Running Head: JUST DO IT?

Just Do it?

Sarah Dunn

UGS 303: Modern Day Slavery

University of Texas at Austin

March 4, 2014

JUST DO IT? 1

Just Do It?

INTRODUCTION

"No Pain, No Gain:" just one of the many logos nicely printed on Nike Inc. t-shirts and

posters. However, a slightly modified version of this quote describes the unfair labor that the

workers who printed this logo had to endure at work every day: "Pain, No Gain." Nike goes

through a series of steps before their shoes land directly on your feet. First Nike Manufactures

purchase rubber, fabric and other raw materials from different companies and send them straight

to a shoe manufacturing and assembly factory. After the shoes are assembled, they go through a

series of marketing strategies that includes, and is not limited to, advertising them on the feet of

athletes and or models to get consumer's attention of the newly designed shoes. From there, Nike

branded stores, different kinds of department stores, and online catalogs buy the shoes from Nike

and place them on the shelves to distribute them to consumers. The final steps are the ones taken

by the consumer who wears the Nike shoes. What consumers do not know is that low-waged

women workers under harsh working conditions in Vietnam produce their product. (Rothenberg-

Aalami, 2004, p. 335).

PRODUCTION

Beginning in 1996, Nike faced the first accusations of mistreatment and underpayment of

their workers abroad (NIKE INC PETITIONERS, 2003, p. 1). They were also accused of unsafe

working conditions, long working hours and even sexual harassment (Jenkins, 2003, p. 2). In

1997, Nike published a report given by former Ambassador to the United Nations, Andrew

Young, in which he "commented favorably on working conditions in the factories and found no

evidence of widespread abuse or mistreatment of workers" (NIKE INC PETITIONERS, 2003, p.

1). Later that year, an activist named Marc Kasky sued Nike under California's Unfair

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Competition Law, and False Advertising Law (NIKE INC PETITIONERS, 2003, p. 1). The

plaintiff side argued that Nike had promoted false advertisement in order to increase its sales.

(NIKE INC PETITIONERS, 2003, p.1). However the judge dismissed the lawsuit on the grounds

that Nike was practicing its right to freedom of speech (Jenkins, 2003, p.2). Even though the suit

was dismissed, Nikes problems did not go away and their sales dropped (Jenkins, 2003, p.6).

After a few years of taking criticism from activists and the public, Nike announced in 1998 that it

would enforce reform efforts to ameliorate the unfair working condition practices throughout the

developing world. However, from an economic point of view, Nike was very smart for closing

its American factories and shifting their production factories to developing countries. (Ballinger,

1992, p. 1). Since Nike opened up factories in 1991 in developing countries such as Indonesia,

China, Malaysia, Thailand and Taiwan, "the company grossed more than $3 billion in sales…

and reported a net profit of $287 million, its highest ever" (Ballinger, 1992, p. 1). In more recent

years, strong demand for Nikes products drove up revenues to $25.3 billion. (Nike, Inc Reports,

2013). On their website, Nike also claims to have changed their policies to avoid unfair labor for

workers:

Nike continues to push the rest of the industry to provide transparency about factories

and facilitate more collaboration among multiple parties to support sound working

conditions, strong environmental performance and resilient communities in the global

supply chain. Through the Fair Labor Association (FLA), the Fair Factories

Clearinghouse (FFC) and pilot projects of the Better Work Initiative, leading companies

are converging on codes of conduct, common assessments and mechanisms for sharing

performance data among each other and publicly. (p.1)

This means that Nike is claiming to work and strive towards practicing fair labor. The reason

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why Nike made it possible to keep these factories hidden was because Nike does not actually

own any shoe factories (Rothenberg-Aalami, 2004, p 341). Rothenberg-Aalami (2004) also says

that Nike denied that it could control its manufacturers' labor practices and that the allegations of

the conditions and wages were inaccurate but that they would continue to strive to remedy

controversial conditions. (p. 341).

SUPPLY CHAIN

Nike has many primary contractors "including Pou Chen and Feng Tay of Taiwan, and

Tae Kwang Vina of South Korea, which all have plants in southern Vietnam" (Rothenberg-

Aalami, 2004, p 340). Nike chose Feng Tay to be an exclusive contractor in 1975 because it was

a very effective and innovative model footwear factory. "Located in Song May industrial zone in

Dong Nai, Feng Tay produced 2.4 million pairs of shoes for Nike, close to 6000 pairs a day

produced by approximately 6000 people, the majority Vietnamese Women." (Rothenberg-

Aalami, 2004, p 344). Feng Tay, owning factories in Indonesia, China and Vietnam, became

Nikes "strategic partner' coordinating a manufacturing network of over eight subsidiaries, 60

production lines and 45,000 employees" (Rothenberg-Aalami, 2004, p 343). Feng Tays complex

network is extremely difficult to keep track of because it is a large company to begin with. Nike

says they have given contractors a list of approved vendors that they can purchase materials from

because they have met Nike's codes of conduct (Rothenberg-Aalami, 2004, p 343). Nikes official

website excludes the list of material suppliers. However, Max Nisen (2013) from Business

Insider wrote an article called "How Nike Solved Its Sweatshop Problem," in which he says that

in 2005, Nike publicly publish a complete list of all the factories it uses to produce Nike

products, making them the first producers to do so in their Industry (p. 1).

