Nike Inc. agreed to extend shoe production at two Indonesian factories
employing 14,000 workers for up to 18 months, after receiving
assurances from the local supplier about quality and future severance
deals. Nike had previously said it would stop working with PT Hardaya
Aneka Shoes Industry and Nagasakti Paramashoes Industry by the end of
the year, triggering protests by workers and demands from lawmakers
that the government intervene in the dispute. Siti Hartati Murdaya,
owner of both factories, had been demanding Nike offer the workers jobs
with its other contractors in Indonesia or give her more time to pay
the workers' severance packages.
Under the deal reached last week, one of the factories will continue
supplying Nike until July 2008 and the other until July 2009, the
company said in a statement. Nike agreed to make “an exception” to its
standard agreement so the factory owner could develop a business plan
“that takes into consideration the well-being of (her) workers,” said
Eric Sprunk, the company's vice president of global footwear. Murdaya,
whose factories have been supplying Nike for 18 years, acknowledged she
would be responsible for any future severance deals and agreed to meet
minimum Nike standards for product delivery, quality and compliance.
