Reebok - Managing Human Rights Issues 'Ethically?'

            
 
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Case Details:

Case Code : BECG019
Case Length : 13 Pages
Period : 1984 - 2002
Pub. Date : 2002
Teaching Note : Available
Organization : Reebok, China Labor Watch
Industry : Apparel and Footwear
Countries : China, USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"I don't know that anybody has bought a pair of Reebok shoes because of its human rights programme. But we're a global corporation and we have an obligation to give back to the communities in which we live and work." 1

- Doug Cahn, Director of Human Rights Programmes, Reebok International Limited.

Introduction

In January 2002, China Labor Watch2 published a report on working conditions in six factories in China.

These factories manufactured footwear products for the US-based Reebok International Limited (Reebok), one of the leading footwear and apparel companies in the world. The report highlighted the poor working conditions in these factories. A similar report had been published in 1997 by two Hong Kong based non-profit organizations, which had accused Reebok's sub-contractors3 of violating some of the provisions of Chinese labor laws in footwear factories in China. With over a hundred years of operations in the footwear industry, a large workforce (estimated to be over 75,000 in 2002), and operations in over 170 countries across the world, Reebok's dominance in the global footwear industry was unquestionable.

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However, with the focus of the international community drifting to human rights issues in Chinese footwear and apparel factories, Reebok joined the ranks of those companies that were accused of not paying sufficient attention to human rights issues. Reebok had taken several measures to prevent human rights violations in its Asian footwear manufacturing operations (Refer Exhibit I).

It had established an exclusive human rights department (HRD) in 1998 to address human rights issues in its operations across the globe, and it had also instituted a Code of Conduct, also known as Reebok's Human Rights Production standards (Refer Exhibit II), to regulate working conditions in the factories of its sub-contractors. However, in spite of the measures taken by the company, it had to face several allegations regarding the violation of labor laws in its Chinese operations. Analysts felt that the efforts made by the company were not adequate, and that the company needed to be more committed to the protection of human rights to enhance its image as a socially responsible company.

Reebok - Managing Human Rights Issues 'Ethically?' - Next Page>>

1] As quoted in the article, "Reebok in China: Worker Elections in Two Supplier Factories," written by Alison Maitland in the Financial Times, dated December 12, 2002.

2] A New York-based independent non-profit organization for Chinese labor and human rights, which works towards improving Chinese workers' living and working conditions, defending their rights, upholding international labor and human rights standards, and preparing independent labor union organizations that are true representative of the workers.

3] In most Asian countries, Reebok manufactured its footwear and sports goods through sub-contractors. Sub-contractors were essentially middlemen who contracted workers on a daily wage basis. Reebok paid a negotiated amount to the sub-contractors, according to the size of contract. In most cases, the factories were owned by the sub-contractors.

 

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