“Nike: Just Do It”
By Adam Fernald
ETH/316
John Bevell

In the past Nike has been accused of using child labor in the production of its soccer balls and sweatshop conditions in suppliers’ overseas factories. Nike has about 28,000 employees globally and over 800,000 workers who are employed by its suppliers in 52 countries and create sports and fitness footwear, apparel, equipment, and accessories for worldwide distribution (Trevino, L.K. & Nelson, K.A., 2011). Nike has worked to improve labor conditions in their footwear, apparel and equipment supply chains for more than 15 years. Key issues in which they have engaged include the health and safety of the workers who make their products, excessive overtime, the ability of workers to freely associate, and child labor and forced labor (Nike Inc., Labor, 2013). Since these accusations were brought to the publics attentions Nike has been focused on improving the monitoring of the organizations supply chain, sent auditors to evaluate conditions and enforce the company code. About a decade after Nike was first targeted they released factory names and locations of their suppliers. A MIT professor was brought in to assess Nikes audit data and the results were disappointing. Most suppliers’ factories had not improved, and some even got worse (Trevino, L.K. & Nelson, K.A., 2011). Nike's entrance into the Pakistani markets was the part of its long term strategic planning. Although Pakistan has laws against child labor and slavery, the government has taken very little action to combat it. Only a boycott by the United States and other nations will have any impact on slavery and child-based industries. The U.S. Constitution states that child labor is an illegal and inhumane practice and any U.S. company found guilty practicing and encouraging it will be prosecuted.
Nike went into Pakistan, having full knowledge of the favorable conditions prevailing in terms of child labor and has taken no precautions whatsoever to prevent the use of child labor in the production of its soccer balls (Faraz Azam, 1999). They realized the company would make a huge profit by subcontracting the production to a local firm who uses child labor. Nike knew what was happening but acted as if they did not and when the question came up they put the blame on these local companies. Any organization that Nike subcontracts is supposed to abide by international rules and regulations when producing its goods. If there is no one enforcing these laws, it comes down to business ethics. In these third world countries it is easy to say that profit trumps ethics. Most of the children who work for these suppliers do so to support their family and if they were to lose these jobs their family will not be able to survive. Nike bases its operations on finding the lowest-cost labor to make its products. They have the habit of hiding behind its good public image and its effective means of promotions and advertising. Nike attempts to create a good public image by offering charity, donating equipment and never passing an opportunity to remind the public that it has set up stitching centers in places such as Sialkot, Pakistan (Faraz Azam, 1999). Life Magazine posted an article about child labor in Pakistan with a lead photograph that showed 12-year-old Tariq surrounded by pieces of a Nike soccer ball. He would spend most of the day stitching together this soccer ball for the grand sum of 60 cents. In a matter of weeks, activists across Canada and the United States were standing In front of Nike outlets, holding up Tariq’s photo (Faraz Azam, 1999). Things were not looking good for Nike, they have not been open about their labor practices the way a public company should be. Cameramen have been pushed out of factory floors. Supervisors at a plant in Vietnam apparently beat workers being paid 20 cents an hour and refused to allow them to leave their work posts. Indonesian labor organizers have been put behind bars. Most troubling, nearly all the soccer balls made in Pakistan have been revealed to be made by young children getting paid just cents a day (Faraz Azam, 1999).
This is the first time Nike has been put in the public eye regarding being related to these terrible labor practices. Changing the way an industry views its labor force does not happen by monitoring factories alone. Monitoring reveals the issues, issues which in turn are locked into a complex web of root causes (Nike Inc., Responsibility, 2012). Nike says that it has been working on these issues regarding its suppliers labor practices. They stated this online revealing their strategy for the labor force.

“We know that our role includes holding our suppliers accountable to a set of standards that often goes beyond local law. We also can incentivize shifts in behavior and to apply sanctions when standards are not adhered to. And we can help design and support a system of checks and balances that enable verification and monitoring of our contract supply chain – as a collaborative component of an industry-wide system of checks and balances. We believe in the power of transparency – as a source of education, as a driver of change. We require of our contract factories rapid, complete remediation where issues occur. We know that change won’t happen in isolation, and that meaningful change must be at industry scale” (Nike Inc., Responsibility, 2012).
Nike has learned from their mistakes by using the millions of dollars in profits, the children who worked in these third world countries earned for Nike over the years, to improve their supply chain and labor practices. Nike distanced themselves from the slave labor and abusive tactics that their suppliers were involved with so that they can be an example for other organizations. Doing the right thing and fixing these issues that put a mark on their name, Nike is proving to the world that anything can be accomplished if you “Just Do it.”

References

Trevino, L.K. & Nelson, K.A. (2011). Managing business ethics: Straight talk about how to do it right (5th ed.). Hoboken, NJ: John Wiley & Sons.

Nike Inc. (2012) Sustainable Business Report: Labor http://www.nikeresponsibility.com/report/content/chapter/labor

Faraz Azam, Ted Case Studies (1999). NIKE: Nike Shoes and Child Labor in Pakistan (http://www1.american.edu/ted/nike.htm)

Nike Inc. (2012) Sustainable Business Report: Responsibility (http://www.nikeresponsibility.com/report/content/chapter/targets-and-performance)