Running from Reform

Nearly three years ago, in a dramatic break with the past, Indonesian students filled the streets and led protests which drove out the autocratic General Suharto from power. The right to establish independent trade unions was among the reforms quickly granted by the new government. Still today, there is no meaningful collective bargaining going on between any of the myriad new independent unions and any multinational corporation; Indonesian police and military units are routinely called out to break up strikes. Clearly, the underlying "rules of the game" have not been changed.

These rules were made clear to me in the late 1980s when I was in Jakarta running a small office supported by unions in the U.S. The right of collective bargaining was "not in the paradigm" one democracy-promotion expert told me; an American working for the World Bank lectured me on wage elasticity when I complained that the government set the minimum wage well below the poverty line for a single adult, in order to attract foreign investment.

Students at colleges and universities across North America have built a movement to respond to the rapaciousness of the apparel industry--the main beneficiaries of the present brutal system. With dogged determination, they have challenged hundreds of administrators across the country to take responsibility for the production practices behind shirts and baseball caps being sold in college bookstores. Earlier this month there was a significant breakthrough. Students and administrators representing nearly 50 institutions of higher learning gathered in New York's historic Judson Memorial Church at the founding conference of the Workers Rights Consortium (WRC).

The basic plan is simple. Schools will give a tiny percentage of the licensing fees received for school logo-bearing merchandise and participate with the students in a monitoring operation aimed at ensuring that a code of reasonably fair labor practices is being observed.

There were two major developments that led to the formation of the WRC. First, the decisions of over 100 schools to join the White House panel now known as the Fair Labor Association (which began in 1996 as the Apparel Industry Partnership). This was certainly not the vehicle the students had in mind because of the very low standard set for suppliers' compliance and because of serious reservations about corporate-controlled monitoring. Second, students won the disclosure issue; once they became aware of hundreds of factory locations, they decided it was time to go and talk to the workers themselves.

The transparent nature of the WRC plan has clearly discomfited the industry. Nike went so far as to cancel a sports equipment deal with Brown University, citing the school's role as a founding member of the WRC.

The Nike overreaction is best illustrated by an incident which took place last fall, when I took two university-based "anti-sweat" activists to Indonesia. We were contacted by union officers at the sprawling Nikomas Gemilang factory, where more than 18,000 young Indonesians were making shoes for a Nike contractor; they wanted us to visit the factory. We weren't on the property for more than three minutes before a breathless Taiwanese manager chased us down and told us that no one could visit the factory without Nike's permission and, further, that we could not even see the dormitories.

Instead, we sat with the management team and union leaders for a wide-ranging discussion. One of the first issues to come up was the "collective bargaining agreement" (KKB, Indonesian acronym) which was due to expire the very next day. Management explained that they had applied for and received from the Indonesian government a three-month extension of the agreement. They were baffled with the next (obvious) question: What issues are you deadlocked over?

It was clear that there was no real bargaining going on; three months later an e-mail arrived to confirm that another bogus KKB had been signed with no meaningful improvements.

Nike, predictably, criticized our visit as unhelpful. In retrospect, we did not even need the factory visit. With the help of some Indonesian students, we spoke with scores of workers and did some rudimentary "faux bargaining" calculations. Had the workers won a meager seniority clause increase of 15 cents per worker per day for each year of seniority, a worker with four years' experience would earn $1.70 a day, instead of $1.10. This does not sound like much money, but in this huge factory, it would cost the contractor $10,000 a day! No wonder the vast majority of Nike contractors have set up shop where bosses can refuse to bargain with workers.

Jeffrey D. Ballinger, currently working on a Turkish constitutional law project at the Kennedy School of Government, is a member of the Advisory Council of the Workers Rights Consortium. He is also the founder and Director of Press for Change, a consumer-information NGO which monitors worker rights issues in Asia.