Appendix 1: Nike's Code of Conduct

(Source: http://nikebiz.com/labor/code.shtml)

NIKE Inc. was founded on a handshake.

Implicit in that act was the determination that we would build our business with all of our partners based on trust, teamwork, honesty and mutual respect. We expect all of our business partners to operate on the same principles.

At the core of the Nike corporate ethic is the belief that we are a company comprised of many different kinds of people, appreciating individual diversity, and dedicated to equal opportunity for each individual.

Nike designs, manufactures and markets products for sports and fitness consumers. At every step in that process, we are driven to achieve not only what is required, but also what is expected of a leader. We expect our business partners to do the same.

Specifically, Nike seeks partners that share our commitment to the promotion of best practices and continuous improvement in:

1.Occupational safety and health, compensation, hours of work and benefits standards
2.Minimizing our impact on the environment.
3.Management practices that recognize the dignity of the individual, the rights of free association and collective bargaining, and the right to a work place free of harassment, abuse or corporal punishment.
4.The principle that decisions on hiring, salary, benefits, advancement, termination or retirement are based solely on the ability of an individual to do the job. There shall be no discrimination based on race, creed, gender, marital or maternity status, religious or political beliefs, age or sexual orientation.

Wherever Nike operates around the globe, we are guided by this Code of Conduct. We bind our manufacturing partners to these principles. Our manufacturing partners must post this Code in all major workspaces, translated into the language of the worker, and must endeavor to train workers on their rights and obligations as defined by this Code and applicable labor laws.

While these principles establish the spirit of our partnerships, we also bind these partners to specific standards of conduct. These standards are set forth below.

1.Forced Labor: The manufacturer does not use forced labor in any form - prison, indentured, bonded or otherwise.
2.Child labor: The manufacturer does not employ any person below the age of 18 to produce footwear. The manufacturer does not employ any person below the age of 16 to produce apparel, accessories or equipment. Where local standards are higher, no person under the legal minimum age will be employed.
3.Compensation: The manufacturer provides each employee at least the minimum wage, or the prevailing industry wage, whichever is higher; provides each employee a clear, written accounting for every pay period; and does not deduct from worker pay for disciplinary infractions, in accordance with the Nike Manufacturing Leadership Standard on financial penalties.
4.Benefits: The manufacturer provides each employee all legally mandated benefits. Benefits vary by country, but may include meals or meal subsidies; transportation or transportation subsidies; other cash allowances; health care; child care; emergency, pregnancy or sick leave; vacation, religious, bereavement or holiday leave; and contributions for social security and other insurance, including life, health and worker's compensation.
5.Hours of Work/Overtime: The manufacturer complies with legally mandated work hours; uses overtime only when each employee is fully compensated according to local law; informs each employee at the time of hiring if mandatory overtime is a condition of employment; and, on a regularly scheduled basis, provides one day off in seven, and requires no more than 60 hours of work per week, or complies with local limits if they are lower.
6.Management of Environment, Safety and Health (MESH): The manufacturer has written health and safety guidelines, including those applying to employee residential facilities, where applicable; has a factory safety committee; complies with Nike's environmental, safety and health standards; limits organic vapor concentrations at or below the Permissible Exposure Limits mandated by the U.S. Occupational Safety and Health Administration (OSHA); provides Personal Protective Equipment(PPE) free of charge, and mandates its use; and complies with all applicable local environmental, safety and health regulations.
7.Documentation and Inspection: The manufacturer maintains on file all documentation needed to demonstrate compliance with this Code of Conduct; agrees to make these documents available for Nike or its designated auditor to inspect upon request; and agrees to submit to labor practices audits or inspections with or without prior notice.

Minimum Age Requirements
"Nike has zero tolerance for under-age labor." Nike CEO Phil Knight

In May 1998, Nike increased the minimum age of footwear factory workers to 18 years old, and the minimum age for all other light-manufacturing workers (apparel, accessories, and equipment) to 16 years old. These new minimum age requirements in footwear factories are equal or in some cases higher than those in the United States because these jobs require heavier machinery and more complex manufacturing processes.

"At 18," says Knight, "workers are generally more mature, have more work experience, are easier to train in health and safety issues, and are therefore better suited to work in a footwear factory than a younger person."

In many regions of the world where our products are made, Nike's age standards exceed those mandated by the local government. In some rare cases, local standards are more strict. Our contract manufacturers must adopt the strictest standard either the local minimum age, or the Nike minimum age standard.

To ensure these standards are being met on a continuous basis, Nike production and labor staff are trained to look for younger-age workers, and to report that possibility to the labor management staff. In addition, all factories making Nike products around the world are subject to labor practices monitoring visits and audits by teams of independent inspectors. Those inspectors verify all workers meet the Nike age standards through documented records and interviews with workers.

Adults should work. Children should study and play. We do everything we can to ensure this happens. Setting the highest age standards in the industry, and requiring independent certification that factories meet those standards, is our best practice to make it so.