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May 03, 2000
Nike CEO Retracts University Donation over Human Rights
Founder Philip Knight canceled a $30 million gift to University of Oregon after the school took a
stand on international labor and human rights.
SocialFunds.com --
Nike Inc., the athletic footwear and clothing giant, has faced continued scrutiny and criticism
over the past five years concerning sweatshop conditions endured by contract workers in overseas
factories. Recent actions by Nike founder and CEO Philip Knight have again drawn attention to
Nike's position, and the complexities of international labor standards.
 Knight, a graduate and former track star for
the University of Oregon, has a long history of philanthropy at the school, having donated $50
million for athletic and academic facilities in the past. But he changed his mind on an additional
generous gift of $30 million after the school announced joining the Workers Rights Consortium, a
group promoting workers rights in overseas factories.
"With this move the University
inserted itself into the new global economy where I make my living," said Knight in a public
announcement. "And inserted itself on the wrong side, fumbling a teachable moment."
The
Workers' Rights Consortium (WRC) is supported by student and labor activists, including the
AFL-CIO, who advocate independent monitoring of overseas factories and living wages for contract
workers. The organization has kept corporations at a distance, accepting no corporate support or
representatives, and insists on the importance of surprise inspections by independent monitors.
Nike, on the other hand, is supportive of the U.S. Department of Labor's Fair Labor
Association (FLA), a coalition of human rights groups, universities, and corporations created by
the Clinton administration to address the problem of sweatshop labor. The FLA espouses less
stringent standards, allowing companies to contract their own FLA-approved monitoring entity to
monitor only a fraction of the factories in question.
Like many individual company Codes
of Conduct, the FLA has been criticized by some human rights groups as insufficient to cope with
the gravity of worker rights abuses in overseas factories. These groups disapprove of the FLA's
failure to address the issue of a living wage, or sufficient compensation for contract workers to
meet their basic needs plus additional discretionary income.
For it's part, Nike has made
considerable efforts to improve contract worker conditions overseas since the first reports of
sweatshop conditions and shareholder resolutions in 1996 and '97. It has instituted factory
monitoring by students and by PricewaterhouseCoopers, the international auditing and consulting
firm, and will make these results public next month.
Nike has recently taken measures like
increasing minimum age requirements for footwear workers to 18 years, and increased wages for
Indonesian footwear workers by more than 70 percent. It has established community-based micro-loan
programs and on-site continuing education for factory workers, and improved factory air quality
consistent with OSHA guidelines.
"Nike did not invent the global economy, but has been
determined to be a leader and to show its good citizenship," said Knight. "We are very, very
serious about providing good factory working conditions and continuously improving the work
experience for all 500,000 people who make Nike products."
Nike has contracts to supply
athletic and collegiate clothing to almost 200 colleges in the U.S., and many of them are members
of the Workers' Rights Consortium, a measure of students' concern on this issue. Knight plans to
honor the company's contractual obligations with the University of Oregon, but the withdrawal of
his generous gift adds another twist to the growing debate over international labor rights.
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