Nike supplier 'resisting pay rises' in Indonesia

Nike shoes displayed in a shop in Jakarta (Getty Images)

The ethics of the sportswear giant Nike are under scrutiny yet again following claims that its supplier factories in Indonesia have pressured workers into renouncing their right to a minimum wage.

After protests by garment workers last year, authorities in Jakarta raised the minimum wage to 2.2m rupiah (£142.25) a month. But an investigation by trade unions and labour-rights activists has established that at least six Nike suppliers are resisting implementing the pay rise. Indonesia is the third biggest producer of Nike goods, after Vietnam and China, with 40 factories employing 171,000 people. Indonesian factory workers are among the lowest paid in Asia.

At one factory in the city of Sukabumi, in West Java, high-ranking members of the Indonesian military accompanied managers as they pressured the mainly female employees to sign a document stating their willingness to forgo the pay rise, according to Educating for Justice (EFJ), a US-based NGO. One woman, who filmed the incident on her mobile phone, told EFJ: “We got summoned by military personnel that the company had hired to interrogate us and they intimidated us.”

The Jakarta Globe said investigators were also told that factory managers hoodwinked trade-union officials by asking them to sign what they thought was an attendance sheet. The sheet was then allegedly attached to a document stating that they supported the company’s request.

Under Indonesian law, factories can apply to be excused from paying the minimum wage if they can demonstrate it would hurt them financially and that their workers back their position. Jim Keady, who runs EFJ, said all but one of the seven or eight Nike suppliers investigated were seeking exemption.

Nike’s code of conduct says it expects its suppliers to pay workers “at least the minimum wage required by country law”. The company said it was investigating the claims.