Nike's Corporate Responsibility Sham

On May 12, 1998, Nike CEO Philip Knight stood before the National Press Club and vowed to implement a six-pronged plan to improve labor conditions in his company's 600 contract factories. The speech didn't appear to be a palliative: Knight seemed genuinely concerned that activists and journalists had found Nike to be fostering sweatshops and lax safety standards abroad.

And Knight was brave. He described his company's product as "synonymous with slave wages, forced overtime and arbitrary abuse," and then announced a series of reforms that included new labor policies for health and safety, child labor, independent monitoring and workers' education. "A sea change in company culture" is what he called the move.

As for the details, Knight promised to meet the U.S. Occupational Safety and Health Administration (OSHA) standards in indoor air quality. He said the minimum age for Nike factory workers would be raised to 18 years for full-time employees and 16 part-time ones. He ensured Nike would include non-governmental organizations in its factory monitoring. He championed an expansion of Nike's worker education program, making available free high school equivalency courses, and an expansion of Nike's micro-enterprise loan program to benefit 4,000 families in Vietnam, Indonesia, Pakistan and Thailand. And, lastly, Knight promised to fund university research and open forums on responsible business practices.

Given Knight's remarks were made to the National Press Club, it wasn't surprising they were absorbed by prominent news organizations. A May 1998 New York Times editorial argued Nike's reforms "set a standard that other companies should match," and the Washington Post's E.J. Dionne Jr. called the new measures a "breakthrough for American and international human rights campaigners."

Long-time critics of Nike remained cautious, arguing Nike's workplaces would still be sweatshops even with the proposed reforms. But generally there was the impression that bad press can lead to good reform and that Knight's announcement was a victory.

Now three years have passed. And Global Exchange, an international human rights organization that has monitored Nike's labor practices since 1988, has issued a report following up on Nike's promises. "Still Waiting for Nike To Do It" is the title of the 115-page investigation, and the title pretty much says it all. According to Global Exchange's researchers, Nike has fallen short on all its six areas of reform.

Perhaps most troublesome in Global Exchange's report is that Nike has not made good on its promise to institute OSHA standards. Toluene, a chemical solvent known to cause central nervous system depression and liver and kidney damage, is still being used in Nike sneaker manufacture. And although the amount of Toluene has been reduced, Nike seem to be providing factory managers advance notice of testing, "giving them considerable scope to change chemical use to minimize emissions on the day of the test is conducted." Moreover, Nike has not regularly made the results of those tests available to the public.

Among the report's other findings are that only one nonprofit organization has been permitted to conduct one audit of one Nike factory; that Nike's education program has expanded, but wages paid in Nike factories are not high enough for the majority of workers to give up overtime income to take courses; that Nike refused reputable academics access to Nike factories to conduct research; that there is evidence Nike contract factories employ workers under 16; and that the company continues to abide factories that demand 70 hour work weeks from their employees.

"While Nike touts itself as an 'industry leader' in corporate responsibility, Nike workers are still forced to work excessively long hours in high pressure environments, are not paid enough to meet the most basic needs of their children, and are subject to harassment, dismissal and violent intimidation if they try to form unions or tell journalists about labor abuses in their factories," concludes the report.