Mistreatment of Vietnamese workers by Sam Yang, Pouchen, Tae Kwang Vina— contractors for Nike—is becoming known throughout the world. As a result, the Nike logo is being perceived differently now by consumers. In Vietnam, Nike contractors from Taiwan and Korea try to soothe the public with claims of a "wage increase" and a "reduction in work hours." This article assesses the latest information from Dong Nai, a region with four Nike contractors employing over 30,000 workers, most of whom are women under 25 years of age.

Widespread coverage by newspaper, radio and television journalists revealed that "Nike has raised the exploitation of poverty-stricken foreign workers to a fine and spectacularly remunerative art." (New York Times, March 31, 1997). In response to this negative publicity, several Nike representatives and high-level consultants visited Vietnam to access the situation and to come up with plans for rescuing the company’s image. Nike announced that it would increase wages by 10%, and Mr. Tae Park, former president of Sam Yang Vina Co., announced that the company had given workers a 8.6% salary increase. But what is the truth?

Reviewing figures for the period April through June of 1997 in the Dong Nai district, Mr. Vo Minh Quang, Director of Dong Nai Labor Bureau and Mr. Nguyen Dinh Thang, president of the Dong Nai Confederation of Labor reported: "These statements are incorrect. Most workers here in Dong Nai received at most $40 (US) per month or 440,000 VND (Vietnam Dong). According to [Vietnam’s minimum wage law], this pay level is not even legal."

Paystubs from April from the Pouchen Co. confirm that allegation. In addition to a basic salary of 440,500 VND, the worker "LTT" (who started on January 3, 1997) received an extra 105,457 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; 28,000 VND for miscellaneous (undefined), leaving only 465,957 VND or approximately $42.50 US, [still less than the legally mandated $45.00 per month minimum wage]. This worker did not have to pay for social security or health insurance. She also met all eight criteria for receiving a good-employee bonus (no annual leave and no time off for travel, weddings, funerals or menstruation, no time off without prior permission and did not forget to punch-in). Had she violated even one of these "no-no’s," there would have been several deductions. Due to such deductions, employees often bring home less than the basic salary.

So, for 221.5 hour of work (208 regular hours plus 13.5 hours of overtime), this worker took home at most $42.50 US. Thang (of the Dong Nai Confederation of Labor) said, in a circular issued by the Ministry of Labor, "The company should increase the basic salary to $52 US" ($40 US x 1.3 for wage scale level 1). Thang went on to charge that including bonuses as part of a supposed wage increase is deceptive on Nike’s part. "These bonuses are not part of the basic wage," said Thang. "We have documented cases where workers have so many deductions that they received no salary— because of a couple of days illness, forgetting to punch in a couple of times, leaving the factory grounds for lunch and other such infractions." Thang questioned: "Why is it that a worker in Korea is paid $700 US or more per month, yet in Vietnam—for the same type of work and for the same number of hours—a worker receives only $40?"

Have hours been reduced?

Before Nike sent its representatives to Dong Nai, the workers at Tae Kwan Vina, Pouchen, Chang Sing, Viet Vinh (Dona Victor) had to work 12- to14-hour shifts. Now a company statement claims that shift have been reduced to 8 hours: 7 hours of work plus a combined total of 1 hour for rest and lunch. What is the truth? Let’s take a look at Pouchen Co which has 9,200 workers. According to workers on the sole assembly line: Whereas previously 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 eating. Thus the actual work time is 8 hours (night shift) and 8 ½ hours (day shift). This is not the 8 hours per shift (including rest and meal) claimed by the company. According to workers, contractors are altering employee time cards to bring apparent hours into conformity with the company’s stated new policy, making it impossible for the labor union and Nike representatives to find out the truth.

As a result, Ms. "LTT" (whose case was cited above) has quit and gone home to Long Khanh. Ms. "BTTU," another worker, said thatin she will try to survive for a few months and before going back to selling fruit. She also said that each night someone faints on the job from hunger or fatigue. (During the June 9, 1997 night shift, at least three workers fainted.) She also said that, when workers are thirsty, they are not allowed to drink water. When they faint, there are no doctors or nurses. When they become ill, they are issued cheap (or possibly bogus) medicine. At this time, at Pouchen, there is an epidemic of flu. Workers who become ill during a shift can expect 20,000 to 50,000 VND to be deducted from their paycheck.

As this investigation demonstrates, even while Nike contractors claim to have increased wages by 10%, in actual practice the wage of workers in Dong Nai may even have been reduced.

Certainly, the reduction in work hours at these factories in Dong Nai is a positive development. But the difference between Nike’s claims and documented reality, combined with several deceptive practices used by these expatriate contractors, forces us to question whether the reduction in the shortenign of shifts resulted from a genuine concern for the workers’ well-being or because of reduced orders from Nike due to a slump in sales. We will be monitoring whether these factories begin laying off workers in large numbers, just as the Sam Yang factory recently did. At Sam Yang, the 540 workers who were laid off had just completed their 3-month "training period," during which their wages were even less than the base wage.

Thang, of the Dong Nai Confederation of Labor, warned that the union will bring pressure to bear on Nike and its contractors unless their labor practices are reformed. He also stated that companies looking to invest in Vietnam should expect wages there to increase in the future.

Finally, since the beginning of 1997, there already have been 35 traffic accidents involving factory workers traveling to work at the Pouchen and Taekwang Vina factories. (These are classified as work-related accidents.) Critics charge that these accidents are a result of expatriate contrators’ refusal to provide transportation, effectively forcing workers to use unsafe alternatives. Because of this, they say, at least 6 workers from the northern and central regions of Viet Nam have lost their lives in a place far away from home.

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