatives in Indonesia are upfront in saying that it
was American public pressure that pushed Nike to require its contractors to improve pay, benefits and working conditions over the past three years.

Would Nike have made these improvements otherwise? I asked Tammy A. Rodriguez, a corporate-responsibility compliance official for the firm in

”Probably not as quickly,” she answered, ”probably not to the degree.”

Tony Nava, general manager for Nike in Indonesia, added, ”All these issues have really pushed us.” He said the other big sport-shoe brands, Reebok and Addidas, probably have responded similarly.

On the other hand, Nava suggested the factories that make ”non-branded”
shoes, the knockoffs that show up in discount stores, still might deserve
the ”sweatshop” label. ”The rest of the industry is pretty bad,” that
is, more like many other workplaces in this Third World country.

But when corporate responsibility can be directly connected to a company’s highly visible name, like Nike, public involvement and pressure work. Whatever you think of tactics like the five-day sit-in in UW-Madison
Chancellor David Ward’s office last February, the people in the corporate
offices are paying attention.

Just ask Kusniah and Tumarni.

Denton is editor of the Wisconsin State Journal.