8/14/2010 Vietnam Labor Watch

Vietnam Labor Watch

June 21, 1997 Press Contact: Thuyen Nguyen, thuyen@spacelab.net

from Youth Newspaper (Thanh Nien) June 14 1997, Ho Chi Minh City Vietnam,
page 1. (translated by Vietnam Labor Watch)

Nike, the truth behind public statements

a special investigation by Dang Ngoc Khoa
June 14, 1997

At last, the horrible treatment of Vietnamese workers by companies Sam

Yang, Pouchen, Tae Kwang Vina, contractors for the American sport shoe
company, Nike, were exposed throughout America and the world. The
result: the Nike logo is having a different effect on consumers. In
Vietnam, the contractors from Taiwan and Korea try to placate the public
with initiatives for workers such as "wage increase", "reduction in work
hours". But what is the truth? This article is the latest information from
Dong Nai, the area with four Nike contractors employing over 30,000
workers; most are young women under 25 years old.

After 50 newspapers, numerous radio programs and several television

broadcasts in America and Great Britain revealed that "Nike has raised the
exploitation of poverty-stricken foreign workers to a fine and spectacularly
remunerative art." (New York Times, Mar. 31, 1997), several Nike
representatives and high-level consultants visited Vietnam to access the situation
and to come up with rescue plans. Putting its prestige and good name on the
line, Nike announced that it will increase wages by 10%; and Mr. Tae Park,
former president of Sam Yang Vina Co. enthusiastically told AFP that the
company "gave workers a 8.6% salary increase". But what is the truth?

For April, May and June of 1997 in Dong Nai, Mr. Vo Minh Quang, Director
of Dong Nai Labor Bureau and Mr. Nguyen Dinh Thang, president of the Dong
Nai Confederation of Labor said, "These statements are incorrect. Most
workers here in Dong Nai received at most 40 USD per month or 440,000
VND (Vietnam Dong). According to circular no. 11 of the Ministry of Labor,
these wage figures are not even legal."
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Actual paystubs from April 1997 from Pouchen Co. prove the point. Beside a
basic salary of 440,500 VND, the worker LTT (who started in Jan 3, 1997)
received an extra 105,000 VND which includes: 28,720 VND (for 18.5
overtime hours); 2,000 VND bonus; 26,737 VND bonus; 26,000 VND for
meals; 22,000 VND for good employee bonus. From the above, the company
subtracts 52,000 VND for meals; 28000 VND for miscellaneous (what is
miscellaneous?), leaving the worker only 465,000 VND. This worker did not
have to pay for social security, health insurance, and she also has completed all
eight criteria's (8 "no-no") for a good employee bonus (no annual leave, no day
off for trip, no day off for wedding, no day off for funeral, no day off for
menstruation, no day off without prior permission and did not forget to punch-
in). This is how she has received the good employee bonus. But if she has
violated one of the eight no-no's, there will be many deductions and in a lot of
cases because of the deductions, employees bring home less than the basic
salary.

Let's just calculate: with 208 hours of work and 13.5 hours of overtime, bring
us to 221.5 hours and this worker took home 465,000 VND. It is easy to see
that these wages can get very low.

Mr. Nguyen Dinh Thang said: "the company should increase the basic salary to
52 USD (40 USD x 1.3 for wage scale level 1) according to a circular from the
Ministry of Labor. But to say that the bonuses are part of an increase is a
deliberate attempt to muddy the issue. Why? Because these bonuses are not a
part of the basic wage; we have cases where workers have so many deductions
that she did not receive any salary, because she was sick a couple of days, she
forget to punch in a couple of times, she went outside the factory grounds for
lunch etc." He also asked a question that "why is it that for the same type of
work and for the same duration of work, a Korean worker in Korea get paid
700 USD and above, yet in Vietnam, a Vietnamese worker can only get 40
USD per month."

How has the working hours been reduced?

