30 Sep 2022
Shareholder groups are proposing the Nike abandons sourcing cotton and other raw materials in China, as it may originate from the province of Xinjiang where China is accused of running forced labour camps and violating the human rights of Uyghur and Kazakh Muslim minorities.
The proposals filed by Domini Impact Investments recommends that Nike suspend manufacturing in China until the US government rescinds its advisory about the heightened risks for businesses with supply chain and investment links to the Xinjiang Uyghur Autonomous Region.
Nike maintains that it does not source from the Uyghur Autonomous Region and so is not complicit in the alleged abuses. However, this stance has been countered by arguments that production from this region is spread throughout China so that cotton and materials sourced by Nike could well have an element of forced labour and abuses related to the supplies it purchases.
Nike has defended its business contracts with manufacturers saying that it has been using them for more than fifteen years and that Nike does not directly source cotton or raw materials, and is committed to responsibly and sustainably sourcing the materials used throughout its supply chain.
Nevertheless, the Domini proposal contends that audits and due diligence are impossible to implement in the Uyghur region, as there is no unfettered access to suppliers or workers there.