28.5 Case Study: Removing Child Labor from Nike’s Supply Chain

Child labor is defined as the employment of children in work that deprives them of their childhood, potential, and dignity, and is harmful to their physical and mental development. It is a major social problem that affects millions of children worldwide, often forcing them to work in hazardous conditions for long hours and little pay. This practice not only violates basic human rights but also impedes children’s access to education, thereby perpetuating cycles of poverty and limiting future opportunities for economic advancement.

Child labor is prevalent in various industries, including agriculture, manufacturing, mining, and services, and is driven by factors such as economic hardship, lack of education, and inadequate labor laws. Addressing this issue requires comprehensive strategies, including stronger regulations, enforcement of labor standards, access to education, and socio-economic support for affected families.

At one point, Nike’s supply chain was riddled with products made by child labor. A supply chain encompasses the entire process of producing and delivering a product, from the initial gathering of raw materials to the final delivery to the consumer. In Nike’s case, child labor was found at various stages, including sewing and assembling products, as well as packaging and preparing them for shipment.

As reports of child labor within Nike’s supply chain became public, the company faced significant pressure to reform. Initially, Nike was criticized for its lack of oversight and the poor working conditions in factories producing its products. In response, Nike undertook several measures to eliminate child labor and improve conditions across its supply chain:

Transparency – Nike began by disclosing the names and locations of its factories, a move aimed at increasing transparency and accountability. This allowed external parties to monitor and verify labor practices.

Code of Conduct – Nike revised its factory code of conduct to include stricter labor standards. This code was enforced across all supplier factories and included provisions against child labor, forced labor, and unfair wages.

Independent Audits – Nike hired independent auditing firms to conduct regular safety and labor condition checks. These audits helped identify and address violations in real-time.

Internal Monitoring – Nike established its own team to conduct frequent and unannounced inspections of supplier factories to ensure compliance with its labor standards.

Remediation Programs – Nike developed programs to support the transition of child workers to school, providing education and support for affected children and their families.

Supplier Training – Nike implemented training programs for suppliers to educate them about labor standards, ethical practices, and the importance of compliance with international labor laws.

Partnerships – Nike partnered with various non-governmental organizations (NGOs) and industry groups to promote better labor practices and to develop industry-wide standards against child labor.

These actions represented a significant shift in Nike’s approach to managing its supply chain and addressing labor issues. While challenges remain, these measures have helped Nike make substantial progress in eliminating child labor and improving working conditions in its supply chain.