[Congressional Record Volume 143, Number 90 (Tuesday, June 24, 1997)]
[Extensions of Remarks]
[Pages E1311-E1312]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                            NIKE'S RESPONSE

                                 ______
                                 

                          HON. ELIZABETH FURSE

                               of oregon

                    in the house of representatives

                         Tuesday, June 24, 1997

  Ms. FURSE. Mr. Speaker, I would like to place in the Congressional 
Record a report that former Congressman, U.N. Ambassador, and Atlanta 
Mayor Andrew Young recently wrote on Nike's labor practices. I also am 
including in the Record Nike's response to the Young report.
  Earlier this year, Nike asked Ambassador Young to conduct an 
independent review on the implementation of Nike's code of conduct and 
provide specific recommendation on what Nike was doing right, and what 
can be done better.
  That report, which was released June 24, lays out some very 
meaningful recommendations which I believe my colleagues would be 
interested in reviewing. Nike's response to the Young recommendations 
demonstrates that this Oregon-based company is truly committed to being 
a leader on these issues. With my colleague from Oregon, Mr. 
Blumenauer, I commend the Young report on Nike's response, and urge my 
colleagues to review it.

  Nike's Response to Andrew Young's Report on the Nike Code of Conduct

       Our NIKE Code of Conduct sets out a basic goal--for NIKE, 
     and for all of our business partners--always to do what is 
     expected, as well as required, of a leader.
       In this spirit, in February, we decided to seek a separate 
     and independent assessment of the extent to which our 
     contractors are complying with that Code. We turned to one 
     person we thought had three attributes that would make that 
     assessment most valuable.
       First, a truly independent voice. Second, a person with 
     experience and understanding of the developing world, where 
     most of the world's apparel and footwear products are made. 
     And third, someone who was not party to the issue--who would 
     bring a fresh perspective to bear.
       Andrew Young, former United Nations Ambassador, life-long 
     human rights advocate, with a wealth of experience in labor 
     and factory issues, was an obvious choice.
       Today, after four months of investigation, Ambassador Young 
     delivered his report.
       His overall assessment is that we are doing a ``good job.'' 
     But good is not the standard NIKE seeks in anything we do.
       We are acting now to improve in every area he suggests. His 
     recommendations, and our response, are:
       1. Recommendation: ``NIKE should continue its efforts to 
     support and implement the provisions of the Apparel Industry 
     Partnership.''
       Action: NIKE was the first company to join. We will 
     continue to work with our Partnership colleagues from the 
     apparel industry, and related labor, human rights, religious 
     and consumer groups. NIKE is represented on all of its 
     various subcommittees, addressing implementation of the new 
     Code and its monitoring principles. The most recent meeting 
     was held the very day Ambassador Young presented his report 
     to US.
       We will carry this message of industry, labor and rights 
     groups cooperation to all of our business partners and others 
     in the industry. We will urge other apparel and retail 
     companies to sign on. In the past two weeks we have 
     already begun to do this with other athletic, dress and 
     casual footwear companies.
       2. Recommendation: ``NIKE should take more aggressive steps 
     to explain and enforce the Code of Conduct.''
       Action: As a result of comments made during Ambassador 
     Young's factory inspection tour in March and April, NIKE 
     reinforced implementation of the Code of Conduct and its 
     monitoring principles by conducting eight weeks of training 
     for NIKE production people and contract factory management in 
     Asia, in 11 countries and 15 cities. We will follow up by:
       a. Ensuring that contractors provide every employee with 
     renewed Code of Conduct training and a simplified, written 
     form of that Code.
       b. Redoubling our efforts to ensure that every NIKE 
     contract factory has the Code posted visibly in every major 
     workspace, in the language of both the worker and the 
     manager, when those language are different.
       c. Add to our auditing procedures to assure that the Code 
     of Conduct is understood, that training, posting and personal 
     copies of the Code have the desired impact: that workers 
     truly understand their rights, and management its 
     obligations.
       3. Recommendation: ``NIKE should take proactive steps to 
     promote the development of `worker representatives' in the 
     factories who can effectively represent the workers' 
     individual and cumulative interests.''
       Action: NIKE contract factory worker representation spans a 
     broad spectrum around the world, from worker management 
     committees to full trade unions. NIKE will survey existing 
     worker representation processes and require each of our 
     contract factories to redouble its efforts to assure that 
     workers truly have a voice in workplace issues.
       4. Recommendation: ``NIKE should insist that the factories 
     which manufacture its products create and enforce a better 
     grievance system that allows a worker to report a complaint 
     without the fear of retribution and abuse.''
       Action: NIKE will survey existing grievance procedures in 
     our contract factories and with other industries and factory 
     groups. We will require each of our contract factories to 
     adopt and implement one of several model procedures, as 
     appropriate to its size, current representation system, and 
     the effectiveness of that current system.
       An addition, NIKE will create several pilot ombudsman 
     projects to determine how well an outside voice can 
     supplement and enhance the grievance procedure.
       5. Recommendation: ``NIKE should expand its dialog and 
     relationship with the human

