1 Employment Access

In 1996, Nike began purchasing soccer balls from the Sialkotbased sports equipment manufacturer Saga Sports. The company was one of the largest soccer ball producers in Pakistan [NEWS 2006]. Besides the Saga Sports factory in Sialkot, assembly took place in 13 stitching centres located up to 70 kms from the city. The majority of workers involved in soccer ball manufacturing for Nike worked in these centres (Figure 2 and Figure 4, p 61). Sub-centres belonged to some of them. Further, stitching took place in home-based workshops, albeit unofficially. The stitching centres that were established for soccer ball manufacturing for Nike were considered model facilities, amongst others because even those workers became direct employees of Saga Sports, and were offered a number of benefits similar to those employed in the company’s factory and Saga Sports invested in local schooling [PRNewswire 1996]. As will be shown later in

Star Group. Production started in September 2007. At the time of writing this little can be said about the new suppliers’ social and environmental compliance. The volume of the order from Silver Star is significantly lower than Saga Sports’ production for Nike. Currently 850 workers are employed there, although the company has reported plans for expansion both within the factory and into renovated stitching centres.1 During the interim period, orders were shifted to vendors of hand- and machine-stitched balls from China and Thailand [Nike 2006].2

Estimates regarding the share of former Saga Sports workers who found alternative employment in the factory of Nike’s new supplier differ. Whereas Silver Star management claims that about two-thirds of all former Saga Sports workers have been recruited in their factory, observers assume 10 per cent to be realistic.3 While Nike purchased from Saga Sports five times the volume of initial orders from Silver Star [Pakistan Times 2007], it is obvious that majority of dismissed workers have not been absorbed by the new soccer ball supplier. Information about their current employment status is not available.4

The availability of alternative employment opportunities appears to differ by region. In some regions, other soccer ball manufacturers have absorbed the surplus demand for soccer balls caused by Nike’s withdrawal. Consequently, they have created jobs for stitchers. Other regions are characterised by a jump in unemployment as the rural labour market has no alternatives to offer. This is particularly the case for women who face a narrower choice in sectors and occupations considered appropriate for them. Besides, their greater mobility provides men with more employment opportunities in urban areas, in sectors such as trade and construction. Some workers and observers reported a drop in local piece rates per ball completed after Nike stopped orders from Saga Sports. This may be attributed to the greater competition of workers for available jobs and is indicative of their weak market power.

The significant reduction in the workforce manufacturing soccer balls for Nike has important spatial dimensions and associated implications for gender equality in access to employment. So far, Silver Star only produces in its factory located at the

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2 Compliance with Core Labour Standards

The core labour standards are a set of internationally recognised principles at work. They are enshrined in conventions of the International Labour Organisation (ILO) and encompass the effective abolition of child labour (ILO conventions 138 and 182), the elimination of discrimination in employment and occupation (ILO conventions 100 and 111), the elimination of all forms of forced or compulsory labour (ILO conventions 29 and 105), as well as the freedom of association and the effective recognition of the right to collective bargaining (ILO conventions 87 and 98). Apart from a clause related to discrimination, the Nike code of conduct includes most of these minimum requirements for decent work.7

Silver Star/Nike’s health and safety as well as standard operation policies (SOPs) for the different production stages were on display in all units visited in September, commonly at least in Urdu, the national language, sometimes also in English. The SOPs were provided in pictorial form, also. The Silver Star management informed us that Nike’s “core leadership standards” on management, environment, safety, and health are provided to a company before Nike engages with a supplier. If local laws differ from these standards, then the more stringent standard would be applied. For example, this is relevant with regard to minimum working hours. National regulation on working hours and overtime was changed in June 2006. The new law stipulates 12 daily

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working hours as the maximum daily working time, which is significantly higher than the limit laid down in the ILO convention 1 (eight hours).8 The policies on management, environment, safety, and health were not provided by Silver Star despite repeated requests. During the interview we were informed that they could be shared with Nike’s approval. Nike has given instructions to Silver Star not to communicate with NGOs or the media without previous approval by the multinational. Twice a year the supplier would conduct a self-assessment, based on documentation, workers’ interviews, etc. Nike has no representative based in Pakistan. A buying house acts as authorised intermediary between Nike and its two Pakistani suppliers.

