Ethical Performance
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NGOs turn up heat on Nike over Indonesian workers’ below minimum wage pay rates

March 2013

Indonesian suppliers to the US sportswear group Nike are being pressured by trade unions and the US Catholic NGO Education for Justice (EFJ) to pay their workers minimum wages.

The EFJ director Jim Keady reports that only one of seven or eight Nike suppliers he investigated was paying the minimum, which in Jakarta is now 2.2m rupiah ($227, £148, €171) a month.

Some suppliers are asking local authorities for an exemption from paying the minimum – which is granted if they show they cannot afford to pay the rate and if the workers accept the exemption.

However, the pressure groups condemn these negotiations, maintaining that even the minimum wages cannot support a reasonable life.

Said Iqbal, the head of Indonesia’s trade union confederation, who protests that many low-paid workers are not benefiting from the country’s recent economic growth, said: “We need investment but we don’t need investors that don’t follow the law.” He is threatening a national strike.

Apindo, the employers’ body, has warned that some factories are preparing to leave Indonesia and that others will be deterred from investing there unless union pressure is resisted.

Another allegation, possibly more serious, is that the Pratama factory’s workers were deceived into approving an exemption.

Keady says union officials signed an attendance sheet when lunching with Pratama managers. The officials claim the sign-in sheet was attached afterwards to a document stating they accepted the exemption.

Shop-floor workers were said to have then been intimidated into signing in front of high-ranking army officers. This, say the campaigners, enabled Pratama to obtain minimum wage exemption.     

Nike insists that factory workers must be paid at least the minimum wage and is investigating all the allegations.

Nike | Asia |


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