More Collaboration, Please

More Collaboration, Please

Some of the world's best-known brands have been working for more than a decade to improve the working conditions in clothing and footwear factories. Beginning in the 1990s, responding to growing public and private sector concerns about the working conditions in global supply chains, companies such as Nike developed labor, health, and safety standards for suppliers.

Global programs were created to monitor contract factory compliance with those standards.

Such efforts were an important first step. But as the corporate responsibility report issued by Nike in April shows, codes and monitoring do not go far enough to create lasting change.

Other companies' reports show the same. Wage and working-hours violations, worker harassment and denial of workers' right to freedom of association are still too prevalent.

Corporate codes and monitoring programs have been effective at uncovering systemic problems but largely inadequate in driving meaningful change in the lives of contract factory workers.

More needs to be done. More transparency is needed. More collaboration is required.
That's why Nike decided to take the step of publicly disclosing its Nike-branded supplier base of more than 700 contract factories that produce finished products in more than 50 countries.

The list and the company's corporate responsibility report are available online.

Disclosure Essential

Nike believes that full factory disclosure is an essential step in creating better conditions through greater industry collaboration. If other companies do the same, disclosure and collaboration can lead to common standards and shared solutions. Workers will benefit and consumers can be more confident that the clothing and footwear products they wear are made under acceptable conditions.

Most companies, Nike included, have resisted disclosing their contract factory bases to protect competitive information. It's true that Nike and other global brands expend significant resources finding contract factories that can meet product and compliance standards - and protecting proprietary information will continue to be a concern. Nike now believes the potential benefits of disclosure for workers outweigh possible competitive risks.

It is time for new thinking. Competitive concerns should not disadvantage factory workers.

More shared responsibility across our industry is needed to ensure better conditions and decent jobs.

Why work together? If there's one thing Nike has learned over the years, it's that individual companies can’t solve industry problems. Nike is a big company. Annual revenues are more than $12 billion. But Nike represents a fraction of the $800 billion global footwear and clothing market.

Wage and hour, harassment, freedom of association issues are pervasive industry problems that require collaborative solutions. Industry disclosure is a first step to helping everyone devote less time uncovering acknowledged problems and more time addressing them.

Common standards, shared monitoring and collaborative remediation will lead to more efficient use of resources. Today, it’s not unusual for a contract factory to have to comply with half a dozen different standards, from maximum working weeks to the height of a fire extinguisher.

Competing standards are confusing and time-consuming for factories and their corporate customers.

Nike supports multi-stakeholder efforts underway to develop a common code for the industry. Wouldn’t it be better if a factory could have one visit from a monitor, who used a common set of standards to review practices and operations for all of the brands that use the facility?

With such a system in place, Nike and other companies could devote more time to fostering long-term solutions, such as helping factories build management skills, promoting factory remediation of non-compliance issues and identifying root causes of non-compliance. Industry collaboration also will make it more feasible for smaller companies with fewer resources to address standards in their contract factories.

Development of common standards, greater collaboration and more transparency should in turn support an evolving marketplace where responsibility and competitiveness go hand-in-hand. Fact-based information and comparable reporting standards are needed. When financial and consumer markets have the ability to consistently reward responsible behavior, all companies and factories will have a stronger incentive to maintain high standards.

While calling for more industry collaboration, Nike continues to address ways to embed corporate responsibility more fully into its business practices. Nike knows the better it is, the better its suppliers can be.

Nike hopes disclosure launches the next chapter of change in efforts to improve the lives of clothing and footwear factory workers. Let’s see all the problems, and work together to find common solutions. In doing so, clothing and footwear factory conditions can be transformed from a competitive challenge to an industry advantage for workers, companies and consumers.

Hannah Jones is vice president of corporate responsibility at Nike.

This column has been reprinted courtesy of Ethical Corporation magazine. It was first published on May 16, 2005.