05/12/1997
The Wall Street Journal
Page A14
(Copyright (c) 1997, Dow Jones & Company, Inc.)

By Greg Rushford

Nike Inc. has been accused by labor and human-rights activists of running sweatshops in China and Indonesia and of abusing female workers who make sneakers in Vietnam. How is Nike -- which is adamantly proud of its employment practices -- defending itself? More pointedly, has Nike's public relations effort helped or hurt? The answer to the latter question is that Nike, like so many other corporations under fire, sometimes seems to be its own worst enemy when it comes to getting out its side of the story.

This is particularly unfortunate, since careful scrutiny of the complaints against the company suggests that Nike really is the progressive and humane employer it claims to be. Despite some problems, impartial reporters who have looked into Nike's operations have mainly found them to be clean.

So why is Nike a target? Because, with 37% of the athletic-shoe market, it is "the biggest," says Medea Benjamin of San Francisco's Global Exchange, part of a loose network of about 15 left-wing organizations world-wide that aims to bring as many bodies as possible into the streets for an international protest day against Nike on Oct. 18. Funded variously by labor unions, the religious left and a grass-roots donor base, the anti-Nike protesters are the younger brothers and sisters of the antiwar and pro-Sandinista activists of decades past.

The critics ask if it's right for Nike to pay millions a year to CEO Philip Knight and athlete endorsers Michael Jordan and Tiger Woods while the young women who make Nike sneakers in Asia earn about $2 a day. But that's the wrong question. A monthly wage of $40 to $60 in Vietnam, for example, is two to three times that country's per-capita annual income of $250, notes Russell Roberts, an economist at Washington University in St. Louis.

Economists also say Nike's capital has helped bring vastly improved living standards to the countries where the company has operated: first Japan, then South Korea and Taiwan, and now newly developing nations like China, Indonesia and Vietnam. "Nike's arrival usually corresponds to an economic boom, while its departure usually signals that the time has arrived for a country to move up the development scale," write Li Tong and Robert Zielinski of Jardine Fleming Research's Singapore office. Messrs. Tong and Zielinski coined a phrase -- "the Nike Indicator" -- to describe the wave of prosperity that Nike has helped create in Asia.

But Nike hasn't been so adept at public relations. Last year, company officials put their hands in front of CBS correspondent Roberta Baskin's camera as they barred her from one of their factories in Vietnam. Ms. Baskin then trashed Nike, interviewing a group of women who had been slapped by a Korean supervisor working for one of the subcontractors that run Nike's five Vietnam plants. Nike had actually dealt with the abuses before the U.S. journalists showed up -- but the company sure made itself look guilty.

Nike made the same mistake with Thuyen Nguyen, a 33-year old New Jersey businessman who emigrated from Vietnam in 1975. Disturbed by the CBS broadcast, Mr. Nguyen flew to Vietnam to investigate for himself. Nike officials took him on a plant tour, but Mr. Nguyen says he became frustrated when they asked him to stay away from the press. So he hooked up with officials from the Vietnamese General Confederation of Labor, a government-dominated union, who made sure he interviewed disgruntled workers. He also gleaned anti-Nike reports from Vietnamese publications like Worker magazine. "When I gave my report to Nike, I got little response," says Mr. Nguyen, who has now launched an organization called Vietnam Labor Watch. "So I called [New York Times columnist] Bob Herbert, because Nike was telling me Bob Herbert is dishonest."

Mr. Herbert, an honest Manhattan liberal whose literary juices flow when the subject is corporate greed, wrote a column ripping Nike. He passed along Mr. Nguyen's most damning finding: that a Taiwanese supervisor had made 56 women employees run twice around a 1.2-mile factory perimeter as punishment. Nike's "boot camp," Mr. Herbert dubbed it.

Nike officials protest vehemently that Mr. Nguyen's "discovery" actually had already been reported to them and dealt with; the Taiwanese supervisor is being prosecuted. But again, Nike would have been better off not acting as if it had something to hide.

Meanwhile, the company's PR team has issued a stream of press releases, boasting that it was the first in the industry to establish a code of conduct, that it has worked with a White House task force to sign an antisweatshop accord, and that it has hired former Atlanta Mayor Andrew Young to inspect its Asian operations. To Nike's critics such symbolism means nothing. And while the company pays hired guns like Mr. Young big bucks in hopes of clearing its name, prominent critics like the Rev. Jesse Jackson aren't let anywhere near Nike factories. Coverup, the activists cry.

True, Mr. Jackson & Co. wouldn't be satisfied even if Nike doubled the wages it pays its Asian workers. But what Mr. Knight must do is forget PR gimmicks and slam-dunk his critics with the economic facts.

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