Nike’s strategy to enforce monitoring and compliance of labor codes in contract factories

NIKE

English

DigitalCommons@ILR

Cornell University ILR School 
DigitalCommons@ILR 
Monitoring and Compliance 
December 2005 
Factory Compliance Life Cycle 
NIKE 
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Factory Compliance Life Cycle 
Abstract 
Nike’s strategy to enforce monitoring and compliance of labor codes in contract factories. 
Keywords 
Nike, monitoring, compliance, life cycle, factory, inspection, audit, independent, external, training, 
education, business, SHAPE, FLA, codes, code, conduct, corporate, responsibility, globalization, portal, 
NGOs, workplace, international, labor, labour, standards, law, international 
This article is available at DigitalCommons@ILR: https://digitalcommons.ilr.cornell.edu/monitor/2 
 
 
NIKE INC. WAS FOUNDED ON A HANDSHAKE 
 
Implicit in that act was the determination that we would build our business with 
all of our partners based on trust, teamwork, honesty and mutual respect. We 
expect all of our business partners to operate on the same principles. 
 
At the core of the NIKE corporate ethic is the belief that we are a company 
comprised of many different kinds of people, appreciating individual diversity, and 
dedicated to equal opportunity for each individual. 
 
NIKE designs, manufactures .and markets products for sports and fitness 
consumers. At every step in that process, we are driven to do not only what is 
required by law, but what is expected of a leader. We expect our business 
partners to do the same. NIKE partners with contractors who share our 
commitment to best practices and continuous improvement in: 
1 . Management practices that respect the rights of all employees, 
 including the right to free association and collective bargaining 
2. Minimizing our impact on the environment 
3. Providing a safe and healthy work place 
4. Promoting the health and well-being of all employees 
 
Contractors must recognize the dignity of each employee, and the right to a work 
place free of harassment, abuse or corporal punishment. Decisions on hiring, 
salary, benefits, advancement, termination or retirement must be based solely on 
the employee's ability to do the job. There shall be no discrimination based on 
race, creed, gender, marital or maternity status, religious or political beliefs, age 
or sexual orientation. 
 
Wherever NIKE operates around the globe we are guided by this Code of 
Conduct and we bind our contractors to these principles. Contractors must post 
this Code in all major workspaces, translated into the language of the employee, 
and must train employees on their rights and obligations as defined by this Code 
and applicable local laws. 
While these principles establish the spirit of our partnerships, we also bind our partners to specific standards of conduct. The core standards are set forth below. 
 
 
Forced Labor 
The contractor does not use forced labor in any form -- prison, indentured, bonded or otherwise. 
 
 
Child Labor 
The contractor does not employ any person below the age of 18 to produce footwear. The contractor does not employ any person below the age of 16 to produce apparel, 
accessories or equipment. If at the time Nike production begins, the contractor employs people of the legal working age who are at least 15, that employment may continue, but 
the contractor will not hire any person going forward who is younger than the Nike or legal age limit, whichever is higher. To further ensure these age standards are complied 
with, the contractor does not use any form of homework for Nike production. 
 
 
Compensation 
The contractor provides each employee at least the minimum wage, or the prevailing industry wage, whichever is higher; provides each employee a clear, written 
accounting for every pay period; and does not deduct from employee pay for disciplinary infractions. 
 
Benefits 
The contractor provides each employee all legally mandated benefits. 
 
Hours of Work/Overtime 
The contractor complies with legally mandated work hours; uses overtime only when each employee is fully compensated according to local law; informs each employee at the 
time of hiring if mandatory overtime is a condition of employment; and on a regularly scheduled basis provides one day off in seven, and requires no more than 60 hours of 
work per week on a regularly scheduled basis, or complies with local limits if they are lower. 
 
 
Environment, Safety and Health (ES&H) 
The contractor has written environmental, safety and health policies and standards, and implements a system to minimize negative impacts on the environment, reduce 
work-related injury and illness, and promote the general health of employees. 
 
Documentation and Inspection 
The contractor maintains on file all documentation needed to demonstrate compliance with this Code of Conduct and required laws; agrees to make these documents 
available for Nike or its designated monitor; and agrees to submit to inspections with or without prior notice. 
 
Nike Code of Conduct 
Nike Code of Conduct 


Factory Compliance Life Cycle

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