November 8, 1997
Nike Shoe Plant in Vietnam Is Called Unsafe for Workers
By STEVEN GREENHOUSE
Undermining Nike's boast that it maintains model working
conditions at its factories throughout the world, a prominent
accounting firm has found many unsafe conditions at one of the shoe
manufacturer's plants in Vietnam.
In an inspection report that was prepared in January for the
company's internal use only, Ernst & Young wrote that workers at
the factory near Ho Chi Minh City were exposed to carcinogens that
exceeded local legal standards by 177 times in parts of the plant
and that 77 percent of the employees suffered from respiratory
The report also said that employees at the site, which is owned
and operated by a Korean subcontractor, were forced to work 65
hours a week, far more than Vietnamese law allows, for $10 a week.
The inspection report offers an unusually detailed look into
conditions at one of Nike's plants at a time when the world's
largest athletic shoe company is facing criticism from human rights
and labor groups that it treats workers poorly even as it lavishes
millions of dollars on star athletes to endorse its products.
Though other American manufacturers also have problems in
overseas plants, Nike has become a lightning rod in the debate
because it is seen as able to do more since it earned about $800
million last year on sales of $9.2 billion.
Critics of Nike's working conditions, who had been given a copy
of the internal report by a disgruntled employee, made it available
to The New York Times and several other reporters, prompting the
company to call a news conference Friday to address the
"We believe that we look after the interests of our workers,"
said Vada Manager, a Nike spokesman. "There's a growing body of
documentation that indicates that Nike workers earn superior wages
and manufacture product under superior conditions."
He and other Nike officials said the company had carried out
"an action plan" to improve working conditions since the report
was issued last January, 17 months after the factory opened. The
company said it had slashed overtime, improved safety and
ventilation and reduced the use of toxic chemicals.
The company also asserted that the report showed that its
internal monitoring system had performed exactly as it should have.
"This shows our system of monitoring works," Manager said.
"We have uncovered these issues clearly before anyone else, and we
have moved fairly expeditiously to correct them."
While Nike has often been attacked over low pay and long hours,
the Ernst & Young report pushed hard on a relatively new front for
Nike's critics: air quality in its factories. Ernst & Young found
that toluene, a carcinogen, was in the air at different sites in
the factory studied, six to 177 times the amount allowed by
Vietnamese regulations, which itself is about four times as strict
as American toluene standards. Extended exposure to the carcinogen
toluene is known to cause damage to the liver, kidneys and central
The fact that such conditions existed in one of Nike's newer
plants and were given a withering assessment by Nike's own
consultants made for yet another embarrassing episode in a
Only five months ago, the company had taken out full page
newspaper ads excerpting Andrew Young, the civil rights advocate
and former United Nations representative, who had inspected 15 Nike
factories last spring at Nike's behest. After completing his
two-week tour covering three countries, he informed Nike it was
doing a "good job" in treating its workers, though he allowed it
"should do better." Young was widely criticized by human rights
groups and labor groups for not taking his own translators and for
doing slipshod inspections, an assertion he repeatedly denied.
Like many American apparel makers, Nike uses many subcontractors
in Asia, with some 150 factories employing more than 450,000
workers. And like many, that tricky relationship is often offered
as a reason why it is hard to impose American-style business
practices on factories in that part of the world.
The Tae Kwang Vina factory, which was inspected by Ernst &
Young, is one of Nike's larger plants. It has 9,200 workers and
makes 400,000 pairs of athletic shoes each month at Bien Hoa City,
some 25 miles northeast of Ho Chi Minh City, formerly Saigon.
The Ernst & Young report painted a dismal picture of thousands
of young women, most under age 25, laboring 10 1/2 hours a day, six
days a week, in excessive heat and noise and in foul air, for
slightly more than $10 a week. The report also found that workers
with skin or breathing problems had not been transferred to
departments free of chemicals and that more than half the workers
who dealt with dangerous chemicals did not wear protective masks or
In plain, unemotional language, the report detailed problem
"Dust in mixing room exceeded the standard 11 times," the
report said. And, it added, "There's a high rate of labor
accidents caused by carelessness of employees."
Later, the report pointed to two other problems: "workers'
inadequate understanding of the harmful effect of chemicals" and
"increasing number of employees" with health problems continue to
work with chemicals.
The report also stated that "more than half of employees" in
several departments who use chemicals "do not wear protective
equipment (mask and gloves) -- even in highly hazardous places where
the concentration of chemical dust, fumes exceeded the standard
The Transnational Resource and Action Center, a nonprofit group
based in San Francisco that often criticizes conditions at American
factories overseas, made the report available. The center obtained
the report from Dara O'Rourke, an environmental consultant for the
United Nations Industrial Development Organization whose job
involves inspecting factories in Vietnam and who was given a copy
of the report by a disgruntled Nike employee.
O'Rourke, who is also a research associate at the Transnational
Center, said he was making the report public because he wanted to
pressure Nike to treat its workers better and because he was
convinced that Ernst & Young's inspection report let Nike off easy.
O'Rourke said wages at the plant were the lowest of any of the 50
factories he visited in Vietnam, and that working conditions were
well below average.
Tien Nguyen, Nike's labor practices manager in Vietnam, said at
a news conference Friday that as soon as Ernst & Young made its
confidential report 10 months ago, the company took numerous steps
to improve working conditions.
Nguyen said the number of hours worked a week had been reduced
to 45, from 65. He said that many more fans had been installed, but
he acknowledged that the company had done no measurements to
determine whether chemical levels were now low enough to meet legal
With the improvements, "it's markedly better than shoe
factories in the United States," said Dusty Kidd, Nike's director
of labor relations. "The shoe factories in Vietnam are among the
most modern in the world. The factories there are excellent
factories, but there are a lot of things they could get better."
But O'Rourke, who has visited the Nike factory three times as
part of his United Nations duties, said that when he visited
Vietnam last month, several workers said the plant was hardly
better than in January. He said many workers still failed to wear
protective equipment, that pay remained low and that managers still
yelled at or otherwise harassed workers.
Young, who made his visits in June, did not inspect this
particular plant. And his report, which pronounced the plants to be
"clean, organized, adequately ventilated and well lit" had few
findings in common with the Ernst & Young report.
Was he aware of the Ernst & Young study prior to the trip? Doug
Gatlin, who toured the Nike factories with Young, said they were.
"We didn't see or read all of the reports they did prior to our
going," said Gatlin, who nonetheless defended the job they did.
"Nike always said they were asking for the facts," said Gatlin,
who was working for Young's consulting firm, Goodworks
Young could not be reached for comment because he was traveling.
As far as the Ernst & Young report went in shedding light on
Nike's practices, some found fault with it, too. Rourke, for
instance, criticized its conclusion that most employees were happy
with the wages and working conditions. O'Rourke said the workers
whom Ernst & Young interviewed were scared to speak candidly.
O'Rourke said his interviews found much discontent.
O'Rourke said the Ernst & Young report had so many inadequacies
that it showed the benefits of using noncommercial monitors, like
human rights groups, to inspect factories.
Other Places of Interest on the Web
Nike Workers Web site
Communications Works: Just Do It Nike - Pay Fair Wages Web Site