Sept. 15, 1997 The New Republic
For the past year, the Nike athletic wear company has been the object of intense scrutiny, thanks to reports of widespread labor abuse by its subcontractors in Asia. In Vietnam, 800 laborers walked off the job to protest what they said were poor working conditions; in Indonesia, thousands of workers ransacked their factory this spring, claiming Nike hadn't been paying the $2.50-a-day minimum wage. Tales of exploitation have also sparked demonstrations back home in New York, Los Angeles and Seattle. On February 22, hundreds of activists filled San Francisco's Union Square on the opening day of Niketown, a multi-floor Nike superstore. Outside the entrance, hundreds of protesters chanted, "Just don't do it!" and urged prospective customers to stay away.
Two days after the San Francisco incident, Nike CEO Phil Knight announced that his company was taking swift--and, it would turn out, savvy--action to shore up its meticulously maintained but suddenly threatened public image. Nike was commissioning an independent investigation of its Asian operations: it would make all facilities and internal documents available to a team of inspectors, and it would then allow the inspectors to make their findings public. "Nike has always been a business about excellence and achievement," Knight proclaimed. And, to prove it, Nike would hire not just any old corporate hack to lead the investigation into its overseas operations, but a man of famous independence and renowned stature--a man who had first gained recognition as a civil rights hero, who had won wide acclaim as the mayor of Atlanta, who had served his country as ambassador to the United Nations and who had co-chaired the Atlanta Committee for the Olympic Games. The honorable Andrew Young, Knight said, would get to the bottom of this.
But Young was not just another pretty public servant summoned from an idyllic private life to answer duty's call. He was a businessman. And his fledgling business was to stimulate investment in developing countries--a mission statement that, it seems, includes helping companies deal with the p.r. messes that can come with such overseas endeavors. To conduct this business, Young had recently founded a firm in Atlanta called GoodWorks International. With Young at the helm, GoodWorks was perfectly positioned to take advantage of an emerging niche market: recently, Texaco, General Motors and Mitsubishi had all invited well-respected former government officials to serve as independent arbiters of complaints made by employees or consumers.
Nike was GoodWorks's first big client, its first chance to send corporate America evidence that GoodWorks did, from the businessman's point of view, good work. And when, four months after Knight's announcement, Young's firm published its seventy-five-page, full-color report on Nike's Asian operations, the client certainly had reason to feel it had gotten its money's worth. There was, Young had concluded, "no evidence or pattern of widespread or systematic abuse or mistreatment of workers" in the twelve operations he examined. To hammer home the point, GoodWorks packed the report with photographs--many taken by Young himself--of smiling workers playing a guitar on their break and relaxing around a television in their dorm. Young had a few criticisms, but his only substantive recommendations were that the shoemaker "consider" independent labor monitoring, that it establish better grievance procedures and that it distribute business cards with the company's "Code of Conduct" translated in the local language, so all foreign workers could read it. Nike wasted no time publicizing word of its vindication. It bought full-page ads in The New York Times and other major newspapers, touting the GoodWorks report. And the good news was hailed in the unpaid media, too. "In several ways," gushed The Atlanta Journal and Constitution, Young's hometown paper, "the job is classic Andy Young--a man who ... has spent his life bridging the gaps between rich and poor, black and white, business, government and the international community."
But if the Nike report was "classic Andy Young," it was also a classic sham, marred not just by shoddy methodology but by frequent misrepresentations. The report lists consultants who were never consulted and includes photos of union representatives who, it turns out, were not union officials. Young deliberately avoided the most obvious and controversial question--whether Nike paid its employees fair wages--and, when gathering testimony, he relied almost exclusively on translators employed by the Nike factories. Phone calls to Young's office were referred to a GoodWorks spokesman, who insists Young did his best; he says that looking at these details misses "the big picture" of the report. Young, he notes, never claimed to be an expert on labor issues. But then Nike didn't need a labor expert. This was a public relations problem, and the world's largest sneaker company did what it does best: it purchased a celebrity endorsement. Andrew Young was happy to oblige.
The most obvious and important flaw in the GoodWorks report comes at the end, where there is a list of thirty-four "Non-Governmental Organizations With Whom GoodWorks Met or Spoke." This is the section that gives the publication intellectual credibility: it suggests that Young consulted with some of the leading minds in the field, who could have provided him with the context and guidance to judge whether Nike's operation was abusing workers. But, in a number of cases, Young did not consult with these experts at all. Anita Chan, a researcher who has studied China extensively at the National University of Australia in Canberra, appears on the list. Chan, interviewed by tnr, says she was never contacted by Andrew Young or anybody at GoodWorks. Logan Ide, a GoodWorks spokesman, explains that Chan was included accidentally because her name was on an internal office memo of people they should call. "It was just a simple mistake," Ide says, adding that GoodWorks has formally apologized to Chan and that she has accepted the apology. But that, too, is wrong, according to Chan. "I have never heard from them," she said. "No, they have never called me."
