Some of the footballs used by stars in Premier League matches may have been stitched by children in Pakistani homes, the league's official supplier Nike admitted today.
Nike is sacking its main manufacturer of hand-stitched balls, a Pakistani company called Saga Sports, because of concerns about "significant labour compliance violations".
The American multinational said that a six-month investigation had concluded that Saga was outsourcing many of the balls to casual workers who sew them together in their homes around the city of Sialkot, near the Indian border.
A Nike spokesman said home working was unacceptable: "If you have production in homes, it's very difficult to monitor safe labour conditions. There's also the potential for underage labour which we obviously do not condone."
The loss of Saga will mean a shortage of balls for the foreseeable future as Nike hurries to switch production to factories in China.
In a statement from Nike's Oregon headquarters, chief executive Mark Parker said: "This contract factory has persistently broken its commitments and irrevocably breached its trust with us. Most importantly, the factory has failed its employees."
Premier League balls have been provided by Nike since 2000, when the company wrestled the prestigious contract from rival Mitre. At the time, Nike described its balls as faster, more responsive and scientifically rounder than those of its rivals.
Initially, Nike paid the league close to £10m for a three-year deal and in return got publicity, corporate hospitality and licensing rights. The arrangement was renewed in 2003 for an undisclosed sum.
The Premier League was fully briefed by Nike in advance of today's decision. A league spokesman said: "We can only support Nike in taking action where they've found their standards of labour have been violated."
A series of revelations about child labour at factories around Sialkot in the late 90s prompted sportswear companies to tighten their monitoring in the area.
Nike, which was pilloried as a particularly bad offender, has since been praised by charities for cleaning up its act.
An Oxfam senior policy adviser, Samar Verma, said: "We've been working very closely with Nike to ensure the rights and conditions of people working in these factories are fair and of an acceptable standard."
He described Nike's decision to sack Saga Sports as "a very positive step in the right direction" but added: "It's a small step and the company needs to do more to ensure that trade union rights are respected."
An Oxfam report last year criticised Nike for cutting orders to factories in Asia where unions had been established. It said that irrespective of whether Nike's cutbacks were linked to the creation of unions, the company ought to prioritise suppliers which permit worker representation.
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Mr. Knight's pledges did not include increased wage, a major complaint of critics who say that Nike and other American companies pay workers in China and Vietnam less than $2 a day and workers in Indonesia less than $1 a day. (A 1996 World Bank report concluded that more than one-fifth of the world's population lives on less than $1 a day.) Still, even with much lower prices in these countries, critics say workers need to make at least $3 a day to achieve adequate living standards.
Nike, in a statement today, cited a report it commissioned in 1997, which said that its factories in Indonesia and Vietnam pay legal minimum wages and more.
In his speech today, Mr. Knight defended Nike's record of creating jobs and improving factory conditions abroad, but seemed to acknowledge that it was time for drastic action. ''The Nike product has become synonymous with slave wages, forced overtime and arbitrary abuse,'' he said. ''I truly believe that the American consumer does not want to buy products made in abusive conditions.''
The initiatives announced today address the types of issues, like air quality, that were raised by an inspection report prepared for the company by Ernst & Young, the accounting and consulting firm. The report, which found many unsafe conditions at a plant in Vietnam, gained force when it was made public by the Transnational Resource and Action Center, a nonprofit group that often criticizes conditions at American factories overseas.
Critics of Nike responded favorably to many elements of the plan released today, while noting that Mr. Knight had not promised to increase pay. They cautioned that he had not detailed which groups would be allowed to take part in the monitoring of factories or provided other details on that part of his commitment.
''Independent monitoring is a critical element of an overall system of improving labor practices,'' Mr. Knight said. ''Nike's goal is to reach a point where labor practices can be tested and verified in much the same manner that financial audits determine a company's compliance with generally accepted accounting principles.''
Monitoring labor standards abroad has divided industry members of a committee established by the White House to consider such standards of American corporations, preventing it for the past year from coming up with recommendations.
Jeffrey D. Ballinger, director of Press for Change, a group that has been critical of Nike, called the company's plan a major retreat and a sign of the critics' growing strength.
''I think on the health and safety question, it is a very significant statement,'' he said. ''There is not a lot of wiggle room. They either fix it or they don't. I really, really believe they are going to get after that problem.''
The company has been hurt by falling stock prices and weak sales even as it has been pummeled in the public relations arena, including ridicule in the comic strip Doonesbury and an encounter between Mr. Knight and the gadfly film maker Michael Moore in his new documentary, ''The Big One.''
Mr. Knight said the main causes of the company's falling sales were 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.
''I truthfully don't think that there has been a material impact on Nike sales by the human rights attacks,'' he said, citing the company's marketing studies.
But for months, the company, which spends huge sums for advertising and endorsements by big-name athletes, has responded increasingly forcefully to complaints about its employment practices, as student groups have demanded that universities doing business with Nike hold it to higher standards. In January, it hired a former Microsoft executive to be vice president for corporate and social responsibility.
Other critics, such as Thuyen Nguyen, director of Vietnam Labor Watch, were critical when the civil rights figure Andrew Young reported favorably last year on the company's efforts to improve conditions in its Asian factories, saying that he had glossed over problems.
Mr. Knight emphasized today that using objective observers to monitor working conditions would serve not just Nike, but eventually American industry in general, by ''giving the American consumer an assurance that those products are made under good conditions.''
Some critics, though, stressed that the company could not reassure consumers without improving wages in its factories.
''We see one big gap,'' said Medea Benjamin, director of the San Francisco-based human rights group Global Exchange. ''A sweatshop is a sweatshop is a sweatshop unless you start paying a living wage. That would be $3 a day.''Continue reading the main story