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When you’re performing research as part of your job or for a school assignment, you’ll probably come across case studies that help you to learn more about the topic at hand. But what is a case study and why are they helpful? Read on to learn all about case studies.

Deep Dive into a Topic

At face value, a case study is a deep dive into a topic. Case studies can be found in many fields, particularly across the social sciences and medicine. When you conduct a case study, you create a body of research based on an inquiry and related data from analysis of a group, individual or controlled research environment.

As a researcher, you can benefit from the analysis of case studies similar to inquiries you’re currently studying. Researchers often rely on case studies to answer questions that basic information and standard diagnostics cannot address.

Study a Pattern

One of the main objectives of a case study is to find a pattern that answers whatever the initial inquiry seeks to find. This might be a question about why college students are prone to certain eating habits or what mental health problems afflict house fire survivors. The researcher then collects data, either through observation or data research, and starts connecting the dots to find underlying behaviors or impacts of the sample group’s behavior.

Gather Evidence

During the study period, the researcher gathers evidence to back the observed patterns and future claims that’ll be derived from the data. Since case studies are usually presented in the professional environment, it’s not enough to simply have a theory and observational notes to back up a claim. Instead, the researcher must provide evidence to support the body of study and the resulting conclusions.

Present Findings

As the study progresses, the researcher develops a solid case to present to peers or a governing body. Case study presentation is important because it legitimizes the body of research and opens the findings to a broader analysis that may end up drawing a conclusion that’s more true to the data than what one or two researchers might establish. The presentation might be formal or casual, depending on the case study itself.

Draw Conclusions

Once the body of research is established, it’s time to draw conclusions from the case study. As with all social sciences studies, conclusions from one researcher shouldn’t necessarily be taken as gospel, but they’re helpful for advancing the body of knowledge in a given field. For that purpose, they’re an invaluable way of gathering new material and presenting ideas that others in the field can learn from and expand upon.


nike case study sweatshops

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nike case study sweatshops

Nike is one of the largest athletic footwear and clothing companies in the world, but its labour practices have not always been ethical. Back in the late 1990s and early 2000s, the company was accused of using sweatshops to make activewear and shoes. Despite an initial slow response, the company eventually took measures to improve the working conditions of employees…

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Nike is one of the largest athletic footwear and clothing companies in the world, but its labour practices have not always been ethical. Back in the late 1990s and early 2000s, the company was accused of using sweatshops to make activewear and shoes. Despite an initial slow response, the company eventually took measures to improve the working conditions of employees in its factories. This has allowed it to regain public trust and become a leading brand in the sportswear sector. Let's take a closer look at Nike's Sweatshop Scandal and how it has been resolved.

Nike and sweatshop labour

Like other multinational companies, Nike outsources the production of sportswear and sneakers to developing economies to save costs, taking advantage of a cheap workforce. This has given birth to sweatshops - factories where workers are forced to work long hours at very low wages under abysmal working conditions.

Nike's sweatshops first appeared in Japan, then moved to cheaper labour countries such as South Korea, China, and Taiwan. As the economies of these countries developed, Nike switched to lower-cost suppliers in China, Indonesia, and Vietnam .

Nike's use of sweatshop dates back to the 1970s but wasn't brought to public attention until 1991 when Jeff Ballinger published a report detailing the appalling working conditions of garment workers at Nike's factories in Indonesia.

The report described the meagre wages that the factory workers received, only 14 cents per hour, barely enough to cover basic living costs. The disclosure aroused public anger, resulting in mass protests at the Barcelona Olympics in 1992. Despite this, Nike continued making its plans to expand Niketowns - fa cilities displaying a wide range of Nike-based services and experiences - which fuelled more resentment within consumers.

For more insight into how a company's external economic environment can impact its internal operations, take a look at our explanation on the Economic Environment .

Nike child labour

In addition to the sweatshop problem, Nike also got caught in the child labour scandal. In 1996, Life Magazine published an article featuring a photo of a young boy named Tariq from Pakistan, who was reportedly sewing Nike footballs for 60 cents a day .

