A global sportswear and athletic footwear giant is under fire for grave accusations of wage theft in its supplier factories located in Pakistan.
Startling revelations from an investigation conducted by Asia Floor Wage Alliance (AFWA) and Global Labour Justice–international labor rights forums shed light on the exploitation endured by workers in Style Textile Pvt Ltd and Textile Pvt Ltd (Unit 2), both listed as Nike suppliers in 2020 and in the current Nike Manufacturing Map (2023).
The investigation unveiled a deeply concerning scale of wage theft and the dire consequences faced by workers. In Style Textile Pvt Ltd, a textile factory located in Lahore employing 4,500 workers, a sample interview with 12 workers exposed alarming statistics. The pre-pandemic projected monthly average wage of PKR 22,250 (USD 138) nosedived to an actual average wage of PKR 18,542 (USD 115) during the pandemic, resulting in an average wage loss of 17%. To compound matters, all workers were laid off without any wages during the critical months of April and May 2020, accounting for the full wage loss experienced by the workforce.
A joint press release issued by Asia Floor Wage Alliance Pakistan; National Textile, Garments and Leather Workers’ Federation; Muttahida Labour Federation (MLF); Pakistan Institute of Labour Education and Research (PILER); Labour Education Foundation (LEF) and HomeNet Pakistan have demanded an end to wage theft in the fashion industry.
“Amidst the global COVID-19 pandemic, while garment workers faced shrinking incomes, wage theft, and vanishing savings, big fashion brands showered their billionaire owners and Wall Street investors with record dividends and massive stock buybacks. Nike must be held responsible for the unresolved COVID wage violations on their supply chain and its persistent exploitation of garment workers. A multi-national company raked in over $74M in dividends, hundreds of garment workers were left jobless and struggling to make ends meet. The report by AFWA and GLJ-ILRF exposes the disturbing reality of Big Fashion and its Wall Street investors profiting immensely while exploiting the plight of garment workers during the COVID crisis,” said Aabida Ali, Country Coordinator of Pakistan at AFWA.
A demonstration was organized at Qainchi, Ferozepur Road, Lahore, by labour rights organizations, trade unions, and AFWA Pakistan as part of the Week of Action against NIKE. The demonstration aimed to protest against the wage theft and labour rights violations committed by a multi-national in their factories. A large number of workers, progressive groups, and trade union representatives attended the protest. Muttahida Labour Federation (MLF) and Pakistan Textile Powerloom Workers Federation (PTPWF) also delivered a letter to the Labor Director in Lahore, urging an investigation into the foreign company’s supplier factories.
Among wage violations, workers detail the payment of overtime at the normal hourly rates – a blatant violation of legal requirements for double payment. This discrepancy further exacerbates the exploitation faced by these workers, who already struggle to meet their basic needs. A comparison of basic needs expenditure from January to February 2020 reveals that pre-pandemic wages covered 116% of their expenses. However, due to wage theft during the pandemic, the income coverage for basic needs plummeted to a precarious 96%.
Niaz Khan, General Secretary, of Textile Power Loom and Garment Workers’ Federation, said, “The survey revealed the devastating impact of ruthless brand decisions to cut their losses during the COVID-19 pandemic, causing a domino effect on garment workers. Our workers reported a loss of at least USD 163M in wages, with 7 out of 10 falling into poverty. In the absence of severance pay for 80% of those who were laid off during this time, workers were forced to incur debt to finance basic needs, and returning workers were refused legal pay for their overtime work. In an industry where over 90% of the workforce is female, these instances of wage theft resulted in a widening gender pay gap with women earning 4 cents less than men.”
Hanif Ramay, General Secretary of Muttahida Labour Federation, added similar alarming patterns emerge in Textile Pvt Ltd (Unit 2), also located in Lahore where 3,000 workers are employed. The pre-pandemic projected monthly average wage of PKR 21,565 (USD 134) plunged to an actual average of PKR 17,971 (USD 112) in 2020, reflecting a distressing 17% average wage loss. Workers in Textile Pvt Ltd (Unit 2) also suffered from unjustified layoffs without pay during the crucial months of April and May, without any compensation for their lost wages. Additionally, all workers reported receiving normal hourly rates for overtime work, contrary to the legal requirement of double payment. This highlights the urgent need for global fashion brands that profited enough to repay workers’ wages 2,000 times over, to take responsibility for the workers in their supply chain.
The report titled ‘Money Heist and Big Fashion: Wall Street Cash-in on Wage Theft,’ by AFWA presents compelling arguments and extensive evidence of wage theft prevalent in the global fashion industry. It emphasizes the urgent need for swift action and accountability to ensure fair wages for the workers who tirelessly contribute to the profitability of multinational corporations.
As a prominent player in the industry, NIKE must promptly assume responsibility for the wage theft allegations plaguing its supplier factories. We hereby call upon NIKE to:
● Conduct a comprehensive investigation into the wage theft practices at Style Textile Pvt Ltd and Textile Pvt Ltd (Unit 2), ensuring utmost transparency and accountability.
● Immediately rectify the wage discrepancies and provide compensation for the lost wages to all affected workers.
● Temporarily halt billionaire payouts from dividends and stock paybacks until all garment workers are rightfully repaid their wage losses.
● Overhaul the supply chain to guarantee living wages for all workers.
● Implement robust measures to ensure strict compliance with labor laws and standards, including the payment of overtime at the legally mandated double rate.
● Collaborate with labor rights organisations, such as the Asia Floor Wage Alliance, to develop and implement fair wage policies throughout its global supply chain.
● Prioritise the well-being and livelihoods of workers by ensuring that their wages adequately cover basic needs, both during and beyond the pandemic.
The Asia Floor Wage Alliance; Pakistan National Textile, Garments and Leather Workers’ Federation; Muttahida Labour Federation (MLF); Pakistan Institute of Labour Education and Research (PILER); Labor Education Foundation (LEF); and HomeNet Pakistan are committed to fighting for the rights of workers and ending wage theft in the fashion industry. We demand immediate action from NIKE to rectify unfair labor practices, demonstrate dedication to corporate social responsibility, and ensure fair labor practices.
Allegations of wage theft in supplier factories in Pakistan
