The Hong Kong Christian Industrial Committee is shocked to find in the statement released by McDonald's Corporation on 7 September that the corporation denied using child labor and evaded its responsibility over labor abuses by simply cutting contract with City Toys.

1. The use of child labor at City Toys is indisputable
   The HKCIC's report on the five Shenzhen plants of Pleasure Tech Holdings released on 26 August 2000 found the use of child labor. That included both high school students recruited by City Toys from Gaozhou, Guangdong province end of July; as well as other under-aged workers using falsified ID. The use of child labor in this contracting toy manufacturer for McDonald's was furthered confirmed in an interview with the family of a 13-year-old child workers at City Toys with South China Morning Post printed on 3 September 2000. The second report of HKCIC released on 3 September on the five Shenzhen plants found that since 28 August, there had been mass lay-off of both under-aged and adult workers. Cases of under-aged workers being locked up to escape inspection were reported from dismissed workers. Not only did McDonald's turn a deaf ear to these true stories; the corporation seemed happy only with its "announced visits" to the plants and did not demonstrate any sincerity and responsibility to the fact that under-aged workers were sacked and evidences removed to escape investigation. We are angry at the corporation's repudiation of the indisputable fact that child labor was used in the five plants of Pleasure Tech Holdings in Shenzhen. This is not a sincere act to be taken by a giant corporation that has integrity.

2. What is the credibility of McDonald's internal monitoring?
   That McDonald's finally admitted problems of "violations of wages and working hours", "inadequate record-keeping" as well as other labor rights abuses with City Toys, is a bitter irony to the corporation's internal auditing and monitoring system. This is a system, the corporation claimed, to be functioning well and had found nothing wrong with its contractor in the October 99 and May 2000 auditing reports; and in three months' time, the contractor quickly turned into a black sheep. We find that McDonald's moved quickly to terminate business relationship with the black sheep while turning a blind eye to its defaulted internal auditing system, is a short-sighted and misleading act. The HKCIC has a strong position on the credibility of any so-called 'independent' internal auditing and monitoring which does not have workers' participation and is not open to public scrutiny. We could find no ground to believe that such a close-door, internal auditing system can protect workers' rights and interests.

3. What about City Toys workers?
   If, according to McDonald's, halting the production and terminating the contract with City Toys is "the right thing to do", is failing to pay workers what they deserve also "the right thing to do" for the corporation? If McDonald's admitted that there were "violations of wages and working hours" at City Toys, shouldn't these workers, or their families for those that were sacked and have left, be entitled to due compensation for their wages violations? If McDonald's really cares for the benefits of its workers and not its good name only, why didn't the corporation say a word on compensating these City Toys workers who have been laboring for it under abused conditions?

The HKCIC deeply regrets McDonald's repudiation of the use of child labor at City Toys. That McDonald's attempted to end the scandal by terminating contract with City Toys while evading its mistake in auditing and compensating workers, is a highly irresponsible and misleading act.

We strongly demand that McDonald's Corporation,

1. Admit to the fact that child labor was used at City Toys and apologize to all the workers at City Toys for labor abuses;
2. Replace the existing internal monitoring system with one that is open to workers' participation and public scrutiny;
3. Give due compensation to all the workers employed at the five Shenzhen plants of Pleasure Tech Holdings for their wages violations and arbitrary dismissals.

9 September 2000

Contact person: Alice Kwan (852-97219177) or Chan Ka-wai (852-92615946)
Hong Kong Christian Industrial Committee 

Add: 704-5, 57 Peking Road, Kowloon, Hong Kong
Tel: 852- 2366 5860
Fax: 852- 2724 5098

Email: hkcic@hknet.com