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CONSUMERS AND ADVOCACY

According to Forbes that ranked Nike #24 in the World's Most Valuable Brands in 2013,

Nike "sells its products to retail accounts, through Nike-owned retail stores and Internet sales,

and through a mix of independent distributors and licensees, in approximately 190 countries

around the world." This means that Nike products are sold to a massive variety of consumers

throughout the entire world. This poses the question: Do consumers know that their Nike

products have been made with trafficked labor? "Anti-Nike" advocates have been working for

decades to try to expose the truth about the labor that goes into Nike products. According to

Rothenberg-Aalami (2004), advocates such as Global Exchange, the Campaign for Labor Rights,

Vietnam Labor Watch, Press for Change, Justice Do it! Nike, and Sweatshop Watch have been

using the Internet and the media to change Nike's manufacturers' factories and transform global

systems of production. Furthermore, Rothenberg-Aalami(2004) also states (as cited in Benjamin

1999; Bissell 1999; Shaw 1999 p. 399) that "non-governmental organization's in Hong Kong,

Indonesia, Thailand, Cambodia and Mexico have also advanced anti-Nike efforts, publishing

reports on the Internet and using the media to educate the public about labor conditions inside

Nike plants. This proved to be very successful because Nike experienced financial losses while

the public was more exposed to how they were producing." One of the major strategies used by

anti-Nike advocates used was by directly targeting Nike and not the contractors that manufacture

its shoes (Rothenberg-Aalami, 2004, p.340). By using this "top-down" approach, in 1998, Nike

faced weak demand and criticism, forcing them to lay off workers (Nisen, 2013, p. 1). Finally,

after years of taking criticism Nike had to take the initiative and force the factories they used to

change their policies to promote improvements to the labor and environment conditions of their

workers.

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CONCLUSION

There are many major impacts on the producers of Nike products, on the trafficked labor

used to produce them, and on the consumers who buy them. First, as producers, Nike has

suffered financial losses due to local, national, and international pressures over the unfair

working conditions in Vietnam. "In 1998, slumping sales, profits and stock prices caused

economic distress for Nike ... resulting in Nike losing its market share" (Rothenberg-Aalami,

2004, p. 341). Nike also suffered because they destroyed the image of what used to be a good

strong American company. However, as a result of all criticism Nike has taken over the years, it

has actually managed to greatly diminish the problem by being more transparent with who they

work with; by setting up new rules and regulations; forcing their contractors to follow these

standards; and performing factory audits to make sure that their standards are being met (Nisen,

2013, p.1). The individuals that are being trafficked are the ones directly being affected by the

exploitation of their employers. These workers have to endure abuse and are forced to work

through harsh labor and environmental conditions with little or no pay. For example,

Rothenberg-Aalami (2004) states: "The report also found that workers with skin or breathing

problems had not been transferred to a department free of chemicals and that more than half the

workers who dealt with chemicals did not wear protective masks or gloves. The report also

revealed that toluene (an extremely hazardous substance) was found to exceed more than 150

times the acceptable levels." (p. 340). Another way in which the trafficked are being affected is

that even with Nike's new provisions, only a small group of people are being helped: "Nike-

initiated reforms are not tailored to account for differences in status between locals and

foreigners, which stagger the effectiveness or labor and environmental reforms." (Rothenberg-

Aalami, 2004, p. 346). Even though Nike has been working to reform its labor conditions for

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their workers, it cannot completely obliterate all the abuse that many workers still suffer. (Nisen,

2013, p. 1). For example, in 2013, over 200 people were killed in a factory in Bangladesh that

collapsed, only months after more than 100 workers died in a fire in the same area (Al-

Mahmood, Banjo, 2013, p. 1). Lastly, consumers are indirectly being impacted because they are

oblivious to the fact that they are using supplies that are being trafficked. Consumers play a

crucial role in the supply chain of Nike products. Purchasing products made by unfair labor is

indirectly supporting the oppressors of those being trafficked. However, it is important to realize

that consumers are also one of the most effective solutions to the problem. By raising awareness,

consumers could possibly diminish the problem of unfair labor for workers. As consumers, we

have to Just Do It.

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References

Al-Mahmood, S., Banjo, S. (2013, April). Deadly collapse in bangladesh. The Wall Street

Journal. Retrieved March 2, 2014. From

http://online.wsj.com/news/articles/SB10001424127887324874204578441912031665482

Ballinger, J. (1992). The new free-trade heel. Harper's Magazine, p. 1-2

Jenkins, A. (2003). What would you do? Communication World. 20(3), 14).

Nike on the Forbes World's Most Valuable Brands List. (2013). Retrieved February, 2014 from

http://www.forbes.com/companies/nike/

Nike Inc. (n.d.). How we do business. Nike Inc. Retrieved February 2014 from http://

www.nikeresponsibility.com/report/content/chapter/manufacturing

Nike's shoddy performance. (1997). Earth Island Journal, p. 13(1), 14.

NIKE, INC., et al., PETITIONERS v. MARC KASKY: on writ of certiorari to the supreme

court of california. Supreme Court Cases: The Twenty-first Century (2000-Present).

2009, p.1-4

Rothenberg-Aalami, J. (2004). Coming full circle? Forging missing links along Nike's integrated

production networks. Global Networks, p. 335-350.