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Nike factory overtime story serves as a warning

According to the BBC’s Today programme this week Nike has agreed to pay a million dollars to workers in unpaid overtime going back two years.

The only problem with this, is that it is not true or accurate.

That didn’t stop the UK’s Daily Telegraph reporting the same. 

The real story is that a supplier factory in Indonesia has settled a dispute with workers on wages to the tune of the sum reported.

Many of the media headlines show the outlets concerned aren’t able, or willing, to differentiate between the company and one of its suppliers.

It looks to me like an inaccurate wire service story has been circulated and used by media outlets without fact checking. Or editors decided to sex up the story. (Wire services don’t purport, unlike the traditional media, to report the truth, only what they have been told)

So millions of people, in the UK and elsewhere, have now got a completely inaccurate picture of Nike’s business practices. 

At least the Guardian has has the decency to correct their story.

I imagine there are all sorts of anti-Nike comments on social media as a result.

My bet is that Nike has spent a long time encouraging the factory to sort out this unpaid wages problem. I’m sure also that Nike is not their only customer. 

I’m not saying that Nike might not have done more to persuade the factory to settle this matter earlier, or not underpay workers at all, but that’s very different from owning it and being responsible for the problem. 

What does this unfair and inaccurate reporting have to teach us?

Firstly that 15 years of ever more responsible business practices doesn’t help you in a case like this. Your brand is too big a hook for media editors desperate for readers and listeners.

Secondly, and more importantly, that your suppliers are often acting in your name, or will be seen to be in the media, and therefore by customers. 

Understanding how major suppliers work is going to be vital in securing your good name in the coming years. 

Audits and questionnaires won’t cut it. Engagement in the business case for better working practices in supplier operations is the only way. Nike leads the way here, but gets little credit.

Meanwhile I imagine Nike’s media team is having a busy day.

Genuine supplier engagement on better business practices is where sustainable brands will need to focus in going beyond the current compliance agenda.

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