Nike report focuses on labor problems in China

Despite changes to worker rights laws in China, Nike Inc says it still finds significant labor challenges there.

In the company's first corporate responsibility report focused solely on China, the athletic footwear and apparel giant listed a number of problems, including inadequate management, excessive overtime and workers using false documents to seek employment.

Nike it decided to release a country-specific report because this year's Olympics in Beijing is attracting so much attention to China.

Nike Alan Marks said the problems highlighted in the report are "consistent with the problems we face globally."

But the report also states that "corporate responsibility is a relatively new, rapidly evolving business practice in China. Adoption and understanding vary widely."

China crucial to Nike -- roughly one of every three pairs of Nike shoes sold worldwide are made there. The company has 180 contract manufacturers employing more than 210,000 workers there, primarily young women who have moved from China's countryside into the cities.

After years of foreign pressure on China to improve its labor legislation, the country passed two new laws last year that are intended to improve worker rights.

A labor contract law that went into effect this year sets higher standards for labor contracts, use of temporary workers, layoffs and other employment conditions.

Some the move would encourage independent unionization in the country. Roughly half of Nike's contract employees in China belong to the country's only government-approved union.

A second law expands anti-discrimination protection for migrant workers and those with infectious diseases, two classes of people previously without such protections.

The report shows that there are problems at Nike's contract facilities, including management not understanding or implementing moves to meet Nike's minimum standards.

A self-assessment program found 167 workers who were under the minimum age for workers but are now 18 or older. There were only two current cases of workers in Nike contract facilities under age 18. There were more than 1,000 other cases of people who were of age but had incorrect information on their identification.

"Although we understand that it is often a slow, incremental process to bring about change, we strongly believe that there is much more that can be done," the report states.

The report said that improving conditions for workers throughout Nike's global supply chain "continues to be one of our greatest priorities."

Critics the report shows continued Nike shortcomings on labor rights issues.

Labor Jeff Ballinger says the company continues to position itself heavily in countries where workers do not unionize or where managers often are not willing to bargain to meet worker needs.

"They are hanging on to this wishful thinking kind of other world," Ballinger said.