Nike shows admirable commitment in going back to Pakistan
Ethical sourcing: Nike shows admirable commitment in going back to Pakistan
News came late last week of Nike's re-commitment to making footballs in Pakistan. The company deserves plaudits for its approach to supply chain challenges
From what I understand of the Pakistan soccer ball industry, itâs a tough place to work. Not just for workers, many of whom, for cultural reasons, must work at home in pretty poor economic conditions.
It also difficult for companies determined to source from there. It is not the easiest country in the world to source from, and is probably uncompetitive when factoring the cultural issues companies face in sourcing from there alongside the labour costs of somewhere like Vietnam, Bangladesh or China.
Workers do not get the same freedom to work collectively in a factory in the same way as they do in China or Vietnam. Many women, at least in a major area of soccer ball manufacture, Sialkot, are made to work at home largely by conservative religious repression.
Some years ago, Ethical Corporation ran a series of workshops on corporate responsibility issues with Warwick Business School's corporate citizenship unit. Led by Alyson Warhurst and a Pakistani academic, Bahar Ali Kazmi, who had first hand experience of the football industry, the workshops presented attendees with dilemmas and challenges to solve and discussed case studies. Sialkot was one of these.
In that instance, whereby those workers (such as home workers) whose conditions could not be monitored lost their jobs, the world got its desired 'ethical' footballs for the 1998 World Cup.
Ethical only in that labour monitoring was in place and child labour eliminated. But Kazmi estimated some 20,000 women lost their jobs as a result, since they could not be monitored. Living in tough economic conditions anyway, the impact of income loss must have been socially devastating on Sialkot's home workers.
Tough calls
Article continues below this advertisement:
Want to read more articles like this in print each month?
Then click here and quote "ECT05" to order your free trial subscription to Ethical Corporation magazine. Such a sad case study demonstrates how difficult some, if not most, ethical supply chain issues truly are. Doing the right thing often hurts someone innocent.
Having been involved in Sialkot, Nike knows Pakistan and its challenges all too well.
Which is why its return to soccer ball sourcing there is all the more welcome.
For those readers who had not followed the more modern case of Nike and Pakistan, the company canned a supplier around six months ago for continual abuses of its code of conduct. Nike tried long and hard to get the supplier up to scratch, but eventually decided they were just not serious about workers rights and ended their contract.
Now Nike is back, and in Sialkot too, with a supplier called Silver Star, who appears serious about making English Premier League footballs to Nike's ethical specifications.
Nike is refusing to allow any workers to be hired using what it calls "standard industry" practices. That would be a labour force of "part-time workers paid piece wage rates per ball produced without access to health care and other social benefits".
All Silver Star workers must be registered full time employees and will get social benefits, at least of some sort. All workers will be able to unionise and collectively bargain. Needless to say, working conditions must adhere to the highest international standards agreed for the industry.
A tone from the top
"We hope this is the beginning of broader, positive systemic change for workers, and that the example Silver Star sets will help Pakistanâs soccer ball industry create a new model of responsible, globally competitive manufacturing" said Mark Parker, Nike's President and CEO.
Nike expects to place its first order with Silver Star this summer, with production to begin later in the year.
Nike, along with Gap, has been one of the first big apparel companies to decide on supplier transparency as strategy that may help improve labour conditions.
"We believe that disclosure of supply chains is a step toward greater efficiencies in monitoring and remediation and in shared knowledge and capacity building that will elevate overall conditions in the industry," the company says on its website, concluding that:
"No one company can solve these issues that are endemic to our industry". Quite.
Nike is making serious transparency commitments in its supply base. The company has changed its supply chain philosophy to move from a focus on pure auditing to capacity building and monitoring.
The firm demonstrates it is seriously committed to providing economic development in troubled regions such as Pakistan. Nike can truly be called a world class brand in anyone's book.
The biggest task of all will be moving beyond the supply chain heroes such as Nike, to the 80% or so of the global apparel industry that is unbranded and much less accountable.
