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Who's making your Nikes?

Bloomberg Equality
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This week's top headlines:

Shoppers, especially young ones, are more conscious than ever about supporting companies they consider to be ethical players in the marketplace. And, right now some of the biggest brands aren't looking so moral.

Earlier this year, a Congressional report found big name consumer goods companies, including Nike, Coca-Cola, and Calvin Klein, were suspected of relying on forced labor in China's Xinjiang Uyghur Autonomous region. The Chinese government has arbitrarily detained up to 1.8 million people from predominantly Muslim ethnic minority communities. Many of the detainees are forced to work in internment camps or factories around XUAR region to help produce things like cotton, tea, cakes, and textiles, the report found. 

Nike said in a statement that it does not source products from the XUAR region and has confirmed its contract suppliers are not using textiles or spun yarn from the region. In the past, PHV Corp., which owns Calvin Klein, and Coca-Cola have said they prohibit forced labor in their supply chains. 

Still, the human rights abuses are so damning that the House of Representatives almost unanimously passed the Uyghur Forced Labor Prevention Act, which aims to curb imports from the region. Under the bill, goods manufactured or produced in Xinjiang will not be allowed into the United States unless U.S. Customs and Border Protection determines they weren't made by forced or indentured labor.

"We need to hold the Chinese Communist Party accountable for these acts that violate our very conscience," Congressman Tom Suozzi, a New York Democrat, said after the bill passed

Outside Congress, however, the legislation has its critics. Trade groups, including the Retail Industry Leaders Association, National Retail Federation, and the American Apparel & Footwear Association are lobbying to weaken the bill as it heads to the Senate. The groups represent consumer goods giants like Nike, Walmart, Gap, and Macy's. 

The objections? That goods flowing out of the region will be considered "guilty until proven innocent." The groups also worry the law could destabilize legitimate supply chains and jeopardize the livelihoods of millions of workers around the world.

Nate Herman, senior vice president of policy at the American Apparel & Footwear Association, said in an interview that industry lobbyists are pressing lawmakers to better define how companies can prove their products are not made with forced labor. "We do not tolerate forced labor in our supply chains," Herman said. The organization is also working on its own ways to better track and trace products, he said.

The question is if that's enough for consumers. Or, will the association with unethical labor practices send people buying elsewhere? 

By the Numbers

America's richest neighborhoods have fared just fine during the pandemic. A Bloomberg analysis found that home values in the top 100 zip codes have soared by almost $30,000 on average since March. 

 

Before You Go

On December 9, Bloomberg will convene influential voices such as Cherie Blair CBE QC to discuss how the Covid-19 downturn has profoundly affected this generation of working women, and how to get back on track towards creating a more equal and gender-balanced workforce. Register here to attend.  

 

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