Nike Accused of Wage Abuse in Indonesia
An Indonesian Nike contractor allegedly intimidated workers into giving up their wages.
The contractor in Sukabumi, Indonesia, reportedly hired military officials to force workers into accepting a lower than minimum wage, which was recently increased. The report says that the officials intimidated workers into signing a petition that exempted the company from paying the new, higher minimum wage.
The higher minimum wage was a result of last year’s strike in Indonesia, where millions of workers protested the low pay amidst cost of living increases.
Six Nike-contractor factories in the country have applied for an exemption to the wage hike — which wouldn’t necessarily be illegal. Minimum wages are set at both provincial and district levels in Indonesia. If a company can prove it’s unable to afford the hike — and get its workers to sign off on that claim — the company can be exempted from the law.
According to the Trade Union Rights Centre’s Surya Tjandra, “You have to provide financial conditions of the company in the last two years which show some not profit, and then you have to accept some consent from the workers directly, which is not that easy because for the workers, the new wages is actually better and fairer.”
The new wages are a difference of thirty cents – from $3.70 a day to $4.00.
According to The Independent, Indonesia is the third biggest producer of Nike goods, after Vietnam and China, and the country’s factory workers are among the lowest paid in Asia.
Nike defended itself against the charges in a recent statement. The statement noted that the company’s code of conduct explicitly states that contractors are to pay workers “at least the minimum wage required by country law, provide legally mandated benefits, including holidays and leave, and statutory severance when employment ends.”
Nike says it is investigating the issue.
Flickr photo courtesy of Robin Geschonneck
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