Nike and Working Conditions

Nike as many multinational companies with contracted manufactures based in Asia have been highly criticized for their unethical working conditions. Nike in the 1990s was greatly accused for poor working conditions in its factories in Indonesia, very low wages, harassment and intimidation of workers who dared talk about the workers’ rights and poor waste management in the factories. The company publicly accepted the wrong doings and promised to make changes to ensure that customer confidence was returned. The company has made major steps towards addressing those challenges. The company set wages for factory workers, improved workers conditions, set proper mechanisms towards waste management and currently is more involved in charity activities in the community around the factory. The company has made tremendous steps towards improving the major areas it was criticized over. This gradually has changed the perceptions of customers who previously where shunning goods and products of Nike.

            Keywords: Nike, working conditions, factories

Ethical Issues Surrounding Nike

Nike in the 1990s came under critical accusations for poor working conditions and low wages to its factory workers in the developing and under-developed countries. Like many multinationals, Nike outsources all its product manufacturing to Asia and more so in Indonesia. Major reason for outsourcing has been due to low cost and availability of labor compared to America (Christina A, Marcedes G, & Hordijk R., 2012).

Ethical issues raised included poor working conditions in the factories below acceptable ones in the developed world. Long working hours and considerable overtime had to be endured by the employees of Nike just to remain in employment. Employees worked for up to 13 hours a day portraying Nike’s barbaric behavior. The $ 1.5 wage per day given to the employees was not sufficient to carter for employees’ basic needs (Educating for Justice, 2011). This forced employees to live in informal settlements with poor sanitations. Besides, they had to share rooms and washrooms just because they could not afford better housing. Regardless the lower wage levels, what the employees were paid is more of exploitation.

Employees were not allowed to form unions by the factories and whoever tried to go against this was dismissed and sometimes threatened with death. The factory management worked both with the police and armed gangs to suppress any person who attempted to voice grievances of factory workers (Educating for Justice, 2011). At this point in time, the government of Indonesia had strong restrictions on unions; the company needed to put up in place mechanisms for workers air their grievances (Cray, 2001).

Both in and out of the factory, there were increased health hazards which put the lives of residents and workers at risk. For instance, most of the factory workers were not provided with protective clothing and it is said that one of the factories manufacturing Nike shoes damped and burnt waste materials in residential areas with full knowledge that fumes released posed a major health hazard (Habblethwaitte, 2003). It is reported that people started developing skin and breathing problems and cases of cancer increased gradually (Educating for Justice, 2011).

The criticism over Nike’s unethical treatment of factory workers became overwhelming and it publicly acknowledged that its factory conditions were below standard and the workers were unethically treated. With this acknowledgement, the company set out to make right the wrongs which were happening. The company gradually improved the working conditions of its workers, increased wages, prohibited the use of child labor and started to care more about the environment. They focused on sustainable use of water and were committed to use of renewable energy in their supply chain. They affirmed their commitment to reduce environmental pollution.

In the path to correcting its unethical operations, Nike published a list of all companies/factories contracted to produce its products and their locations. This was to bring about transparency in its operations. The company set minimum wages for workers in the factories in a bid to ensure that the workforce was paid enough to afford comfortable living conditions. The number of working hours by employees was greatly reduced and cases of excessive working hours have become a gone case. Currently employees are allowed only to work for the recommended working hours (Nike, 2016).

Intimidation and harassment which was common previously is no longer happening and the company set channels through which the employees could air their grievances. (Van Burrel & Greenwood, 2013). The factory working environment has been improved and also there are better ways set in place for waste management that poses minimal health risk to the community living around the factory and also less detrimental to the environment. In many ways, the company has become increasingly transparent over its labor practices. All this is changing the perception of the public towards the company and starting to build confidence of its former critics (Nike, 2016).

After viewing the video, I came to understand what happens in the factories for us to find some of the best quality and top brand products in shops. It also shaped the way I see the dilemma in which companies like Nike have to undergo to maximize profits but on the other hand ensuring that its operations still remain ethical. Just viewing the video could have negatively impacted on my buying behavior, but after also looking into the steps the company has made towards addressing these ethical issues gives me more urge to purchase more of it. This is because a wrong in the past does not make the company a villain. It is currently a hero from the positive steps it has made.

References

Christina A, Marcedes G, & Hordijk R. (2012). Four case studies on corporate social responsibility: Do conflicts affect a company’s corporate social responsibility? Utrecht Law Review.

Cray C. (2001). Nike’s sweatshirt sweatshop. Multinational Monitor.

Educating for Justice (2011). Nike Sweatshops: Behind the Swoosh. Retrieved from www.youtube.com/watcgv?=M5uYCWVfuPQ.

Habblethwaitte M (2003). Report says sneaker makers exploit workers. Catholic Reporter.

Nike (2016). FY 16/17 Report. Retrieved from https://sustainability.nike.com/faq

Van Burrel H. & Greenwood M (2013). The Genesis of Employment Ethics. Journal of Business Ethics.