Christmas greetings!

While customers are buying toys as Christmas presents, Chinese toy workers who are at the bottom of global supply chain cannot share the same joy when they are producing them. To have a closer look at the working conditions of toy workers in China, Students and Scholars Against Corporate Misbeaviour (SACOM), investigated two toy factories in China, namely Tianyu Toys Factory and Wai Shing Factory, which are suppliers to international brand name companies, including Disney. In December, SACOM, in corporation of Südwind Agentur, published the report titled “Exploitations of Toy Factory Workers at the Bottom of Global Supply Chain”. The executive summary is attached.

The two Hong Kong operated factories, Tianyu Toys Factory and Wai Shing Factory, have undergone the International Council of Toy Industries’ (ICTI) CARE Process, which signifies they pledge to adhere to the industry’s code of conduct. In reality, SACOM finds that wage of worker is upheld up to 45 days, wage is even deducted due to arbitrary wage system, workers are not protected by social insurances, no pre-post occupational health training is delivered. Even worse, both factories ignore the ICTI’s CARE Process by means of deception during inspections.

“In March, I worked overtime for 2-4.5 hours everyday. I was even forced to work overnight for 3 nights, the longest working hours were up to 28 hours continuously. Nevertheless, I was only paid RMB 1,029,” a worker from Tianyu Toy complained that the wage system was unfair.

“I cannot endure the irritating smell in the workplace, it makes me feel dizzy,” a worker at Wai Shing Factory expressed.

The hardship of workers is indispensible with the buying practice of the international brand names companies which presses down the pricing and compresses the delivery time. The manufacturers usually shift the burden to the workers. Inevitably, workers can only earn a living from overtime work.

Therefore, we demand the brand name companies must rectify the unethical buying practices, assist their suppliers to improve the working conditions, provide labour rights trainings for workers, set up and promote complain hotline for non-compliance of code of conduct and so on.

SACOM wishes that all toy workers in China can be respected so they can produce toys with a joyful heart.

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Exploitations of Toy Factory Workers at the Bottom of Global Supply Chain

September 2009

Executive Summary

Amidst the global financial crisis, the manufacturing industry in China faces a tough time. The toy industry in China, which is export-oriented, is disproportionally affected. It is foreseeable that toy workers who are at the bottom of the global supply chain are most vulnerable. This report aims to outline the situation of toy workers in China in the aftermath of the financial crises by looking at the relationship between the brand companies and the manufacturers in depth. To have a better understanding about the working conditions of workers, the investigated two factories in Southern China, Tianyu Toys Factory and Wai Shing Factory.

The two Hong Kong operated factories, Tianyu Toys Factory and Wai Shing Factory, have undergone the International Council of Toy Industries’ (ICTI) CARE Process, which signifies both of them agree with the industry’s Code of Conduct standards and pledge to adhere to them. Disappointingly, in both factories, the deception of auditors was reported by workers. This raises our concern over the commitment of the two factories to the Code of Business Practices, as well as to the effectiveness of the mechanism itself.

The following are the key findings in the report.

Contract

In both factories, workers are never given copies of the employment contract.

Working Hours and Overtime

Workers in both factories have to work overtime for 3-6 hours per day, which exceeds the ceiling of 3-hour per day and 36-hour per month as stipulated by the law. Excessive and forced overtime is intolerable in Tianyu Toys Factory. A worker claimed that she was forced to work for 28 hours continuously. Even worse, some of the overtime work remains unpaid.

Wage and Overtime Premium

Wage stubs provide the workers with their working records every month, displaying a clear break down of all parts of the monthly salary. It should include information on the hours worked, the basic wage, overtime remuneration, deductions for food and accommodation etc. While wage stubs are provided to workers at Wai Shing Factory, workers at Tianyu Toys Factory do not receive wage stubs. Workers at Tianyu Toys Factory even criticize the wage system as arbitrary. Moreover, to discourage workers from resigning, Tianyu Toys Factory withholds the wage of workers for up to 45 days.

Health and Safety

Violations in relation to health and safety are obvious in both factories. Both factories do not provide health examination for workers upon employment, and no pre-post occupational health training is delivered. Moreover, personal protective equipment is inadequate or even absent. As such, workers are at risk of occupational disease or work-related injury.

Social Insurances

Social insurances primarily include pension, medical insurance and work-related injury insurance. Employers have inescapable responsibilities to contribute to the social insurances in the light of domestic laws. The two factories are reluctant to cover workers in the social insurance scheme.

Food and Accommodation

Hygiene in dormitory is a major concern of workers. Cockroaches were found in Tianyu Toys dormitories, and workers at Wai Shing Factory suffer from allergy.

Worker Union

Wai Shing Factory workers point out that the worker’s union is not formed by democratic election, and exists in name only. Meanwhile, workers at Tianyu Toys Factory are not aware of a worker’s union.

Deception in Audit

Workers in both factories are asked to wear the whole set of personal protective equipment only when there is a factory audit. Even worse, workers at the two factories are forced to give falsified answers to audit firms. If answers are unsatisfactory, they are punished and fined by the management.

In response to continued advocacy from NGOs, the ICTI CARE Process was launched to monitor the implementation of the industry code. Applicants of the CARE Process receive certification from ICTI after successful auditing. If minor violations are recorded, probationary status will be given. The two investigated factories are examples of factories with probationary status. To some extent, the process is able to detect non-compliance to the code in the factories. However, low transparency is a major pitfall in the system. Moreover, the absence of voices of workers and NGOs must be addressed. In the long run, workers must be empowered through labour law training and the establishment of a system of labour representation in their factories.

Full version of the report can be downloaded at: http://sacom.hk/wp-content/uploads/2009/12/toy-report_final-version.pdf.