Nike disclosure takes extra step

Globe and Mail

By Stephanie Kang

Nike Inc. today will release a corporate responsibility report listing more than 700 contract factories around the world that manufacture its footwear, apparel and equipment, a broad step toward workplace transparency by a company that has long been hounded by allegations it uses sweatshops.

The disclosure comes at a time when consumer awareness about issues such as labour rights and the environment are high, putting companies like Nike under pressure to reveal more detail about how they do business abroad. Many apparel companies have adopted codes of conduct and taken other steps, but Nike says it is going further than other companies in the footwear and apparel industries by actually naming so many of its contractors.

Such disclosure is meant to move the industry toward common standards and co-ordinated monitoring and remediation, on the premise that a unified industry response can better attack workplace deficiencies that are endemic in many overseas factories.

"If monitoring becomes standardized, and we can achieve consistency in the quality of audits, it should follow that it will be quicker and cheaper to acquire compliance data and to achieve broader coverage," the report says.

The 108-page report reviews Nike initiatives on the environment, employee diversity and factory conditions for the more than 650,000 workers that make Nike-brand products. It addresses issues ranging from how the company chooses factories to how much organic cotton is used in a Nike brand garment.

Audits conducted by both Nike, of Beaverton, Ore., and the Fair Labor Association, a Washington-based worker-rights organization, identified problems in several areas, including work hours, freedom of union association, wages and harassment. But the report says that child labour isn't a major issue in the contract factories.

The report also cites the company's special challenges in China, where more Nike goods are produced than any other country but where labour organization is prohibited and there are other problems involving issues like falsification of wage data by factories.

After enduring withering criticism in the 1990s about conditions at factories where its goods were made, the footwear company is now trying to show it has changed.

"Our goal in writing this report has been to be as accurate, complete and honest as we can be about how Nike performs," company chairman Philip Knight says in the report's forward. He adds that the company is intent on proving it is focused on improved working conditions after "a bumpy original response" to critics, "an error for which yours truly was responsible."

The new Nike report earmarks three goals: to change working conditions within the footwear, apparel and equipment industries; to create sustainable products; and to use sports as a tool for social change.

The report details the results of 569 factory audits from Nike and 50 from the Fair Labor Association, which served as an independent monitor. It was reviewed by a committee of representatives from non-governmental organizations, academia, trade unions and others, which requested that future reports include similar data on factories contracted to make products for Nike subsidiaries such as Cole Haan, Bauer Nike Hockey, Hurley International and Converse.