From 2001 on, Nike started to audit its factories and prepared a report in which it concluded that it could not guarantee that its products would not be produced by children .

Nike's initial response

Nike initially denied its association with the practices, stating it had little control over the contracted factories and who they hired.

After the protests in 1992, the company took more concrete action by setting up a department to improve factory conditions. However, this didn't do much to resolve the problem. Disputes continued. Many Nike sweatshops still operated.

In 1997-1998, Nike faced more public backlash, causing the sportswear brand to lay off many workers.

How did Nike recover?

A major shift happened when CEO Phil Knight delivered a speech in May 1998. He admitted the existence of unfair labour practices in Nike's production facilities and promised to improve the situation by raising the minimum wage, and ensuring all factories had clean air.

In 1999, Nike's Fair Labor Association was established to protect workers' rights and monitor the Code of Conduct in Nike factories. Between 2002 and 2004, more than 600 factories were audited for occupational health and safety . In 2005, the company published a complete list of its factories along with a report detailing the working conditions and wages of workers at Nike's facilities. Ever since, Nike has been publishing annual reports about labour practices, showing transparency and sincere efforts to redeem past mistakes.

While the sweatshop issue is far from over, critics and activists have praised Nike. At least the company does not turn a blind eye to the problem anymore. Nike's efforts finally paid off as it slowly won back public trust and once again dominated the market.

It is important to note that these actions have had minimal effect on workers' conditions working for Nike. In the 2019 report by Tailored Wages, Nike cannot prove that minimum living wage is being paid to any workers. 6

Protection of workers' human rights

Nike's sweatshops undoubtedly violated human rights. Workers survive on a low minimum wage and are forced to work in an unsafe environment for long periods of time. However, since the Nike Sweatshop Scandal, many non-profit organisations have been set up to protect the rights of garment workers.

One example is Team Sweat, an organisation tracking and protesting Nike's illegal labour practices. It was founded in 2000 by Jim Keady with the goal of ending these injustices.

USAS is another US-based group formed by students to challenge oppressive practices. The organisation has started many projects to protect workers' rights, one of which is the Sweat-Free Campus Campaign . The campaign required all brands that make university names or logos. This was a major success, gathering enormous public support and causing Nike financial loss. To recover, the company had no choice but to improve the factory conditions and labour rights.

Nike's Corporate Social Responsibility

Since 2005, the company has been producing corporate social responsibility reports as part of its commitment to transparency.

Corporate social responsibility (CSR) is a set of practices a business undertakes in order to contribute to society in a positive way .

Nike's CSR reports revealed the brand's continuous efforts to improve labour working conditions.

For example, FY20 Nike Impact Report, Nike made crucial points on how it protects workers' human rights. The solutions include:

Forbid underage employment and forced labour

Allow freedom of association (Forming of workers' union)

Prevent discrimination of all kind

Provide workers with fair compensation

Eliminate excessive overtime

In addition to labour rights, Nike aims to make a positive difference in the world through a wide range of sustainable practices:

Source materials for apparel and footwear from sustainable sources

Reduce carbon footprint and reach 100% renewable energy

Increase recycling and cut down on overall waste

Adopt new technology to decrease water use in the supply chain

Slowly, the company is distancing itself from the 'labour abuse' image and making a positive impact on the world. It aims to become both a profitable and an ethical company.

Nike sweatshop scandal timeline

1991 - Activist Jeff Ballinger publishes a report exposing low wages and poor working conditions among Indonesian Nike factories. Nike responds by instating its first factory codes of conduct.

1992 - In his article, Jeff Ballinger details an Indonesian worker who was abused by a Nike subcontractor, who paid the worker 14 cents an hour. He also documented other forms of exploitation towards workers at the company.

1996 - In response to the controversy around the use of child labour in its products, Nike created a department that focussed on improving the lives of factory workers.

1997 - Media outlets challenge the company's spokespersons. Andrew Young, an activist and diplomat, gets hired by Nike to investigate its labour practices abroad. His critics say that his report was soft on the company, despite his favourable conclusions.

