2Sustain

In what some are calling a watershed moment in supply chain ethics, Nike, Inc. has agreed to provide financial, medical and vocational support to workers affected by closures at contract supplier factories in Honduras.

Nike announced late last month that it had reached an agreement with the Central General de Trabajadores de Honduras (CGT), representing the former employees of Hugger and Vision Tex factories, and as a result the company has agreed to:

• contribute to a workers relief fund of $1.5 million to be administered jointly by CGT, the Solidarity Center, the Worker Rights Consortium and supervised by professor Lance Compa of Cornell University.

• work with its Honduran suppliers to offer vocational training programs.

• prioritize hiring of former Hugger and Vision Tex workers as jobs become available over the next two years.

• cover worker’s enrollment in the Honduran Institute of Social Security (IHSS) to obtain health care coverage for a year or until they find new employment, whichever comes first.

If you have been following this story over the past year or so, you know that Nike was facing significant pressure to assume these responsibilities. An organized student movement across several college campuses has been urging the company, which produces college-logo apparel, to assume direct financial responsibility for the obligations to the workers in their contractors’ factories.

So now, of course, the big question is this: Does Nike’s agreement with CGT set a precedent –-and not just for Nike, but for other apparel manufacturers, as well?

Nike, to its credit, has shown tremendous leadership here, and I suppose only time will tell how this move will ripple through the industry. When circumstances like this arise again –as they inevitably will, given today’s global supply chains –will other corporations show the same level of accountability?