Garment workers blast ‘dangerous’ new normal at Nike – Sourcing Journal

Garment workers in the Global South are tired of watching the world’s biggest brands profit from what they have dubbed wage theft. Companies like Nike, Levi Strauss and The North Face-owner VF Corp., they say, have quickly recovered from the early slowdown caused by Covid-19 to see their profits soar. In contrast, they continue to grapple with the loss of income forced upon them in the darkest days of the pandemic.

Now a group of 20 garment sector unions representing workers in Nike’s supply chains in Cambodia, India, Indonesia, Pakistan and Sri Lanka are fighting back. Together with the Asia Floor Wage Alliance (AFWA) and the Global Labor Justice-International Labor Rights Forum (GLJ-ILRF), they filed an international labor grievance with the Organization for Economic Co-operation and Development (OECD) in Washington, DC. on Monday accused the sportswear giant of violating the guidelines of the intergovernmental organization on responsible business conduct for multinational companies.

Nike, they claim, has not only contributed to “serious human rights impacts” at the factories it commissions, but it is also not addressing and addressing them as the guidelines require. The complaint also alleges that the Just Do It company failed to cooperate with labor unions, despite its requests for dialogue and the recommendations of the OECD. Instead of compensating workers or investing in safety or productivity programs, the company engages in buyback programs to “falsely inflate” its share price, the release said.

According to OECD Watch, an international network of NGOs that maintains a database of OECD complaints, 35 complaints related to garments and textiles have been filed since 2001. Only seven were accepted.

Unions like the Coalition of Cambodian Apparel Workers Democratic Union, Karnataka Garment Workers Union and Federasi Serikat Buruh Persatuan Indonesia say workers have faced layoffs, arbitrary pay cuts, unpaid wages and gender discrimination on an “unprecedented scale” since 2020. Nike and other similar brands, they add, “triggered this crisis” when they canceled orders in March and then reduced new orders “en masse” in response to widespread economic uncertainty.

According to an AFWA survey of more than 2,000 garment workers, respondents lost an average of three months’ wages in 2020, leaving them unable to shell out groceries or rent without going into debt, and the gender pay gap in an industry where mainly women are employed, tightened . Its reverberations can still be felt today, said Anannya Bhattacharjee, the nonprofit’s international coordinator.

“The reason we are still talking about the pandemic today is not because of the pandemic three years ago, but because pandemic practices have set a new normal around the world,” Bhattacharjee said at a Tuesday news conference. “We need to examine this new normal. It is dangerous and it may dictate how the predicted global recession will be managed and what it will do for garment workers.”

Falling customer demand in the West is already being felt in countries like Vietnam, where a Nike supplier owned by Taiwan’s Pou Chen cut 3,000 of its 50,000 jobs, with a further 3,000 cuts later this year, according to a Reuters report last month. In November, Taiwan’s Footgearmex Footwear Co., which produces goods for VF Corp, announced financial problems.” When the World Cup began in Qatar that same month, 300 workers making Adidas-branded goods for the sporting event said they were working with only half were laid off on their statutory severance pay, with another 1,500 to follow.

Covid-19, Bhattacharjee said, gave nametags like Nike, Levi’s and VF Corp. a “new opportunity” to “experiment how far they might go for extreme greed and extractivism,” such as profiting from wage-stealing from workers who have already been “oscillated under poverty wages and mounting debt for decades.” It’s almost as if brands thought they could “get a personal get out of jail card,” even though violating minimum wage laws is a crime in many countries, she added.

Nike, which did not respond to a request for comment, said early in the pandemic that it would continue to pay its suppliers in full for finished products and honor previously agreed payment terms for anything still in production. In the case of canceled orders, it said, its policies and agreements with suppliers are “and always have been, that Nike pay the reasonable amount of the order, depending on the stage of production, as communicated by our supplier, to enable the supplier to fulfill the with the refund costs associated with canceled orders.”

Still, the coalition made the Tiffany collaborator the target of its first OECD complaint because it proved to be “the least accommodating,” Bhattacharjee said. While the OECD guidelines have no legal force, their US National Contact Point (NCP) could mediate in a meeting between Nike and the unions to discuss their grievances. If the Air Jordan manufacturer refuses to engage in dialogue, the NCP could issue recommendations on Nike’s treatment of garment workers in its supply chain. “We always prefer dialogue over litigation, but if we have to argue, we will,” she added.

In a report released this week by the AFWA, it put some numbers in stark terms.

In spring 2020, the Knight family, Nike’s largest shareholder, reaped $74 million in dividends on Nike stock, even though workers who made the brand’s shoes and apparel made an estimated $9.3 million through short-time work and pay lost, the organization said. A year later, Nike reported sales of $44.5 billion, a 19 percent increase over the previous year. This was soon followed by the start of a four-year, $18 billion program to buy back Nike Class B common stock.

“With the money Nike made from share buybacks, they could have paid workers 2,000 times more than what we’re asking,” Bhattacharjee said.

Levi’s and VF Corp. also launched buybacks of $19.7 million and $34.4 million, respectively. Workers at their factories, meanwhile, say they are owed $12.2 million and $2.5 million respectively as of 2020 alone.

Buybacks are “illegal,” according to Sahiba Gill, a senior GLJ-ILRF attorney who spoke at the same briefing [means of] Stock manipulation that enriches corporate investors at the expense of investing in workers.”

“Our grievance aims to create a process where unions can discuss directly with Nike the harm Nike is causing in its supply chain, discuss the required remedial actions and discuss a way forward to transform Nike’s supply chain.” said Gil. “For its garment workers to have decent work and living wages, which is particularly important to create substantive equality for the women workers who make up 70 percent of Nike’s supply chain.”

Instead of a direct answer, VF Corp. enclosed a November letter she sent to AFWA and GLJ-ILRF outlining her commitment to respect human rights in line with key international guidelines and outlining her due diligence efforts to “prevent, mitigate and remedy” people Rights risks in its value chain.

“Regarding your specific request, VF Corp. Assessed actual and potential human rights impacts on our supply chain related to COVID-19, worked proactively to prevent such impacts from occurring, and supported remedial actions where such impacts did occur,” it said. “During the pandemic, VF took an employee-centric approach to its international suppliers and proactively and directly informed our suppliers that they are required to pay workers compensation for manufacturing VF products.”

A Levi’s spokesman said the jeans juggernaut’s “longstanding” code of conduct for suppliers requires that all suppliers meet their financial obligations to their workers in the required timeframes and that all reports of shortcomings are “thoroughly” investigated and addressed “as soon as possible.” become possible.”

Still, Lalitha Dedduwakumara, chief organizer of the Textile Garment and Clothing Workers’ Union in Sri Lanka, said a complaint to the OECD is really a last resort. At the conference, she said through a translator that national laws and legal remedies had “no impact” in the last three years. Brands, she added, have failed to take action to protect workers from unemployment risks. When discussions are held, those responsible seem to talk around the workers – especially women – rather than with them. Even now, employers and brands are still using the economic crisis to “undermine workers’ freedom of association,” Dedduwakumara said.