1998 - Nike faces unrelenting criticism and weak demand. It had to start shedding workers and developing a new strategy. In response to widespread protests, CEO Phil Knight said that the company's products became synonymous with slavery and abusive labour conditions. Knight said:

"I truly believe the American consumer doesn't want to buy products made under abusive conditions"

Nike raised the minimum age of its workers and increased monitoring of overseas factories.

1999 - Nike launches the Fair Labor Association, a not-for-profit group that combines company and human rights representatives to establish a code of conduct and monitor labour conditions.

2002 - Between 2002 and 2004, the company carried out around 600 factory audits. These were mainly focused on problematic factories.

2004 - Human rights groups acknowledge that efforts to improve the working conditions of workers have been made, but many of the issues remain . Watchdog groups also noted that some of the worst abuses still occur.

2005 - Nike becomes the first major brand to publish a list of the factories it contracts to manufacture shoes and clothes. Nike's annual report details the conditions. It also acknowledges widespread issues in its south Asian factories.

2006 - T he company continues to publish its social responsibility reports and its commitments to its customers.

For many years, Nike's brand image has been associated with sweatshops. However, since the sweatshop scandal of the 1990s, the company has made a concerted efforts to reverse this negative image. It does so by being more transparent about labour practices while making a positive change in the world through Corporate Social Responsibility strategies. Nike's CSR strategies not only focus on labour but also other social and environmental aspects.

Nike Sweatshop Scandal - Key takeaways

Nike has been criticised for using sweatshops in emerging economies as a source of labour .

The Nike Sweatshop Scandal began in 1991 when Jeff Ballinger published a report detailing the appalling working conditions of garment workers at Nike's factory in Indonesia.

  • Nike's initial response was to deny its association with unethical practices. However, under the influence of public pressure, the company was forced to take action to resolve cases of its unethical working practices.
  • From 1999 to 2005, Nike performed factory audits and took many measures to improve labour practices.
  • Since 2005, the company also published annual reports to be transparent about its labour working conditions.
  • Nike continues to reinforce its ethical image through Corporate Social Responsibility strategies.
  • Simon Birch, Sweat and Tears, The Guardian, 2000.
  • Lara Robertson, How Ethical Is Nike, Good On You, 2020.
  • Ashley Lutz, How Nike shed its sweatshop image to dominate the shoe industry, Business insider, 2015.
  • Jack Meyer, History of Nike: Timeline and Facts, The Street, 2019.
  • A History of Nike’s Changing Attitude to Sweatshops, Glass Clothing, 2018.
  • Tailored Wages Report 2019,

Frequently Asked Questions about Nike Sweatshop Scandal

--> what was the nike sweatshop scandal about.

Nike has been criticised for using sweatshops in emerging economies as a cheap source of labour that violated the human rights of the workers.

--> When was the Nike sweatshop scandal?

The Nike Sweatshop Scandal began in 1991 when Jeff Ballinger published a report detailing the appalling working conditions of garment workers at Nike's factory in Indonesia.

--> Does the Nike sweatshop scandal involve human rights violations?

Yes, the Nike sweatshop scandal involved human rights violations. Workers survive on a low minimum wage and are forced to work in an unsafe environment for long periods of time. 

--> What is the main reason Nike is considered unethical?

The main reason Nike was considered unethical is Human rights violations of workers in its offshore factories.

Final Nike Sweatshop Scandal Quiz

Nike sweatshop scandal quiz - teste dein wissen.

what year was Nike founded?

Show answer

Show question

What was the nike sweatshop scandal about? 

Nike has been criticized for using sweatshops in Asia as a source of labour. The company was accused of engaging in abusive and verbal behaviour toward its workers. 

Does nike sweatshop scandal involve human rights violations? 

Yes. A report by the Washington Post in 2020 stated that Nike doesn't have evidence of a living wage for its workers. The same year, it was revealed that the company uses forced labor in factories. 

What is the main reason Nike is considered unethical? 

