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1 Mar 2023

Jasmin Malik Chua, Sourcing Journal

Asia: Unions accuse VF Corp, Levi's & Nike of 'extreme greed & extractivism' for alleged wage theft during the pandemic while earning millions in stock buybacks & dividends

"Garment Workers Blast ‘Dangerous’ New Normal at Nike", 1 March 2023

Garment workers in the global South are tired of watching the world’s biggest brands cash in on what they have characterized as wage theft. Companies like Nike, Levi Strauss and...VF Corp., they say, have quickly bounced back from the early Covid-19 slowdown to watch their profits skyrocket. In contrast, they’ve continued to struggle from the income loss that was foisted upon them in the darkest days of the pandemic.

...a group of 20 garment-sector unions representing workers in Nike’s supply chains in Cambodia, India, Indonesia, Pakistan and Sri Lanka is fighting back. Together with the Asia Floor Wage Alliance (AFWA) and the Global Labor Justice-International Labor Rights Forum (GLJ-ILRF), they filed an international labor complaint to the Organisation for Economic Co-operation and Development (OECD) in Washington, D.C., on Monday accusing the sportswear giant of violating the inter-governmental organization’s guidelines for responsible business conduct by multinational enterprises.

Nike, they allege, has not only contributed to “severe human rights impacts” at the factories it contracts but it also does not address and remediate them as required by guidelines. The complaint also claims that the...firm has not engaged with worker unions despite their requests for dialogue and the OECD’s own recommendations. Instead of compensating workers or investing in safety or productivity programs, it engages in buyback schemes to “falsely inflate” its stock price, it adds...

Unions...say that workers have experienced layoffs, arbitrary pay cuts, unpaid wages and gender discrimination at an “unprecedented scale” since 2020. Nike and other brands like it, they add, “triggered this crisis” when they canceled orders that March, then reduced new orders “en masse” in response to the widespread economic uncertainty.

According to an AFWA survey of more than 2,000 garment workers, respondents lost on average three months of pay during 2020...Its reverberations are still being felt today, said Anannya Bhattacharjee, international coordinator at the nonprofit.

“The reason we are still talking about the pandemic today is...because the pandemic practices have set a new normal globally,” Bhattacharjee said... “This new normal is something we have to examine. It is dangerous and it can shape how the global recession that is predicted will be handled and what it will do to garment workers.”

Covid-19, Bhattacharjee said, gave nameplates like Nike, Levi’s and VF Corp. a “new opportunity” to “experiment with how far they could go for extreme greed and extractivism,” such as profiting from the wage theft of workers who have already been “reeling for decades from poverty-level wages and mounting debts.”...

Nike, which did not respond to a request for comment, noted at the outset of the pandemic that it would continue to pay its suppliers in full for finished products, as well as honor previously agreed-upon payment terms for anything still in production. In the case of canceled orders, it said, its policies and agreements with suppliers “are, and have always been, that Nike will pay the appropriate amount of the order, depending on the stage of production as communicated by our supplier to enable the supplier to recover costs associated with the canceled orders.”

Even so, the coalition made [Nike] the target of its first OECD complaint because it has proven the “most unresponsive,” Bhattacharjee said...

“With the money that Nike has made from stock buybacks, they could have paid workers 2,000 times than what we are asking,” Bhattacharjee said.

Levi’s and VF Corp. also launched buybacks to the tune of $19.7 million and $34.4 million, respectively. Workers at their factories, meanwhile, say they’re owed $12.2 million and $2.5 million, respectively, from 2020 alone...

In lieu of a direct response, VF Corp. attached a...letter that it sent AFWA and GLJ-ILRF outlining its commitment to respecting human rights according to the major international guidelines and detailing its due diligence efforts to “prevent, mitigate and remediate” human rights risks in its value chain.

“...VF Corp. has assessed actual and potential human rights impacts on our supply chain associated with COVID-19, proactively worked to prevent such impacts from materializing, and supported remediation if such impacts occurred,” it said. “During the pandemic, VF took a people-first approach with its international suppliers and proactively and directly informed our suppliers they must pay remuneration to workers for the manufacture of VF products.”

A Levi’s spokesperson said the jeans juggernaut’s “longstanding” supplier code of conduct requires that all suppliers meet their financial obligations to their workers in the required time frame and that any reports of failure to do so are “thoroughly” investigated and addressed “as quickly as possible.”...