--Indonesian factory that has contract with Nike will pay roughly $1 million in back wages --Nike says a task force has been formed to rectify grievances --Factories are contracted by Nike, which doesn't own any factories it uses to manufacture its goods By John Kell Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- An Indonesian footwear factory that has a contract with Nike Inc. (NKE) agreed to pay roughly $1 million in back wages, as the facility seeks to address allegations of workplace misconduct. The sporting-goods maker said an agreement reached between PT Nikomas Gemilang IY and the local union to reimburse the workers would be overseen by a third party and was in accordance with Indonesian labor law. Nike said a task force was formed to rectify grievances and update other human-resource practices when needed. A national trade union representing nearly 4,500 employees from a plant in Banten province said employees weren't paid for close to 600,000 hours over a two-year period, according to the Associated Press, which initially reported the news. The AP reported the money will be distributed to workers by early next month. Nike spokeswoman Mary Remuzzi said the plant's actions "clearly demonstrate how seriously they are taking the allegations of workplace misconduct." Nike didn't disclose what percentage of its goods are made at the Indonesian plant, which the company has done business with since 1993. Most of the factories Nike has contracts with are located in China, Indonesia and Vietnam, though the sporting-goods maker owns none of those locations. Nike does business with 43 factories in Indonesia. Shares of Nike were up 0.7% to $98.86 in recent trading. -By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com
