Advancing Labor Conditions in Our Supply Chain

Nike has worked to improve labor conditions in our supply chain for more than 20 years.

We embrace accountability and leadership in advocating for the protection and respect of workers worldwide. We do it because it is the right thing to do, and because it makes our business more resilient and more innovative.

Click here to watch the full video with closed captions.

Background

We’ve been on a journey and learned a lot since we first established our business.

 

In the 1990s, we were a company on a sharp growth trajectory when we were hit with allegations of poor working conditions in our supply chain. The experience taught us we had unintentionally built a business model that was transactional and disengaged, lacking the long-term perspective needed to enable a fair or growing supply chain.

 

We gained clarity through our experience. We confronted the truth – that supply chains needed to be re-designed with the worker and the environment at the center. We vowed we’d disrupt ourselves and the industry, and invent new ways to run supply chains, and new ways to create products. We saw that as the leader in the industry we could innovate new ways to build businesses. We made our baseline requirement protection and respect for all workers.

 

Today, we require the factories we source from to meet our Code of Conduct and Code Leadership Standards, which are some of the highest in our industry. We rely on announced and unannounced audits by third party auditors to gain regular insight into the adherence to our standards across our suppliers – a process that is supported by universities and NGOs. When problems do occur, they can be a symptom of a systemic problem. Rather than remediating only the specific occurrence, we expect factory management to also assess and address the root cause, and we work with factories to help them build capabilities for the future so the problem doesn’t happen again.

 

We know that a valued and engaged workforce improves compliance levels and business performance – it raises quality of product, improves business performance for the supplier, and, benefits workforce and their families. We incentivize suppliers to invest in people-centered lean and human resource systems, culture and capability to enable their workforces to perform their best. We encourage all our strategic suppliers to find modern methods, especially relying on mobile technology, to communicate with, train and support their workforces. And, we are advancing a strategic approach to compensation to increase wages for workers, improve productivity, and advance the overall factory performance.

 

We also used to believe that Nike our relationship with other brands was always competitive. Today, we understand that the challenges facing our industry are complex and require collevetive action to address. Aligning with other brands that share our source base is a powerful, pre-competitive approach to global change. Only by working together, across brands, can we implement positive change at scale.

 

Over these 20 years, we’ve made deep-rooted improvements, understanding that our purpose includes driving positive change for workers in contract factories and across the industry. We have recognized that only through investment by us and by our suppliers in innovation, new technologies and capabilities, and incentivizing this investment through our sourcing practices, will we be able to sustain a resilient, agile and responsible supply chain in the long-term.

 

We own the mistakes we’ve made in the past – because they forced us to learn that vulnerabilities are opportunities to build new capabilities, which can ultimately become our strength. Today, we stand behind our investment in responsible and sustainable manufacturing because we know that the global marketplace of the future is built on a shared commitment to safeguarding and empowering the people who make our products.

 

The graphic below outlines some of our major milestones over the past 30 years.

Child Labor

We specifically and directly forbid the use of child labor in facilities contracted to make Nike products, and we regularly monitor contract factories to remain vigilant. Our contract factories are required to comply with Nike’s Code of Conduct and Code Leadership Standards, which are audited by independent monitors. Nike’s standards meet or exceed international standards set by the International Labour Organization (ILO). The ILO Convention on Child Labor is available here.

 

Nike’s Code of Conduct requires that workers must be at least 16 years of age, or past the national legal age of compulsory schooling and minimum working age, whichever is higher.

 

Nike’s Code Leadership Standards include specific requirements on how suppliers must verify workers’ age prior to starting employment. They also contain specific requirements for actions the facility must take to remediate a situation where the supplier violates Nike’s standards with focus on protecting the rights and wellbeing of the worker. Those requirements include:

 

Nike’s Code Leadership Standards include specific requirements on how suppliers must verify workers’ age prior to starting employment. They also contain specific requirements for actions the facility must take to remediate a situation where the supplier violates Nike’s standards with focus on protecting the rights and wellbeing of the worker. Those requirements include:

  • Removing the underage employee from the workplace;
  • Providing support to enable the underage employee to attend and remain in school or a vocational training until the age of 16 or the minimum legal working age, whichever is higher; and,
  • Agreement to rehire the underage employee when they reach the age of 16 or legal working age if the worker wishes.
Compensation

Everyone in Nike’s supply chain has the right to compensation sufficient to meet their basic needs and provide some discretionary income. Nike’s Code of Conduct requires our suppliers to pay their employees at least the local minimum wage, or prevailing wage, whichever is higher, including premiums for overtime worked, legally mandated benefits and compliance with social insurance regulations required by country law. Nike’s Code Leadership Standards also contain requirements for suppliers to work on the progressive realization of a fair wage, defined as meeting employees’ basic needs including some discretionary income.

Health & Safety

We require suppliers producing Nike products to properly inform their workers about potential hazards of their job as well as adequately train them on how to perform their work safely. Through our Code of Conduct and Code Leadership Standards we have detailed requirements aligned with internal standards and best practice for evaluating and minimizing a wide range of risks to workers and to the facility.

Forced Labor

Nike has strict requirements in our Code of Conduct prohibiting any type of forced, bonded or indentured labor at supplier facilities. We know that such prohibitions by themselves are not enough; we must also address key risks which collectively can contribute to a situation of forced labor. One such risk is workers paying any recruitment-related fees to obtain a job, which is a particularly common risk for foreign migrant workers. In 2008, Nike was one of the first companies to establish a supply chain policy with explicit requirements on the employment of foreign workers, including the prohibition on workers paying for their employment.

Today's Global Issues

Forced labor, low wages and poor working conditions still exist today across multiple industries, including ours and especially in the world’s poorest countries. We know there is still major work to be done and we are committed to doing it.

 

We are inspired by seeing many of our peers also addressing labor issues head-on as they take a stand against these conditions in their production processes. But how long until we see a full eradication? What does it take to shift the industry and alter the way billion-dollar businesses operate?

 

We don’t have all the answers, but we do know it will take industry-wide, systemic change from all players in our industry.

 

We work with multi-stakeholder initiatives, including the Fair Labor Association, Better Work and the Better Cotton Initiative to address critical human rights risks across different levels of the supply chain. Through these partnerships, we work to address and prevent child labor and improve labor practices globally.