Walt Disney Co, the second-biggest US media company, is investigating alleged labor abuse in one of its factories in China.
"Our auditors are currently in the factory investigating claims brought to our attention," Alannah Goss, the company's Hong Kong-based Asia spokeswoman, said in an e-mail yesterday.
She declined to identify the factory and said Disney would not comment until the probe is completed in "the coming days."
Walt Disney and Sanrio Co were named in an August report by New York-based advocacy group China Labor Watch as companies whose demands for lower prices from toy suppliers contribute to low product quality.
Products made in China have been the focus of several recalls this year, including at least 21 million items recalled by the world's largest toymaker, Mattel Inc.
"We don't expect to see immediate improvement, but we welcome the investigations in China taken by international organizations," said Jeffrey Cronthall, an editor at China Labour Bulletin, a Hong Kong-based human rights group.
"The main focus is on ensuring that workers have the ability to protect their own rights," Cronthall said, because China doesn't have enough effective democratic labor unions.
Conditions for workers in Guangdong Province, where many toymakers 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 China Labor Watch report, citing its survey of eight factories in the province.
Walt Disney and its units "take claims of unfair labor practices very seriously and investigate any such allegations thoroughly," Goss said.
Guangdong's average annual manufacturing wage was 18,019 yuan (US$2,430) last year, making the province attractive for factory owners.
Pearl Tower Garments & Toys Co in Shenzhen, which makes Mickey Mouse dolls for Disney, had violated the employee contracts of many of its 1,000 workers, the China Labor Watch report said.
China Labor Watch didn't provide any information in its 41-page report to support its charge that price-cutting by international toy companies was responsible for the poor working and living conditions in Chinese factories.
Labor conditions at 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, Apple said in August last year.
The All-China Federation of Trade Unions said in April that McDonald's Corp and Yum! Brands Inc's KFC restaurants paid part-time workers less than the legal wages in Guangdong.