Ethical Performance
inside intelligence for responsible business


Nike rift with AmCham reveals growing tensions

February 2007

Nike has taken the unusual step of publicly disagreeing with the American Chamber of Commerce - of which it is a member - over its opposition to proposed labour legislation in China.

The multinational's decision to criticize publicly AmCham's views highlights what some see as the growing problem of relatively conservative business associations taking a more sceptical line on corporate responsibility than many of their member companies.

Nike says it 'repudiates' what it sees as attempts by AmCham to derail the Chinese government's efforts to improve factory workplace standards, which take the form of a draft labour contract law that could come into force next year.

AmCham is campaigning against the measure on the grounds that it will 'reduce employment opportunities for Chinese workers' and 'negatively impact on China's ... appeal as a destination for foreign investment'.

Hannah Jones, Nike's corporate responsibility vice-president, said the company was concerned not just that AmCham's response opposed its own views, but that it did not appear to have been made after proper consultation. She added that it made commercial sense for Nike to support progressive law changes in China as 'improving factory conditions and strengthening the legal protections for workers in our factory supply chain is ... core to our business values.'

There have recently been signs of tension between industry bodies and leading companies in the CSR field. Two examples of this include AmCham's campaigning against proposals for United Nations 'norms' on multinationals' behaviour, even though these were backed by some leading companies, and the Confederation of British Industries' key role in the ditching of UK government plans for an operating and financial review reporting regime, which many businesses had supported. In both cases companies privately admitted to unease about the position taken by their representative bodies, although they failed to make their opposition public.

Neil Kearney, general secretary of the International Textile, Garment and Leather Workers' Federation, which works closely with Nike on CSR, said more businesses should follow the company's example and 'distance themselves from the position of their industry associations' when necessary.

John Elkington, chair of the SustainAbility consultancy, said some should go even further and resign from such bodies. 'When leading companies began addressing these issues, the deeply entrenched conservatism of industry federations forced them to set up alternative organizations, like the World Business Council for Sustainable Development,' he told EP.

'Almost without exception, however, they also remained as members of those old institutions. Now that the issues are becoming mission-critical, growing numbers will reconsider their position, up to and including publicly resigning their memberships. This will be extremely tough for companies, but it's the only way we are going to make real progress.'


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