Married to Nike

'U' community should be skeptical of deal

Tuesday, the University announced that it has signed a seven-year licensing and supply contract with Nike. Despite condemnation of the move by progressive campus activist groups like Students Organizing for Labor and Economic Equality, the administration argues the move signals the beginning of a unique, mutually beneficial and (above all) socially responsible relationship between the University and Nike.

Operating on the dubious assumption that the University had to sign a contract with Nike to remedy recent athletic financial shortfalls to begin with, we think it is uncontestably good that the contract with Nike at least included some kind of human rights provisions. However, student activists, the Michigan Student Assembly (as evidenced by its near-unanimous approval of two resolutions Tuesday) and the general student body are right to be pessimistic about the contract's ability to fulfill ethical obligations that ought to be at the heart of all the University's business dealings.

The burden ought to fall on the administration to prove to the University community that the Nike contract can protect workers' rights as well or better than the Code of Conduct approved by the Standing Committee on Labor Relations and Human Rights on Jan. 10. Starting Jan. 9, labor activists have been circulating reports of egregious labor and human rights violations being committed at the Kukdong International factory in Puebla, Mexico - a major Nike contractor.

Since there are overwhelmingly compelling reasons to believe the recently-signed contract with Nike is not the best way for the University to promote workers' rights, all future licensing contracts must contain the Code of Conduct approved by the committee; not the "enhanced" Collegiate Licensing Company Code written into the agreement with Nike. Discussion on writing codes other than those approved by the University's committee should only commence in the event that the agreement with Nike has proven at least as effective at the University's own code at promoting and preserving workers' rights.

The University's first long-term Nike licensing and supply contract signed in 1994 had no human rights provisions. Over the six-year period the original contract was in effect, Nike provided the athletic department with $7.8 million in equipment.

This spring, Nike announced that it would not renew the original contract in response to the University's joining of the Worker's Rights Consortium - a student-developed labor rights organization - unfairly criticized by big business to be unorganized and idealistic with ties to radical ideologies.

Not having a licensing deal, Athletic Director Bill Martin told the Daily, would have strained athletic department finances - already stressed enough from past budget deficits. To top that off, Martin said, student athletes and coaches overwhelmingly wanted a Nike contract. Bollinger said having human rights stipulations in the Nike code is a step in the right direction. It is, but the agreement should have used the committee's code, not the CLC code.

There are fundamental flaws and dangerous loopholes in the University's contract with Nike that could allow labor abuses to go unchecked and leave the University with few options and little power if the administration wants to challenge Nike.

The administration's assertion that both the committee's proposed Code of Conduct and the CLC code used in the agreement with Nike are fundamentally the same is mostly correct. There are, however, unacceptable fundamental differences between the two codes, the most serious of which involves the "living wage."

In the University's agreement with Nike, workers only need to be paid "at least the minimum wage required by local law or the local prevailing industry wage, whichever is higher." But the University's own Code of Conduct goes further by requiring that "(l)icensees shall ensure that wages and benefits ... are at least sufficient to meet the worker's basic needs." The substantive differences between these two codes are significant.

In many Third World nations, workers making the "prevailing industry wage" live in squalor and barely make enough money to feed their families. This state of affairs is woefully inadequate and should not be tolerated by the administration or the University community. In auditor reports available on Nike's own website, 90 percent of workers in El Salvador (where Nike has the most contractors) stated that they were unable to save any of their salary or use any part of it to support others outside of their immediate household.

The numbers are telling - it is highly probable that if these workers cannot save any of their salary, they are also unable to meet their "basic needs" or save for retirement or an emergency. No one is asking that the University require its suppliers and/or licensees to pay foreign workers as well as American workers. It is, however, not unreasonable or frivolous to demand that workers be paid enough so that they can meet their basic human needs - this is a human rights issue and yet the University's contract with Nike blatantly ignores it.

The "Supplemental Standard on Women's Rights" in the agreement - an addition to the original CLC code - lacks the teeth it needs to have. In the contract, it is explicit that the University can terminate the agreement under certain conditions if the actual CLC code is breached.

However, if the "Supplemental Standard on Women's Rights," is violated, it is less clear if the University has the power to do anything. In the words of University General Counsel Marvin Krislov, "... as with anything, we might have a debate with them about that ... if they were in a material violation of our policy, it is more likely than not it would be a violation of the CLC code ... If we're talking about a serious violation I think that it would be a violation of the same thing. As with any contract, the language is a starting point for a discussion ..." Of course, no contract or labor standards code can be perfect but the University community should be uncomfortable with a contract that only appears to implicitly provide protection for women's rights, such as the right not to be fired if she becomes pregnant.

Clearly, serious skepticism about the quality of the enhanced CLC code of conduct is warranted.

After all, if most of the differences between the two codes are just semantic, then Nike should have been more than happy to sign a contract with stronger, more explicit workers' rights provisions. Still, the administration ought to be given a chance to prove to the University community that the new agreement truly is a "win-win" situation, both for the athletic department and for poor workers.

That chance is embodied in how the University responds to the alleged conflicts in Puebla.

The agreement with Nike allows the University to terminate the contract within certain parameters if any workers' rights are breached. The University needs to exploit the contract termination clauses when the situation arises when Nike is in violation of basic human rights the University claims to embrace.

Assuming the allegations being made about the Kukdong factory will become compelling, the University immediately needs to put as much pressure as possible on Nike to put forth a genuinely good faith effort to determine whether there are indeed labor violations and to correct any and all wrongs that may have been committed against workers there.

With the current allegations of labor abuses in Mexico, we will soon see if the University administration will act and live up to the human rights principles it espouses.