Nike Ends Orders With Soccer Ball Manufacturer

Beaverton, Oregon, November 20 (ots/PRNewswire) -

- Factory inaction on significant labor concerns forces decision
after exhaustive efforts; Nike engages stakeholders to support
affected workers and explore fresh approaches to local manufacturing
and social enterprise models

NIKE, Inc. (NYSE: NKE) today announced that the company is ceasing
orders with its hand-stitched soccer ball supplier, Saga Sports,
based in Sialkot, Pakistan, due to the contract factory's failure to
correct significant labor compliance violations. As a result, Nike is
limiting its supply of hand-stitched soccer balls for the foreseeable
future. Nike is engaging with a diverse group of governmental,
non-governmental and industry stakeholders to secure support for
affected workers and jointly explore sustainable, fresh approaches to
local manufacturing and social enterprise models in Sialkot.

(Logo: http://www.newscom.com/cgi-bin/prnh/19990818/NIKELOGO )

"This contract factory has persistently broken its commitments and
irrevocably breached its trust with us; most importantly, the factory
has failed its employees," said Nike CEO and president Mark Parker.
"Rather than continue with Saga, we have decided to limit our supply
of hand-stitched soccer balls as we are developing new sources with
factories committed to upholding our standards and treating workers
fairly."

While Nike continues to source apparel in Pakistan, the company
currently does not have other soccer ball vendors in Sialkot able to
absorb production under conditions acceptable to the company. Soccer
teams and leagues sponsored by Nike will not be affected by the
decision. For its retail partners, Nike is working to mitigate any
shortfalls between supply and demand. Nike will continue to work with
several existing contract factories in China and Thailand to supply
premium hand-stitched and machine-stitched soccer balls. Those
contract factories already supply a significant portion of Nike's
total soccer business.

Nike made the decision to end its relationship with Saga following
a six-month investigation into conditions and a concerted effort to
remediate. Efforts included repeated meetings between Nike and Saga
executives, detailed remediation plans and timeframes, and
adjustments of Nike orders to provide Saga the opportunity to devote
more management time and resources to implement the agreed-upon
plans. Despite those efforts by Nike, Saga did not make needed
changes.

Through both company-led and independent investigative efforts,
Nike discovered widespread unauthorized outsourcing of its products
from Saga facilities, resulting in the production of Nike soccer
balls inside homes in the Sialkot area. Nike has a long-standing
policy against such practices because of the potential for using
under-aged workers and the inability to ensure safe working
conditions in home-based settings. The company also found numerous
labor, environmental and health and safety compliance violations
within Saga's facilities, including serious allegations by trade
union representatives and other Saga employees of worker harassment,
wrongful termination and inaccurate payment of wages. The Fair Labor
Association, in a recent unannounced audit of Saga unrelated to
Nike's investigation, found similar violations.

Hannah Jones, Nike's vice president of corporate responsibility,
said that in support of workers the company strives to work with its
contract factories to remediate compliance violations and create
continuous improvement in contract factory conditions. However, in
this case, the company exhausted all options and was left with no
alternative but to cease orders, despite the potential impact to
workers and the near-term affect on Nike's soccer ball business.

"In this case, remediation didn't work," Jones said. "In fact, we
saw a further significant deterioration of working conditions due to
a lack of commitment by management to address the problems. We also
are deeply concerned about the broader conditions and practices we
saw in home-based settings."

"Our energies are now focused in two areas: first, helping to
protect the rights of Saga workers potentially affected, and second,
exploring with stakeholders ways in which this moment can become a
catalyst for transforming local manufacturing models and creating
sustainable development," Jones said. "We see the potential that
fresh approaches like social enterprise initiatives can create for
economic diversification and the long-term health of the community."

About Nike, Inc.

NIKE Inc., based near Beaverton, Oregon, is the world's leading
designer, marketer and distributor of authentic athletic footwear,
apparel, equipment and accessories for a wide variety of sports and
fitness activities. Wholly owned Nike subsidiaries include Converse
Inc., which designs, markets and distributes athletic footwear,
apparel and accessories; NIKE Bauer Hockey Inc., a leading designer
and distributor of hockey equipment; Cole Haan, a leading designer
and marketer of luxury shoes, handbags, accessories and coats; Hurley
International LLC, which designs, markets and distributes action
sports and youth lifestyle footwear, apparel and accessories, and
Exeter Brands Group LLC, which designs and markets athletic footwear
and apparel for the value retail channel.

Web site: http://www.nikebiz.com

ots Originaltext: Nike, Inc.
Im Internet recherchierbar: http://www.presseportal.de

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