July-August 2000 NVA

he link between globalization and militarism was all but ignored in the recent debate over China trade. China’s Peoples Liberation Army benefits a great deal from increasing trade with the United States, and the dynamic growth of Asia’s “new Tigers” owes much to the military-dominated internal security systems that protect foreign investors from independent trade unions. Out of the hundreds of “sweatshop” stories published in the past several years, only a mere handful even mention the tacit partnership between foreign investors—many of them shoe and apparel companies based in Taiwan or South Korea—and corrupt militaries in Thailand, Indonesia, Malaysia and elsewhere.

Getting the story out at an anti-sweatshop rally in Washington: author Jeff Ballinger (center) with reporter (right) and Indonesian labor activist Cicih Sukesih (left center), who was fired by Nike contractors after military threats failed to intimidate her.

Nike’s enterprises in Indonesia are a case in point. The company’s multi-billionaire CEO, Phil Knight, has often lashed out at Nike’s critics with little or no effort to conceal his contempt. Several years ago, his public relations people put out a Dear Shareholders letter that consisted of questions and answers such as: “Why on earth did Nike ever choose such a terrible place as Indonesia to have shoes made?” Knight answered by saying that the U.S. government had asked him to place shoe factories in Indonesia to make up for the fact that the Pentagon’s Commander in Chief-Pacific was withdrawing U.S. forces from Southeast Asia.

Officials at the State Department were presumably attempting to replace one type of influence with another, as the correlation of forces in the region changed in the mid-1980s. As it worked out in practice, however, the brutal contractors Nike moved from the company’s North Asian production sites in Taiwan and Korea would find it difficult to restrain themselves in Indonesia and pushed their advantage to egregious extremes. Frequently, workers’ protests erupted into strike actions that culminated in police and military units being called in. So it was that shoe producers became notorious labor law violators and responsible, in large measure, for the involvement of military units in labor disputes. It was about this time that an NGO was organized in Seoul with the express purpose of monitoring the behavior of Korean companies in the developing world. The “Peoples Solidarity for Participatory Democracy” group has conducted surveys of workers in countries from Sri Lanka to Guatemala. While the PSPD reports have been useful to anti-sweat campaigners in the North and in developing countries, no media pressure was ever brought to bear in Korea, nor was public pressure generated to bring those contractors to heel.

High Ranks, Low Wages
As early as 1988, I saw a story in a Jakarta daily newspaper about a riot at a shoe factory where the Korean manager (producing for Nike and Reebok) had cut wages by two and a half cents a day. It was obvious that eighty-three cents a day was just below “rock bottom,” and the local military, according to the press account, prevailed on the management to reinstate the old wage. A short time later, two journalists from the newspaper Media Indonesia told me that they met the personnel manager at a huge new factory staffed by Koreans. He was a retired Indonesian Army colonel, and the Korean managers often saluted him as he made his rounds, the reporters observed. In his otherwise Nike-friendly book Just Do It (Random House, 1994), author Donald Katz called it “management by terror” and wrote that Indonesian workers got fed up with “South Korean Tiger Division types yelling at them.” A top Korean manager told Katz that “many of the supervisors sent in were former lieutenants and captains.”

Even more disturbing were reports that troops were often much closer than the barracks down the street—sometimes they were deployed right in the shoe factories. This was documented in an in-depth study of the shoe industry in Indonesia carried out jointly by the Institute for Social Studies in the Hague and the Institute for Technology in Bandung, West Java. When the report was made public before a crowd of shoe industry leaders, one manager strenuously objected to the language about troops in the factory. He was told to keep quiet by the manager of a Reebok-producing factory, who said it was a common practice. Though that study goes back 10 years, I heard the same complaint from workers at a Nike-producing factory just last fall. Nike has acknowledged the presence of “security forces” in the Nikomas Gemilang factory in Tangerang, West Java, where 18,000 young Indonesians make Nike shoes for the Taiwan-based Pou Chen company (see the Nike statements at www.web.net/~msn/3nike13.htm).

Rent-a-Troops
While Nike spin-meisters say that the troops are in the factory to protect workers, workers report that they are intimidated by their presence. Some years ago at the Nikomas factory, a dozen independent union activists were locked in a meeting room each day for a week, guarded by a rent-a-troop. This action was in response to a protest the group organized aimed at reducing a punishing new production quota.

The most notorious case of military involvement in an organizing campaign took place at West Java’s Sung Hwa factory, which produced for Nike in 1992. Twenty-four workers had circulated a petition calling for the legal minimum wage for all workers—about a quarter of the workers were receiving an illegal “training wage”—and asked for a free and fair election of union officers. Management ignored the petition, which was signed by only a few score courageous workers who had attended basic labor rights training from the Jakarta-based NGO, Urban Community Mission. The following week, an all-out strike took place and, when troops started to push the workers back into the factory, violence broke out and some factory windows were broken and managers’ cars damaged.

