It reads like an urban or even a biblical myth. David versus Goliath in cyberspace. A postgraduate student asks Nike to personalise a pair of shoes by stitching the word "sweatshop" on to them. He sends a copy of a highly amusing e-mail exchange with Nike to a few friends.

They e-mail it on and, eventually, it reaches millions of Internet users. It causes a stir on national television and newspapers in the US and Jonah Peretti's e-mail inbox bulges with up to 500 e-mails a day.

Speaking by phone from MIT Media Lab in Boston, Peretti says: "I was visiting the Nike site because I'm interested in new Web technologies. It was all about personal freedom and your right to express yourself. You can make your own shoes. I tried to challenge Nike."

He filled out the form and sent them the $50 to personalise the shoes. An exchange of emails ensued in which Nike defended its refusal to stitch "sweatshop" on the shoes on various pretexts, all of which Peretti debunked (see panel). Eventually, the company denied him his personalised shoes on the grounds that it reserved the right to do so.

Peretti says his e-mail box began to fill, initially with reaction from activists, but soon messages were coming in from a diversity of people: members of the armed forces, children, church groups and school teachers. "I think it's caused people to think about the sweatshop issue. . . Nike has to worry about people associating the swoosh with sweatshop," says Peretti. But he also points out that the sweatshop issue is much bigger than Nike.

A spokeswoman for Nike UK, Yvonne Waniuk, says Nike has made very big inroads into dealing with the labour issue. The company employs thousands of workers in 700 factories around the world, she says. "Nobody has yet come up with a perfect monitoring system but we're trying. . . Nike is not hiding anything. We do allow Non Governmental Organisations in and we have independent monitoring systems."

Nike's website contains reams of information on the company's "Transparency 101 initiative" and includes full reports of monitoring visits to various factories. It states that Nike has "long been concerned about providing decent working conditions for its employees and contract workers. Nike has zero tolerance for child labour. . . No contract worker making Nike footwear product can be under the age of 18. No contract worker making Nike apparel, equipment or accessories can be under the age of 16."

The typical wage is between 15 and 40 per cent more than the minimum wage, before overtime is calculated (in the countries where Nike has studied the wage issue in detail), according to Nike. It breaks down the cost of a Nike shoe as follows: half of what the consumer pays is then paid by the retailer to Nike; the company uses half of this to cover shipping, insurance, marketing, sales, administration, duties, R&D and profits; the other 25 per cent goes to the factory, and includes about 17 per cent for materials, just over 3 per cent covers overheads and depreciation, 1.5 per cent for profit and 3.5 per cent goes on labour.

Nike has put codes of conduct in place and, in 1998, Nike began a programme of global monitoring visits to all Nike contract factories, to be carried out by PriceWaterhouseCoopers local monitoring teams.

Activists contend that Nike only publishes reports on selected factories, that it will not release the name of all of its contractors and that the monitoring teams do not ask many of the relevant questions. Community Aid Abroad - Oxfam Australia has been running a Nikewatch campaign for the past six years. It claims workers in Nike contract factories are still commonly required to work more than 60 hours per week and are harassed or threatened if they refuse overtime.

Micheal O'Brien, campaigns and advocacy executive with Oxfam Ireland, says Nike is "very strong on rhetoric and weak on independent monitoring". The difficulty with Transparency 101 is that it is not an independent monitoring system and fails to ask fundamental questions such as whether they had the right to form a union, he says. "We feel that it's a total contradiction for Nike to be promoting sport and healthy living while the lives of those who make clothes and shoes for Nike are so unhealthy."

What can Irish consumers do? O'Brien says some 400,000 people have now called on Nike to change their labour practices. Fill out the "talk to us" form on the Nike website, he adds. "The attention that has been focused on Nike has encouraged them to look at developing monitoring systems. . . public pressure needs to be maintained. . .the door is now ajar."

David Joyce, development education officer with the Irish Congress of Trade Unions, echoes this approach. Don't boycott Nike goods, he says. Buy them and save the receipt. Then send the receipt, or a copy of it, to Nike with a letter outlining your concerns, he advises.

Nike website: www.nikebiz.com Community Aid Abroad-Oxfam Australia (which has run Nikewatch since 1995): www.caa.org.au

Asia Monitor Resource Centre: www.amrc.org Global alliance: www.cleanclothes.org