Child Labour: The use of child labour in the production of soccer balls has been primarily documented in Pakistan and India. In 1996, an ILO study estimated that more than 7,000 Pakistani children between the ages of 5-14 were involved in soccer ball stitching on a regular basis. Most of these children were boys. Child labourers earn less than their adult colleagues. A recent study quoted Pakistani rupees (PKR) 2,030 per ball, $ 0.33-0.49 [ILAB 2007]. This is about 25 per cent lower than adult stitching rates. A campaign was launched against child labour in the soccer ball industry leading to the so-called “Atlanta Agreement” with Pakistani manufacturers, the ILO, and UNICEF to stop using child labour. It came into force in 1997.

Nike’s code of conduct prohibits the use of child labour, defined as a person under the age of 15 unless national laws state that the minimum age for work is 14 or the age at which compulsory schooling has ended. They rely on the system established by the Atlanta Agreement to monitor their child labour policy, in addition to any monitoring they might conduct on their own [ILAB 2007]. The monitoring mechanism established by the agreement involves the transfer of all stitching from home-based workshops to stitching centres where external monitoring is carried out by the ILO through unannounced visits [NEWS 2006]. In response, Nike created new stitching centres in order to better ensure children are not stitching soccer balls [ILAB 2007].

As a result of the attention that has been devoted to the issue of child labour in Sialkot during the past 10 years, all stakeholders, including workers, appear to be sensitised to the issue. Saga Sports was a signatory to the monitoring system established by the Atlanta Agreement [NEWS 2006]. Most former Saga Sports workers stated that under-aged children were not employed in the company’s establishments. The same applies to the Silver Star management. However, employment of child labourers was the stated reason for Nike’s withdrawal of orders from Saga Sports [Clark 2006]. Observers confirmed that children were stitching balls for Saga Sports. They were mostly located in home-based workshops, though.

Bonded Labour: There have been allegations of debt servitude in the Pakistani soccer ball industry. Although denied by Pakistani manufacturers, many families take loans or advances from subcontractors [ILAB 2007]. They bind workers to a particular employer and may make the vendors liable under the Bonded Labour Abolition Act 1992, which declares such advances as illegal.

Such advances have been reported from the Saga Sports stitching centres as well. However, if all workers become registered as fulltime employees as required by Nike in their agreement with Silver Star, then this concern would become obsolete.

Freedom of Association: In the Saga Sports factory, a trade union had been formed. Apparently, it was unsuccessful in persuading the factory management to abide by commitments to Nike. The union was not considered independent of the management and stopped its activities when the problems between Nike and Saga Sports began. No trade unions or other organisations representing workers’ interests had been formed in the stitching centres or sub-centres. Despite the lack of support by workers’ associations, in some centres, workers protested against poor working conditions. Strikes were triggered by low piece rates, poor quality of the canteen food, or dissatisfaction with the transport facility. It appears that the propensity to complain was higher when workers originated from areas where land ownership is common, i e, their fallback position was better. However, the management commonly did not respond to their demands but stressed “not to create any fuss”.

Nike’s agreement with its new contractor, Silver Star, requires that workers have full rights to freedom of association and collective bargaining. However, so far no trade union has been formed in its factory. According to the management, workers’ committees have been established with PILER’s consent. PILER assumes that the newly recruited workers’ awareness regarding labour rights, including the right to association and collective bargaining should be raised before they conduct elections [Shah 2007].

3 Decent Work and Wages

Occupational Safety and Health: As noted above, the Saga Sports factory and especially the company’s stitching centres were assumed to be model establishments, amongst others from the point of view of occupational safety and health (OSH). The ones, in which our interviewees had worked were all equipped with a medical unit where a doctor, nurse, or compounder was either present permanently or visited regularly. However, the medical support was mainly confined to smaller problems, such as pains or stomach problems. Sub-centres did not provide medical facilities, but in case of minor problems, medicine for treatment would be sent over from the centre. New workers would undergo a health check. One respondent reported that if any illness was detected, applicants would not be offered employment at the centre. Bathrooms were available at the rate of one for about 30 workers. The adequateness of ventilation, lighting, and fire fighting equipment could not be assessed ex post, amongst others, because the centre visited was stripped of a lot of equipment after the closure.

The Silver Star factory appeared to be well ventilated and lighted. However, we visited after the peak summer months and in the late afternoon. Fire extinguishers were observed in all units as well as some buckets. Both electrical and manual fire alarms were present. Emergency exits were marked. We were

60 informed that fire fighting as well as health committees were formed and trained for emergencies. The company’s brochure mentions primary medical facilities for staff, which may relate to the first aid boxes that were seen in some units. A doctor or other medical personnel were not present at the premises.