Maniza Naqvi, a child labor expert at the World Bank, did not even know that she was listed in the appendix until she was called by tnr. "My only connection to Nike is that I wear their shoes for running," she says. "I had nothing to do with this study. I wish I wasn't in there." Naqvi recalls but one communication with GoodWorks: she called on March 3 to ask if GoodWorks would send her the report when it was finished. The call lasted less than a minute.
Other experts cited say they, too, had only fleeting contact with the firm. Conrad MacKerron, the former director of social research for Progressive Asset Management Inc., says he had "just a courtesy call" with GoodWorks, and that it lasted less than ten minutes. "It seems a bit disingenuous to put me there," he says. Thuyen Nguyen, the founder of Vietnam Labor Watch, who has toured Nike's factories before, says someone from GoodWorks called him once, for a brief conversation, and that he was told that more substantive contact would follow, but no one ever called him again. Medea Benjamin, the director of Global Exchange, a San Francisco-based human rights group, says her lone phone conversation with GoodWorks was over in five minutes. She says she asked for a meeting with Young, but no one called her back.
Not that the conversations would have been so productive anyway. In a conversation that lasted less than fifteen minutes, Jeff Ballinger from Press for Change, a Washington-based labor rights group, says he realized that the folks from GoodWorks "had no idea what they were talking about. I mean they didn't know even the basics."
Logan Ide, GoodWorks's spokesman, says the organization is sorry that so many people feel the report overstates their contributions. GoodWorks was not, he insists, trying to create a false impression. "It surprises me that people will say that," Ide says. "The heading only says we spoke with them. Sometimes it just may have been very, very briefly."
Recently Garry Trudeau's "Doonesbury" comic strip featured a series in which Kim, an Asian American character, visits a relative working in one of Nike's Vietnamese factories. In the series, the Nike translators manage to render the workers' pleas of mistreatment into joyous reports of a labor paradise. Just a case of Trudeau taking artistic license? No, more like art imitating GoodWorks.
In their field visits to Nike's factories, where they interviewed Nike workers about work conditions, Young was hampered by the fact that he wasn't fluent in the languages of the workers. No problem: Nike provided translators. And Young chose to use Nike's translators, although he could have easily hired his own. "We regularly provide translation for government officials and the media who visit," Nike's spokesman, Veda Manager, says. "By any standard those were acceptable translators."
Any standard? Not quite. In 1980, the International Law Association established the Belgrade Minimal Rules, to set common rules for the inspection of human rights conditions around the world. Rule Number 10, which most human rights groups consider essential, stipulates that analysts should provide all of their own experts. Diane Orentlicher, an international law professor at American University and author of Bearing Witness: The Art and Science of Human Rights Fact-Finding, says that rule certainly applies to translators: "Don't even worry about the Belgrade Rules, doesn't it just violate common sense?" she said. "How can you speak freely when your employer is listening or someone who might talk to the employer is literally in the room?"
Even journalists, who for the most part do not follow the same rigorous rules of inquiry as human rights organizations, and who work under much tighter time constraints, usually meet this basic requirement of fact-finding. Except when it is impossible--when, for instance, state or military authorities insist on providing official translators--experienced foreign correspondents hire their own translators, often at significant cost.
Ide says Young decided to use Nike translators when he was planning the trip with Nike officials; according to Ide, Young thought it would be the most convenient way. Ide concedes that Young had no way of knowing whether the translations were accurate. "We didn't follow [the Belgrade Rules] since we don't have all the technical expertise," Ide adds. "This was not designed to be a great academic study."
Another basic precept in labor and human rights investigations is to spend enough time at the job to really investigate. Young reports that his investigators spent, on average, up to three to four hours in each factory--a fact that prompts derision from veteran inspectors who have worked for manufacturers and unions in the past. Generally, these experts say, inspection teams on a tour will visit each factory at least ten times--for several hours at a shot. Graham Honiker, a consultant for two European apparel manufacturers, said he was "appalled" when he learned that Young spent only four hours in a factory. "You have got to be kidding me," Honiker said. "He might as well have been at Disneyland on a little factory [ride]. You know, where they can all sing, `It's a small world after all.' You know, `It's a world of laughter, a world of tears.'"
