Wed, Aug 22, 2007 - Page 11 News List

Price cuts worsen quality

BLAME GAME Demands from Western companies for lower prices are contributing to lower product and working condition quality, China Labor Watch said

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Walt Disney Co and Sanrio Co are among companies whose demands for lower prices from Chinese toy suppliers contribute to low product quality, according to New York-based advocacy group China Labor Watch.

The working conditions of Chinese workers in Guangdong Province, where many toy exporters operate, "remain devastatingly brutal, with long hours, unsafe workplaces and restricted freedom of association, and in blatant violation of Chinese and international labor law," according to the report, citing its survey of eight Guangdong toy factories.

Chinese manufacturers, who make 70 percent of the world's toys, are coming under increasing scrutiny after Mattel Inc recalled China-made toys twice this month for using lead-based paint. Some factories cut corners, ignored labor conditions to cap costs and meet the demands of overseas clients with "single-minded pursuit of ever lower prices," China Labor Watch said.

Guangdong's average annual manufacturing wage was 18,019 yuan (US$2,374) last year, making the province attractive for exporters and producers of low-profit margin goods.

Pearl Tower Garments & Toys Co in Shenzhen, which makes Mickey Mouse dolls for Disney, doesn't provide pension, unemployment or maternal insurance for many of its 1,000 workers, violating its employee contracts, the report said.

Pearl Tower's general manager Dai Huan Cheng could not be reached to comment.

Disney is committed to fair and just labor standards and investigates any alleged infringements, the company's Hong Kong-based Asia spokeswoman Alannah Goss said in an e-mail yesterday.

At Duoyuan Plastic Production Co in Shenzhen, overtime is mandatory, with employees adding three hours everyday on average after their 6pm daily shift.

Workers earn 1,000 yuan a month on average, including overtime pay, according to the report.

Duoyuan makes inflatable toys, plastic products and furniture, supplying companies in the US and Japan including Hasbro Inc and Sanrio. Kazuo Tomatsu, a Sanrio spokesman, declined to comment.

China Labor Watch didn't provide any information in its 41-page report to support its charge that price cutting by international toy companies is responsible for the poor working and living conditions in Chinese factories.

Labor conditions among Chinese manufacturers were put in focus last year after Apple Computer Inc said its main supplier for iPod music players violated Apple's code of conduct.

The manufacturer, owned by Taiwan's Hon Hai Precision Industry Co (鴻海精密), corrected its violation after it was found to have made employees work more than 60 hours a week, according to an Apple statement in August last year.

Some overseas companies have conducted quality audits of their Chinese suppliers to enhance working conditions and ease concerns that they're exploiting cheap Chinese labor and lax working conditions for profit.

"We have a strong International Labor Standards Code of Conduct for Manufacturers and conduct regular social compliance audits of the independently run factories that produce Disney branded merchandise," Disney's spokeswoman Goss said yesterday.

Disney in 2003 checked working conditions of its supplier Aoyagi Toy Factory in Shenzhen, while Hasbro Inc conducted an audit on the same factory in 2004, according to the China Labor Watch report.

Aoyagi's employees work five days a week for eight hours every day, getting paid 4 yuan an hour for regular hours and up to 8 yuan for each hour of weekend overtime.

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