Hong Kong NGO Students & Scholars Against Corporate Misbehavior (SACOM) has accused Walmart and Disney of normalizing the violation of basic workers rights by repeatedly sourcing from suppliers that break China's labor laws.

SACOM spent six months in 2010 investigating wages and conditions at Sunny Toys in Shenzhen and Crown-Ace Toys in Dongguan, both of which supply Disney and Walmart. The organization published a report based on the investigation on October 22.

Long hours, low wages, few holidays

Researchers who worked undercover in the factories found evidence of excessive overtime of up to 160 hours per month, three times the limit allowed under Chinese law. Workers told them they often have only one or two rest days per month and are subject to arbitrary fines and unfair deductions from their wages. They also met an obviously under-age worker who had used his brother's ID card to get a job at Crown-Ace Toys.

Cutting room workers at Sunny Toys told researchers that in August and September this year they were being paid 1600-1800 yuan (US$240 – 270) per month for 28 days work. In the packing department, workers put in 30 days in August, working from 8 am to 11 pm for 1500-1700 yuan (US$225 – 255).

SACOM says Sunny Toys also failed to give workers either the 3-day Mid-Autumn holiday in September, or the 7-day National Day holiday in October, as mandated by China's State Council. Nor did it compensate workers with overtime premiums for working through the holiday.

In a separate investigation carried out this summer by a Beijing student group, workers at a Shenzhen-based Disney supplier owned by the Hong Kong Greetings International Company were found to be working 11 hours a day on average. In July, according to the students, workers were on duty for a whole month without a day off.

The basic wage at the plant is 900 yuan per month, lower than the local legal minimum of 1100 yuan. Workers pay 90 yuan per month to live in damp and dirty dormitories.

Sex discrimination, arbitrary rules and fines

Sunny Toys security guards told researchers that the factory used to hire both male and female workers, but has recently switched to hiring only women. It is well-known that many employers favor women workers as they see them as less likely to take industrial action.

At Crown-Ace Toys, SACOM researchers found that being one minute late for work can mean a 10 yuan fine. Workers have to get a special permit to use the toilet. Security guards are posted at toilet doors and workers using the toilet without permission are fined 100 yuan.

Tycoon

Crown-Ace Toys was established in 1995 and at its peak employed about 10,000 workers in China. It currently employs around 5,000. According to SACOM, Hong Kong tycoon Li Ka Shing used to be Crown Ace's major shareholder, but it was sold to an Italian company in 2009. Sunny Toys is headquartered in Hong Kong, but has three factories and two research and development centers in the mainland. Its Shenzhen factory employs around 300 workers.

Cover up

Both Sunny Toys and Crown-Ace Toys are certified by the International Council of Toy Industries (ICTI), a trade body that, according to its website, promotes "ethical manufacturing in the form of fair labor treatment, as well as employee health and safety." Walmart and Disney commission regular audits of their suppliers, but SACOM is skeptical of the findings as workers can be easily coached to give the "right" answers to auditors. The problems found at Sunny Toys and Crown-Ace Toys are "just the tip of the iceberg," the organization says.

"Codes of conduct and internal audits won't improve working conditions," SACOM project officer Debby Chan said. "There is no transparency in audits, and deception is rampant. As things stand Walmart and Disney are making labor rights violations sustainable. The big brands need to increase the prices they pay their suppliers, and facilitate genuine workers' representative systems."

The full SACOM report can be downloaded here.
http://sacom.hk/wp-content/uploads/2010/10/report-on-disney-walmart-and-icti.pdf