Nike opens up in standards drive

More than 120 Chinese factories produce goods for Nike

Sportswear giant Nike has published details of the 700 factories which make its products, as it seeks to address criticism of poor labour standards.

Nike said the move was one of a series of measures such as more stringent monitoring of factory standards aimed at improving working conditions.

China boasts the largest number of Nike contract factories - 124 in total.

Chairman Phil Knight said he hoped Nike could become a global leader in corporate responsibility.

Past errors

Human rights and aid groups have for years criticised Nike for not doing enough to tackle poor working conditions in its supply chain, particularly in developing countries.

Mr Knight - who founded Nike 30 years ago - admitted that the company had been slow to respond to evidence of poor conditions in the past.

Our goal in writing this report has been to be as accurate, complete and honest as we can about how Nike performs Phil Knight, Nike chairman

However, he emphasised that Nike had made progress in the area.

Publishing the addresses of all contract factories - the first firm in the global sportswear industry to do so according to Nike - would provide a more "complete picture" of its efforts to raise standards, Mr Knight said.

"Our goal in writing this report has been to be as accurate, complete and honest as we can about how Nike performs," he said.

Challenges

About 620,000 people currently work in contract factories around the world producing Nike branded footwear, apparel and clothing, the majority of which are women under the age of 25.

More than 75% of these work in Asia, predominantly in China, Thailand, Indonesia, Vietnam, Korea and Malaysia.

Nike said it faced a number of "ongoing challenges" in its supply chain, including unsatisfactory levels of compliance in key areas such as poor pay, long working hours, staff harassment and lack of trade union representation.

However, Nike said instances of the illegal use of child labour were extremely rare, with only five cases discovered in the past two years.

NIKE FACTORIES WORLDWIDE(TOP 12 BY COUNTRY) China: 124 Thailand: 73 United States: 49 Indonesia: 39 South Korea: 35 Vietnam: 34 Malaysia: 33 Sri Lanka: 25 Turkey: 26 Japan: 22 India: 20 Mexico: 20 Source: Nike (2004)

Although 60% of factories monitored achieved an A or B rating in terms of compliance with agreed standards, a quarter of factories were found to present more serious problems.

These ranged from a lack of basic terms of employment and excessive hours of work to unauthorised sub-contracting, confirmed physical or sexual abuse and the existence of conditions which could lead to death or serious injury.

Nike said it would set up a taskforce to improve compliance with its code of conduct on working hours.

It will also work with factories to help them address the most pressing problems as well as seeking to establish a set of common standards across the industry.

'Turning a corner'

Debora Spar, a professor of business administration at Harvard Business School, said the publication of the report showed that Nike had "turned a corner".

"Back when all this came out, their top manager was quoted as saying, 'I don't know what is going on and I don't know that I need to know'," Professor Spar told the Associated Press.

"They have now realised that they have to know."