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Annual Report of the Committee on Manufacturer Responsibility
January 23, 2007, Volume 53, No. 19

The following was sent on June 2, 2006 to President Amy Gutmann from Dr. Howard Kunreuther, Chair of the Committee on Manufacturer Responsibility (CMR) in accordance with the Code of Workplace Conduct for University of Pennsylvania Apparel Licensees. As outlined in the Code, the CMR will review the Code annually; review the effectiveness of monitoring; review the state of compliance of the apparel licensees and review any alleged violations of the Code.

This is a report on the activities of the Committee on Manufacturer Responsibility (CMR) for 2005-2006. This is the sixth year that the Committee has been operating under the University’s Code of Workplace Conduct (the Code) for manufacturers licensed to provide apparel with the Penn logo or identification. We held our four meetings as required by the Code. Meetings were held on November 11, 2005; December 7, 2005; March 15, 2006; and April 12, 2006.

For on-going, re-certification of vendors, the Center for Technology Transfer has sent our License Compliance Questionnaire (LCQ) to the 46 current apparel licensees as part of their license renewal for the year July 1, 2006 through June 30, 2007. Of the 46, 39 have responded affirmatively and the remaining seven are being contacted to determine their reasons for not responding. If any of the seven do not re-certify by signing the LCQ, their licenses will not be renewed.

During the past three months, we have had the services of student intern Chase Bender, a senior in the School of Arts and Sciences. He researched on the Internet to discover any publicized violations or accusations associated with our 46 current licenses. Although there were a couple of incidents reported, his further research indicated the situations were remedied. He communicated with the University of Wisconsin to determine their recent consideration of proposed changes to their adopted code. In addition, he benchmarked Penn’s Code with Carnegie Mellon. He also established the contacts of Student Groups (United Students Against Sweatshops) at Columbia University, Swarthmore College and the University of Michigan for future consultation.

The CMR debated the license application from Nike. Members offered documentation on Nike’s past history of grievances and their recent history of change. Other members offered that it was premature to judge Nike’s actions. The member representing the Undergraduate Assembly reported that the information on Nike was submitted to the Assembly and that they voted to approve the Nike application. After careful and extensive exchange of views on the Nike application, CMR voted to approve the application conditioned upon Nike accepting language in the License that confirms it will purchase from factories that are in compliance with the Penn Code. The Marketing and Business Development Department of Penn’s Business Services Division has assumed the lead in negotiations with Nike to reach a mutually acceptable license agreement. A summary of this activity is as follows:

In an effort to respond to student request to expand product lines in the Bookstore’s assortment, Penn asked Barnes & Noble to facilitate conversations between the University and representatives from Nike’s collegiate apparel line. These conversations occurred in 2005. Although licensing discussions ensued between Penn and Nike, deliberations on the approval of Nike as a vendor remained incomplete by the close of the 2005 academic year and it was agreed that the 2006 CMR would resume those talks. The Committee agreed to accept Nike’s candidacy as a licensee provided that Nike agree that goods shipped to the Bookstore were from factories that were in compliance with the principles of the University’s Code of Workplace Conduct.

Penn’s Office of General Counsel provided feedback that the parameters of Penn’s license contract had provisions that encompassed that parameter and recommended adhering to the existing contract language. Subsequent conversations in the CMR reiterated that the provision be emphasized to Nike. Business Services learned that there is precedent for a similar stipulation in at least one other peer institution of Penn.

Given that the last exchange between the contract teams of Nike and Penn occurred more than one year ago (and given that those conversations resulted in Nike recommending numerous language changes to Penn’s contract language) conversations regarding the specific licensing contract language must be re-initiated and negotiated anew.  In early May, representatives from Business Services contacted the Nike’s compliance officer and contract administrator associated with collegiate licensing of Nike to reopen dialogue relative to the issues. Preliminary indications are that Nike is open to reaching a mutually acceptable agreement (they cite they are a charter member of the Fair Labor Association (FLA), as well as having their own Code of Conduct which they believe is more stringent than FLA’s).

The Business Services team believes that the CMR has provided them with a clear set of objectives surrounding the terms under which an agreement would be acceptable to the University community and is pursuing cultivation of the relationship with Nike in accordance with those recommendations.  Business Services fully supports the Committee’s objective that the Bookstore’s licensing agreement with Nike will only be implemented  if Nike agrees to comply with the principles set forth in the committee and hopes to have an agreement reached with Nike for the fall of 2006.

The CMR is discussing changes to the general code of conduct, proposed by USAS, which seeks to narrow the selection of manufacturers to those supporting their workers organized efforts for improved conditions. CMR members volunteered to collect information in the summer of 2006, for discussion in the next Academic Year.

The membership in the CMR is continuing to undergo change. This year, the CMR reached full membership. The membership list is below.

–Howard Kunreuther, Chair,
Committee on Manufacturer Responsibility
Cecilia Yen Koo Professor of Decision Sciences and Public Policy


Committee on Manufacturing Responsibility 2005-2006

Howard Kunreuther, Chair, Wharton School; Gregory Possehl, Penn Museum; Thomas Dunfee, Wharton School; Colleen Rotindo, PPSA; Candice Cozart, WPSA; Danielle Siegel, Civic House; Alicia Marini, Civic House; Daniel Cope, Undergraduate Assembly; Ryan Burg, GAPSA; Nancy Nicely, Ex-Officio, Provost’s Office; Leah Popowich, Ex-Officio, President’s Office; Christopher Bradie, Ex-Officio, Business Services; Pierce Buller, Ex-Officio, Office of General Counsel.

Almanac - January 23, 2007, Volume 53, No. 19