Hugger and Vision Tex shut operations January 2009

Hugger and Vision Tex shut operations January 2009

Sportswear giant Nike has defused a row over sub-contractor worker rights by signing a wide-ranging agreement with union officials in Honduras.

The US company faced a barrage of criticism after two sub-contracted factories in the central American country, Hugger and Vision Tex, closed without paying 1,800 workers severance pay estimated at about US$2m.

The Universities of Washington and Wisconsin ended their licensing deals with Nike in protest at the situation, while student protest groups orchestrated a concerted campaign against the company under the slogan: “Just pay it.”

Now Nike and the Honduran CGT union have announced the formation of a $1.5m fund to help the sacked workers, administered jointly by the CGT, the Solidarity Center, the Worker Rights Consortium and supervised by Professor Lance Compa of Cornell University.

The company will also offer vocational training programmes and will prioritise the hiring of affected workers over the next two years.

And it is to provide workers with health care coverage via the Honduran Institute of Social Security (IHSS) for at least a year, unless they find alternative employment.

In a joint statement, Nike and the CGT said they were “pleased” to have found a solution to the situation, adding that both were committed to finding long-term, sustainable approaches to providing workers with social protection when facing unemployment.

The University of Wisconsin said it was “delighted” with the news, adding that it would pave the way for the university’s contract with Nike to be renewed.

“More than taking responsibility for correcting the violations of its sub-contractors, Nike’s actions chart a responsible course for its competitors to follow in similar situations,” said university president Mark Emmert.