Saturday, March 15, 2008

Nike report on Chinese Factories

Big trouble in River City, well Chinese shoe factories anyway, according to Nike Inc., the world's biggest sneaker and sportswear maker. Presently about one-third of their shoes are made in China which represents Nike's largest single sourcing country, with some 180 manufacturers and about 210,000 employees. Despite improvements in worker rights laws in China, Nike Inc. maintains significant problems remain in working conditions and with managers not meeting Nike's standards. In a recent report published on Nike’s website some Chinese suppliers have falsified documents, used underage workers and have unpaid wages outstanding. According to the report there are still deep rooted problems in manufacturing in China, particularly at a time when sharply rising costs and a stiffening legal environment are present. Nike has over the years made efforts to get suppliers to comply with Nike’s code of conduct and Chinese law, including a program to monitor Olympics-related suppliers this year. However as the report clearly shows the factories contracted within China continue to face challenges. The report noted problems including falsification of factory documents such as payroll records, lack of effective grievance systems for disgruntled workers and hiring practices that did not ensure minimum age standards were met. Nike claim to have tried to improve labour conditions in China, but always found this a challenge as Chinese labour laws evolve. The report states multiple factors drive up the cost of business some contract factories try to avoid making changes to wages in a timely manner. After years of foreign pressure on China to improve its labour legislation, the country passed two new laws in 2007 that are intended to improve worker rights. One that went into effect this year sets higher standards for labour contracts, use of temporary workers, layoffs and other employment conditions. Some hoped the move would encourage independent unionization in the country. Roughly half of Nike's contract employees in China belong to the country's only government-approved union. A second law expands anti-discrimination protection for migrant workers and those with infectious diseases, two classes of people who had not been protected from bias. Despite the published findings Nike remain committed to improving conditions for workers throughout their global supply chain as one of their highest priorities. Critics of the Oregon based company consider the recent report only confirms the continued shortcomings at Nike on labour rights and for long as they positions their manufacturing in countries where workers continue to be able to unionize or managers refuse to negotiate then these problems will continue.

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