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Contents © 1999
by Jim Holman.
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Of Mouse Ears and Men

ANOTHER REASON TO BOYCOTT DISNEY?

"It's a small, small world," happily sing the figures of the world's children to amused spectators on holiday. Many of these visitors to the "Happiest Place on Earth," sporting their Mickey Mouse and Pocohontas tee-shirts, their mouse ears or Donald Duck hats, do not, perhaps, know just how small a world ours has become; that their Disney garb has been manufactured in countries as remote as China, and by workers maybe a mite less gleeful than their mechanical imitators.

If ours is "a world of laughter," it is even more "a world of tears" -- at least according to reports that manufacturers licensed by Disney to make clothing depicting their cartoon characters pay slave wages to employees in both Haiti and China. Based on a February 1999 report issued by the Hong Kong Christian Industrial Committee, Chinese factory workers manufacturing clothing, hats and shoes for the Burbank, California-based Walt Disney Company work severely long hours for extremely low wages. The committee's report, drawn from interviews conducted over eight months with Chinese factory workers from four factories, states that workers at one factory work 16 hours a day, seven days a week (112 hours a week), violating China's mandated maximum 49-hour work week. The wages paid to workers at the four factories, says the report, vary between 13.5 and 36 cents an hour, depending on the schedule of production. The report notes that, according to "independent research groups in Hong Kong," a worker must make at least 87 cents an hour to provide necessities for a small family in any major Chinese city.

In Haiti, the situation is better, but still grim, say reports issued by the Washington, D.C.-based Campaign for Labor Rights. There, manufacturers of Disney-branded merchandise earn 36 gourdes (approximately $2.20) for an eight-hour day, or 28 cents an hour. Though, according to the Campaign, such wages accord with Haiti's legal minimum wage, allowing those working eight hours a day, six days a week to earn $14.40 a week, a family in Port-au-Prince, Haiti, must spend at least 363 gourdes, or $24.40 a week to meet his family needs for food, shelter and education.

"It gets even worse than that," Trim Bissell, coordinator for the Campaign for Labor Rights, told me in a July 14 telephone conversation, "because there's a Haitian-owned factory in Haiti called Megatex producing clothes for Disney. The workers in the factory last year organized a union, and they were bargaining with management and they were asking Disney to intervene to pay the producer enough so the workers could be paid a living wage. Disney's answer was not to answer their letters, but, instead, to pull its production from that factory."

On August 10, 1998, according to a Campaign report, Megatex workers, represented by the worker organization Batay Ouvriye, sent a letter to the owner of Megatex, Mr. Michel Liautaud, as part an official registration process to organize a union. Though in September of that year Liautaud agreed to initiate negotiations with Megatex employees, in October he said he would break off negotiations because of leafleting done by what was claimed to be an organization not associated with Batay Ouvriye. In October, too, Disney withdrew its authorization from Megatex to manufacture Disney-branded clothing.

Bissell could not say whether the Megatex situation was similar to that in other factories that produce Disney merchandise. While the Megatex workers approached Bissell's organization, "It's hard to get the information on these companies," he said, "because they [Disney] refuse to disclose the names and locations of the factories where they produce. We have to find that out on our own. They do a lot of their production in highly repressive countries, like China. When we get the information, it always turns out to be pretty damaging of Disney. But it's hard to get that information."

In a July 14 telephone conversation, Dimitri A. Agratchev, director of corporate communiciations for the Walt Disney Company in Burbank, told me he was aware of the issues raised by the Campaign for Labor Rights and the Hong Kong Christian Industrial Committee. Agratchev did not deny the allegations made by these groups, but explained that the issues they raised were not new. These issues, said Agratchev, have been "a concern for a long time."

This concern, said Agratchev, prompted Disney to make sure that wherever their goods are manufactured, "conditions are safe and fair." The factories used by Disney, explained Agratchev, are not owned by Disney, but, he said, Disney authorizes certain "licensees" to manufacture products with Disney-branded images, characters and brand names. These licensees, in turn, contract with manufacturing facilities in countries throughout the world. To regulate these factories, said Agratchev, Disney "started out a few years back by developing a code of conduct for manufacturers worldwide."

The Disney Code of Conduct for Manufacturers commits all manufacturers of Disney merchandise 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." The code mandates that manufacturers shall use no child labor -- "child" being defined as "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." It also states that "forced or involuntary labor, whether prison, bonded, indentured or otherwise" shall not be used, and forbids all "corporal punishment, threats, violence or other forms of physical, sexual, psychological or verbal harassment or abuse. Manufacturers, too, says the code, must provide a safe and healthy work place.

