[1/3]The Nike European HQ in Hilversum is home to a woman running on March 2, 2019. REUTERS/Yves Herman/File Photo Acquire Licensing Rights
Reuters has seen a letter sent to Nike CEO John Donahoe on September 7 that calls for Nike to compensate garment workers who lost their wages due to the COVID-19 closures.
Nike was asked to reimburse $2.2 millions in unpaid wages to over 4,000 employees at two suppliers located in Cambodia or Thailand. Reuters was unable to independently verify these allegations.
This investor demand could increase pressure on sportswear giant Nike, which will hold its annual shareholders meeting next Tuesday. Nike’s supply chain is under scrutiny from both Canadian and U.S. federal agencies.
The Nike investors want evidence that Nike is “future-proofing” its manufacturing ahead of a slew of European Union regulations aimed at the fashion industry, said Kees Gootjes, business and human rights advisor for ABN AMRO who signed the letter on behalf of the Dutch bank.
Nike issued a denial to Reuters. Nike denied the allegations in a statement to Reuters.
Both factories could not be reached immediately for comment.
The investors, including Dutch bank Triodos and pension fund PGGM, cite a June report by the Washington, D.C.-based nonprofit Workers Rights Consortium (WRC) alleging that Cambodian factory Violet Apparel dismissed 1,284 workers in June 2020 with less than a week’s notice and without paying full benefits, including damages for being dismissed without cause.
WRC reports that Ramatex was the owner of Violet Apparel prior to its closure in July 2020. Ramatex is a global textile company and Nike’s supplier. WRC claims that Violet Apparel was a Nike subcontractor up until 2020. It cites testimony and photos taken in the factory.
Nike found no evidence that Violet Apparel manufactured Nike apparel after 2006.
A second Nike supplier in Thailand – Hong Seng Knitting – has refused $800,000 furlough payments to roughly 3,000 mostly Burmese workers temporarily suspended in 2020 due to pandemic related work slowdown. This was according to WRC June’s report.
Nike said all employees at Hong Seng Knitting were “compensated in accordance with local law and Nike’s Code of Conduct,” citing “an independent third-party investigation and legal review.”
Tulipshare is an activist shareholder platform. In March it filed a request for Nike to give more details on the way they track risks associated with forced labor, wage theft and other illegal activities in their supply chains.
Katherine Masters, Josie Kao and Katherine Masters are the editors.
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