[[Page E1312]]

     rights community and the labor groups within the countries 
     where they produce goods and with their international 
     counterparts.''
       Action: NIKE has already begun this process. Starting in 
     major source countries, we are seeking to establish regular 
     sessions with groups who can foster productive dialog on 
     contract labor issues. The Apparel Industry Partnership and a 
     quarterly conference call with concerned investor groups are 
     two of several forums in which we will continue to address 
     these issues with affiliated and interested international 
     parties.
       6. Recommendation: ``NIKE should consider some type of 
     `external monitoring' on an ongoing basis as a way to 
     demonstrate its commitment to the Code of Conduct and to 
     insure its effective application.''
       Action: Specifically, Ambassador Young recommends two 
     steps: (a) establish an ombudsman function, and (b) establish 
     a small panel of distinguished international citizens to 
     provide a continuing oversight role similar to that 
     undertaken by the Ambassador. We're already doing the first, 
     as noted above. We're working now to appoint an international 
     oversight panel to fulfill the second.
       Because NIKE is a leader, we have decided to take further 
     steps beyond Ambassador Young's recommendations, but speaking 
     to issues he raised.
       1. NIKE will strengthen the penalty system for contract 
     factories found in violation of the NIKE Code of Conduct. 
     This includes escalating monetary penalties, whose proceeds 
     will fund: (a) remedial action to correct the violation or 
     (b) investment in worker education, recreation or 
     habitability enhancement programs.
       2. We are determined that the 500,000 jobs created by 
     NIKE's contract relationships around the world continue to be 
     the best jobs in the business. if any contractor consistently 
     fails to adhere to our Code of Conduct, we will terminate 
     their relationship with NIKE.
       3. With our partner factories, NIKE will establish an 
     ongoing training system for managers and supervisors that 
     includes (a) basic people management skills; (b) education in 
     local culture for expatriate managers and (c) learning the 
     local language.
       4. Ambassador Young has identified the need for a higher 
     level of host country management in factories owned and 
     operated by foreign investors. NIKE will assess current 
     levels of indigenous management, and establish action plans 
     with each contractor to assure that local management is 
     integrated at the highest levels.
       5. NIKE will continue to test pilot projects to measure the 
     effectiveness of independent monitoring by third parties. To 
     date two such projects have been undertaken in two countries. 
     A third is underway.
       NIKE will implement each of the actions noted above by 
     January 31, 1998, and then reassess further steps or the 
     enhancement of those already taken.
       In addition, NIKE will continue to implement a 
     comprehensive factory inspection program, called SHAPE 
     (Safety, Health, Attitude of Management, People Investment, 
     Environment) in all contract factories worldwide. Our aim is 
     to ensure that every aspect of the factory work experience 
     meets NIKE standards, from fire drills and sanitation to 
     worker training and recreation programs.
       Since 1994 NIKE has had independent auditors test factory 
     compliance with our Code of Conduct. We are encouraged that 
     Ambassador Young has found these audits to be 
     ``professionally done, (and) rigorous,'' We will redouble our 
     efforts to assure they are an effective tool. By August 1, 
     1997 NIKE will have in place a single, unified set of 
     instructions to make sure that every independent audit, 
     anywhere in the world, by any auditor, is done to the same 
     standard.
       NIKE management appreciates not only the independence and 
     objectivity that Ambassador Young has brought to these 
     issues, but the many other voices in government, the human 
     rights, labor, religious, consumer and business communities, 
     that have also contributed valuable insight.
       Ambassador Young has demonstrated--on assignment for NIKE, 
     but also over 40 years of public and private service in human 
     rights arenas--that these issues are always best served by 
     reasoned, honest and respectful discussion. We are committed 
     to that course.

     

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