Dear Friends, Last week we circulated an update on the case of Kuk Dong in Mexico and requested further action in support of the workers struggle to set up an independent union. Please find below the response we received from Nike.

From: Nike, Wed. June 6th

Thanks for asking about recent issues at Kukdong. We appreciate your concern. For the last five months, Nike has been actively involved in bringing a resolution to the labor dispute at the Kukdong factory in Puebla, Mexico. As a result of Nike's collaborative efforts with a number of interested parties, including the independent monitoring organization Verité; a local labor expert provided by a US-based labor rights organization and our compliance manager on the ground, the situation at Kukdong has stabilized in recent weeks.

However, last week allegations of an altercation involving two workers were made public. Nike would like to make it clear that the company does not condone violence at factories where our products are manufactured, no matter what the circumstances. After learning of the incident, Nike's compliance manager, who has been working with the Kukdong factory management, workers and outside parties on these issues throughout the year, began an investigation into the allegations. Preliminary reports indicate that there are conflicting "eyewitness accounts" about what caused the fight between the two workers that resulted in disciplinary action for both. Whatever the circumstances, this behavior is unacceptable and once we have all of the facts, Nike will work with Kukdong's management to address the issues raised and do everything within our sphere of influence to ensure that a safe and peaceful work environment exists.

There have also been reports that the fight involved members of the existing union at Kukdong and a worker from an organization yet to be union certified. Nike has consistently maintained that we are committed to the principle of freedom of association, which is a key tenet of our Code of Conduct. To be clear, Nike supports the rights of Kukdong workers to freely associate and collectively bargain, and to join organizations of their choosing. We have facilitated these rights through various training, including engagement with labor law experts at the International Labour Organization, a United Nations agency, which at our request held training for Kukdong workers more than two months ago.

All interested parties, including workers, management, and supervisors, must act responsibly to ensure a stable work environment. As one of many customers of the Kukdong factory, Nike cannot shoulder the responsibility of the Kukdong factory's well-being alone, nor can we prevent random individual or group actions that create instability for the entire workforce. All groups concerned have a choice --- they can either try to achieve something constructive by working together or squander the possibility of reaching common ground in this situation.

As only one of several producers in the Kukdong factory, Nike has been doing everything within our power to help facilitate a resolution to this situation, including placing additional orders with the factory even though we do not have a demand for the particular fleece product manufactured there. As long as Nike products are produced at the Kukdong factory, we will continue to do our part and remain committed to working collaboratively to ensure that the men and women employed at Kukdong have a safe, fair and healthy environment.

Thanks again for taking an interest in this issue. We encourage those who are interested in this issue to visit our Web site at www.nikebiz.com for the most recent information about Nike's corporate responsibility initiatives.

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