Nike Is Reviewing its Supply Chain After Reports of Uighur Labor Abuse in China

In the wake of reports of forced labor by Uighurs in factories across China, Nike Inc. said it is reviewing its supply chain to evaluate potential risks involving workers from the Muslim minority group.

The move comes after a new study was released last week by the Australian Strategic Policy Institute that linked more than 80 global companies, including Nike, Adidas, Gap, Samsung and Apple, to factories where members of the persecuted Turkic ethnic minority from China’s far western Xinjiang region (XUAR) are working under conditions “that strongly suggest forced labor.” The report estimates that more than 80,000 Uighurs were transferred to work in factories throughout China between 2017 and 2019. That particular period coincides with China’s campaign of mass detention and surveillance of ethnic minorities in Xinjiang in what the government said has been a bid to quell terrorism and separatism.

Some of those workers were brought to one of the largest factories in Nike’s supply chain, Qingdao Taekwang Shoes Co., in Laixi, according to a story in the Washington Post, whose reporter visited the factory and described it as resembling a prison, with barbed wire, watchtowers, cameras and a police station.

In the statement released on its website, Nike underscored that it does not directly source products from Xinjiang, nor does it have relationships with the three factories cited in the Australian Strategic Policy Institute report as being Nike suppliers. But amid the controversy, the company said it has been “conducting ongoing diligence with our suppliers in China to identify and assess potential risks related to employment of people from XUAR.”

Nike noted that the Taekwang facility has not recruited recently new employees from XUAR and is currently seeking expert counsel on the best, most responsible approach to terminate employment of the remaining workers from the region. The factory confirmed to Nike that its employees from XUAR have the ability to end their contracts at any time without repercussion.

“Nike is committed to upholding international labor standards, and we are continuing to evaluate how to best monitor our compliance standards in light of the complexity of this situation. The Nike Code of Conduct and Code Leadership Standards have requirements prohibiting any type of prison, forced, bonded or indentured labor, including detailed provisions for freedom of movement and prohibitions on discrimination based on ethnic background or religion,” the statement added.

The athletic giant also said it is collaborating closely with industry trade associations as it tackles the issue. A coalition of five of those organizations — including the American Apparel & Footwear Association, the National Retail Federation and the Footwear Distributors and Retailers of America — released their own statement yesterday, condemning the use of forced labor.

“We are deeply concerned by reports of forced labor and the treatment of Uighurs and other ethnic minority workers in the Xinjiang [region] and elsewhere in China. The reported situation is of a scale, scope, and complexity that is unprecedented during the modern era of global supply chains,” the statement reads.

The group said it is working with companies across the industry to consider all available approaches to address the situation but that the industry cannot solve this issue on its own. It called on the U.S. government to immediately assemble a multi-stakeholder working group — encompassing government, industry, labor advocates, non-governmental organizations and others — to develop and implement a collective approach.

“[The goal is to] find constructive solutions that target bad actors and protect the rights of workers and the integrity of global supply chains,” the statement reads. “The conditions in Xinjiang and the treatment of ethnic minority workers from the region present profound challenges to the integrity of the global supply chain, including issues of transparency, access, and auditing. Accepting the status quo is not an option.”

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