The settlement covers a period of two years and concerns workers of the workers of the PT Nikomas Gemilang IY plant. This agreement sets an important precedent. ‘This has the potential to send shock waves through the Indonesian labour movement,’ says the union’s chairman, Bambang Wirahyoso of Indonesian trade union federation Serikat Pekerja Nasional (SPN). He continues: 'Now that the precedent has been established, the leadership at SPN is gearing up to take on the fight for any workers who have been subjected to forced overtime without pay. We have only just begun’.

The settlement follows on from the Indonesian Protocol, an agreement signed last year by Indonesian textile, clothing and footwear trade unions, major suppliers and sportswear brands like Nike, Adidas, Pentland, New Balance and Puma. The agreement guarantees freedom to form unions and bargain collectively and stems from discussions emerging from Play Fair 2008. The Play Fair campaign, in which the Clean Clothes Campaign participates, has been, among other global partners, specifically working with Indonesian unions to address poverty wages, abuse of short-term contracts and violations of the right to organise for the last three years.

While the union is happy with the settlement, it is clear that malpractice has already existed for 18 years (which is almost as long as Nike’s code of conduct has existed!). Indonesian law, however, allows redress only for the past two years. Nike uses about 30 factories in Indonesia, but other major sportswear brands like Puma, Adidas or New Balance are also using dozens of factories who produce their merchandise. Wage violations are commonplace at these workplaces too. SPN aims at concluding similar arrangements with these workplaces.

This wage settlement clearly shows that empowered unions, capable of bargaining with employers and brands, are the best way to improve workplace conditions.