For the next two months, local police and military units interrogated workers and, eventually, handed Sung Hwa supervisors a list of the 24 “troublemakers.” Some reported serious intimidation at the police and military compounds during questioning. “Troublemaker” Cicih Sukaesih, for example, reported that one soldier put a revolver on the table during questioning of her friend. She and all the other independent union activists were fired. Only a few months earlier, the independent union Solidarity had been subjected to serious police harassment after staging a small protest in front of the International Labor Organization offices in downtown Jakarta. For at least two years after these events, no one was bold enough to publicly advocate an independent union for Indonesian workers. Meanwhile, the Indonesia Legal Aid Institute carried on a legal battle on behalf of the dismissed workers, a case they eventually won in Indonesia’s Supreme Court in 1998. The lawyers and activists from Urban Community Mission and the Legal Aid Institute deserve special commendation for resisting security-forces intimidation for keeping this group of workers engaged in this struggle; in hundreds of other cases, workers fired for leading protests never even file illegal discharge cases.

Much of the problem in Indonesia can be traced to the “security approach” to labor relations laid out by Admiral Sudomo, the first Minister of Manpower in the era of Indonesia’s rapid industrialization (1985-90). Previously the coordinating minister for security affairs, Sudomo had became one of the most feared men in a very repressive regime. It was Sudomo who forced all unions into the government-controlled “All Indonesian Workers’ Union” in 1985, according to Adam Schwarz’ authoritative account of modern Indonesia, A Nation in Waiting; Indonesia’s Search for Stability (Westview Press, Colorado, 1994). Schwarz wrote that the “defanging of unions … exposed workers to predatory employers.” This same conclusion, he points out, had been drawn in 1991 by an editorial writer in the English-language daily, Indonesian Observer: “Indonesian laborers have virtually been delivered to their employers’ arbitrariness and greed.”

Three years later, the Jakarta Post outlined the conundrum this way: “Businessmen, either domestic or foreign, will sink their capital in the country only when we can maintain a sense of stability and security … The question, though, is whether the high rush of labor strikes has really required direct military involvement.”

U.S. policymakers were in no way oblivious to what was going on in Indonesia, including the fact that contractors producing shoes for U.S. companies were the worst violators of labor laws. It is worth noting that the labor rights complaint against Indonesia (based on special tariff benefits of the U.S. Generalized System of Preferences) was “settled” by U.S. Trade Representative Mickey Kantor and Maj. Gen. Suharto in 1994 by gaining Indonesia’s pledge to get the military out of strike-breaking. According to the Jakarta office of the Legal Aid Institute, the agreement was a cruel joke—more than 70 cases of military intervention were reported in only six months after the “settlement.”

The irony here, of course, is that the United States claimed for years that military-to-military contacts made Indonesian soldiers respect democracy, civil society groups, etc. Yet it turns out that the military in Indonesia is heavily involved in snuffing out one of the most promising pro-democracy forces in society and the beneficiaries (and protagonists) are U.S.-based shoe and apparel companies.

For many—such as James Castle, chair of the Jakarta-based Castle Group—this is as it should be. In a slide show for prospective investors (cited in the 1998 book The Sweatshop Quandary, Investor Responsibility Research Center, Washington, D.C.), he said, “The military will remain the ultimate arbiter for the next decade … The dominant role of the military is generally acceptable to the vast majority of all Indonesian groups and communities … its role as the decisive player is considered right and proper at this historical juncture.” The slide show was probably changed after Indonesians rose up in defiance of the military as it tried to keep Suharto in power. On the worker rights question, Castle said, “Unions are restricted, but they're not the only group.”

No one can plead ignorance, then, of how the role of the Indonesian military has been perverted by the sine qua non of attracting foreign investment: preventing the formation of independent trade unions. What remains for labor activists to do is to draw attention to the ongoing suppression of the right to organize, bearing in mind that this is not the “special interest” of some groups in the North. Rather, the workers who have risked so much to call corporations to account deserve fervent support.

To build such support, there are two encouraging recent developments in anti-sweatshop activism: the formation of the Workers Rights Consortium and the continued growth of the United Students Against Sweatshops. The WRC promises to be an effective antidote to shoe and apparel industry claims that these jobs are the best that workers in developing countries can hope for. This effort will rely on interviews with workers and survey work that puts the factories producing university-logo merchandise in some kind of context. (Sometimes, for example, another shoe or baseball cap factory down the road is paying double the country’s minimum wage with a 65-page union contract.) Meanwhile, USAS activists will be connecting up thousands more North American students with NGOs and struggling unions in developing countries.

Shoe, toy and clothing companies, meanwhile, are trying all manner of public relations and do-gooder schemes to gloss over the depredations of their contractors. These efforts will, no doubt, generate sufficient controversy for the capitalist press to give the impression that they are actually covering the sweatshop story—without delving into the nitty-gritty: the workers battling multinationals protected by corrupt military-backed governments.

Jeff Ballinger is the founder and director of Press for Change, a New Jersey-based consumer-information NGO that monitors workers’ rights issues in Asia. He went to Asia to teach trade union training programs for the AFL-CIO in 1984 and returned to the United States in 1995.