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Aprisindo opposes Nike's labor charge

Jakarta Post - September 24, 1997

Jakarta – Indonesian Footwear Manufacturers' Association (Aprisindo) contested yesterday U.S. shoe giant Nike Inc's reason behind the termination of contracts with its four Indonesian partners.

Association chairman, Anton. J. Supit, said the decision to terminate Nike's contracts with the four Indonesian companies was made as part of the American shoe giant's budget revision. "The termination was originally based on Nike's budget revision and not because the Indonesian firms had failed to meet the company's requirement to increase wages. It's not right. I oppose the statement," Anton told the Jakarta Post.

He said the termination of job contracts was usual practice in the garment and footwear industry but said he wanted to seek a further explanation from Nike about the issue.

Nike Inc. severed ties with four Indonesian-based factories because they failed to adhere to the company's requirements for wages and working conditions, Reuters reported Monday. The announcement came as a workers' rights group accused Nike of contracting with companies in China that use child labor.

In a lengthy statement, Nike challenged the allegations made about four Chinese subcontracted factories by a group called Global Exchange. "The report incorrectly states the wages earned by workers makes irresponsible accusations about workers' health and safety and is just plain wrong in its assertion that Nike's Code of Conduct is not made available to workers," said Nike's director of labor practices, Dusty Kidd.

"These are not new issues," Nike chairman Phil Knight told shareholders. "We try to be good citizens and operate as good a factory as we can." Nike President Tom Clarke confirmed the company's growth rate would slow down in the current fiscal year, reflecting weaker U.S. footwear sales.

Sources in Jakarta said the four Indonesian companies became Nike subcontractors early this year. The firms are PT Prima Inreksa, PT Kuye Adetex, PT Prima Cipta Kreasi and PT Indomulti Inti. Total capacity of the companies is estimated to reach 800,000 pairs per month.