But with big, profitable and influential role models such as Nike to look up to, smaller firms will find it easier to realise they too can tread the true ethics path.
http://www.ethicalcorp.com/content.asp?ContentID=5108
Ethical sourcing: Nike shows admirable commitment in going back to Pakistan
News came late last week of Nike's re-commitment to making footballs in Pakistan. The company deserves plaudits for its approach to supply chain challenges
From what I understand of the Pakistan soccer ball industry, itâs a tough place to work. Not just for workers, many of whom, for cultural reasons, must work at home in pretty poor economic conditions.
It also difficult for companies determined to source from there. It is not the easiest country in the world to source from, and is probably uncompetitive when factoring the cultural issues companies face in sourcing from there alongside the labour costs of somewhere like Vietnam, Bangladesh or China.
Workers do not get the same freedom to work collectively in a factory in the same way as they do in China or Vietnam. Many women, at least in a major area of soccer ball manufacture, Sialkot, are made to work at home largely by conservative religious repression.
Some years ago, Ethical Corporation ran a series of workshops on corporate responsibility issues with Warwick Business School's corporate citizenship unit. Led by Alyson Warhurst and a Pakistani academic, Bahar Ali Kazmi, who had first hand experience of the football industry, the workshops presented attendees with dilemmas and challenges to solve and discussed case studies. Sialkot was one of these.
In that instance, whereby those workers (such as home workers) whose conditions could not be monitored lost their jobs, the world got its desired 'ethical' footballs for the 1998 World Cup.
Ethical only in that labour monitoring was in place and child labour eliminated. But Kazmi estimated some 20,000 women lost their jobs as a result, since they could not be monitored. Living in tough economic conditions anyway, the impact of income loss must have been socially devastating on Sialkot's home workers.
Tough calls
Article continues below this advertisement:
Want to read more articles like this in print each month?
Then click here and quote "ECT05" to order your free trial subscription to Ethical Corporation magazine. Such a sad case study demonstrates how difficult some, if not most, ethical supply chain issues truly are. Doing the right thing often hurts someone innocent.
Having been involved in Sialkot, Nike knows Pakistan and its challenges all too well.
Which is why its return to soccer ball sourcing there is all the more welcome.
For those readers who had not followed the more modern case of Nike and Pakistan, the company canned a supplier around six months ago for continual abuses of its code of conduct. Nike tried long and hard to get the supplier up to scratch, but eventually decided they were just not serious about workers rights and ended their contract.
Now Nike is back, and in Sialkot too, with a supplier called Silver Star, who appears serious about making English Premier League footballs to Nike's ethical specifications.
Nike is refusing to allow any workers to be hired using what it calls "standard industry" practices. That would be a labour force of "part-time workers paid piece wage rates per ball produced without access to health care and other social benefits".
All Silver Star workers must be registered full time employees and will get social benefits, at least of some sort. All workers will be able to unionise and collectively bargain. Needless to say, working conditions must adhere to the highest international standards agreed for the industry.
A tone from the top
"We hope this is the beginning of broader, positive systemic change for workers, and that the example Silver Star sets will help Pakistanâs soccer ball industry create a new model of responsible, globally competitive manufacturing" said Mark Parker, Nike's President and CEO.
Nike expects to place its first order with Silver Star this summer, with production to begin later in the year.
Nike, along with Gap, has been one of the first big apparel companies to decide on supplier transparency as strategy that may help improve labour conditions.
"We believe that disclosure of supply chains is a step toward greater efficiencies in monitoring and remediation and in shared knowledge and capacity building that will elevate overall conditions in the industry," the company says on its website, concluding that:
"No one company can solve these issues that are endemic to our industry". Quite.
Nike is making serious transparency commitments in its supply base. The company has changed its supply chain philosophy to move from a focus on pure auditing to capacity building and monitoring.
The firm demonstrates it is seriously committed to providing economic development in troubled regions such as Pakistan. Nike can truly be called a world class brand in anyone's book.
The biggest task of all will be moving beyond the supply chain heroes such as Nike, to the 80% or so of the global apparel industry that is unbranded and much less accountable.
But with big, profitable and influential role models such as Nike to look up to, smaller firms will find it easier to realise they too can tread the true ethics path.
http://www.ethicalcorp.com/content.asp?ContentID=5108
