Nike's Armies: How the Military Enforces Global Capitalism
By Jeff Ballinger, founder and director of Press for Change, a New Jersey-based
consumer-information NGO monitoring workers' rights issues in Asia.
The link between globalization and militarism is all but ignored in the debate
over trade with China. China's Peoples Liberation Army benefits a great
deal from increasing trade with the U.S., and the dynamic growth of Asia's
"new Tigers" owes much to the military-dominated internal security
systems that protect foreign investors from independent trade unions. Of
the hundreds of "sweatshop" stories published in the past several
years, only a handful even mention the tacit partnership between foreign
investors - many of them shoe and apparel companies based in Taiwan or South
Korea - and corrupt militaries in Thailand, Indonesia, Malaysia and elsewhere.
Nike's enterprises in Indonesia are a case in point. The company's
multi-billionaire CEO, Phil Knight, has often lashed out at Nike's critics with
little or no effort to conceal his contempt. Several years ago, his public
relations people put out a "Dear Shareholders" letter with questions
and answers such as: "Why on earth did Nike ever choose such a terrible
place as Indonesia to have shoes made?" Knight answered by saying
that the U.S. government had asked him to place shoe factories in Indonesia to
make up for the fact that the Pentagon's Commander in Chief-Pacific was
withdrawing U.S. forces from Southeast Asia.
Officials at the State Department were presumably attempting to replace one type
of influence with another. The brutal contractors that Nike moved from
their production sites in Taiwan and Korea would find it difficult to restrain
themselves in Indonesia. They pushed their advantage to egregious
extremes. Frequently, workers' protests erupted into strike actions that
culminated in police and military units being called in. Shoe producers
became notorious labor law violators and responsible, in large measure, for the
involvement of military units in labor disputes. It was about this time
that Peoples Solidarity for Participatory Democracy (PSPD) was organized in
Seoul to monitor the behavior of Korean companies in the developing world.
PSPD has conducted surveys of workers in countries from Sri Lanka to Guatemala.
While their reports are useful to anti-sweat campaigners, no media pressure was
ever brought to bear in Korea, nor was public pressure generated to bring those
contractors to heel.
High Ranks, Low Wages
As early as 1988, I saw a story in a Jakarta newspaper about a riot at a shoe
factory where the Korean manager (producing for Nike and Reebok) had cut wages
by two and a half cents a day. It was obvious that 83 cents a day was just
below "rock bottom" and the local military, according to the press
account, prevailed on the management to reinstate the old wage. A short
time later, two journalists from the newspaper Media Indonesia told me that the
personnel manager at a huge new factory staffed by Koreans was a retired
Indonesian Army colonel. The Korean managers often saluted him as he made
his rounds. In his otherwise Nike-friendly book Just Do It (1994), Donald
Katz called it "management by terror" and wrote that Indonesian
workers got fed up with "South Korean Tiger Division types yelling at
them." A top Korean manager told Katz that "many of the
supervisors sent in were former lieutenants and captains."
Even more disturbing were reports that troops were
often much closer than the barracks down the street - sometimes they were
deployed right in the shoe factories. This was documented in an in-depth
study of the Indonesian shoe industry carried out by the Institute for Social
Studies in the Hague and the Institute for Technology in Bandung, West Java.
When the report was made public before a crowd of shoe industry leaders, one
manager strenuously objected to the language about troops in the factory.
He was told to keep quiet by the manager of a Reebok-producing factory, who said
it was a common practice. Though that study goes back 10 years, I heard
the same complaint from workers at a Nike-producing factory in 1999. Nike
acknowledged the presence of "security forces" in the Nikomas Gemilang
factory in Tang-erang, West Java, where 18,000 young Indonesians make Nike shoes
for the Taiwan-based Pou Chen company.
Rent-a-Troop
While Nike spin-meisters say that the troops are in the factory to protect
workers, workers report that they are intimidated by their presence. The
most notorious case of military involvement in an organizing campaign took place
at West Java's Sung Hwa factory, which produced for Nike in 1992.
