At NIKE, Inc., we focus on the respect for human rights throughout our value chain. We define human rights based on the Universal Declaration of Human Rights and the International Labour Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work and look to the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises as best practice for managing related risks and impacts.
According to the ILO, Walk Free and the International Organization for Migration (IOM), as of 2021 approximately 27.6 million people were in forced labor situations globally, and foreign migrant workers are three times more likely to be at risk for forced labor than non-foreign migrant workers. Mitigating these risks is a key component of a resilient and responsible supply chain.
As part of our compliance program, we conduct annual audits of our Tier 1 finished goods suppliers and Tier 2 materials suppliers representing 90 percent of footwear upper materials and apparel textile production. The suppliers we audit employ almost 17,000 foreign migrant workers across Thailand, Malaysia, Jordan, Taiwan, Egypt, Brazil, Japan and South Korea.
One of the driving factors of heightened forced labor risks for foreign migrant workers is the difference in recruitment and employment processes versus those for non-foreign migrant workers. Considering this, we take a holistic, four-pillar approach to addressing forced labor risks:
- Strengthening Standards: We regularly evaluate and update our supplier standards and expectations, identify risks and collaborate with cross-industry organizations to prevent and remediate concerns.
- Identifying and Mitigating Risk: We use multiple tools to identify and mitigate risk related to forced labor and foreign migrant workers.
- Building Supplier Capabilities: We support suppliers to drive more responsible recruitment practices and identify risks in their operations. Where risks related to foreign migrant workers exist, we encourage suppliers to take ownership in addressing them and to pursue employment best practices.
- Engaging Partners and Advocating for Change: We partner with organizations dedicated to addressing labor risks, promoting adoption of the Employer Pays Principle and driving positive change across our industry.
NIKE, Inc. regularly evaluates and updates our Code of Conduct and Code Leadership Standards. These updates are meant to more closely align our Supplier Code of Conduct and CLS with our labor, health and safety and environment priorities and evolving international best practice. Among these updates have been more explicit definitions of employment fees that suppliers are responsible for, as well as stronger requirements and oversight of both labor recruiting agents and the processes used to hire foreign migrant workers.
A key component of our efforts to develop a more responsible and resilient supply chain is our adoption of the Employer Pays Principle, which prohibits workers from paying fees for their employment. We also encourage wider external adoption to reduce forced labor risks across the footwear and apparel industry and beyond, which will continue to help reduce systemic risk to foreign migrant workers.
Foundational and Global Risk Screening
NIKE, Inc. deploys a forced labor screen to map cross-border labor supply chains and recruitment agents back to foreign migrant workers’ countries of origin, proactively screening for ILO forced labor indicators. The tool also includes a feature for verifying that employers pay all fees and costs associated with migrant worker recruitment.
We use the tool to annually assess Tier 1 finished goods and Tier 2 materials suppliers hiring foreign migrant workers in the countries and regions mentioned above. Risks identified through the screen are used to inform overall forced labor risks and to prioritize suppliers for our Enhanced Due Diligence Program.
Enhanced Due Diligence Program
NIKE, Inc. runs a Foreign Migrant Worker Enhanced Due Diligence program to identify risks specific to foreign migrant workers and forced labor. This includes deploying specialized assessment tools that help identify forced labor risks at specific supplier facilities or labor providers, including recruitment agents.
As of the end of FY25, we conducted the Foreign Migrant Worker Enhanced Due Diligence program with suppliers that, collectively, employ nearly 48 percent of foreign migrant workers in our supply chain.
