Nike's at it again, and it's losing millions due to a powerful anti-sweatshop campaign led by United Students Against Sweatshops, the same student movement that forced Nike to disclose its factory locations and recognize garment worker unions a decade ago.
The sportswear giant consumers in the U.S. equated with sweatshops back in the '90's reported sales of $19 billion last year, but refuses to pay $2.2 million to Honduran garment workers in legally-mandated severance. The dispute dates back to January 2009, when two Nike factories in Honduras called Vision Tex and Hugger -- closed without paying 1,800 workers their hard-earned severance and other legally-required benefits. The total money owed per worker is approximately $1,300, equivalent to a manufacturing worker in the U.S. losing between $15,000-$20,000. As Antonia Lopez Andrade, a former worker at Vision Tex, explains in a letter to Nike "I suffer nights of insomnia and hopelessness over my mortgage, and keeping my lights on, and the water running."
Nike insists it's not responsible for what happens in sub-contracted factories it outsources to, despite Nike's claim of being "driven to do not only what is required by law, but what is expected of a leader." Nike's code of conduct requires the company to ensure its suppliers comply with all the manufacturing laws of the countries they operate in, including the payment of legally-mandated severance pay. In the event a Nike factory closes down, as was the case with both Hugger and Vision Tex, then the buck stops at Nike's doorstep.
None of this is a surprise. After all, we are talking about the corporation that pioneered the modern apparel industry's use of sweatshops. When consumers reacted negatively to sweatshop scandals in the 90's, Nike's stock price dropped by half from $38 per share in 1996, to $19 in mid-1997. Student protests along with falling consumer confidence in its brand, convinced Nike of the need to clean up its badly tarnished image.
The first thing Nike did to repair its reputation was to hire a 135-person "Corporate Social Responsibility" (CSR) department, in addition to a separate "compliance team" of 74 full-time staff. Today, Nike spends an estimated $25 million per year on CSR efforts. Nike also chairs a committee within an anti-sweatshop organization called the Multi-Fiber Agreement Forum, whose guidelines require participating companies to make sure garment workers receive legally-mandated severance pay - ironic, considering the $2.2 million Nike still owes its workers at Hugger and Vision Tex.
Nike's second ploy was to slap its swoosh on the jerseys of popular athletes and sports teams. In 2009, Nike spent an estimated $260 million on sponsorships and nearly $200 million on its advertising budget, paying superstars like LeBron James $90 million over seven years, and World Cup soccer teams such as France and England $54 million and $44 million per year, respectively. Sales climbed, but Nike's predatory exploitation of garment workers continues unabated.
So far Nike's Board of Directors has turned a blind eye to this behavior, but students aren't standing for it. United Students Against Sweatshops' network launched a national "Just Pay It!" campaign against Nike in January, partnering with the Hugger and Vision Tex workers in demanding the $2.2 million Nike owes them in severance. In March, Gina Cano and Lowlee Urquia - two former workers from Hugger and Vision Tex - participated in a tour of U.S. colleges organized by USAS, speaking at nearly 40 different campuses around the country.
In Nike's hometown of Portland, Oregon, a panel of community leaders held a hearing on whether Nike is violating Honduran law and its company policies. The panel recommended Nike enforce its code of conduct by immediately paying the workers their severance. Before going back to Honduras, Gina Cano and Lowlee Urquia spoke to five thousand people in front of Portland's flagship Niketown store, as part of the city's annual May Day march for worker and immigrant rights.
Then in April, the Just Pay It! campaign won a historic victory when the University of Wisconsin-Madison became the first U.S. college to ever to cut a Nike contract over sweatshop abuses, losing Nike $1 million in annual sales of Badger gear. This summer Cornell University followed suit, announcing it would let Nike's contract with the university expire at the end of December, unless Nike pays its workers the money they're owed -- a major step considering Nike is the exclusive sponsor of Cornell's entire athletics program.
Riding the momentum from Cornell's decision, students now know they can hold Nike accountable anywhere, even at universities with big Nike athletic contracts. Its unclear when these new threats to Nike's all-important image will register with the company's leaders, but students will continue building alliances with workers who sew Nike clothing like Antonia Lopez Andrade, until USAS wins justice for garment workers in the college apparel industry.