In its first country-specific supply chain report, Nike announced that it has been facing labor-related problems in China.
Some suppliers in that country have been providing falsified documents, hiring underage workers, and/or failing to establish a proper grievance system for their workers, Nike said in a report published online.
Nike said it has been trying to get the Chinese suppliers to follow its code of conduct and Chinese law in anticipation of the upcoming Beijing Olympics. One-third of the company's shoes are made in China, as well to a major part of the apparel and equipment it manufactures.
China is Nike's largest single sourcing country, with around 180 manufacturers and about 210,000 employees. According to Nike's report, "As China continues to develop we see progress and best practices emerging. But like our partners in any other country, the factories we contract with in China continue to face challenges as well."
In an identity check carried out by Nike on 150,000 of its workers in China, Nike found 167 instances where the employee was below the minimum age standard when hired but was 18 years old now and two cases where the worker was underage. Wages at some places did not match with the government mandated raises, the report said. "As multiple factors drive up the cost of business, we find that some contract factories try to avoid making changes to wages in a timely manner."