Before Nike sent its representatives to Dong Nai, the workers at Tae Kwan
Vina, Pouchen, Chang Sing, Viet Vinh (Dona Victor) must work 12-14 hour
shift. Now, the companies have issued a statement that they have reduced each
shift to 8 hours including 7 hours of work and 1 hour for rest and lunch. What is
the truth? Let's take a look at Pouchen Co which has 9,200 workers. The
workers at the PU sole assembly line told us: before they worked 12 hours per
night, now the work hours have been reduced to 9 hours per night (including
two rest-periods and 30 minutes for meal. The actual shift starts between 10:00
- 10:30 PM and end between 2:00 - 2:30 AM. This proves that the Korean
and Taiwanese managers still force workers to work an actual 8 hours (night
shift) and 8 ½ hours (day shift). This is not the 8 hours per shift (including rest

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and meal) as announced. But these contractors are using another trick by
changing the hours on the employee time card to reflect the hours that they have
announced making it impossible for the labor union and Nike representatives to
find out the truth.

What is the result? Ms. L.T.T. (as mentioned above) has quit and went home to
Long Khanh. Ms. BTTU, another worker, said that in she will try to survive for
a few months and will go back to selling fruit. She also said that: each night
there is always someone fainting from hunger or fatigue (on the night of June 9,
1997, there were at least three workers fainted). And the working conditions
for the workers, she described that when they are thirsty, they cannot drink
water; when they faint, there are no doctors or nurses; when they are sick, they
got cheap (or fake?) medicine. Right now at Pouchen, there is an epidemic
involving many workers who are suffering from the flu. On the night of June 4,
1997, in a rented room we have witnessed two of these cases. Because of the
flu, 20,000 to 50,000 VND will be deducted from their paycheck for each
night that they did work.

With labor practices such as the above, even when Nike contractors promised
to increase workers wage by 10%, the actual wage of workers in Dong Nai
can only be reduced.

The Final Truth?

No matter what, the reduction in number of work hours at these factories in

Dong Nai, Pouchen, Taekwang Vina, Chang Sing, Viet Vinh must be duly
noted. But, the difference between the Nike's statement and the actual reality,
plus the various "underhanded" tatics employed by these contractors from
Korea and Taiwan, force us to reverse the issue and to ask the question:
whether the reduction in the number of work hours came from genuine concern
for factory workers or due to the reduction in demand for Nike products in the
world market? In the future, we need to determine whether these companies
can also lay off workers in large number just as Sam Yang has done recently in
laying off 540 workers that have just completed 3 months of training.

The final question: when will these Nike contractors obey the labor law of Viet
Nam? When are they going to implement a request from the Ministry of Labor
to establish a wage scale for these shoe factory workers that is above the
minimum wage?

According to Mr. Vo Minh Quang, Director of Dong Nai Labor Bureau, if they
are sincere and are willing to implement these requests then many issues of the
past few years will be resolved quickly. And Mr. Nguyen Dinh Thang,
president of the Dong Nai Confederation of Labor: if they continue to pretend
not to know or un-interested in implementing the labor code of Viet Nam, then
we'll use stronger pressure. With the role of "contracting for the contractors",
the Confederation of Labor will be in solidarity with the workers to fight and to
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get to the bottom of the truth. "At least we must know the price of each pair of
shoes that Nike has agreed to pay these companies" He concluded that: "In
regards to the labor conditions with the ASEAN region, the price for labor in
Viet Nam will only become more valuable and will not remain as cheap as
today."

We also found out that since the beginning of 1997, at Pouchen and Taekwang
Vina factories, there are already 35 traffic accidents involving factory workers
traveling to work (these accidents are classified as labor accidents). The reason:
the Korean and Taiwanese managers have come up with many "difficulties" to
explain why they have not been able to provide transportation to factory
workers, and because of this, there were at least 6 workers from the North and
Central Viet Nam who have lost their lives in a place far away from home.

Nike in the News

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