Nike: A model company that cares for workers’ rights

    Nike targets abuse in Malaysian factories

From The Wall Street Journal Asia, source Malaysian Insider

My comments read the following article/posting_

KUALA LUMPUR, Aug 4 — Nike Inc said it has taken steps to correct worker-abuse problems in a factory it uses in Malaysia, an action that the athletic-apparel giant said reflects its concerns about the country’s chronic labour shortage and how it affects factory workers.

Nike on Friday alleged abuse at Hytex Integrated Bhd., a Kuala Lumpur-based garment manufacturer that owns a factory producing Nike T-shirts. Nike, which is based in Beaverton, Oregon, the United States, said it had completed its initial investigation into “claims of unacceptable living conditions, withholding of worker passports and garnishing of wages” that began after an Australian television report last month alleged worker mistreatment at Hytex.

In some cases, migrant workers complained that their passports were confiscated by managers, said Hannah Jones, Nike’s vice-president of corporate responsibility.

The practice may have been used by the factory to compel workers to pay their own employment-permit fees, ordinarily paid by the company itself, she said. Nike said that all current employees will be reimbursed for fees associated with employment while from now on, any such fees “will be paid by the factory as a cost of doing business.”

Also, Nike said it found that the majority of housing for employees was “unacceptable.” It said all workers will be transferred to new Nike-inspected housing within a month.

Michael Saw, executive director of Hytex, said the company met Nike compliance officials about two weeks ago to discuss violations of Nike’s code of conduct for foreign contract manufacturers and that Hytex has “rectified” the issues. “We have been working for Nike for the past 15 years,” Saw said, maintaining that the allegations of abuses by the Australian reporter were “out of proportion” to the facts.

Like many businesses in Malaysia, Hytex depends on migrant labour. The country has an estimated 2.1 million foreign workers legally employed. Estimates of illegal workers range from 500,000 to 1.2 million.

The recent issues highlight a growing concern for Nike’s manufacturing operations in Malaysia, where the US company focuses primarily on apparel.

The country, once viewed by the industry as a possible alternative to China for manufacturing, has found itself crippled by a labour shortage as a prospering populace of 27 million shifts away from factory jobs.

That has left Malaysia dependent on workers from as far as Nepal and Pakistan, who are offered fewer rights in the country, setting the stage for the kinds of abuses that can embarrass American partners. Nike itself has battled criticism of its labour practices on and off since the 1990s.

The Malaysian government has tried, with limited success, to impose order on the migrant-worker situation. Labour officials have vowed to prosecute employers who break labour laws and have periodically announced crackdowns. But corruption, porous borders and lack of strict legal enforcement have impeded progress.

“Many Malaysian policies for bringing in migrant labour into the country are enabling some of the behaviour we think is unacceptable,” said Nike’s Jones. “The issue of foreign migrant labour is very new to us.”

Hytex’s Saw said Malaysian garment operations like his company are almost completely dependent on migrants. “We have no choice,” he said. “Malaysia is not a third-world country anymore … Malaysians don’t like factory work. If you ask them to do things like sewing, they’re not interested.”

Saw complained that the TV report alleged that Hytex and other Malaysian contract garment makers used “forced labour,” a charge he disputed. He said the workers at the apparel plant — mainly from Bangladesh and Vietnam — held Malaysian work permits and were legally recruited through employment agencies.

“Nobody is being forced to work here,” Saw said. “Our facilities are similar to those for locals for pay, overtime, etc … We treat the foreigners equally as local workers.” Saw acknowledged that housing for the migrant workers at what he described as a “temporary hostel” was inadequate. He said Hytex had begun shifting the workers into new housing as demanded by Nike.

Saw said withholding migrant workers’ passports was a common practice among Malaysian employers and was done simply to secure the documents.

“If we didn’t keep the passports, they might be lost or stolen,” he said. Nike said all workers will now “have immediate and total free access to their passports.”

Last week, Nike met representatives from its 37 apparel factories in Malaysia to reiterate its policies.Factory placed on ‘red alert’

COMMENT written by Jessy, August 04, 2008

There is no such thing as “treat the foreigners equally as local workers.” Ask any foreign labor and you will find that they get double the work compared to a local worker, and lesser the salary! Where is the “equality” in this? 

This Saw guy really needs to get his facts right before he said that “Malaysians don’t like factory work.” It’s all about the money! The only reason why Malaysians don’t work in factories is because the pay is absurdly low, which is why they hire foreigners from countries like Indonesia, Vietnam or Myanmar in the first place. They wanted to cut cost. It has nothing to do with Malaysians having no interest to work in factories! And while you are reading this, Saw’s so-called‘Malaysians-who-doesn’t-like-factory-work’ are probably making their way to Singapore to work their shift in a factory.SAN FRANCISCO: Nike Inc, the world’s largest maker of sports footwear and apparel, said on Friday it was putting a Malaysian factory, contracted as its supplier, on “red alert” after it discovered workers living in substandard housing and wages being garnished.

Allegations of abuse at a Malaysian factory which has made garments for Nike for 14 years, were first raised in the media, Nike said.

“Our investigation confirms serious breaches of Nike’s Code of Conduct,” said Hannah Jones, vice-president of corporate responsibility for Nike, in a statement.

The factory employed some 1,200 workers who met the minimum age requirement but were living in “unacceptable” housing and whose passports were withheld, Nike said. Additionally, the factory garnished workers’ wages, the company said.

The factory under investigation supplies T-shirts to Nike and other apparel brands.

The factory will be subject to additional monitoring from Nike as orders to change policies are implemented, Jones said.

Migrant workers will be reimbursed for fees related to employment, including agent and work permit fees, and workers who wish to return home will be given return air fare, Nike said.

Workers, who will move into Nike-approved housing within a month, will be given free access to their passports and to a 24-hour Nike hotline in case of future passport withholding, the company said.

Closing the Malaysian factory would be a last resort for Nike, Jones said. “If we cut a factory, we lose our influence to force them to change,” she said.

Portland, Oregon-based Nike said it would review all its contract factories in Malaysia over the next 10 days. According to data from early last year, Nike worked with some 34 factories in Malaysia.

In March, the company found falsified documents, underage workers and unpaid wages at some suppliers in China.

Abuses discovered at garment and shoe factories making Nike gear over two decades ago spurred Nike to launch its code of conduct in the early 1990s covering contractors who make Nike-branded products.

The code mandates that contractors not use forced labour or child workers and factories not pay their workers less than minimum or prevailing industry wages, among other things. – Reuters

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