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Report on Nike Contract Factories in Indonesia

Report on Nine Nike Contract Factories in Indonesia

Groundbreaking Study by Global Alliance Reveals Advances, Challenges Continue in Global Manufacturing The full report can be found at:
Thousands of Workers in Indonesia Respond to Survey with Concerns, Hopes for the Future

BALTIMORE, February 22, 2001 -- An alliance of public, private and not-for-profit organizations designed to improve opportunities for factory workers has released the findings of a comprehensive and insightful study of workers' needs and aspirations in Indonesian factories. The study, entitled "Workers' Voices: An Interim Report on Workers' Needs and Aspirations in Nine Nike Contract Factories in Indonesia" is the result of an intensive interviewing and focus group process involving more than 4,450 workers at nine Nike contract factories. Workers were asked - many for the first time - for their views on a wide range of topics, such as workplace conditions, family life, health concerns, and their aspirations for the future. The report was released today by the Global Alliance for Workers and Communities, a partnership of non-profit, public and corporate members - of which Nike is also a member. The mission of the Global Alliance, an initiative of the Baltimore-based International Youth Foundation, is to maximize workers' potential and to improve their lives, both at work and in their communities.

"This is a significant first step toward improving the lives and prospects of tens of thousands of workers in Indonesia," said Rick Little, chairman of the Global Alliance Operating Council. "With this report, we have deepened our understanding of the everyday lives of these workers, both in terms of their aspirations for the future, and some very real concerns in the workplace including harassment and health issues. The next step in this process will be to work with our corporate partners, factory managers, trade unions, local NGOs and workers themselves to design and deliver programs that are directly responsive to the needs the workers have identified." "Nike and the contract factories themselves should be commended for their decision to voluntarily open themselves up to this level of public scrutiny," Little said. "They provided unprecedented access and transparency so that the Global Alliance could properly conduct confidential conversations with thousands of their workers." The in-depth assessment process, conducted by the Center for Societal Development Studies at the Atma Jaya Catholic University in Jakarta, Indonesia, involved one-on-one interviews, surveys and focus groups with workers. This is the first phase of the Global Alliance's worker assessment and development initiative in Indonesia. The results of this assessment process are used to design and deliver programs that address the needs and aspirations identified by the workers themselves, including helping them develop the skills and resources to achieve their goals and improve their daily experience in the workplace. Each of the nine Nike contract factories in Indonesia, which in total employ about 54,000 workers, voluntarily agreed to participate in the Global Alliance program. Some of the key findings about workplace issues and aspirations from the study at nine Nike contract factories are as follows: Workplace Issues While the majority of workers said they were satisfied with the health facilities at their factory, more than 45 percent were not satisfied. Workers had a number of serious complaints about healthcare clinics and the difficulties of obtaining adequate medicines and gaining permission to go to the factory clinic and to take sick leave. Sixty to 90 percent of focus group respondents in all nine factories reported that the procedures to obtain permission of sick leave and/or access to medical care are very difficult. In several cases, workers reported collapsing before their supervisors would grant access to the clinic. A small number of workers (six) reported two incidents of worker deaths in two separate factories. Those surveyed had heard that the workers involved had been ill and were denied sick leave and medical attention. Worker focus groups, however, indicated these deaths occurred outside of the factories and Nike has conducted an investigation of the circumstances that can be obtained from them directly.
Workers in all nine factories reported experiencing or observing various forms of harassment and abuse. Verbal abuse, such as swearing or yelling, was the most frequently reported complaint, with 30 percent of respondents reporting personally experiencing such abuse. Nearly 8 percent of workers reported receiving unwanted sexual comments and nearly 2.5 percent said they have received unwanted sexual touching. Workers' reports of physical abuse from a line supervisor or manager, such as throwing objects, hitting, pushing, or shoving, ranged from a low of one percent in one factory to almost 14 percent in another. Workers also reported deeply disturbing incidents of sexual favors for employment practices at two factories. These reports have not been verified and subsequent focus group discussions also have not confirmed these reports. Nike has conducted an investigation of the circumstances that can be obtained from them directly.
