UW-Madison applauds Nike response on Honduran factories

July 26, 2010

by John Lucas

The University of Wisconsin-Madison's decision to end its licensing agreement with Nike over the treatment of Honduran factory workers has had a major, positive impact.

Today (July 26), Nike announced a decision to contribute $1.54 million to a workers' relief fund to help improve the lives of workers affected by the Hugger and Vision Tex factory closures.

UW-Madison was the first university to protest Nike's actions in the matter and sever its licensing agreement with the company. Several other universities, including Cornell University and the University of Washington, were also active on the matter.

At issue was the nonpayment of severance to workers at the two apparel factories, both of which were under contract with Nike to produce collegiately licensed apparel. Although Nike did not own the factories in question, the company was obligated under a code of conduct for the actions of its subcontractors.

Under the agreement announced today, Nike's fund contribution will be distributed to roughly 1,500 eligible workers by the Worker Rights Consortium (WRC), the Solidarity Center and the Central General de Trabajadores union federation, which represents the workers.

Nike will also cover the cost of enrolling the workers and their families in Honduras' national health program for one year. In addition, the company will take several measures that will lead to the re-employment of many of the workers.

The combined financial value of these measures is sufficient to fully compensate workers for what they are owed, after the previously completed liquidation of factory assets. The agreement fulfills the WRC's recommendations and constitutes full remediation of the violations.

"We're extremely pleased that Nike has found a way to make the workers whole," says Dawn Crim, special assistant to the chancellor for community relations and liaison to the Labor Licensing Policy Committee (LLPC), which first raised the issue.

"Thanks to the work of this university and others who engaged Nike regarding this case, there is now a tangible resolution for cases involving failure to pay severance," she adds. "This action acknowledges the strength in the language of the code of conduct as it pertains to subcontractors."

The code addresses workers' wages, working hours, overtime compensation, child labor, forced labor, health and safety, nondiscrimination, harassment or abuse, women's rights, freedom of association and full public disclosure of factory locations.

As a result of Chancellor Biddy Martin's April decision, Nike was restricted from producing UW-Madison licensed apparel and products for the foreseeable future, though the decision is reversible.

"As with other important labor rights successes, the positive results achieved here would not have been possible without the leadership and engagement of students and universities," says Scott Nova, executive director of the WRC. "This case demonstrates that the university community remains very much at the forefront of labor rights efforts in the global apparel industry."

UW-Madison has been a national leader among colleges and universities working to curb sweatshop abuses in licensed-apparel manufacturing. The university has contracts allowing more than 500 companies to make products bearing the university's name or logos. The products are made in approximately 3,300 factories in 47 countries worldwide.

Read the full Nike statement on the issue: http://www.nikebiz.com/media/pr/2010/07/26_Nike_and_CGT_statement.html