Nike told to compensate Cambodia workers following factory closure

[CEOCambodiaNews]

Nike told to compensate Cambodia workers following factory closure
posted by Andrew Allen
Yesterday

A coalition of labour and human rights groups are urging Nike to compensate more than 1000 workers whose employment was abruptly ended at a supplier’s factory in Cambodia.

Some 58 organisations called on the Ramatex group and Nike, which it said was Ramatex’s main business partner, to provide what it claims was the legally owed and legally mandatory compensation to 1284 workers at the Violet Apparel factory in Phnom Penh.

Workers at the factory were allegedly given just 24 hours’ notice when the factory closed operations in June 2020.

The coalition of labour organisations said that many of the workers were women, had worked at the factory for more than a decade and were now suffering significant hardship.

Ramatex is a Florida-based textile giant with an estimated annual revenue of more than $265m. The workers’ organisations are claiming it refused to pay Violet Apparel workers $1.4m of what they believe is legally obligatory compensation.

At the heart of the dispute is what the organisations call a “problematic decision” by Cambodian courts.

Cambodia's Arbitration Council said it had a lack of jurisdiction when it came to the case and declined to order Ramatex to compensate workers in lieu of giving them a longer period of notice.

The NGOs, however, criticised the Arbitration Council, saying that recent Human Rights Watch research had cast doubt on its fairness and independence. It added that Nike itself had expressed concerns to the Cambodian labour minister about the diminishing independence of the council and threats to labour rights in the country.

The worker rights consortium says that the council’s decision was legally invalid as it in fact had clear jurisdiction under Cambodian labour law to adjudicate in this case.

It also claimed that Ramatex was hiring workers at other factories in Cambodia at the same time as it dismissed workers at Violet Apparel and argues that Nike bears a responsibility for the alleged labour abuses in its supply chain.

Nike has said that it stopped sourcing from Violets Apparel in 2006. However the NGOs claimed to have evidence of Nike goods being produced on the company's production lines until December 2019.

“Nike’s persistent failure to exercise its considerable leverage with Ramatex to ensure workers receive what they are legally owed goes against its own stated commitments under the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises,” said the NGOs in an open letter to Nike.
https://www.cips.org/supply-management/ ... y-closure/

[CEOCambodiaNews]

Nike Accused Of Wage Theft
B&T Magazine

While billions of people are cheering on their favourite teams during the Women’s World Cup, Nike – sponsor of thirteen of the teams – refuses to pay 1,284 Cambodian garment workers US$1.4 million($A2.1 million) in legally owed severance pay.

Global women’s rights organisation, ActionAid Australia, alongside the Manufacturing Division of the CFMEU and the garment workers they represent, are calling on Nike to pay their workers by the end of tournament.

In July 2020, 1,284 women garment workers at the Violet Apparel Factory in Phnom Penh, Cambodia were let go when the factory abruptly closed during the COVID pandemic. They are owed unpaid severance compensation, yet they were making products for one of the richest brands in the world: Nike.

“Nike makes the amount that it owes women garment workers in under 15 minutes. For Nike the amount owed is mere pennies, but for the women who are struggling to put food on the table and have been forced to take on debt since the factory closed, the money owed would be life changing. It is simple: by refusing to pay workers in their supply chain, Nike is contributing to wage theft,” said Michelle Higelin, executive director of ActionAid Australia.

“Nike positions itself as a champion of women’s empowerment, but it is ignoring the women who’ve driven its profits. This Women’s World Cup, ActionAid is appealing to players with close ties to Nike to raise this case and help end the three-year fight for wages that women garment workers are owed.”

The Matildas and the USA recently showed the power of standing together for a fair deal when they collectively bargained for equal pay. Cambodian women garment workers are doing the same.

