China: Labour rights abuses in toy factories supplying major brands - companies respond

In November 2014, the NGO China Labor Watch (CLW) published a report "Investigations on Toy Suppliers in China: Workers are Still Suffering" which alleged that toy factories producing for brands such as Disney, Mattel, Hasbro, Crayola (part of Hallmark) and other companies were exploiting workers.

Concerns included mandatory overtime, wages below the legal minimum, unpaid overtime wages, unpaid insurance, harsh and high-pressure working conditions, poor living conditions, and abusive management.

The following month, China Labor Watch Executive Director Li Qiang stated in testimony to a Congressional Hearing that:

...the violations identified "suggest that labor conditions have failed to improve in toy industry supplier factories over the past seven years. And relative to other industries [such as electronics], conditions may even be deteriorating."

The report notes that toy companies tend to divide their orders among dozens of factories, so that “their orders in any given factory only consists of a small proportion of that factory’s total orders—usually no more than 20%”.  China Labor Watch alleges that this gives companies the ability to absolve themselves from any responsibility for poor labour conditions.

CLW also alleges that the International Council of Toy Industries (ICTI)’s certification process is ineffective, noting that factories can easily obtain official certification without complying with Chinese law or the ICTI’s code of practice.

Business & Human Rights Resource Centre invited companies named in the report to respond.  Below are responses by Lung Cheong Group, Mattel, Disney, Target, and also the International Council of Toy Industries.  We have also contacted Zhang Jia Bian Enterprise Group 张家边企业集团 for a response and are continuing to follow up.

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27 February 2015

Lung Cheong Group response to China Labor Watch report:

Business & Human Rights Resource Centre invited Lung Cheong Group to respond to a Nov 2014 report by China Labor Watch, "Investigations on Toy Suppliers in China: Workers are still suffering".  Lung Cheong Group sent the following response:

On November 18, 2014, China Labor Watch reported several toy factories in China about exploitation of labor worker, including force to overtime, pay under minimum wages, poor condition and verbal abuse by the management.

Knowing it, management of Lung Cheong Group had established an Internal Investigation team to review on related problems which reported by the China Labor Watch. On the other hand, ICTI gather Disney and TakaraTomy to make an unannounced audit to the factory. After the ICTI and other brand customers associated audit, they both reflect that the factory operation is running in normal status. According to the ICTI experts, they will publicize the audit result on their official web as below.

In addition, ICTI certification of Lung Cheong Group have been audited by BV corporation on Dec. 9, 2014 and Dec. 10, 2014, and there is no Zero Tolerance violation item, the group have generated the Corrective Action report according to the timeline of the audit corporation and granted the ICTI certification, which can be accessed from the website of ICTI.

We continue to improve our social responsibilities system to comply with ICTI care process and brand customers social responsibilities criterions.

Company response
10 February 2015

Target response to China Labor Watch report: "Investigations on Toy Suppliers In China: Workers are still suffering"

Business & Human Rights Resource Centre invited Target to respond to a report by China Labor Watch: ""Investigations on toy suppliers in China: Workers are still suffering".  Target sent the following response:

As you may know, Target has always been committed to the strongest business ethics and we hold ourselves and our partners accountable to the highest ethical standards. In fact, our Standards of Vendor Engagement require all vendors, including manufacturers, contractors, subcontractors and suppliers to share in and uphold our ethical standards.

We reviewed the referenced China Labor Watch report after it was issued late last year.  Target has no known production for its own brand products in any of the factories mentioned in the report, nor do we have any direct relationship with these factories. We have been in touch with the national brand vendors that utilize these factories. They are conducting a joint investigation and will keep Target informed of the results. 

Thank you for the opportunity to respond to your correspondence.

Company response
9 February 2015

Disney response to China Labor Watch Report: "Investigations on toy suppliers in China: Workers are still suffering"

Business & Human Rights Resource Centre invited Walt Disney to respond to a report by China Labor Watch: ""Investigations on toy suppliers in China: Workers are still suffering"

Walt Disney sent the following response:

“Disney has been working with our licensees, the International Council of Toy Industries’ ICTI CARE Process, and others to assess the situation.  We are awaiting the results of audits from Verité before determining a course of action.”

NGO rejoinder
16 January 2015

Response Letter to Mattel re: CLW's 2014 toy factory inestigative report

Author: Li Qiang, China Labor Watch

I am writing this in response to your letter on December 22 [available here] addressing the report published by China Labor Watch (CLW) on working conditions at two of Mattel’s factories. With all due respect, I believe that your response focused on minor problems while avoiding major issues mentioned in the report and was quite misleading. The letter also indirectly acknowledged the veracity of the issues mentioned in our report...

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Company response
22 December 2014

Mattel response to China Labor Watch report: "Investigations on Toy Suppliers In China: Workers are still suffering"

I write to correct the misleading impression created by China Labor Watch’s November 18, 2014 report on labor conditions at two of Mattel’s owned and operated toy factories in China and its December 11, 2014 testimony before the Congressional Executive Commission on China.

As in past years, our investigation, including independent audits, demonstrates, as detailed below, that the claims asserted by China Labor Watch (CLW) are incomplete, at best, or false. That is likely because CLW’s undercover investigators, however well intentioned, neither are  trained professional auditors nor do they have access to complete information...

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1 December 2014

ICTI (Intl. Council of Toy Industries) CARE response to China Labor Watch report

Author: ICTI Care

The ICTI CARE Process has received the China Labor Watch (CLW) report on four factories registered in the ICTI CARE Process in China. We take very seriously any allegations of noncompliance with the standards set by the ICTI CARE Process among factories that are registered and participating in our system.
Since receiving the report on 18 November, The ICTI CARE Foundation has been going through its normal process for handling allegations of this nature. There are five steps...

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