Figure 3: Stages in the Soccer Ball Production Process

Labour intensive stage Labour intensive stage Potential safety health risks Potential safety health risks Lamination Cutting Printing Stitching Washing Packing

Source: Author’s design

The production process of soccer balls within the Silver Star factory starts with the lamination of cloth with polyurethane (PU). Workers involved in the PU lamination are exposed to strong fumes with unknown potential health effects. Those observed all wore masks with the exception of their supervisor. Some of the workers did not wear shoes despite the presence of large, partially open PU bins. Cutting of PU panels is the next stage in soccer ball production. At Silver Star, cutting as well as lamination is done both manually and as an automatised process. One hand-operated machine requires one worker. The operator has to use both hands in the process of cutting, otherwise the machine would not respond.

Other than laminating and cutting, printing is labour-intensive. The observed workforce in Silver Star’s printing unit totals approximately 60 persons. However, automation of this production stage is on the anvil. The workers apply paint of different colours and shapes in layers on a sieve that transfers the desired prints on the PU panels. This work is associated with strong fumes originating from the paints applied. All observed workers wore protective masks. The unit is located in the middle of the building with potentially negative effects on the circulation of fresh air.

Stitching is the most labour-intensive work associated with soccer ball manufacturing. It causes significant ergonomic problems. All interviewed workers reported muscular pain in their shoulders and neck, especially after long working hours. We did not encounter any specific measures to improve occupational safety and health of the Saga Sports stitching centres in this respect. In the former centre visited, workers sat on the ground on small chairs made out of metal tubes. It appears that the chairs were too hard to sit on for an extended period. Foam was wrapped around many of the tubes, especially on the backrest and on the seat. The workers did not perceive other work-related risks for their health and safety. A key informant pointed out the respiratory problems associated with stitching of a particular, but not very common, type of ball. These balls have cloth on the synthetic leather panels. Loose fibres can enter the workers’ respiratory system and cause health problems, from cough to tuberculosis (TB). No masks were provided. Silver Star’s stitching halls are equipped with separate bathrooms for women and men. Overall, one washroom is provided for 25 workers.

After the completion of the ball, and the quality is checked, it is washed with chemicals, deflated and packed. The potential OSH risks especially from manual washing of the balls as well as in lamination and printing are to be explored. None of the resources consulted elaborated on these.

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essary expenses [PILER 2005]. The slack period during the monsoon rains also posed considerable problems for workers who depended on the daily income source of soccer ball stitching. Permanent employees in supervisory and managerial positions obtained a salary of PKR 4,000.

At present, the salary package for Silver Star’s permanent workers guarantees the minimum wage of PKR 4,600 for unskilled workers (since July 2007). It includes transportation facilities for all workers, incentives during the harvest season, childcare for married women, leave encashment, as well as bonus

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employed informally. Although most factory employees were on regular contracts, stitchers were pieceworkers. They formed the overwhelming majority of workers outside the factory and of total employment devoted to soccer ball stitching for Nike. Informalisation as well as geographical dispersion of employment prevents the organisation of workers. One of the stated reasons for Nike’s withdrawal from Saga Sports was the widespread outsourcing of its products from Saga Sports facilities, resulting in the production of Nike soccer balls in home-based workshops in the Sialkot area. Nike has a policy against such practices because of the potential for using child labour and the inability to ensure safe working conditions in home-based settings. Overall, observers estimate that about 5 per cent of the workers producing for Saga Sports were home-based workers.

The more informal the workplace, the greater was the share of female workers in Saga Sports establishments. Whereas very few women worked in the factory in Sialkot, about 16 per cent of the labour force in the stitching centres were women and girls. Furthermore, half of the stitchers in the sub-centres were female. It is likely that this share was even higher for home-based workers, due to the greater attraction of a workplace that can be combined with domestic responsibilities of women. This results in an invisible but double discrimination with regard to gendered earnings [NEWS 2006]. Due to lower stitching rates in sub-centres (and possibly home-based workshops), women are at a disadvantage given their greater concentration in informal workplaces. Besides, the same domestic obligations that cause this concentration constrains women’s working time and thus the amount of balls they can produce per day. The table gives examples of the resulting gender gap earnings.

Silver Star reports providing stitchers who were previously recruited as contract workers with permanent contracts. This was done on Nike’s request as it requires all workers in its new contract factory to be registered as full-time employees who are paid hourly wages and are eligible for social benefits [Nike 2007a]. However, screen-printing, washing, as well as lamination is still done by contract workers.