Nike has been criticized for using sweatshops in Asia as a source of labor. The company was accused of abusing its employees. In addition, some of the factories reportedly imposed conditions that severely affected their workers' restroom and water usage. 

Was Nike involved in child labour? 

In what year did Nike created the Fair Labour Association, which was created to oversee the company's 600 factories?

In what year did the company started improving the conditions of its factories?

Where was the first Nike store to be open?

First Niketown store to launch open in Portland, Oregon. 

When was Nike first founded?

Life magazine in America did a report on child labour in 1996, which included a shocking photo of a 12-year-old boy sewing a Nike football. What country was he from?

What is corporate social responsibility?

Corporate social responsibility (CSR)  is a set of practices a business undertakes in order to contribute to society in a positive way.

How does Nike try to make a positive difference through sustainable practices?

What is Nike doing to address the human rights issues that they face?

Prevent discrimination of all kind 

Provide workers with fair compensation 

Other than the sweatshop problem what was one of the unethical practices employed by Nike?

Child labour

What does Nike's CSR report entail?

Nike's CSR reports disclosed the brand's continuous efforts to improve labour working conditions. 

What are sweatshops?

 factories where workers are forced to work long hours at very low wages under abysmal working conditions. 

Why did Nike outsource production to deveoping economies?

To save costs because these economies have lower labour wages.

When did Nike start benefitting from sweatshops?

From the 1970s.

When did the use of sweatshops by Nike gain public attention?

How was the public made aware of sweatshops?

Jeff Ballinger published a report detailing the appalling working conditions of garment workers at Nike's factories in Indonesia.  

Who was the CEO of Nike during the scandal?

Phil Knight  

When and why was Fair Labour Association established?

It was established in 1999 to protect workers' rights and monitor the  Code of Conduct in Nike factories. 

Name one of USAS's campaign.

Sweat-Free Campus Campaign.

A set of practices a business undertakes in order to contribute to society in a positive way is knwon as ____________

Corporate social responsibility (CSR).

Fill in the blanks:

Nike's solutions to protect workers' human rights include:




Fil in the blanks:

Nike's sustainable practices include:

What is the significance of the year 2005 for Nike?

Nike became the first major brand to publish a list of the factories it contracts to manufacture shoes and clothes. Nike's annual report detailed the conditions. It also acknowledged widespread issues in its south Asian factories.  

Human rights groups acknowledged that efforts to improve the working conditions of workers had been made in the year ____.

How much did Nike initially pay their Indonesian labourers?

14 cents an hour

Who was Andrew Young?

Andrew Young was an activist and diplomat, gets hired by Nike to investigate its labour practices abroad.  

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nike case study sweatshops

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Nike sweatshops: inside the scandal

  • 15 Nov 2019

Their brand celebrates humanity and all its potential, but Nike has a history of treating its workers as if they were not human at all.

In 1991, American labour activist Jeffrey Ballinger published a report on Nike’s factory practices in Indonesia, exposing a scandal: below-minimum wages, child labour and appalling conditions likened to a sweatshop – a factory or workshop where employees work long hours for low money in conditions that are hazardous to health.

A sweatshop in India.

A sweatshop in India.

US College student Jim Keady also delved into Nike’s inhumane production practices in the 90s, and in his film Behind the Swoosh exposed how workers, who were paid $US1.25 per day, were forced to live in slums near open sewers, and shared toilets and bathwater with multiple families.

And in 1996, Life magazine ran a reportage on child labour that included a shocking photo of a 12-year-old Pakistani boy sewing a Nike soccer ball.

Sweatshops are common in developing countries, including in Indonesia, India, Thailand, Bangladesh and Cambodia, where labour laws are rarely enforced.

A Nike factory in Thailand.

A Nike factory in Thailand.

The factories, which are often housed in deteriorating buildings, are cramped with workers and pose fire dangers. Workers are also restricted access to the toilet and drinking water during the day.

Companies such as Nike and Adidas will spruik the line that their factories have strict codes of conduct, but it is difficult to know if those codes are enforced in developing countries. As the world fumed over Nike's apparent lack of regard for its foreign workers in the 90s, the American company pledged to overhaul the appalling conditions.

