The Walt Disney Company

Founded : 1923
Primary industry/service : Theme parks and resorts, broadcasting (ABC), entertainment production
Total revenue : $23.402 billion (1999)
Net revenue : $1.368 billion (1999)
Current CEO : Michael Eisner
CEO's salary : $750,000 salary, a $9.9 million bonus, $565 million in stock options. (1996)
Philanthropy : Unknown - no response to inquiries as of 12-19-99
Checklist :

The Good
[  ]  one of top 50 best companies for minorities
[  ]  one of top 100 companies for working mothers
[X]  Has a non-discrimination policy that includes sexual orientation

To Be Improved
[X] - sites in non-democratic nations
[  ] - child labor violations in last five years
[  ] - environmental violations in last five years

Environment

Disney is being asked by Ecopledge to stop selling toys containing PVC (polyvinyl chloride) given its potential adverse health impacts.  Ecopledge is a group encouraging students to withhold employment from companies that have a negative impact on the environment until the company changes its "offending practice."

According to Greenpeace

• Scientific studies reveal that these chemicals [organochlorides, PVC included] are linked to severe and wide-spread health problems, including infertility, immune system damage, impaired childhood development, hormone disruption, cancer and many other harmful effects.

• Evidence suggests that, throughout its entire lifecycle, PVC is responsible for a greater share of the nation’s annual dioxin burden than any other industrial product... In its ongoing study of dioxin, the U.S. Environmental Protection Agency (EPA) suggests that there is no safe level of dioxin exposure.

• PVC can be replaced with safer materials in virtually all cases. Substitutes for PVC include traditional materials such as clay, glass, ceramics and linoleum. In those cases where traditional materials cannot be used as a replacement, even chlorine-free plastics are preferable to PVC.

• Large companies such as Proctor and  Gamble, Mattel, and the Body Shop have phased out PVC packaging

  The Ecopledge campaign is encouraging Walt Disney to stop selling toys with PVC plastic because "of the serious health effects of toxic chemicals on young children, in particular, as their bodies begin development."  For the full statement to Disney from Ecopledge : www.ecopledge.com/corps/letter/disney.html

  Disney has no comment on this issue and has not replied to our inquiries on the topic as of 4-21-00.

Labor

A recent report by the Hong Kong Christian Industrial Committee (HKCIC) written in February 1999 focuses on workers in China who are making Disney products. The HKCIC, founded in 1967, provides direct services to workers and their families, and is a watchdog for government policies. It has also produced numerous reports on working conditions in China, particularly in the garment, shoe and toy industries.  The committee investiaged several factories in China which manufacture Disney products which include Disney toys, garments, and footwear.

The findings of this committee are not disputed by Disney and are as follows :

• The Walt Disney Company's Chinese subcontractors consistently violate Chinese labor laws regulating wages, overtime, and workplace conditions, as well as Disney's own corporate Code of Conduct.  The violations include the following :

• Factories visited by the HKCIC were found to often delay payments of wages and to request fees and deposits from workers when they are first hired to ensure they don't leave.
• It was observed that it was common practice for factories to require workers to work overtime, from between 11-16 hours a day for 6-7 days per week, violating Chinese labor laws which restrict overtime to one hour a day.
• Wages were found to average between 13.5 - 36 cents per hour whereas independent research groups in Hong Kong say one must make 87 cents an hour to meet the basic survival needs of a small family in a Chinese city.

• Many employees working at Disney-contracted factories in China, when interviewed, reported that they were not aware of their labor rights.  Workers report that any attempt to organize or protest would result in the employee being fired.

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Human Rights Groups Respond

Several human rights groups are currently urging Disney to do the following to improve the conditions in China :

1. Establish a system of independent monitoring - As of now, Disney has a monitoring systems which consists of for-profit auditing firms and in-house monitors.  However, in light of the recent report by the HKCIC which claims that workers cannot be candid with these monitors, Disney is being asked to "augment its monitoring efforts with groups that workers trust. This monitoring team must have the right to make unannounced site visits, review factory records, and speak to workers without management's presence." (CAFOD/Global exchange article, see references)

2. Take steps to make sure workers are educated about their rights.

3. Publicly disclose the name and addresses of factories producing Disney products (which are currently kept secret).

4. Pay their employees a living wage.  A joint report from Global Exchange and CAFOD claims that " Workers in China who produce Disney products should be able to lift themselves out of poverty."

