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Nike Targeted in Xinjiang Complaint Amid Track-and-Field Criminal Probe

A Berlin-based human rights group is targeting brands including Nike and Patagonia for their alleged complicity in the forced labor of Uyghurs in China’s Xinjiang region.

The complaint arrives as Nike finds itself connected to a criminal investigation into the governing body of U.S. track and field. According to a report Runner’s World published Tuesday, the U.S. Attorney’s Office for the District of Columbia has issued a grand jury subpoena requesting documents related to USA Track & Field’s (USATF) relationship with Nike and two other businesses, one of which was involved in the massive 23-year sponsorship agreement Nike and USATF signed in 2014.

ECCHR brings complaint against Nike, Patagonia, others

The European Center for Constitutional Rights (ECCHR) announced Thursday it had submitted a criminal complaint in the Netherlands against Patagonia, Nike, C&A and State of Art, arguing that the four brands had been directly or indirectly complicit in forced labor in Xinjiang. The organization said it had also asked the Dutch Public Prosecutor to investigate their alleged complicity in “human rights violations that could amount to crimes against humanity.”

“It is unacceptable that European governments criticize China for human rights violations while these companies possibly profit from the exploitation of the Uyghur population,” Corina Ajder, a legal advisor to the ECCHR, said in a statement. “It is high time that responsible corporate officers are investigated and—if necessary—held to account.”

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When asked to comment on the ECCHR’s complaint, Nike pointed to a statement it published last year that asserts it does not source products from Xinjiang and that it has found no evidence of employment of Uyghurs or other minorities from the region elsewhere in its supply chain.

Patagonia published a statement on Xinjiang on July 2020 saying it was actively exiting the region. It also said it had communicated to its suppliers that fiber and manufacturing in the Xinjiang was prohibited.

The ECCHR filed a similar complaint in September against five retailers, including C&A and Hugo Boss, in Germany. The organization argued the corporations were directly or indirectly abetting and profiting from alleged forced labor of Uyghurs in Xinjiang and could be “involved in crimes against humanity.”

The U.S. government, the U.K. House of Commons and the Canadian Parliament have all labeled China’s treatment of Uyghurs as “genocide.” A 2019 report estimated that the Chinese government was holding 1.8 million Uyghurs, Kazakhs and other Turkic Muslim minorities in internment camps and prisons.

A report released by the Australian Strategic Policy Institute (ASPI) in March last year outlined what it described as “a new phase” of China’s “re-education” campaign centered around transferring Uyghurs from Xinjiang to factories across China. According to ASPI’s estimates, more than 80,000 Uyghurs were transferred between 2017 and 2019.

One case study specifically linked Nike to a factory that allegedly employed 600 ethnic minority workers from Xinjiang. Nike later said the factory had stopped hiring workers from Xinjiang and that it had sent all workers from the region home. In its official statement on Xinjiang, it said it has not found evidence of employment of Uyghurs elsewhere in its supply chain and that it was strengthening its audit protocols “to identify emerging risks related to potential labor transfer programs.”

Even as Nike’s efforts to mitigate Xinjiang-related concerns spawn trouble for the company among Chinese consumers, some outside of China still don’t believe the company is doing enough. Boston Celtics center Enes Kanter Freedom has emerged as one of the most vocal of these voices in recent weeks. On Twitter and in cable news appearances, the NBA player has repeatedly said Nike uses “slave labor” to make its shoes. In October, he invited Nike’s co-founder and owner Phil Knight and basketball icons LeBron James and Michael Jordan to travel with him to China so they could all inspect the company’s supply chain together.

“Nike remains vocal about injustice here in America, but when it comes to China, Nike remains silent,” the NBA player said in a video posted to his social. “You do not address police brutality in China, you do not speak about discrimination against the LGBTQ community, you do not say a word about the oppression of minorities in China. You are scared to speak up.”

Prosecutors investigate USATF’s ties to Nike

Meanwhile, in the United States, federal prosecutors appear to be investigating U.S. track and field’s governing body’s financial relationship with Nike, its largest sponsor.

According to Runner’s World, the U.S. Attorney’s Office for the District of Columbia has filed a grand jury subpoena requesting documents detailing the financial relationship related to USATF and its board of directors, as well as three businesses—Nike, Bevilacqua Helfant Ventures LLC and Matchbook Creative. FBI agents have reportedly interviewed a high-ranking official within USATF as well.

“Nike firmly believes in compliance with laws and fair play in all sports and would be committed to cooperating with any government investigation into this matter,” Nike said in a statement.

A longtime sponsor of the USATF, Nike announced in 2014 that it had extended its partnership with the organization from 2017 through 2040. At the time, ESPN reported that the deal was worth between $450 million and $500 million. Under the new agreement, Nike is thought to be paying USATF about $19 million per year, Runner’s World said. The pair’s prior deal, signed in 2009, saw the footwear giant pay an estimated $10 million a year.

USATF CEO Max Siegel dubbed the arrangement a “game-changer” for track and field and what his organization would be able to offer its constituents.

“In working together with Nike, we placed an emphasis on growth as well as scope, so we can broaden the level and breadth of support for all USATF programs,” Siegel said in a statement in 2014. “Nike’s support for USA Track & Field and the sport as a whole is unmatched, and we look forward to this new era of collaboration.”

The arrangement’s 23-year term, however, shocked some observers. Among these critics was Doug Logan, the USATF’s CEO from 2008 until his firing in 2010, who publicly criticized the deal for being too risky.

“Nike is a huge public company with an army of smart guys and access to the best economists on the planet,” Logan wrote in a 2014 blog post. “The Federation is headed up by a lawyer who made a name for himself as a producer of a reality television show for NASCAR. Its self-perpetuating Board of Directors is composed of part-time policy makers. Who do you think was better informed as to what the economic future looks like in 2040? Who do you think got the better of the deal?”

According to a Washington Post report in October 2016, two former Nike executives— Chris Bevilacqua and Adam Helfant of Bevilacqua Helfant Ventures LLC—came up with the idea for a long-term extension of the USATF-Nike deal. According to the USATF’s 2014 tax filing, Bevilacqua and Helfant’s firm earned $504,594 that year, with $23.75 million set aside as commission payments through 2039. The firm earned $937,500 in both 2018 and 2019.

That the subpoena requested documents related to both Nike and Bevilacqua Helfant Ventures LLC would suggest that the investigation is in part looking into USATF’s 2014 deal. However, the subpoena also reportedly named Matchbook Creative, an Indianapolis marketing firm that has done work for the USATF and appears to be tied to Siegel.

According to The Washington Post, which also dove into USATF’s relationship with Matchbook Creative in its 2016 article, the firm used to be located next door to Max Siegel Inc., did contract work for Siegel and for a time shared office space. At one point, employees reportedly used email addresses ending in “@maxsiegelinc.com.” When the two entities shared office space, a window described Matchbook as “a Max Siegel company.” The firm’s CEO, Donna Gray, claimed that it never intended to “give the impression that Matchbook was owned by Max,” but that it was “doing creative work for Max Siegel Inc.”