After years of criticism over its labor practices abroad, Nike Inc. is disclosing for the first time the names and locations of more than 700 factories that produce its sneakers, apparel and other products.
Industry experts said the disclosure, included as part of the company’s corporate responsibility report, makes the sneaker giant the first major apparel manufacturer to voluntarily disclose its entire supply chain.
In the report released Wednesday, Nike also acknowledges that factories with which it contracts to produce goods have harassed workers and forced some to work overtime.
For years, activists have demanded that Nike and other major companies reveal where factories are located, so that independent observers could go and assess the labor conditions.
Corporations have been reluctant to do so, arguing that the plants are where the company’s trade secrets are laid bare and that advanced products could be leaked to rivals.
Some Nike critics welcomed the disclosure of the supplier locations because it challenges others to do the same.
“This is a revolution,” said longstanding Nike critic Neil Kearney, general secretary of the International Textile Garment and Leather Workers Federation, which represents 10 million workers. “Now the world can see if the policies Nike claims to be implementing are actually being implemented.”
While Nike might improve its public image, some critics contend Nike still has a long path to fully meet its corporate responsibilities.
Labor activist Jeff Ballinger viewed the report with cynicism. “It’s good information to have,” he said. “But I’ve always viewed their corporate responsibility work as trying to put the best face on the situation and not necessarily dealing with the issues workers have raised.”
Ballinger, the director of Boston-based Press for Change, wrote a 1992 expose of Nike’s allegedly abusive labor policies.
In its 108-page corporate responsibility report, Nike discloses the names of 124 plants in China contracted to make its products, 73 in Thailand, 35 in South Korea, 34 in Vietnam — with others elsewhere in Asia, as well as in South America, Australia, Canada, Italy, Mexico, Turkey and the United States.
While the competitive risk still exists, Nike spokesman Lee Weinstein said, “that’s something we’re willing to take on if this disclosure will in fact move the industry forward in addressing some of these endemic issues.”
The “endemic issues” are past allegations of sweatshop conditions.
Nike’s report acknowledges that those issues still exist in some overseas operations.
According to the report, Nike audited 569 factories in 2003 and 2004 and found abuses it has previously identified. Monitors found cases of “abusive treatment” — either physical or verbal — in more than a quarter of its South Asian factories, and between 25 percent and 50 percent of the contract factories in the region restrict access to toilets and drinking water during the work day.
The monitors found that in more than half the South Asian factories, and in over 25 percent of factories overall, the normal course of business led to work hours in excess of 60 hours per week. In more than one-tenth of all the plants surveyed, refusal to work overtime led to a penalty of some kind, the report said.
The business world is embracing “corporate responsibility,” with many companies hoping to win over customers by showing greater transparency. According to a 2004 survey by the London-based think tank AccountAbility, 72 of the world’s 100 highest-grossing companies produced annual corporate responsibility reports.
As part of that trend, one of Nike’s main rivals — Reebok Inc. of Canton, Mass. — has disclosed the names and addresses of all of its footwear factories on its Web site and of its collegiate apparel factories, but has not publicly revealed its other apparel factories or its equipment factories, said company spokesman Dan Sarro.
Debora Spar, a professor of business administration at Harvard Business School and author of a case study on Nike and its labor practices, said the report shows the company “has turned a corner, although I’m not sure that I would describe it as a very sharp corner.”
“Back when all this came out, their top manager was quoted as saying, ‘I don’t know what is going on and I don’t know that I need to know,”’ Spar said. “They’ve now realized that they have to know.”