But was it lip service, or did they actually do something?

A Nike factory in Thailand.

In 2001, Leila Salazar, corporate accountability director for Global Exchange, told The Guardian : "During the last three years, Nike has continued to treat the sweatshop issue as a public relations inconvenience rather than as a serious human rights matter.”

The company disagreed. ”I think we've made significant strides, and I'm proud of what the company has done over the last three years," said Nike's chairman Phil Knight. “It may take a while longer, but I do think that it will be understood that Nike is a good citizen in all the countries that it operates in.”

In 2007, as the world began embracing “corporate responsibility,” Nike provided a list of its 700 factories around the world as a way of allowing others to check if it was adhering to its policies. Nike spokesman Lee Weinstein said he hoped the report will "move the industry forward in addressing some of these endemic issues.”

A textile factory in China.

A textile factory in China.

Many were skeptical of the move.

“It’s good information to have,” Ballinger told NBC News at the time. “But I’ve always viewed their corporate responsibility work as trying to put the best face on the situation and not necessarily dealing with the issues workers have raised.”

A textile factory in Bangladesh.

A textile factory in Bangladesh.

So where does Nike stand today?

According to the ethical clothing advocacy group Good On You, Nike is certified under the Fair Labor Association Workplace Code of Conduct. But a 2018 report by the Clean Clothes Campaign, found that Adidas and Nike still pay “poverty” wages to workers. The report called on both Nike and Adidas to commit to paying "living" wages (the amount of income needed to provide a decent standard of living) to its workers.

With an annual revenue of over $US30 billion it should be able to afford it.

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What Working Conditions Do Garment Workers Still Face?

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How Nike Solved Its Sweatshop Problem

It wasn't that long ago that Nike was being shamed in public for its labor practices to the point where it badly tarnished the company's image and hurt sales.

The recent  factory collapse in Bangladesh  was a reminder that even though Nike managed to turn around its image, large parts of the industry still haven't changed much at all. 

Nike was an early target for the very reason it's been so successful. Its business model was  based on outsourcing its manufacturing , using the money it saved on aggressive marketing campaigns.

Nike has managed to  turn its image  around. Nike hasn't been completely successful in bringing factories into line,  but there's no denying that the company has executed one of the greatest image turnarounds in recent decades. 

Here's the timeline of how Nike became a global symbol of abusive labor practices, then managed to turn things around: 

  • After prices rose and labor organized in Korea and Taiwan, Nike begins to urge contractors to move to Indonesia, China, and Vietnam. 
  • 1991 : Problems start in 1991 when activist Jeff Ballinger publishes a report documenting low wages and poor working conditions in Indonesia.
  • Nike first formally responds to complaints with a factory  code of conduct . 
  • 1992 : Ballinger publishes an exposé of Nike.  His Harper's article   highlights an Indonesian worker who worked for a Nike subcontractor for 14 cents an hour, less than Indonesia's minimum wage, and documented other abuses. 
  • 1992-1993 :  Protests  at the Barcelona Olympics in 1992, CBS ' 1993 interview of Nike factory workers, and Ballinger's NGO "Press For Change" provokes a wave of mainstream media attention. 
  • 1996 : Kathy Lee Gifford's clothing line is shown to be made by children in poor labor conditions . Her teary apology and activism makes it a national issue.  
  • 1996 : Nike establishes a department  tasked with working to improve the lives of factory laborers. 
  • 1997 : Efforts at promotion become occasions for public outrage. The company expands its "Niketown" retail stores, only to see increasing protests. Sports media begin challenging spokespeople like Michael Jordan . 
  • Abuses continue to emerge, like a report that alleging that a Vietnamese sub-contractor ran women outside until they collapsed for failing to wear regulation shoes.
  • Nike tasks diplomat and activist Andrew Young with  examining its labor practices abroad. His report  is  criticized for being soft on Nike. Critics object to the fact that he didn't address low wages, used Nike interpreters to translate, and was accompanied by Nike officials on factory visits. Since Young's report was largely favorable, Nike is quick to publicize it, which increases backlash . 
  • 1997 :  College students  around the country began protesting the company.  
  • 1998 : Nike faces weak demand and unrelenting criticism. It has to lay off workers, and begins to realize it needs to change. 
  • The real shift begins  with a May 1998 speech  by then-CEO Phil Knight. “The Nike product has become synonymous with slave wages, forced overtime, and arbitrary abuse,” Knight said. “I truly believe the American consumer doesn’t want to buy products made under abusive conditions.”
  • At that speech, he announces Nike will raise the minimum age of workers; significantly increase monitoring; and will adapt U.S. OSHA clean air standards in all factories.
  • 1999: Nike begins creating  the Fair Labor Association , a non-profit group that combines companies, and human rights and labor representatives to establish independent monitoring and a code of conduct, including a minimum age and a 60-hour work week, and pushes other brands to join.
  • 2002-2004 : The company performs  some 600 factory audits between 2002 and 2004, including repeat visits to problematic factories. 
  • 2004:   Human rights activists acknowledge  that increased monitoring efforts at least deal with some of the worst problems, like locked factory doors and unsafe chemicals, but issues still remain.
  • 2005 : Nike becomes the first in its industry to publish a complete list of the factories it contracts with.
  • 2005: Nike publishes  a detailed 108-page report  revealing conditions and pay in its factories and acknowledging widespread issues, particularly in its south Asian factories. 
  • 2005-Present : The company continues to post its commitments, standards, and audit data as part of its corporate social responsibility reports . 

