Back to Inquiry Set

12E.6.4 Nike’s Code of Conduct

Document detailing Nike's Code of Conduct for contracting employers, released in response to bad press that reported poor working conditions for some of the workers who manufactured Nike products in the 1980s and ‘90s.

Nike (Firm)
2002
Book

Nike Code of Conduct. Circa 1998. New Mexico State University, https://business.nmsu.edu/~dboje/NIKcodeconduct.html.

In response to bad press that reported poor working conditions for some of the workers who manufactured Nike products in the 1980s and 1990s, Nike hired a firm to investigate some of the factories it contracted with around the world. This 1997 investigation revealed that in some factories workers were exposed to dangerous levels of chemicals used to make its shoes. This resulted in skin and heart disease for some workers, as well as other illnesses. The investigation prompted Nike to update its code of conduct to the one you see here. The code of conduct is a document that Nike expects its supplying factories to follow in order to do business with Nike. As a result of outsourcing labor to other countries, Nike not only does not run the factories that manufacture its products but also does not always work with countries that protect workers’ rights in the same way that labor laws do here in the United States. What do you notice about who is held responsible for maintaining Nike’s code of conduct? Today Nike produces its shoes and apparel in 42 different countries, and employs one million people around the world. What do you think Nike’s responsibility is to these workers? What responsibility do you think belongs to the factory owners and the countries in which these factories exist? What does this tell you about how globalization affects the individuals who produce global products?
Along with developing this code of conduct after the troubling report by the firm Ernst and Young, Nike instituted for at least some length of time a system that put Nike employees in charge of regularly visiting contracting factories to monitor compliance with the code. Factory owners were made to sign this code of conduct and post it in the factory. Of course, not all employees were literate, and most were rarely in a position of power to demand adherence to this code. As far as holding Nike accountable for labor abuses, some of the problems are inherent in doing business through contracts, and in countries with different labor laws. In the specific case of Nike, its line of products also shape to some degree the type of labor practices involved. Depending on its relationship with its contracting factory, Nike has had varying degrees of influence over how factory owners operate. Long-term, high-investment immobile factories making shoes tend to have longer relationships with Nike than do apparel factories. Moreover, apparel has shorter product cycles and more volatile consumer trends, and Nike may be just one of several sports companies for which an apparel factory manufactures. These different relationships can significantly affect how much Nike can influence compliance with its code of conduct. Consider having students do research on which countries produce Nike products, and whether these countries have legislation that is enforced to support workers’ rights. A news search may bring up instances in which labor unions in some of these countries are having success in protecting workers, or whether factories have been found in violation of labor laws or workers’ rights.

NIKE Inc. was founded on a handshake.
Implicit in that act was the determination that we would build our business with all of our partners based on trust, teamwork, honesty and mutual respect. We expect all of our business partners to operate on the same principles…

NIKE seeks partners that share our commitment to the promotion of best practices and continuous improvement in:
1. Occupational health and safety, compensation, hours of work and benefits.
2. Minimizing our impact on the environment.
3. Management practices that recognize the dignity of the individual, the rights of free association and collective bargaining, and the right to a workplace free of harassment, abuse or corporal punishment.
4. The principle that decisions on hiring, salary, benefits, advancement, termination or retirement are based solely on the ability of an individual to do the job.

…we also bind these partners to specific standards of conduct. These are set forth below:

Forced Labor: (Contractor) certifies that it does not use any forced labor -- prison, indentured, bonded or otherwise.
Child Labor: (Contractor) certifies it does not employ any person under the minimum age established by local law, or the age at which compulsory schooling has ended, whichever is greater, but in no case under the age of 14.
Compensation: (Contractor) certifies that it pays at least the minimum total compensation required by local law, including all mandated wages, allowances and benefits.

Benefits: (Contractor) certifies that it complies with all provisions for legally mandated benefits, including but not limited to housing; meals; transportation and other allowances; health care; child care; sick leave; emergency leave; pregnancy and menstrual leave; vacation, religious, bereavement and holiday leave; and contributions for social security, life, health, workers compensation and other insurance.

Hours of Work/Overtime: (Contractor) certifies that it complies with legally mandated work hours; uses overtime only when employees are fully compensated according to local law; informs the employee at the time of hiring if mandatory overtime is a condition of employment; and, on a regularly scheduled basis, provides one day off in seven, and requires no more than 60 hours of work per week, or complies with local limits if they are lower.

Health and Safety: (Contractor) certifies that it has written health and safety guidelines, including those applying to employee residential facilities, where applicable; and that it has agreed in writing to comply with NIKE’s factory/vendor health and safety standards.

Environment: (Contractor) certifies that it complies with applicable country environmental regulations; and that it has agreed in writing to comply with NIKE’s specific vendor/factory environmental policies and procedures, which are based on the concept of continuous improvement in processes and programs to reduce the impact on the environment.

Documentation and Inspection: (Contractor) agrees to maintain on file such documentation as may be needed to demonstrate compliance with this Code of Conduct, and further agrees to make these documents available for NIKE or its designated auditor’s inspection upon request.

The NIKE Code of Conduct is a document that defines our contractor's obligations to NIKE and the contract worker, and provides a set of standards against which we can measure our contractors’ compliance.

First written in January 1992, NIKE’s Code of Conduct has been revised recently to add new language and provisions suggested by non-governmental organizations (NGOs) and other bodies. It is a living, breathing document, and can and will be revised again as we learn new and better ways to communicate our standards to the contractor, and to the worker.