1996 NIKE
PROPOSAL 3 - Labor Rights - Indonesia

The General Board of Pension and Health Benefits of the United Methodist Church, of 1201 Davis Street, Evanston, Illinois 60201, a holder of 61,700 shares of NIKE, Inc. Class B Common Stock, submitted the following resolution for the reasons stated:

"WHEREAS, the image of Nike Incorporated is an extremely important corporate asset--recently valued at between $1.3 and 1.7 billion by authoritative Trademarks and Licensing Associates--assuring continued strong performance of our brand in an intensely competitive market.

There are persistent reports of exploitative conditions and military suppression of workers' legitimate protests at shoe factories near Jakarta, Indonesia.

The Indonesian Legal Aid Institute reports that nearly 70 workers are currently struggling for reinstatement and back-pay settlements with NIKE contractors as a result of their courageous efforts to get those contractors to pay a living wage, treat workers with respect and bargain collectively with genuine workers' representatives. The case of 24 workers who made Nike shoes is now before the Supreme Court of Indonesia.

Corporations, sourcing from dozens of contractors, have begun to recognize their responsibility to protect workers from harsh management practices and denials of their basic rights.

Nike's retention of Ernst and Young to monitor contractors' compliance with Indonesian wage regulations is an indication of the difficulty our company faces in speaking with certitude about only one of the provisions of the Code of Conduct.

That code is supplemented by the Athletic Footwear Association's "Guidelines on Business Practices of Business Partners"--signed by Nike on 9/3/93--which call for the observation of the right of free association, fair compensation and the prohibition of corporal punishment and mental or physical coercion.

Consumers must rely on the good faith of corporations such as ours which pledge to observe production guidelines intended to guarantee that fair treatment of employees is monitored with integrity and in a consistent manner.

BE IT RESOLVED, THAT the shareholder request the Board of Directors to review compliance with the Nike Code of Conduct & "Memorandum of Understanding" with contractors concerning the company's "commitment to people, communities and the environment". We encourage Nike management to take under advisement the following recommendations:

  1. Research conducted by Indonesian non-governmental organizations in direct contact with employees who make Nike shoes.
  2. Establishing independent monitoring and enforcement mechanisms in conjunction with non-governmental organizations.
  3. Strengthening of internal monitoring procedures.
  4. Translating the Nike "Code of Conduct" and "Memorandum of Understanding" into the languages of employees where Nike has international contracts, and to distribute these documents to suppliers.
  5. Utilizing positive influence to encourage suppliers to adhere to NIKE standards of conduct.

A summary of the review should be made available to shareholders by April, 1997."


The Board of Directors recommends that shareholders vote AGAINST Proposal 3.

We at NIKE empathize with workers in any industry who may be treated unfairly. As the shareholder resolution correctly observes, some years ago NIKE established labor standards in order to regulate and improve working conditions of Indonesian footwear factory subcontractors. Without a doubt, NIKE endeavors to possess the highest business ethics. Our shareholders expect nothing less from the industry leader.

This shareholder proposal, however, is directed toward monitoring compliance with NIKE's labor standards. Although well-intentioned, the Board of Directors believes the Proposal is unnecessary in that NIKE's management has for years utilized careful monitoring procedures that have proven effective, and NIKE continues to enhance and strengthen enforcement of its labor standards with new initiatives.

Putting aside any misleading media accounts and unfair attacks, here are the facts:

The Board of Directors believes that NIKE has addressed each of the Proposal's concerns. NIKE's procedures for monitoring Indonesian subcontractors are extensive and effective. Given NIKE's record of leadership, proven monitoring system, and additional steps scheduled to be taken in the coming months, NIKE has addressed monitoring more effectively than the Proposal could, and without consuming the valuable time and funds of NIKE and its shareholders to micro-manage one aspect of one country's operations. Assuring that NIKE's subcontractors treat their employees with dignity and respect is not a new idea at the Company. It is something that NIKE has insisted on for years.

Accordingly, the Board of Directors recommends that shareholders vote AGAINST Proposal 3.

Holders of Class A Stock and Class B Stock will vote together as a single class on Proposal 3. If a quorum is present at the Annual Meeting, Proposal 3 will be approved if the number of shares voted in favor of the proposal exceeds the number of shares voted against the proposal. Abstentions and broker non-votes are counted for purposes of determining whether a quorum exists, but are not counted as voting either for or against and therefore have no effect on the results of the vote.

Corporate Accountability | *SHAREHOLDER RESOLUTIONS* | SEC Regs |

Washington Corporations | Mutual Funds | Related Websites

WISE USE MOVEMENT, David E. Ortman, P.O. Box 17804
Seattle, WA 98107 deom@JPS.NET

1997 Wise Use Movement.

Northwest Corporate Accountability -TABLE OF CONTENTS-