Global Policy Forum

Nike Complaint Spotlights


By Marty Logan

Inter Press Service
April 29, 2004

US and Canadian labour unions say they will consider filing a complaint at the International Labour Organisation (ILO) after another United Nations body that promotes corporate responsibility said it could not deal with their allegation that sports equipment maker Nike is anti-union.

The dispute again highlights the U.N.'s contentious Global Compact, whose participating organisations (the vast majority businesses, including Nike) pledge to voluntarily uphold nine labour, environmental and human rights principles, but are not monitored for compliance. Launched by U.N. Secretary-General Kofi Annan in July 2000, the Compact now counts more than 1,400 companies worldwide, including coffee retailer Starbucks, one of three U.S. firms that joined this month.

Nike signed up in 2000 (by sending a letter of support for the principles) and by 2001 had been accused of violating the compact's third principle -- "Businesses should uphold freedom of association and the effective recognition of the right to collective bargaining" -- by blocking unionising efforts in its overseas factories. In their Apr. 14 letter to Annan, the four Canadian and U.S. unions said that Nike "systematically violates workers' ass ociation and collective bargaining rights" in Canadian plants whose workers they represent.

When the company purchased hockey equipment and clothing maker Bauer in 1995, its three Canadian factories employed 1,100 unionised workers, said the letter. Since then Bauer Nike Hockey has announced it will close two of the plants and cut operations at the other, leaving just 225 union employees.

"We believe that Nike's combined historic absence of union representation and decimation of union representation at facilities that it acquired demonstrate that Nike systematically violates workers' association and collective bargaining rights," added the unions' letter. "While we understand that the Compact currently has no mechanism to force compliance with Compact principles, your website states that the Global Compact Advisory Council is devising provisions 'to manage instances in which companies are misusing their affiliation with the Global Compact'. We believe that Nike should be reminded of this and should be subject to these provisions if it fails to change course," it added.

But Global Compact Executive Head Georg Kell told IPS it is not the body's role to "interfere" in labour disputes. The Compact's third principle "has always been and presumably always will be the subject of ongoing dialogue. It has never been settled in a static manner, where you could say 'this is right and this is wrong'. As a principle, in a narrow sense it means respecting a fundamental human right ... but how this then finds expression is a slightly different story". "Unfortunately we can't interfere in the national laws that (govern) these issues because these are issues that are very very sophisticated ... there's very little the Compact can do in changing industrial relations", Kell added.

For its part, Nike rejects it is closing the plants to get rid of union employees. All hockey equipment makers are downsizing because of a slow market, spokeswoman Michelle McSorley said in an interview. "We will continue to have two unions in Canada. We're outsourcing our products but whether or not those suppliers have unions I'm not aware, but that would never impact our decision. And Nike does have a union in Europe in one of its facilities so I think that speaks for itself."

Kell said the Global Compact can best influence labour principles in places such as China. "The real challenge for the Compact is to convince companies when they invest in China, for example, to allow their own workers to organise themselves, even when the Chinese government says 'we don't support freedom of association in the workplace'. That's where ... I know by practice we can make the biggest inroads," Kell added.

But one observer suggests the Global Compact has yet to influence corporate responsibility. "The Global Compact has not accomplished anything significant," says Kenny Bruno of the Alliance for a Corporate-Free United Nations, based at Earth Rights International in Washington, DC. "We really would love to see the (U.N.) secretary-general give such high-level and enthusiastic support to legally-binding mechanisms, such as were discussed at Johannesburg (the 2002 World Summit on Sustainable Development), a treaty on transnational corporate accountability (or), the U.N. norms (on business)," added Bruno, co-author of 'Greenwash: The Reality Behind Corporate Environmentalism'. The proposed 'U.N. Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights' are under discussion at the U.N. human rights commission.

The Global Compact will meet in June to discuss its progress, and Kell says it will talk about measures to make companies more accountable to the nine principles. But, he adds, the most important step would be for financial markets to endorse them. "The real acceleration would come in if the financial markets would step forward and say, 'well actually it is true: in today's world where transparency is the norm, where everybody can find out about abuses and bad behaviour instantly, it makes good business sense to be proactive and only companies that have a solid policy in place to deal with these issues are considered to be prepared'."

Bruno, on the other hand, believes the United Nations has to look at corporations differently. "Georg Kell and others at the UN have made it clear that they will not have a complaint mechanism ... they've made it clear that the Global Compact is not going to evaluate companies, is not going to accept complaints, is not going to discuss anything bad that companies do." "Just to say that 'we're just going to have a forum (for discussion), this is only about good news' (is not enough); you also have to look at the overall political agenda of the company. If (the Compact) is being used as a rhetorical weapon against measures that would be more effective, then, no, on balance it's having a negative impact," argued Bruno. "And unfortunately the Global Compact has been used as a rhetorical weapon, against the human rights norms (for business), for example."

"There's a place, of course, for cooperation, but there's also a place for accountability, and the groups in our alliance don't believe that partnership is the right model for the relationship between the U.N. and the private sector, at all times. (But) the U.N. leadership right now seems to believe that," added Bruno.

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