New NPCA President Kevin Quigley writes about "Workplaces, Worker Development and Corporate Responsibility in Indonesia"
"Workplaces, Worker Development and Corporate Responsibility in Indonesia"
Dr. Kevin Quigley, Executive Director, Global Alliance for Workers and Communities
The Bank of America hosts this series, with additional support from the GE Fund and in cooperation with the U.S.-ASEAN Business Council
A survey of workers in nine Indonesian factories that produce Nike shoes on contract revealed some totally expected and a few unexpected results, according to Kevin Quigley, the executive director of Global Alliance, a unique partnership organization which directed the survey.
The survey was the first step in an ambitious partnership between corporations, a leading international NGO, universities, foundations and the World Bank whose ultimate goal is to improve the work experience and to change the nature of manufacturing in developing countries. "This is not a story about Nike," said Dr. Quigley, "nor is it an Indonesian story. It's about global manufacture."
"The key to the whole concept is participatory development," said Dr. Quigley. "It begins with asking people about themselves and their aspirations, and basing programs on what people identify as their needs. The effort must be multi-sectored, participatory, transparent and cooperative," he said.
The most publicized result of the survey, highlighted in reports that appeared in more than 300 publications, was the fact that 30 percent of workers interviewed experienced verbal abuse, 8 percent reported "unwelcome sexual comments" and 2.4 percent reported "unwelcome sexual touching." These might not be wholly unexpected (Dr. Quigley noted that US Government studies of sexual harassment cite higher percentages of complaints). Workers also expressed concerns about the quality of health services provided by factory management. In addition wages were a top concern: focus groups reported that salaries, though above the regional minimum wages, were not sufficient to meet cost of living increases. Forty percent of workers were also dissatisfied with the overtime policies.
While the negative responses to the survey received widespread publicity, perhaps the less expected, and less publicized, results revealed that 93 percent of workers were satisfied with their relationships with co-workers, 73 percent were satisfied with relationships with direct supervisors and two-thirds of workers were satisfied with relations with management. The survey consisted of individual interviews with 4004 persons selected at random but reflecting the worker profile of the total 54,000 workers. In addition 450 workers participated in focus groups, half of which were off factory premises. More than 80 percent of the workers are women. The average age of all workers is 23, more than half have completed junior high school, and 45 percent are married. On average workers had been working at these factories a little over three years and most are migrant workers from several regions in Java. Dr. Quigley described the procedures followed by the canvassing organization, the Center for Societal Development Research Institution at Atma Jaya University, to assure a selection of respondents representative of the workers' profile, to develop the interview questions and to assure confidentiality of the interviews.
In asking about workers' life aspirations and needs there were some unexpected results. Global Alliance learned that workers had ambitions outside the workplace. They wanted opportunities to learn skills related to family life (good parenting, child health care, hygiene, and family planning) and also skills not related to factory work (computers, typing, small scale business, home handicrafts). Almost half of the workers were interested in further formal education, including university education. They had even higher aspirations for their children: 86 percent want their children to have a university education.
Following the survey report, the next step in a program with four components was that Nike addressed worker concerns with immediate and transparent remedies and instituted new policies to improve monitoring and reporting procedures. Nike further pledged to report progress to Global Alliance. The third step will introduce management training in factories to enhance management skills and attitudes. (Factories in Indonesia that manufacture Nike products are not owned by Nike. Owners are from Korea, Taiwan and Hong Kong as well as Indonesia. Factory managers are usually the same nationality as the owners.) The fourth element will be to increase awareness of the needs of workers through regular reporting and feedback.
Global Alliance came about through a mutual attraction between Nike and the International Youth Foundation. Nike, mindful of a need to maintain a good corporate image among the youth who are its primary market, was looking for a reputable international youth nongovernmental organization. Meanwhile the International Youth Foundation, a 25 year old NGO with operations in 60 countries, and dedicated to improving life conditions for young people worldwide, was looking for a partner in the private sector with a global brand. In discussions that took place over the course of several months, the two organizations worked out an ambitious program that has as its heart changing the concept of work among the world's factory workers, most of whom are young people.
The project involves other participants and supporters, including Gap Inc., universities and foundations. In-kind support in terms of technical assistance, space, and endorsements is given from the World Bank. All these institutions are represented on Global Alliance's Operating Countil. The starting budget was $14 million, with more contributors expected during the first five-year period. Global Alliance was launched exactly two years ago and has already conducted projects in Thailand and Vietnam, in addition to Indonesia.
"The important thing is that Nike opened up, gave us unprecedented access, and shared openly the results of the findings," Dr. Quigley said. "The story has implications for all foreign investors. Indonesia is sensitive to perceptions of worker conditions. Worker treatment is important to a country's competitive position."
The process "has potential for insights that other auditors miss, for whatever reason," he added. "Our approach and methodology is unique, and has implications for international corporate responsibility." In an era of globalization and market economies, the role of the private sector is growing while that of the state is downgraded. Meanwhile, the focus of corporate responsibility shifts from headquarters to the field.
"It is a possible win for all players," Dr. Quigley concluded, "for workers, factory managers and for global brands. Improvements in skills, reputations and relationships result in changes in the business process. These changes can also improve productivity"
Q: What role did unions play in this process? How did that affect findings? How does Global Alliance see the role of unions in addressing issues? Does corporate responsibility increase because the role of the state is declining, or from consumer pressure?
A: The role of unions and also of consumer pressure should be acknowledged in affecting corporate actions. In our study, unions were involved in initial meetings but were not a driving force in the project.
Q: How does your work affect the development of NGOs?
A: This is one of the most important things we can do. Global Alliance only works with local partners in each country, such as Chulalonghorn University in Thailand, Atma Jaya University in Indonesia. We help build local capacity in creating this kind of study and we create demands for more workplace monitoring.
Q: What are some cross-country comparisons from your studies?
A: Every factory is unique but there are some commonalities, such as age, gender, education and aspirations of workers, and health, especially reproductive health as a major issue.
Q: Did you ask questions regarding social or political views? How would you rank Indonesia compared to other countries? Has 'reformasi' led to more uncertainty, disputes?
A: No social or political questions were asked. Comparisons are difficult because conditions are different in Indonesia than other countries. However Indonesia does not compare well with its neighbors regarding the investment climate.