Some of the very labor rights experts whom GoodWorks listed as consultants say Young was told that he was not spending enough time on the ground to conduct a thorough study. One such consultant says he personally warned GoodWorks about this on five separate occasions. He was ignored, he says: "Young said he didn't really want to do the project anyway and made clear [that his attitude was] let's get in, get out, get the check and be done with the whole thing." (Young has said before that he was wary of taking the Nike contract: "I was reluctant to get involved with Nike in its Asian shoe conflicts because it would inevitably put me back into the `reasonable moderate' role I agonized over throughout my civil rights career," he wrote in a letter to The New York Times.) "Let's not beat around the bush, it takes you two years on the ground in [a foreign country] before you understand what is really going on," says another consultant. "If you are superhuman, and Andrew Young is, you can do it in one year. You're not going to see or hear anything meaningful being [in a foreign country] for three or four days."
Throughout his trip, Young and other members of his research team took photographs of cheery workers; the glossies, reprinted in the report, show the workers flashing the peace sign or working busily at their jobs. But these photographs are somewhat misleading. On page ten is a picture of Young sitting at a table with a group of Vietnamese men and women. The caption says, "Andrew Young meeting with plant management and union representatives in Vietnam." One man and one woman from the photo appear again on page twenty-two, posing with Young in front of a sign that says "Trade Union." Here the caption reads: "Andrew Young with union representatives at Vietnamese factory."
This picture comes as something of a shock to the Vietnamese Confederation of Labor, which represents workers at the Nike factory. Faxed a copy of the photograph, the confederation's officials said they do not know who the individuals are. When pressed, Veda Manager, Nike's spokesman, said they are Nike employees, who collect their salaries from the company, not the union or the government. "But they represent the workers," Manager says: although they have regular jobs in the factory, they are also supposed to look out for the workers' rights.
So, these workers were not exactly union officials, but they were, in Nike's account, still union representatives of a sort, the equivalent of shop stewards in a factory. And, by GoodWorks's own say-so, its investigators' process for identifying the appropriate union representatives was less than what you might call searching. GoodWorks spokesman Ide says the team simply allowed Nike to point out the appropriate union representatives with whom Young should speak. "Vietnam has a less developed understanding of organized labor and unions," Ide explains. "They don't have unions like we do. And these were the people."
Perhaps they were. And perhaps they did indeed give Young valuable information about conditions in the Nike factory from the union perspective. But, if they did, there is no evidence of this in Young's report. There is no quote, positive or negative, from any union representative; there is no account of how the management treats the union representatives or any information about whether the union representatives have any say in the factory's operation. And, while Vietnam may indeed have a different union structure from the West, a well-developed union system does exist there, and this system boasts union officials who are not paid by the company. Young and his team did not speak to these people.
One can understand why Nike might be reluctant to arrange a meeting with Hoang Thi Khanh, the union official who is in charge of the plant, since she has a reputation for being "tough as nails" when it comes to negotiating for better factory conditions; she also publicly criticized Nike earlier this year. Not only is Hoang Thi Khanh the vice chairman of the Vietnam Labor Confederation, she is also editor-in-chief of The Laborer, one of the best-selling local newspapers. Young could have met with Khanh--but, oddly, he declined repeated opportunities to do so. Thuyen Nguyen, the head of Vietnam Labor Watch, called Young's office two or three times to set up the meeting. At the time of the calls, Khanh was actually in the U.S. for several weeks, meeting with federal officials in Washington, D.C., and was anxious to visit Young; Khanh even offered to visit Atlanta if it was more convenient, Nguyen says. But Nguyen was told that GoodWorks wasn't interested.
And the photographs of would-be union officials aren't the only ones to raise questions about Young's examination of the factories. On page thirty-four appears a picture--also taken by Young--of several female workers, many with their arms crossed, sitting at a table. The caption says that these are the women who were "forced to run around Vietnamese factory." The reference is to a well-publicized event in which factory supervisors forced fifty-six Vietnamese factory workers to run laps around the factory because they had not worn proper shoes to work or had not met production quotas. The run was so strenuous that twelve of the women had to be hospitalized. After a wire story reported the incident, Vietnamese police arrested the supervisor.
At the time, the event was widely condemned in the media. But, in an interview with The Atlanta Journal and Constitution earlier this summer, Young said the women were "laughing and joking about it" and were "pretty easy with the experience." Young added that he felt most sorry for the supervisor, who did not speak Vietnamese and who was facing court charges.
Young's decision not to consider questions about whether Nike pays its workers minimum wage also seems baffling--after all, that is the labor activists' primary complaint. While the human rights groups have filed scattered reports of worker abuse, activists say nearly all of their complaints are that Nike is not paying the local minimum wage. Nike denies that it is breaking the law.
