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Cambodia and Thailand face controversy over alleged unpaid wages following COVID-19 factory closures. Investors are seeking $2.2 million for 4,000 workers from two suppliers, turning the spotlight onto sportswear titan Nike ahead of its annual shareholder meeting.
This request from investors, which includes Dutch bank Triodos and pension fund PGGM, adds to the mounting pressure faced by sportswear giant Nike, especially in light of upcoming European Union regulations targeting the fashion industry.
On Tuesday, Nike's annual shareholder meeting is expected to face increasing scrutiny of its supply chain. It includes ongoing investigations by Canadian and U.S. government agencies.
In a letter dated September 7 addressed to Nike's CEO John Donahoe, the investors seek evidence of Nike's commitment to "future-proofing" its manufacturing processes. Kees Gootjes, business and human rights advisor for ABN AMRO, signed the letter on behalf of the Dutch bank. In a statement to Reuters, Nike refuted the allegations, stating that it ceased sourcing products from the Cambodian factory in 2006 and found no evidence of back pay owed to workers in Thailand.
Those advocating for compensation include Dutch bank Triodos and pension fund PGGM. Their concerns are based on a June report from the Washington, D.C.-based nonprofit Workers Rights Consortium (WRC), which claims that Violet Apparel, a Cambodian factory, dismissed 1,284 workers without proper compensation. The factory allegedly manufactured clothing for Nike until its closure in July 2020.
The WRC highlighted issues at another Nike supplier, Hong Seng Knitting in Thailand. It claims the factory withheld around $800,000 in furlough pay from over 3,000 mostly Burmese migrant workers during a pandemic-related slowdown in 2020.
Nike, however, maintains that all employees at Hong Seng Knitting were compensated by local law and its Code of Conduct, citing an independent third-party investigation and legal review.
Photo: FILMDUDES/Unsplash