“Many of the women we’re watching on the field know what it’s like to stand together to win equal and fair wages. We commend these players for the strong and inspiring stance they’ve taken for gender equality, and we hope when they hear about the plight of Cambodian women garment workers, they’ll act together to urge Nike to do what’s right,” said Michelle Higelin.
https://www.bandt.com.au/nike-accused-of-wage-theft/

[CEOCambodiaNews]

Nike faces calls to pay garment workers ahead of annual shareholder meeting
September 11, 2023 — 03:21 pm EDT
Written by Katherine Masters for Reuters ->
NEW YORK, Sept 11 (Reuters) - More than a dozen investors are calling on Nike to pay garment workers in Cambodia and Thailand that a labor rights group said lost wages after COVID-19 factory shutdowns, according to a Sept. 7 letter to Nike's CEO John Donahoe seen by Reuters.

The investors want Nike to provide $2.2 million in allegedly unpaid wages to more than 4,000 workers at two suppliers in Cambodia and Thailand. Reuters could not independently verify the allegations.

The investor request could add more pressure to sportswear giant NikeNKE.N, which is set to hold its annual shareholder meeting on Tuesday. Nike already faces growing scrutiny of its supply chain, including investigations by Canadian and U.S. government agencies.

The Nike investors want evidence that Nike is “future-proofing” its manufacturing ahead of a slew of European Union regulations aimed at the fashion industry, said Kees Gootjes, business and human rights advisor for ABN AMRO who signed the letter on behalf of the Dutch bank.

Nike denied the allegations in a statement to Reuters. The company said it has not sourced product from the Cambodian factory since 2006 and that it also found "no evidence" that it owed workers in Thailand back pay.

Neither factory could be immediately reached for comment.
In full: https://www.nasdaq.com/articles/nike-fa ... er-meeting

[truffledog]

The is soooooo much profit margin in most of the sports goods..its pure greed that those brand owners dont compensate the most fragile in the value chain. Production costs are a small fraction of sales prices, marketing budgets are in the billions, there should be space for a fair payment of the production staff.

[newkidontheblock]

The is soooooo much profit margin in most of the sports goods..its pure greed that those brand owners dont compensate the most fragile in the value chain. Production costs are a small fraction of sales prices, marketing budgets are in the billions, there should be space for a fair payment of the production staff.

Companies are driven by investors. Investors are human. Investors are the ordinary people (through retirement funds, etc.)

If ordinary investors demanded companies not make a profit and lose money instead and continued to pour billions into them, then they would do so.

Unfortunately, it’s human nature to be greedy and get the most possible. Short term usually wins out over long term. Part of why communism fails.

The fault lies not in the stars, but in ourselves.

Just my opinion, of course.

[truffledog]

If ordinary investors demanded companies not make a profit and lose money instead and continued to pour billions into them, then they would do so.

The investors are not demanding companies to exploit anybody because if they do their reputation will be damaged costing them billions in forgone sales and brand value (instead of a mere 1.4M) They are usually asking for a profit made under fair conditions which is sustainable.

[Alex]

I hope that, at the very least, Nike will be forced to respond publicly to those claims. I'd like to hear their side of the story, as they look like total assholes at this point.

[Anchor Moy]

If ordinary investors demanded companies not make a profit and lose money instead and continued to pour billions into them, then they would do so.

The investors are not demanding companies to exploit anybody because if they do their reputation will be damaged costing them billions in forgone sales and brand value (instead of a mere 1.4M) They are usually asking for a profit made under fair conditions which is sustainable.

Yep, the companies like Nike (which is just an example and there are so many others!) should take into account that cool westerners with money don't want to wear clothing and footwear brands that exploit (or are said to exploit) workers and/or children.

Personally, I don't feel good about buying cheap fashion and clothes/shoes. I feel that the trend is changing - ie. that international consumers care more about sweatshop labour etc today than ithey did in the past.
Maybe. What do u reckon ?

[Ghostwriter]

It was a good business already when the retailers made the majority of profit (Footlocker etc), but now that Nike has it's own website, it's even better i guess...

[Jerry Atrick]

It would appear to me that the business which owes the staff compensation would be "Rose Apparel" & not Nike

But that wouldn't attract headlines for three years running I suppose