The Atlanta Journal-Constitution
Published on: 03/01/06
Washington — When Andrew Young, the former Atlanta mayor and United Nations ambassador, announced this week he would head a group that defends the business practices of Wal-Mart Stores Inc., many labor union supporters were dismayed.
This is not the first time Young, one of the Rev. Martin Luther King Jr.’s closest aides, has angered labor and human rights groups. In 1997, they criticized him for defending working conditions in the overseas factories that made shoes for Nike Inc.
But within a year of Young’s high-profile Asian tour to inspect factories, Nike had agreed to bring in independent monitors to oversee working conditions, boost educational opportunities for workers, adopt U.S. standards for indoor air quality and initiate other reforms.
Today, Nike has a good reputation.
"The Nike turnaround is real," said Julie Fox Gorte, chief social investment strategist at Calvert Group, a mutual fund company based in Bethesda, Md. "They made real reforms."
Last year, Calvert Group determined that Nike now meets its standards for being a good corporate citizen.
KLD Research & Analytics Inc., a Boston-based stock research firm, also declared Nike to be an acceptable investment for the socially conscious.
In an interview Tuesday, Young said that after he completed his 75-page report on its Asian subcontractors, Nike reformed some practices.
"I found Nike to be very responsive to everything I suggested, but I don’t think anything I said was that major" because Nike was not doing much wrong, he said.
Still, he thinks his report — especially the photos he took of factories — improved Nike’s image. "I think we helped," he said.
Since 1998, Nike’s reputation has risen, and its stock price has soared from roughly $45 a share to a close of $86.78 Tuesday.
But Young’s critics say he deserves no credit for major changes at Nike.
"I think he hurt the effort to change Nike by whitewashing their abuses," said Medea Benjamin, co-founder of Global Exchange, a San Francisco-based human rights group that spearheaded Nike protests. "He did just what you shouldn’t do — conduct a whirlwind tour by someone who doesn’t speak the language."
"We felt he did himself a disservice" by getting involved with Nike, she said. The company instituted reforms because of the public pressure, not Young’s suggestions. "In the end, we had to work around him," she said.
Whatever Young’s impact on Nike, he now hopes to boost Wal-Mart’s image. On Sunday, he confirmed he would serve as the chairman and public face of Working Families for Wal-Mart, a group that the retailer set up to oppose two union-funded groups, WakeUpWalMart and Wal-Mart Watch.
Young’s involvement with both Nike and Wal-Mart comes through Atlanta-based Goodworks International LLC, a specialty consulting group that promotes commercial ventures, particularly in Africa and the Caribbean.
GoodWorks was hired by Nike, a Beaverton, Ore.-based sneaker maker, to conduct a six-month study of 12 factories operated by subcontractors in Vietnam, Indonesia and China.
Now GoodWorks has a contract with Working Families for Wal-Mart. The value of the contract was not disclosed. Young, an ordained minister and former three-term member of Congress who founded the firm, will give interviews to the media and write opinion pieces on Wal-Mart.
Young has had previous dealings with Wal-Mart. For example, in February 2005, he kicked off Black History Month celebrations at Wal-Mart headquarters in Bentonville, Ark. At a news conference there, he praised Wal-Mart for helping poor people, saying, "You can get quality merchandise at a price anybody can afford."
Young said he sees some flaws with the retailing giant. "The big issue I have with them is traffic around the Wal-Marts," he said.
But labor and human rights activists are seeking far more change. They want Wal-Mart to reform its pay, benefits, imports and other policies.
Gorte, the Calvert Group strategist, said the company’s pay and benefits policies are not up to the standards of more socially responsible companies.
"There are legitimate reasons to be concerned with Wal-Mart practices," she said. "Wal-Mart has very little transparency and monitoring of those factories" overseas that make its products.
She said Wal-Mart would improve its image if it would follow Nike’s lead and use independent monitors to check on suppliers.
"There are some interesting parallels with Nike," she said. "There are some things Wal-Mart needs to hear, just as Nike needed to hear them in the 1990s."
Benjamin said she does not expect Young to have any impact on Wal-Mart’s practices. "Wal-Mart already knows what needs to be done," she said.