Forced labour by Nike supplier

Labour rights article written on the 15 Jul 2008

In July 2008, undercover journalists exposed forced labour and appalling living conditions in a Nike supply factory in Malaysia.

The factory, called Hytex, employed migrant workers, using agents in Myanmar (Burma), Bangladesh and Vietnam to recruit people to move to Kuala Lumpur with the promise of higher wages. People had to pay huge sums – up to a year’s wages – to secure one of these prized jobs.

Once in Malaysia, workers were housed in extremely poor conditions, without space or adequate sanitation. Hytex confiscated their passports so they had no means of returning home. This makes migrant workers extremely vulnerable. To flee abusive situations without travel documents is to risk arrest, detention and deportation. Confiscating passports violates the right to freedom of movement and the right to leave a country – it amounts to forced labour.

The airing of the [news] report spurred immediate action from Nike.

– Andrew Hewett, Executive Director of Oxfam Australia

Caught out, Nike leapt into action

In the maelstrom that followed the Channel 7 exposé, Oxfam Australia urged Nike to investigate the allegations but not withdraw from the Hytex factory.

Oxfam Australia encourages brands to stick with their supply factories and sort out any rights violations, rather than cut and run – which costs workers their jobs and gives factory managers no incentive to improve labour standards.

Nike didn’t withdraw from Hytex, but confirmed Channel 7’s allegations and undertook improvements:

  • Workers were moved out of the squalid factory annex and into apartments
  • Fees paid to unscrupulous employment agents were reimbursed, with Hytex undertaking to pay future recruitment fees as a cost of doing business
  • Passports were returned, with a 24-hour hotline to Nike should passports be withheld
  • Workers were offered return airfares to visit home at any point in their contract

Nike undertook to review rights compliance throughout their supply chain in Malaysia.

Oxfam Australia estimates these actions made a positive difference to about 20,000 migrant workers producing for Nike in Malaysia

– Andrew Hewett, Executive Director of Oxfam Australia

The Hytex case is by no means the only example of Nike’s association with abuses of human rights.

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