Some examples of identified and remediated risks include:
- Recruitment fees and related costs paid by foreign migrant workers: passports, monthly fees, repatriation costs, transportation costs from and to the worker’s home and medical check costs
- Mandatory savings program for foreign migrant workers where deposited monies are only returned to the worker upon completion of the work
- Employment contracts not provided in a timely fashion, not available in workers’ native languages or inaccurately translated
- Insufficient due diligence for recruitment agents and sub-agents, and service agreements with recruitment agents lacking provisions that prohibit fees charged to workers
- A dormitory with unreasonable curfew practices and not equipped with individual, safe and secure lockable storage for workers
- Discriminatory criteria on job advertisements
- Insufficient overtime compensation calculation, and monthly salary lower than agreement with sending country or region government
When these types of risks are identified, we work with suppliers to address them and improve management systems. For example, assessments in Jordan identified a concern related to repatriation costs. NIKE, Inc. worked closely with these facilities and the local Better Work teams, who receive strategic direction and oversight from ILO and the IFC, to enable alignment with our expectations. As a part of remediation, these facilities have changed their policy to cover all repatriation costs, regardless of the length of employment.
In cases where suppliers need additional support, NIKE, Inc. engages with third-party experts, who provide consultation and guidance on specific findings and remediation measures. For example, all suppliers in the Enhanced Due Diligence program with findings were enrolled in a remediation program with third-party experts by the end of FY25 and completed all remediation plans associated with identified findings as of FY26.
Our efforts to help build supplier capabilities start with foundational training about responsible recruitment. We aim to deliver this training broadly, reaching suppliers employing foreign migrant workers. We also deepen our efforts by deploying a program that incorporates training, practical exercises and coaching to suppliers in higher-risk areas.
We partner with third parties to deliver foundational responsible recruitment trainings to suppliers employing foreign migrant workers. In previous years, the trainings were conducted in Malaysia, Thailand, Taiwan, Jordan, Egypt and Japan. The foundational trainings on responsible recruitment were provided to suppliers employing nearly 99 percent of foreign migrant workers in NIKE, Inc.’s Tier 1 finished goods and strategic Tier 2 materials supply chain.*
We also worked with external partners to develop an in-depth responsible recruitment capability-building program, built on an existing responsible recruitment due diligence toolkit training. This program was previously launched in FY23 in Taiwan for suppliers and their recruitment agents. In FY24 we introduced the program in Thailand for suppliers employing foreign migrant workers, both Tier 1 finished goods and Tier 2 material suppliers.
By the end of FY25, this in-depth capability building program was launched with suppliers who employ nearly 47 percent of foreign migrant workers in NIKE, Inc.’s Tier 1 finished goods and strategic Tier 2 materials supply chain.
Peer-to-Peer Learning
Learning from experts is key to building capabilities, but we also recognize the importance of peer-to-peer learning. We frequently convene supplier learning communities to share information on NIKE, Inc. expectations, local policy and legislative developments and other sustainability and labor best practices. These learning communities include topics related to management of migrant workers.
For example, in FY25, we organized local learning community meetings for selected Asian and Middle Eastern suppliers who employ foreign migrant workers. Suppliers discussed various topics in these meetings, including overall human rights due diligence, new legal requirement updates and emerging risks related to the employment of foreign migrant workers from key hiring corridors. The suppliers also shared learnings gained from the ongoing responsible recruitment programs mentioned in the previous paragraphs. The learnings from the discussion will be incorporated in the supplier-maintained foreign migrant workers management handbook. The ILO and IFC’s Better Work Programme and recruitment agents attended one of these events, focusing on a comprehensive awareness of foreign migrant worker management and post-recruitment support for both workers and suppliers.
*Strategic materials suppliers: Suppliers representing approximately 90 percent of total footwear upper materials and apparel textiles production, focus distribution centers (DCs) representing at least 80 percent of volume, and our Nike-owned and operated Air Manufacturing Innovation (Air MI) facilities.
NIKE, Inc. continues to work with multi-stakeholder organizations such as the Fair Labor Association (FLA) and the ILO/IFC Better Work program to address supply chain labor risks. In FY23, we reaffirmed our support for the Commitment to Responsible Recruitment after it was relaunched by the American Apparel & Footwear Association and the FLA.
Through pre-competitive collaboration, NIKE, Inc. and other brands convened to establish a working group with third-party experts focused on the development of common tools and approaches to risk identification and remediation in Taiwan generally.