In the report, Young writes, "I was not asked by Nike to address compensation and `cost of living' issues which some in the human rights and NGO community had hoped would be part of this report." But was he really not asked? According to a January 15 letter from Phil Knight to Young, which was made public in the report, GoodWorks agreed to undertake an independent study of Nike's Code of Conduct, which outlines the basics of Nike's labor practices for its contractors, including prohibitions on child or forced labor and mandatory overtime. The code explicitly discusses wages: "Employers [meaning the subcontractors that run the factories Nike uses] shall pay employees, as a floor, at least the minimum wage required by local law or the prevailing industry wage, whichever is higher, and shall provide legally mandated benefits." Which means that looking at wages was in the code and was therefore well within the scope of Young's assignment. As if that were not enough, the January 15 letter gave Young plenty of room for expansive interpretation: it said he could look into anything he thought was important.
Young has a second explanation for his decision not to consider the wage issue. Determining what is a "`fair wage' in a foreign country is a very complicated process," he writes. "Such an exercise was well beyond the technical capacity of our small firm." Yet, as Nike's critics rightly point out, salary compensation is the one area of foreign labor on which so much has been written that even a novice could quickly get a basic handle on what fair wage estimates are. Provided with a copy of the report, a pro-business economist from the University of Pennsylvania said, "That's idiotic. When I read that, I knew the author was doing a p.r. job, not a serious look. If he really believes it, then he can only be a truly stupid man."
Or a smart one. If Young had excoriated Nike, GoodWorks's first major client, GoodWorks might have had a tough time attracting the next client looking to cleanse its shaky reputation. Young's whitewash perfectly positions GoodWorks International as the public relations agent for future multinationals. But GoodWorks is better than a p.r. firm. The media naturally discount anything they hear from paid spokespeople. But praise from a civil rights leader--now that's something worth paying for.
Speaking of which, Nike and GoodWorks won't say how much the company received for the study. Young wrote in the report: "The total compensation I have personally received for this report is less than I am usually paid for one speech." Note the careful phrasing: Young says nothing about how much Nike paid to GoodWorks (as opposed to Young personally), through which Young, as co-chairman, would presumably profit. Manager, Nike's spokesman, referred all questions on compensation to GoodWorks; he declined to say whether Nike had paid GoodWorks as well as Young. Ide, GoodWorks's spokesman, also declined to comment on pay, referring tnr to what Young wrote in the report.
Sadly, Young appears to be aware that the truth about Nike's operations is more complex than his report indicated. After returning from Asia on May 14, Young held a meeting in Washington with some of the experts whom he actually did consult. By all accounts, Young was unusually candid throughout the meeting. Notes taken by three separate individuals indicate that Young was much more critical at the meeting than he would be one month later in his report. Each set of notes, for instance, quotes Young as saying he knew he had been "snowed" at Nike's Chinese factories. William Conklin of the Asian American Free Labor Institute wrote in an interoffice memo the next day: "On China, AY said he went in expecting the worst but saw relatively good working conditions in the factories. In fact he felt `snowed' in China because the conditions were the best of all the factories." The notes said that Young thought Nike had difficulty recognizing problems in foreign countries.
Young's report makes no mention of these qualms. "I was surprised when I saw how fluffy the report was," said one of the people in the meeting. "That's not how Young was talking in May." Nike's spokesman Manager says the company can't comment on the meeting since its representatives did not attend; Manager stresses that Nike did not pressure Young to come to any specific findings.
Whatever the motivation, the document's physical character has the distinct feel of a public relations ploy--not a serious analysis. While the report weighs in at a hefty seventy-five pages, that's mostly due to the very large typeface and frequent use of boldface throughout. It's actually less than 7,000 words. Reduced to a more standard size of twelve-point text (which is actually 14 percent larger than the type you are now reading), and single- spaced, that comes to just thirteen pages of text. To pad the report even more, GoodWorks inserted photographs on every other page. That's "highly unorthodox," "bizarre" and "totally unprofessional" for a factory analysis, according to three individuals who have done similar analyses for other companies. They say the photographs of smiling, happy workers were inappropriate. (Young, if he had wanted to be critical of Nike, could have just as easily replaced his photos with news pictures of factory workers protesting low wages, which are widely available.)
Nike, meanwhile, remains as pleased as punch with the report. The company promises to "exceed his recommendations"--meaning it will do better than giving the workers business cards. Adds Manager, "Are you questioning the integrity of Andrew Young?"