Nike CSR – Just Do It, amid calls for them to Just Pay It

I don’t really understand the situation that Nike have recently placed themselves in when it comes to Corporate Social Responsibility (CSR). This is a company that understood the very nature of their industry (products primarily made in third world nations and exported for sale in the West at substantial profit margins) has placed them under great scrutiny when outsiders review labour practices. Long before CSR became a common term and goal for corporations around the world Nike were well known for their global branding on what is well manufactured and durable sportswear and they earned that, they also had a reputation for paying sweat shop salaries that were not equitable to for some of their global workforce. Personally, I play football (soccer if you insist) twice a week and wear Nike clothing – in fact they even make the shirt for my favourite team, but I was under the impression that they had cleared up most of their labour issues. I won’t stop following my team of course but I’ll consider other makers for my next pair of boots or new shirts now.

I must be balanced, Nike do indeed have a huge and very active CSR program which makes a huge difference around the world, indeed tens of millions of dollars are spent annually on CSR programs that they support. While that must be applauded I fail to understand why they have let a claim from garment workers in Honduras sully their overall reputation. Moreover they’ve been down this path before. The claim has some different variations online but one must feel there’s no smoke without fire. According to USAS Nike elected to shutter two factories in Honduras at the beginning of last year. Like any company they do of course reserve that right, but the bad press began with how they handled severance. More to the point they didn’t handle it and some 1,500+ workers were not given severance or other associated state benefits. The legal posturing began when Nike to offer the line of these being ‘sub-contracted factories’ and that the responsibility (somehow) did not fall with them.

The overall claim pursued runs at around $2 million from the representatives of the garment workers who lost their jobs. While its not an amount to be scoffed at the continued delay to getting this matter resolved will surely cost Nike more money in the long term. There is a growing noise both in the US and overseas for Nike to get the suit settled amicably as soon as possible, not least of all because it flies in the fact of their overall commitment to running a responsive and valuable CSR program. The ripples of dissent however are already being felt as the desire not to support a company still associated with abuses doesn’t sit well with other organizations. The University of Madison Wisconsin have ended their Nike contract and Cornell University threaten to do the same unless this matter is resolved shortly. Nike have to aware enough of the connotations of such decisions and other athletic programs are sure to follow. This is a story that I’m keen to watch as I think the right conclusion will be reached but in the meantime Nike are running the risk of undoing so much of the good that their overall CSR policies accomplish. As I said at the outset, there does seem to be some significant missing logic that they would expose themselves to risk that flies in the face of their overall mission. Just Do It? Only with reservations….

* Addendum July 27 – 8am.

I wrote this article at the end of last week on July 23rd and scheduled it to publish today. It appears that Nike have reached a settlement with the workers in question yesterday(July 26)  afternoon. More news to follow.