New WRC Report on Hansae Vietnam (Nike)

To:WRC Affiliate Universities and Colleges
From:Scott Nova and Ben Hensler
Date:December 6, 2016
Re:New WRC Report on Hansae Vietnam (Nike)

At this link, please find the WRC’s new report documenting violations of university labor standards at Hansae Vietnam (“Hansae”), an apparel manufacturing facility in southern Vietnam that produces university licensed goods for Nike and employs nearly 8,500 workers.

The WRC has been investigating extensive labor rights violations at this factory for more than a year, including conditions that seriously endanger workers’ health. As you know, our ability to issue a full assessment has been hindered because Nike declined to facilitate access for the WRC to the factory. We were able to release a limited, preliminary report in May of this year. Then, in October 2016, under an arrangement reached with Nike by Georgetown and the University of Washington, and originally proposed by Cornell, the WRC was finally able to inspect Hansae as part of a joint visit with the Fair Labor Association. 

As our report today details, the WRC has identified numerous violations of university labor standards at Hansae, including:

  • extensive wage theft;
  • illegal recruitment fees, extorted from workers by managers;  
  • chronic verbal abuse and incidents of physical harassment of workers;
  • pregnancy discrimination;
  • forced overtime;
  • illegal restrictions on workers’ access to toilets;
  • illegal denial of sick leave;
  • putting factory managers in charge of the factory’s labor union; and
  • dozens of health and safety violations, from factory temperatures well in excess of the legal limit of 90°, to unsafe spraying of toxic solvents, to the chronic problem of workers collapsing due to heat and overwork.

These violations, and others, are discussed in detail in our new report.

Nike has now acknowledged the seriousness of the violations that have occurred and has been working with the factory on a corrective action plan. This plan did not initially include some important remedies needed to comply with university codes, including back pay to correct wage theft, equipment upgrades to protect worker safety, reversal of unjust firings, and accountability for the most abusive managers. The WRC identified for Nike the additional corrective actions necessary, which the FLA also supports (the WRC and the FLA have coordinated substantially in recent months on the case, as we explain in our report). The WRC asked Nike to commit that it will require Hansae to implement these necessary corrective measures and we have received a general commitment from Nike to this effect. We expect this commitment to be translated into further improvements to Hansae’s action plan, which would provide confirmation that Hansae intends to comply with university standards.

The WRC will be monitoring progress at the factory and will update affiliate universities and colleges on whether commitments are being kept and remedies effectively implemented. Given Hansae’s past labor rights performance, ongoing vigilance is strongly warranted.

The experience at Hansae has profound implications for the future of independent monitoring, by universities, of their licensees’ supply chains. Nike, along with many other leading customers of Hansae, has been conducting labor rights audits at the factory for more than a decade. Dozens of audits have been conducted, including audits by Nike and by Better Work Vietnam, which Nike relies upon to assess its Vietnamese suppliers. Yet these audits failed, year after year, to identify the most serious labor rights violations at the factory. The grievous abuses workers were suffering at Hansae Vietnam went undetected until the WRC launched its investigation, in October of 2015. It is hard to imagine a clearer illustration of the importance of universities’ efforts to independently monitor their licensees’ labor practices.

In fairness, it should be noted that Nike was not alone in failing to identify many of the violations at Hansae. None of the other (non-collegiate) brands producing at Hansae appears to have identified these problems either. Nor is Nike the only university licensee that has failed to prevent serious labor rights violations at a supplier factory.

There is, however, one crucial respect in which Nike is alone among university licensees: it is the only licensee that refuses to facilitate access, to its collegiate factories, for WRC labor rights inspections. Despite the ad hoc arrangement that allowed us belated access to Hansae, Nike has failed to make any commitment to facilitate access for the WRC to its other collegiate factories in the future. Without this access, the WRC cannot fully carry out its independent monitoring work on behalf of universities and colleges. Thus, while we recognize Nike’s commitment to remedy the university code violations at Hansae, the fundamental problem of access for the WRC to Nike supplier factories remains unresolved.

Here again is a link to the WRC’s new report. Our preliminary report, released May 6, can be read here. The FLA’s new report on Hansae can be reviewed here.

As always, please contact us if you have any questions about this report.

Scott Nova 
Executive Director
[email protected]