Joining a growing list of multinational corporations, Nike released its first corporate responsibility report, which details the company’s efforts at developing environmental sustainability and global labor compliance.
Although the report cited gains in corporate environmental policy and labor practices at Nike’s more than 700 contracted factories, the company said it has a lot of work to do.
“In this report, Nike for the first time has assembled a comprehensive public review of our corporate responsibility practices,” Nike chairman and CEO Phil Knight said in a statement that accompanied the report. “You will see a few accomplishments and more than a few challenges.”
The Beaverton-based company, which has a contract to provide licensed apparel for the University, has been accused of pushing profits over corporate responsibility.
“Nike seems to be a decade behind,” Law Professor Ibrahim Gassama said, pointing out that companies like Reebok were involved with human rights issues more than a decade ago. “Nike is distinguished by its recalcitrant behavior and its own self, by not being responsible.”
Gassama said corporations started releasing responsibility reports during the anti-apartheid protests of the mid-1980s, when protesters demanded that companies such as Reebok, Coca-Cola and IBM divest funds from South Africa. Since the anti-apartheid protests, he said, many corporate watchdogs and non-governmental organizations have used the court of public opinion to shame multinational corporations into becoming better public citizens.
“They have used the moral arena and the legal arena as a public relations tool for getting straight at the consumer,” Gassama said. “This is the only disciplinary force left to regulate the conduct of multinational corporations.”
Whether or not Nike is a tardy participant in the corporate citizen game, public shaming is a natural fact of capitalism, Business Professor Mark Phelps said. “Within the theory of capitalism, this is exactly what is supposed to be going on,” said Phelps, who is the Tykeson senior instructor of international business, law and social responsibility. “Social pressure tells companies how they should be behaving.”
Over the past few years, this shaming has taken a new form, as corporate watchdogs and media groups have exposed a series of documented environmental law violations at Nike’s contracted factories. In 1997, the Transnational Resource & Action Center found and released a secret audit of a Nike facility in Vietnam. In October 2000, the British Broadcasting Corporation aired a story about a Nike-contracted factory in Cambodia using child labor.
Some monitoring groups are beginning to see changes in the way the company does business. Scott Nova, executive director of the Worker Rights Consortium, a labor watchdog group, said he was impressed by Nike’s conduct during a worker management standoff at a factory in Mexico. Nova said workers at the Modemex factory in Atlixco, Mexico, were permitted to form an independent union because of Nike’s pressure on management.
“There is no doubt in my mind that this would not have happened without the intervention of Nike and Reebok,” Nova said.