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Thu, Apr 14, 2005 - Page 12 News List

Nike reveals details about its factories for first time

DISCLOSURE According to the company's corporate responsibility report, cases of `abusive treatment' were found in more than a quarter of its South Asian factories


After years of criticism over its labor practices abroad, Nike Inc has disclosed for the first time the names and locations of more than 700 factories that produce its sneakers, apparel and other products.

Industry experts said the disclosure, included as part of the company's corporate responsibility report, makes the sneaker giant the first major apparel manufacturer to voluntarily disclose its entire supply chain.

In the report, which was released yesterday, Nike also acknowledges that factories with which it contracts to produce goods have harassed workers and forced some to work overtime.

For years, activists have demanded that Nike and other major companies reveal where factories are located, so that independent observers could go and assess the labor conditions.

Corporations have been reluctant to do so, arguing that the plants are where the company's trade secrets are laid bare and that advanced products could be leaked to rivals.

In its 108-page corporate responsibility report, Nike discloses the names of 124 plants in China contracted to make its products, 73 in Thailand, 35 in South Korea, 34 in Vietnam -- with others elsewhere in Asia, as well as in South America, Australia, Canada, Italy, Mexico, Turkey and the US.

While the competitive risk still exists, Nike spokesman Lee Weinstein said, "that's something we're willing to take on if this disclosure will in fact move the industry forward in addressing some of these endemic issues."

The "endemic issues" are past allegations of sweatshop conditions.

Nike's report acknowledges that those issues still exist in some overseas operations.

According to the report, Nike audited 569 factories in 2003 and last year and found abuses it has previously identified. Monitors found cases of "abusive treatment" -- either physical or verbal -- in more than a quarter of its South Asian factories, and between 25 percent and 50 percent of the contract factories in the region restrict access to toilets and drinking water during the work day.

The monitors found that in more than half the South Asian factories, and in over 25 percent of factories overall, the normal course of business led to work hours in excess of 60 hours per week. In more than one-tenth of all the plants surveyed, refusal to work overtime led to a penalty of some kind, the report said.

The business world is embracing "corporate responsibility," with many companies hoping to win over customers by showing greater transparency. According to a survey last year by the London-based think tank AccountAbility, 72 of the world's 100 highest-grossing companies produced annual corporate responsibility reports.

As part of that trend, one of Nike's main rivals -- Reebok Inc of Canton, Massachusetts -- has already revealed the names and addresses of nearly two-thirds of its footwear factories on its Web site, Reebok spokesman Dan Sarro said.

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