Nike wasn't the only or worst company to use sweatshops. But it was the one everybody knew.

Transparency doesn't change ongoing  reports of abuses , still-low wages, or tragedies like the one in Bangladesh. 

But by becoming a leader instead of denying every allegation, Nike has mostly managed to put the most difficult chapter in it's history behind it and other companies who outsource could stand to learn a few things from Nike's turnaround. 

nike case study sweatshops

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Sweatshops Almost Killed Nike in the 1990s, Now There are Modern Slavery Laws

nike case study sweatshops

One of the biggest threats to a retailer’s reputation is an allegation of involvement in slavery, human trafficking, or child labor. Ask Nike. In the 1990s, the Portland-based sportswear giant was plagued with damning reports that its global supply chain was being supported by child labor in places like Cambodia and Pakistan, with minors stitching soccer balls and other products as many as seven days a week for up to 16 hours a day. All the while, sweatshop conditions were running rampant in factories Nike maintained contracts with, and minimum wage and overtime laws were being flouted with regularity.

The backlash against Nike was so striking that it served to tarnish the then-30 year old company’s image and negatively affect its bottom line. “Sales were dropping and Nike was being portrayed in the media as a company that was willing to exploit workers and deprive them of the basic wage needed to sustain themselves in an effort to expand profits,” according to Stanford University research.

That was not the case according to Nike’s chairman and chief executive at the time Phil Knight, who  told the New York Times in 1998 that he “truthfully [did not] think that there has been a material impact on Nike sales by the human rights attacks,” and pointed instead, to “the financial crisis in Asia, where the company had been expanding sales aggressively, and its failure to recognize a shifting consumer preference for hiking shoes.”

Yet, the company was, nonetheless, forced to spend the next decade cleaning up its act in order to hold on to – and in some cases, win back – consumers, from overhauling its supply chain oversight efforts to include independent monitoring and audits to releasing public-facing vows to “root out underage workers and require overseas manufacturers of its wares to meet strict United States health and safety standards.”

It is critical to note that Nike took hits for its nefarious labor practices long before consumers were readily learning about and connecting with brands on social media, and during a time when retailers’ supply chains were generally less expansive than they are today. Fast forward to 2019 and with the rise of digital media and social media, and the larger trend towards cause-oriented consumerism, paired with the increasingly complicated and multi-national nature of corporate entities’ supply chains, the stakes are significantly higher than they were in the 1990s.