Disney's Response

Although Disney does not deny the charges brought up by the HKCIC, they claim that they are doing all that is in their power to make sure that their Code of Conduct is enforced.  For concerned stockholders who write to Disney about this issue, a letter is sent in response which states that :

1. The approach to monitoring that Disney has taken is "best suited to ensure consistency in compliance with its standards on a global basis.  While the company agrees that there may be a role for local nongovernmental organizations in special circumstances, there is neither an existing network of organizations to carry out such monitoring on a global basis nor a consensus on monitoring standards or methods.

2. The Code of Conduct has been printed in 50 different languages and is distributed to the company's licensees.

3. Publically disclosing the names and addresses of the factories will not do anything to improve conditions in factories overseas.

4. Calls for raising wages are not feasible or economically realistic.

Disney's Code of Conduct

Disney has an admirable corporate Code of Conduct for overseas manufacturers which requires manufacturers of Disney merchandise to meet the following standards :

• Respect the rights of employees to associate.
• Provide employees with a safe and healthy workplace.
• Not require employees to work more than the lesser of

   a) 48 hours per week and 12 hours overtime
   b) the limits on regular and overtime hours allowed by local law

• Employees will be entitled to at least one day off in every seven day period unless under extraordinary circumstances.
• Workers will be compensated for overtime hours at the rate that is legally required.
• Ensure that provisions of this Code of Conduct are communicated to employees.

Other background information on Disney's overseas labor

Disney also has had factories in Haiti, Burma, Vietnam, and Indonesia which have come under scrutiny of various human rights groups.  When workers in Haiti and the U.S.-based National Labor Committee challenged Disney to double the wages for Haitian workers which they claimed were starvation wages (28¢ an hour), Disney's subcontracter H.H. Cutler moved its factory to Mexico and then to China where workers were paid even lower wages (13.5-36¢ an hour).

Other

Walt Disney spent $2,446,800 in 1998 on lobbying expenditures according to the Center for Responsive Politics Database.

For more information

Ecopledge - www.ecopledge.com - The campaign against Disney for its use of PVCs in childrens' toys.  For more information on PVCs in general, visit Greenpeace's website at www.greenpeaceusa.org and search for "PVC"

Global Exchange - www.globalexchange.org/ - For more information on human rights groups' claims against Disney (includes the HKCIC report)

To read the full version of the HKCIC report, click here

Although there weren't any resources we could find in defense of Disney, we have posted their reply to our inquiries about their labor practices in China on the website at www.stanford.edu/group/SICD/WaltDisney/disneyresponse.html

Some other sources used for this information sheet
  "Working Conditions in Chinese Factories Making Disney Products"             Mokhiber, R. Weissman, R. "Michael Eisner vs. Vietnamese Laborers,"
  By the Hong Kong Christian Industrial Committee, Feb 1999                       Multinational Monitor.  (www.essential.org/monitor)  March 24, 1998.

 "Hong Kong labor group protests Disney factory conditions"                          "Working for Disney Is No Fairy Tale"
 The Associated Press State & Local Wire, Aug 5 1999. Business News            Global Exchange and CAFOD on-line article

  ABC News Reporter Discovers the Limits of Investigating Disney                  "Watchdog Says Disney Runs Haiti Sweatshops"
  By Lawrie Mifflin, New York Times.  Oct 19, 1998                                      Palm Beach Post, Nov 4, 1996

This information sheet was last updated April 21, 2000
If you have new information in regards to this information sheet or if you wish to volunteer with SICD visit our website at www.stanford.edu/group/SICD or contact ethical-jobs-owner@lists.stanford.edu