At The Walt Disney Company, we are committed to:
a standard of excellence in every aspect of our business and in every corner of the world;
ethical and responsible conduct in all of our operations;
respect for the rights of all individuals; and
respect for the environment.
We expect these same commitments to be shared by all manufacturers of Disney merchandise. At a minimum, we require that all manufacturers of Disney merchandise meet the following standards:
Manufacturers will not use child labor.
The term child refers to a person younger than 15 (or 14 where local law allows) or, if higher, the local legal minimum age for employment or the age for completing compulsory education.
Manufacturers employing young persons who do not fall within the definition of children will also comply with any laws and regulations applicable to such persons.
Manufacturers will not use any forced or involuntary labor, whether prison, bonded, indentured or otherwise.
Coercion and Harassment
Manufacturers will treat each employee with dignity and respect, and will not use corporal punishment, threats of violence or other forms of physical, sexual, psychological or verbal harassment or abuse.
Manufacturers will not discriminate in hiring and employment practices, including salary, benefits, advancement, discipline, termination or retirement, on the basis of race, religion, age, nationality, social or ethnic origin, sexual orientation, gender, political opinion or disability.
Manufacturers will respect the rights of employees to associate, organize and bargain collectively in a lawful and peaceful manner, without penalty or interference.
Health and Safety
Manufacturers will provide employees with a safe and healthy workplace in compliance with all applicable laws and regulations, ensuring at a minimum reasonable access to potable water and sanitary facilities; fire safety; and adequate lighting and ventilation. Manufacturers will also ensure that the same standards of health and safety are applied in any housing that they provide for employees.
We expect manufacturers to recognize that wages are essential to meeting employees basic needs. Manufacturers will, at a minimum, comply with all applicable wage and hour laws and regulations, including those relating to minimum wages, overtime, maximum hours, piece rates and other elements of compensation, and provide legally mandated benefits. Except in extraordinary business circumstances, manufacturers will not require employees to work more than the lesser of (a) 48 hours per week and 12 hours overtime or (b) the limits on regular and overtime hours allowed by local law or, where local law does not limit the hours of work, the regular work week plus 12 hours overtime. In addition, except in extraordinary business circumstances, employees will be entitled to at least one day off in every seven-day period.
Protection of the Environment
Manufacturers will comply with all applicable environmental laws and regulations.
Manufacturers will comply with all applicable laws and regulations, including those pertaining to the manufacture, pricing, sale and distribution of merchandise. All references to applicable laws and regulations in this Code of Conduct include local and national codes, rules and regulations as well as applicable treaties and voluntary industry standards.
Manufacturers will not use subcontractors for the manufacture of Disney merchandise or components thereof without Disney’s express written consent, and only after the subcontractor has entered into a written commitment with Disney to comply with this Code of Conduct.
Monitoring and Compliance
Manufacturers will authorize Disney and its designated agents (including third parties) to engage in monitoring activities to confirm compliance with this Code of Conduct, including unannounced on-site inspections of manufacturing facilities and employer-provided housing; reviews of books and records relating to employment matters; and private interviews with employees. Manufacturers will maintain on site all documentation that may be needed to demonstrate compliance with this Code of Conduct.
Manufacturers will take appropriate steps to ensure that the provisions of this Code of Conduct are communicated to employees, including the prominent posting of a copy of this Code of Conduct, in the local language and in a place readily accessible to employees, at all times.
Disney unannounced Factory Assessment
Disney's goal in conducting on-site factory assessments is to obtain an accurate and current evaluation of working conditions. To do this, we need access to several things: workers, management, relevant documentation and the physical premises. Since our monitors sometimes need to travel great distances to get to a factory, we historically have arranged for an assessment date with factory management beforehand in order to ensure that we can access everyone and all items we need to successfully complete our assessment. This ensures the best chance for our monitors to gain access to records, management, accountants and human resources personnel. It also ensures that monitors are able to locate the factory, in locations where street addresses are not common or change, or where the address is incomplete.
However, Disney know from experience that assessments can cause anxiety and may encourage factories to present the best possible and not always most accurate picture. Therefore, in 2006 we began to test unannounced assessments in China. Compared with scheduled factory assessments conducted in the same region during the same time frame,, unannounced assessments had a higher percentage of findings of violations in almost every Code category. We continued throughout 2007 to conduct more unannounced assessments, and in 2008 roughly half of the assessments we conducted ourselves in China were unannounced.
In 2009, Disney plan to conduct a larger number of unannounced factory assessments in China, and we will begin testing some unannounced assessments in other countries as well. We are increasing the number of unannounced assessments ?and we encourage our licensees and vendors to do the same depending on the nature of their relationships ?because we believe that we get a more accurate picture of the true working conditions of the factories. However, this approach also means that we will have a greater number of instances of factories denying us access to their staff or factories. In 2008, 10% of the assessments we arranged directly and scheduled in advance resulted in those factories denying us access at the time of the audit. For the same time period, unannounced assessments resulted in a 26% rate of denial of access. When a factory denies us access to their facility to conduct an assessment, we communicate to the licensee or vendor that their factory did not allow us entry to conduct a social compliance assessment. We expect the licensee or vendor to reinforce with their factory that access to the facility is a critical requirement in order to maintain authority to make Disney-branded product. We give them one additional opportunity on a different day to allow us access. If we are still denied access after that second chance, then we have no option but to terminate our authorization of work in the factory. Lastly, in cases where monitors will have to travel great distances to reach a factoy, those factory assessments will remain scheduled.
Remediation for the Disney Ethical Audit
Our assessment process often results in findings of noncompliance with one or more of the standards set forth in our Code of Conduct. We use this information to help us prioritize issues and resource deployment, and then conduct a prompt investigation of the situation. The most common violations found during assessments are related to health and safety, excessive working hours, inability to verify compliance (in part due to record discrepancies) and overtime wages.
We take several steps to identify areas that need to be addressed.
1 At the end of a factory assessment, monitors explain preliminary findings to the factory management.
2 Assessment reports are then reviewed by our ILS team who further evaluate the factory's compliance against the Code and local labor law and then create corrective action plan letters or other reports to communicate expectations for remediation to the licensees and vendors responsible for choosing those factories.
3 Depending on the type and level of nonconformance, factories are given a certain period of time to demonstrate improvements in factory working conditions, which are then typically verified through follow-up assessments.
* Our Code of Conduct for Manufacturers contains 12 provisions that we expect manufacturers to meet. However, noncompliance with some of these provisions creates greater immediate risk to factory workers. Accordingly, we prioritize certain violations that require immediate correction. Examples of our zero tolerance" issues include child labor, involuntary labor and physical abuse. Other issues require prompt attention, but we will allow factories time to correct them, including wage and hour violations.
4 Licensees and vendors are expected to communicate the findings to the factories and support their remediation efforts.
5 Ultimately, the factory is responsible for taking corrective action.
Though we strive for sustained improvement in factory compliance, continued noncompliance with the Disney Code and local labor law may result in a factory being declared ineligible for Disney production. In our fiscal year 2008 we withdrew production authorization from approximately 500 factories due to severe or continued noncompliance.
In addition to non-compliances identified through the assessment process, we also receive information from and act upon claims brought to us by other sources NGOs, unions and other companies. We use this information to help us prioritize issues and resource deployment, and then conduct a prompt investigation of the situation. We then work with the factory, the licensee or vendor who sourced the product, and sometimes other parties to develop a remediation plan to help bring the factory's operation into compliance.