Row over Nike’s Indonesian factory wages

A Nike factory south of Jakarta has cancelled its application to hire for less than the minimum wage after reports that workers were being intimidated by soldiers surfaced.

ABC’s AM reported on Tuesday that military personnel had been used to coerce workers to accept contracts for less than the minimum wage.

After protests last year, Jakarta workers were granted a 44 per cent increase in the minimum wage to 2.2 million rupiahs per month, effective January 1, reported AFP. This is equivalent to $228.

However, unionists say that companies have been avoiding paying the new minimum wage.

"You have to provide financial conditions of the company in the last two years which show some not profit, and then you have to accept some consent from the workers directly, which is not that easy because for the workers, the new wages is actually better and fairer," the Trade Union Rights Centre’s Surya Tjandra told the ABC.

There are between six and eight Nike factories trying to avoid paying the minimum wage, according to Educating for Justice, a non-government organisation.

Workers at the Sukabumi Nike factory, 80 km south of Jakarta, claim that soldiers had been used to force workers to sign on to sub-minimum wage conditions.

"We got summoned by military personnel that the company hired to interrogate us and they intimidated us," an unnamed worker told the ABC.

"The first thing that scared me was his high tone of voice and he banged the table.

"And also he said that inside the factory there were a lot of military intelligence officers. That scared me."

It has now been reported that the factory has withdrawn its application to pay less than the minimum.

“I’m very happy for the workers in the factory,” Jim Keady of EFJ told the Jakarta Globe.

“They are getting the justice they deserve.

“Now we have to move forward case by case, factory by factory and make sure that in all 40 [Indonesian] Nike factories, the 171,000 workers get what they deserve.”

Nike has said claims of mistreatment will be investigated.

"Nike expects contract factory workers to be paid at least the minimum wage required by country law and provide legally mandated benefits, including holidays and leave, and statutory severance when employment ends," the company said in a statement.

 

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