In matters relevant to the Megatex and China situations, the code states that "manufacturers will respect the rights of employees to associate, organize, and bargain collectively in a lawful and peaceful manner, without penalty or interference." "Except in extraordinary business circumstances," the code mandates "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." In regards to wages, since they are "essential to meeting employees' basic needs," manufacturers must "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." At a maximum, the code mandates that "where local industry standards are higher than applicable legal requirements, we expect manufacturers to meet the higher standards."

Agratchev said that Disney ordered that its code of conduct be translated into 50 languages and not only be distributed to the licensees and manufacturers, but posted on the factory floor. This "first step," which Agratchev called "education of our licensees," consists, too in setting up a task force "to deal specifically with these issues" which meets regularly and monitors compliance. Compliance is monitored using a monitoring program which consists of "a group of experts, compliance experts, who have people working for them around the world, Disney employees [and professional firms, like Price-Waterhouse, under Disney's hire], who have set up a very intensive schedule of factory visits -- 'audits,' we call them. They are visits to make sure that down there on the factory floor everything is in compliance with our code, with our requirements."

If these "audits" expose violations, "we do repeat visits," said Agratchev. "We insist that the management of that factory, working through the licensee in question, put a remediation plan in place, and then we do a repeat audit to check on whether that has been done and whether the problems have been resolved or eliminated. If remediation does not work, if the management will not work with us, then we withdraw authorization to manufacture Disney branded merchandise at that facility."

Has this ever happened? "Oh yes," said Agratchev. When asked how many times, he replied "I'm not at liberty to go into specifics, because this is our internal procedure."

Critics of Disney, such as the Campaign for Labor rights say that Disney's Code of Conduct is "commendable;" but they criticize Disney for not using independent bodies to monitor compliance in overseas factories. Agratchev said he has heard this criticism: "We are looking into various options; also, we are starting to study very closely the experience of other companies in that respect, and also international initiatives where various companies have attempted to create standards and to eliminate these abuses. There is now no universal standard and no non-governmental organization that is capable of enforcing such a standard."

Too, while the Code of Conduct mandates that manufacturers pay the applicable minimum wage according to the country in which they operate, that wage is typically too low to support a family -- even in the third world. The case of Haiti demonstrates this. Agratchev admitted that the Megatex wage scale (which followed Haitian minimum wage scale) was acceptable to Disney: the three authorized factories used in Haiti, he said, "were repeatedly monitored, audited, and were established to be in compliance." Thus one is led to question why Disney, whose chief executive, Michael Eisner, made over $575 million in 1997 alone, does not mandate that its contractors pay a living wage (a wage sufficient to feed, clothe, and house a worker and his family) to their employees?

"This is a good question," said Agratchev. "It is obviously an involved issue, something we and, I think, every American corporation that has contractors or sub-contractors in third world countries have had to look at and there's been a lot of public discussion about the issue. To this date, there is really no clear definition of what constitutes a living wage; it's a very complicated issue, and it's something that I'm sure is evolving. We have very carefully looked at this, and we have determined that what we should be doing at this time is, first of all, insist that wages are essential to meeting employees' basic needs -- obviously, that is why that is included in our code of conduct; but also that we should insist that, at the minimum, all applicable minimum wage and hour laws and regulations in the country be met. At this point in time, we do not see how we can get involved in defining a living wage; that is, as I said, not a defined concept at this time. It's a good rhetorical point, and it indicates very important issues, very real issues, but, in itself, it is not a clearly defined standard at all. Obviously, it varies widely from country to country, from place to place."

Did Disney, however, remove authorization from Megatex because the workers were organizing? "Not at all," said Agratchev. "It was a business decision made by the licensee." Haiti, he said, is "a troubled country, a poor country, and a country where local laws are not well enforced or are very poorly enforced and the political situation has been very unstable in the past year, and is getting more so. We have had problems manufacturing there. We specifically focused on that situation, reduced the number of manufacturers that we allowed our licensees to use there to just three, and we'll probably reduce it even further."

But do not Megatex and the difficulty of establishing a living wage for workers illustrate the problems that arise when corporations abandon manufacturing in stable countries, where laws are enforced and workers are organized, and transfer it to places where the governments are corrupt, the poor are oppressed? "Of course," said Agratchev.

-- from the Los Angeles Lay Catholic Mission, September 1999

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