The demands and the level of risk at play is exacerbated by the fact that shoppers, particularly of the millennial type, are actively calling on fashion brands and retailers to be transparent in terms of how and where their products are made. But even more than consumer-driven calls for clarity and principled activity, in many jurisdictions, the law requires it. For instance, in the United Kingdom, the Modern Slavery Act of 2015 requires commercial entities that have a global turnover above £36 million ($43.5 million) to publicly file an annual slavery and trafficking statement, highlighting what steps –  if any –  they are taking to combat trafficking and slavery in their operations and supply chains.

Meanwhile, in the U.S., California passed the Transparency in Supply Chains Act in January 2012, thereby requiring retailers and manufacturers with global revenues that exceed $100 million and which do business in California (a low bar given the sheer size of California’s economy and the sweeping business ties that come about as a result of e-commerce operations) to publicly disclose the degree to which they are addressing forced labor and human trafficking in their global manufacturing networks.

Two years later, the Federal Business Supply Chain Transparency on Trafficking and Slavery Bill was introduced to the House of Representatives. The bill proposed required all companies with worldwide annual sales exceeding $100 million, and which are currently required to file annual reports with the Securities and Exchange Commission, are to disclose what measures, if any, they have taken to identify and address conditions of forced labor, slavery, human trafficking and child labor within their supply chains, either in the U.S. or abroad.

Although not ultimately enacted, the bill “demonstrates the continued attention that the issues of forced labor, slavery, human trafficking, and child labor in manufacturers’ supply chains is receiving in the U.S. and around the world,” according to Pittsburg-headquartered law firm  K&L Gates .

Still yet, since then, the Trafficking Victims Protection Reauthorization Act (“TVPA”) has come into effect. As the first comprehensive federal law to address modern slavery, the TVPA creates a private right of action for victims of forced labor against third parties, such as fashion brands and retailers, that benefit from participating in a venture if they knew or “should have known” that the venture engaged in modern slavery.  In other words, the TVPA imposes civil liability for corporate negligence.

Looking beyond the fact that supply chain oversight and accountability is a legal issue in many jurisdictions, it is worth noting that avoiding supply chain scandals, and in fact, being able to point to efforts aimed at transparency, is just good business. Given consumers’ increasing interest in the supply chains of their favorite brands and with the potential damage that could come about – potentially, virally – as a result of ties to slavery, human trafficking, and/or child labor, companies are being advised to consistently assess and identify potential instances of slavery and trafficking risks in their operations and supply chains, and prioritize those risks for further investigation and/or action.

In furtherance of such efforts, retailers and fashion brands are encouraged to exercise due diligence before entering into a supply agreement or contract, including requiring the supplier to provide information necessary to establish whether or not it – or any of its sub-contractors and sub-suppliers – are involved in misconduct.

Contractually speaking, brands should establish and require that their the suppliers, in performing their obligations under the agreement, comply with an anti-slavery policy and with all applicable anti-slavery and human trafficking laws, statutes, regulations and codes in force, and also require the supplier to include similar provisions in its own contracts with its sub-contractors and sub-suppliers.

Ideally, a brand’s contract with a supplier should  include terms to prevent the supplier from sub-contracting or sub-supplying without its written consent, thereby giving the retailer the opportunity to vet the third party and veto the engagement if necessary; and it should require the supplier to maintain documentary evidence of the age of each of its employees to ensure that minimum legal age requirements are being met.

However, in many cases, this has proven futile from a practical perspective even with dedicated oversight, as contracting and sub-contracting runs rampant in many manufacturing centers, such as Bangladesh, particularly when there are “tight deadlines to meet and/or unanticipated orders” at play, according to the not-for-profit Centre for Research on Multinational Corporations . In these instances, “manufacturers subcontract certain production processes to other factories and workplaces, without informing the buyer.

Because brands and retailers may inadvertently become involved if malpractice claims are risen in connection with their supply chains, turning a blind eye or failing to take active steps to prevent slavery will not be sufficient in the eyes of the law or consumers.

Nicola Conway is a Trainee Solicitor at Bryan Cave in London. Edits/additions courtesy of TFL. 

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