Many of the female workers expressed interest in learning more about reproductive health and other womens' health issues. Several workers reported not fully understanding issues related to pregnancy and prevention. Others said they hide their pregnancy as long as possible to avoid some of the economic disincentives that come with pregnancy (i.e. restrictions on overtime hours, being assigned lighter jobs with less opportunities to earn bonuses).
While workers at all nine factories reported that they received salaries that were above the regional minimum wage, wages remain a top concern of workers. Over half the workers in the focus groups said that basic monthly salaries are not adequate to meet workers' increasing cost of living. Women reportedly receive slightly lower salaries on average, often because women do not receive the same "head of household" tax deductions and allowances as men and they hold different positions within the factory.
When asked about the level of satisfaction workers felt about their work relationships, 93.1 percent said they were satisfied with work relationships with co-workers, compared with 73.4 percent with direct supervisors, 67.8 percent with factory management and 77 percent with labor unions. A correlation was found between workers who reported having experienced harassment and their having lower levels of satisfaction with relationships with direct supervisors and managers. In focus group discussions, workers reported that harsh words or verbal abuse are considered a normal part of these relationships. Therefore even workers who report verbal abuse may be satisfied with these relationships.
The study found that 75.4 percent of workers say they are comfortable sharing ideas or suggestions with their line supervisors, while 43.5 percent said that their supervisors are only sometimes willing to listen to their ideas or suggestions. Aspirations Over ninety-five percent of workers would like to learn how to plan for their future, manage personal finances, and learn more about how to be good parents and provide for their children.
The workers have high hopes for their children's educational and career future. Although few of the workers have ever attended a university themselves, 87 percent would like their children to obtain a university education and hope they will be able to get better jobs.
Almost half the workers expressed interest in enhancing their general education, as well as improving both their work-related and non job-related skills. Work-related job skills include learning effective communication, work safety and new factory technology. When it comes to enhancing non job-related skills, workers expressed the most interest in skills related to computers, sewing, cooking, handicraft production and small-scale business. About 31 percent of the workers said they want to start a small business.
Workers also expressed interest in working on projects to improve their communities, from planting trees to supporting religious activities to assisting their poorest neighbors. "While very troubling workplace issues have been raised, we have concluded that Nike has acted in good faith throughout the assessment process, and has developed a serious and reasonable remediation plan to respond to the findings," said Little. "They also have committed to release a public report on their progress against this plan and a follow-up study will be conducted by the Global Alliance in12 months with these same Nike contract factories." "We believe this report provides a benchmark from which Nike can measure progress and ensure accountability. The result will be improved conditions and enhanced learning opportunities for workers and their families," Little said. This report is the third in a series, following earlier worker needs assessment reports commissioned by the Global Alliance in Thailand and Vietnam. The earlier reports involved five Nike contract factories in Thailand and seven contract factories in Vietnam. With this Indonesian report, the Global Alliance has now assessed the aspirations and needs of workers in 21 of the more than 700 contract factories in Nike's supply network. These factories involve approximately 20 percent of the workers engaged in making products for Nike worldwide. The Global Alliance hopes that this report contributes to a greater understanding about workers and the global supply chain in Indonesia and elsewhere and brings us closer to our goal of improving their workplace experiences and opportunities. Copies of the full Global Alliance Indonesia report, which includes a statement from the Global Alliance, the detailed assessment results, and Nike's remediation plan, can be obtained from the Global Alliance for Workers and Communities by going to the organization's website at A Bhasa Indonesia summary of the report and this release will be available on Friday, February 23.

The Global Alliance for Workers and Communities was launched in April 1999 to improve the workplace experiences and life opportunities for workers in developing countries. A public/private partnership of foundations, global companies and international institutions, the Global Alliance places particular emphasis on reaching young adults workers involved in global production and service supply chains. Members of the Global Alliance include Nike, Gap, Inc., and the World Bank. The Alliance also receives support from Penn State and St. John's University, as well as private foundations. The long-term goal is to develop practical, sustainable multi-sector partnerships to enhance workers' lives.
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