Nike is a multibillion dollar company known worldwide for its sports products like sports equipments, clothing and footwear. Like numerous other multinational companies, Nike has factories all over the globe manufacturing an array of Nike products. It is observed that Nike equipments are manufactured in third world developing countries which include Asian countries like Pakistan, India, Indonesia and Bangladesh. Developing countries are preferred by majority of multinational companies as they provide cheap labor, authoritarian government and lack of human right and union awareness.
Owing to these advantages, even Nike entered the developing nations but with a different policy. Nike follows the policy that instead of launching itself directly into the country it subcontracts it to local firms operating in that area. The local firm has to abide by Nike’s international rules and regulations when producing goods and equipments. Nike on the other hand has to monitor the efficient and proper working of the subcontracted units. The aim of both the companies –subcontracted and international is to minimize cost and maximize profit. In some cases, in the race to reduce costs the companies enter into illegal labor practices which happened in the case of Nike also.
In 1995 Nike began the manufacturing of its soccer balls by subcontracting it to the local firm SAGA sports. Nike was well aware of the conditions prevailing in Pakistan especially related to the large scale use of child labor in domestic as well as export sectors. Nike made profits from its subcontractor who in turn earned profits by using cheap child labor for stitching soccer balls. Nike denied all the acquisitions instead it hid the case behind the good public image it had created by giving charities and donations. In May 1996, it was revealed 12 year girls were working in for 70 hours a week making Nike shoes in Indonesian sweatshops. Nike still remained silent on all the accusations made.
But in June 1996, Life magazine published an article on child labor in Pakistan and this article carried the photograph of Tariq, a twelve year boy, surrounded by pieces of Nike soccer balls. It was found that Tariq spent his day stitching together the pieces for a meager sum of money. This was the last straw for Nike as within weeks of this photo getting published activists across United States and Canada were protesting outside Nike stores. The chairman of Nike acknowledged that the shipment from Pakistan containing Nike soccer balls in 1996 were made by a subcontractor employing child labor in ‘horrible conditions’. As Nike realized that its public image and public relations were getting tainted, it came ahead to face the real questions.
In May 1998, Nike made some major changes in its code of conduct and developed a standard code of conduct for its Nike factories. One of the rule stated that manufacturer will not employ any person below the age of 18 years in footwear industry. Similarly, no person below the age of 16 years will be employed in apparel accessories and equipment manufacturing. Places where the local age limits are higher, no person under the minimum legal age will be employed. Nike promised to root out underage workers and to ensure that the manufacturers follow U.S health and safety standards.
Nike products are loved by millions of people worldwide though the ways and practices of the company have been questioned time and again. Nike already has and is still making major changes in their policies and factory conditions to avoid consumers from boycotting their products. Though Nike states glorified words in its code of conduct, unfortunately the reality of working conditions inside the factories producing Nike goods is completely opposite to what is stated. Out of the Nike factories across the globe, most are located in China, Indonesia and Vietnam. The workers and labor organizations of these countries have filed complaints against Nike and the number of complaints against Nike is higher than for any other American Corporation.
Nike calls itself the industry leader but does not realize that it not only sets trends in the market but also in labor practices. Its policies can influence the labor practices of many smaller companies. Hence, if Nike earnestly wants to be worthy of the positive image it tries to portray and be a true ‘Industry Leader’, it should take positive steps in the right direction especially regarding its labor practices.