China: Workers' lawsuit over conditions at Haowei factory making Disney toys highlights difficulty of tracking abuses in supply chain

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12 February 2008

Disney case highlights China supply chain pitfalls

Author: John Ruwitch, Reuters

Huang Renzhong...explained how creating Disney figurines during 15-hour work days in a grim factory led to a $90,000 lawsuit...Workers were threatened with the sack if they paused, even to help someone who'd fainted, Huang said. They...slept 12 to a dorm room, and were charged for room and board...Cases like Haowei -- and recent product safety scandals and toy recalls -- underscore challenges multinationals face as they struggle to control their supply chains in a country where law enforcement is spotty...A robust underground cottage industry, replete with consultancies and cheat-sheets, has emerged in China to help factories pass audits even if they don't comply...Add a layer of licensees between the brand and the manufacturers, like Disney and others, including Time Warner's Warner Bros and Viacom's Nickelodeon, and simply tracking who is making products in your name can be challenging.

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17 December 2007

[PDF] Review and Actions Regarding Hao Wei Metal Plastic Manufactory and Jin Da Metal Plastic Manufactory [China]

Author: Walt Disney Company

...we conducted a comprehensive assessment of the [Haowei] factory in June 2007. Our audit revealed that a licensee had been ordering Hao Wei without our authorization or knowledge. Moreover, Hao Wei’s authorization to produce Disney-branded merchandise had been terminated in 2001 due to violations of the Disney Code of Conduct for Manufacturers. The same licensee had approval for production at Jin Da. During the audit, both factories revealed areas of non-compliance... our view is that, whenever practicable, promoting sustainable remediation, rather than termination, is in the best interests of workers... Pursuant to this approach, the following activities have taken place [including audits, training, introduction of a helpline]... A worker survey conducted in November 2007 showed positive worker sentiment as a result of the changes that have been made since June 2007...

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