Twenty-four workers had circulated a petition calling for the legal minimum wage
for all workers - about a quarter of the workers were receiving an illegal
"training wage." They asked for a free and fair election of
union officers. Management ignored the petition, which was signed by only
a few score courageous workers who had attended basic labor rights training from
the Jakarta-based NGO, Urban Community Mission (UCM). The following week,
an all-out strike took place and, when troops started to push the workers back
into the factory, violence broke out, some factory windows were broken and
managers' cars damaged.
For the next two months, local police and military units interrogated workers
and, eventually, handed Sung Hwa supervisors a list of the 24
"troublemakers." Some reported serious intimidation at the
police and military compounds during questioning. "Troublemaker"
Cicih Sukaesih, for example, reported that one soldier put a revolver on the
table during questioning of her friend. She and all the other independent
union activists were fired. Only a few months earlier, the independent
union Solidarity had been subjected to serious police harassment after staging a
small protest in front of the International Labor Organization offices in
downtown Jakarta.
For at least two years after these events, no one was bold enough to publicly
advocate an independent union for Indonesian workers. Meanwhile, the
Indonesia Legal Aid Institute (LAI) carried on a legal battle on behalf of the
dismissed workers, a case they eventually won in Indonesia's Supreme Court in
1998. The lawyers and activists from UCM and LAI deserve special
commendation for resisting the intimidation of security forces. In
hundreds of other cases, workers fired for leading protests never even filed
illegal discharge cases.
Much of the problem in Indonesia can be traced to the "security
approach" to labor relations laid out by Admiral Sudomo, the first Minister
of Manpower in the era of Indonesia's rapid industrialization (1985-1990).
Previously the coordinating minister for security affairs, Sudomo became one of
the most feared men in a very repressive regime. It was Sudomo who forced
all unions into the government-controlled All Indonesian Workers' Union in 1985,
according to Adam Schwarz' authoritative account, A Nation in Waiting;
Indonesia's Search for Stability (1994) the "defanging of unions ...
exposed workers to predatory employers."
In 1994, the Jakarta Post outlined the conundrum in this way: "Businessmen,
either domestic or foreign, will sink their capital in the country only when we
can maintain a sense of stability and security.... The question, though,
is whether the high rush of labor strikes has really required direct military
involvement."
U.S. policymakers were in no way oblivious to what was going on in Indonesia,
including the fact that contractors producing shoes for U.S. companies were the
worst violators of labor laws. It is worth noting that the labor rights
complaint against Indonesia (based on special tariff benefits of the U.S.
Generalized System of Preferences) was "settled" by U.S. Trade
Representative Mickey Kantor and Major General Suharto in 1994 by gaining
Indonesia's pledge to get the military out of strike-breaking. According
to the Jakarta office of the LAI, the agreement was a cruel joke - more than 70
cases of military intervention were reported within six months of the
"settlement."
The irony is that for years the U.S. claimed that military-to-military contacts
made Indonesian soldiers respect democracy, civil society groups, etc. In
reality, the Indonesian military is heavily involved in snuffing out one of the
most promising pro-democracy forces in society. The beneficiaries (and
protagonists) are U.S.-based shoe and apparel companies.
For many - such as James Castle, chair of the Jakarta-based Castle Group - this
is as it should be. In a slide show for prospective investors (cited in
the 1998 book The Sweatshop Quandary, Investor Responsibility Research Center,
Washington, D.C.), he said, "The military will remain the ultimate arbiter
for the next decade.... The dominant role of the military is generally
acceptable to the vast majority of all Indonesian groups and communities ... its
role as the decisive player is considered right and proper at this historical
juncture." The slide show was probably changed after Indonesians rose
up in defiance of the military as it tried to keep Suharto in power.
No one can plead ignorance, then, of how the role of the Indonesian military has
been perverted by the sine qua non of attracting foreign investment: preventing
the formation of independent trade unions.
Shoe, toy and clothing companies are trying all manner of public relations and
do-gooder schemes to gloss over the depredations of their contractors.
These efforts will, no doubt, generate sufficient controversy for the capitalist
press to give the impression that they are actually covering the sweatshop story
- without delving into the nitty-gritty: the workers' battles with
multinationals that are protected by corrupt military-backed governments.
Source: Nonviolent Activist, July-Aug. 2000. Web site: <www.nonviolence.org/wrl/nva0700-1.htm>