Nike sees 'gaps' in China labour laws

By Tom Mitchell in Dongguan

Published: March 10 2008 02:00 | Last updated: March 10 2008 02:00

Workers at Nike's contract factories in China do not enjoy the same protection as their peers elsewhere because of "gaps" in the country's labour laws, the global footwear giant has said in a report.

"We commend the important steps taken by the Chinese government to increase protection of workers' rights," Nike said in an inaugural report on its corporate social responsibility initiatives in China, where it works with 180 factories employing 210,000 workers.

"However, when comparing Chinese law with the basic protections outlined under the [International Labour Organisation] Convention, there are gaps in protection that workers elsewhere enjoy."

The report is part of a larger effort by Nike to increase the transparency of its operations in China - where the company sources 35 per cent of its footwear - before this summer's Olympic games in Beijing. Nike also implied that China's existing labour protection regime, although boosted by this year's implementation of a new labour contract law, falls short of standards set by the ILO.

"We encourage all governments to recognise and respect the principles embodied in ILO Conventions 87 and 98 regarding freedom of association and collective bargaining," the report said, without citing China specifically.

Nike was an early supporter of China's labour contract law, which enhances collective bargaining rights. "We endorsed it because we thought it was a good thing," said Hannah Jones, Nike's vice-president for corporate responsibility.

China's only government-approved union, the All China Federation of Trade Unions, is represented in about half of Nike's factories across the country.

Activists hope the new labour contract law could lead to the establishment of more independent unions at companies where the official union is not represented.

Copyright The Financial Times Limited 2008