How Hasbro, McDonald's, Mattel and Disney
Manufacture Their Toys

Report on the Labor Rights and Occupational Safety and Health
Conditions of Toy Workers in Foreign Investment Enterprises
In Southern Mainland China

Hong Kong Christian Industrial Committee
December 2001

Executive Summary

From August to October 2001, the Hong Kong Christian Industrial Committee (HKCIC) conducted a research on the occupational safety and health (OSH) conditions and consciousness of workers employed in the manufacture of toys for export in Guangdong province of mainland China. 93 workers were interviewed with a questionnaire that focussed on the OSH and related issues. The research covered more than 20 toy plants of varying sizes out of which 8 major supplying toy companies/corporations were identified for detailed research. 7 of them belonged to Hong Kong based corporations and one belonged to South Korean capital. The largest manufacturing company and its subsidiaries employed about 25,000 workers, while the smallest one had about 300 workers. All of them were operating in the major industrial cities in Guangdong province, namely Shenzhen, Dongguan, Guangzhou and Nan Hoi. They were all suppliers to prominent toy companies, retailers and brand names in the world, namely Hasbro, McDonald’s, Mattel and Disney. A rough estimation shows that the above trans-national toy giants share more than 50% of the global toy market.

It should also be noted that the above brand name toy companies have been contracting the manufacture of toys all over the world and all of them have developed comprehensive company codes of conduct or ethical business principles to regulate their global suppliers. All of them have been relying on either an internal monitoring system or commercial social auditors in conducting factory audits or inspection on the labor and OSH standards of their global suppliers. Yet, aside from violations of the Chinese Labor Law regarding wages and working hours, the research found that the OSH conditions at the 20 supplier plants were far from satisfactory. Not only was the Chinese Labor Law and the industry's social code (ie the International Council of the Toy Industry or ICTI's Code of Business Practice) violated, each individual company's code of conduct was poorly observed. There was a general lack of OSH provision and consciousness amongst both the workers and the management personnel at the factory level. In some cases, the working conditions as well as the OSH problems were so serious that grave concern was called for.

The HKCIC has studied and compared the company codes of conduct or ethical business principles of Mattel, Hasbro, McDonald's, Disney, as well as the ICTI Code of Business Practice. It is found that all these giant toy companies propagated their commitment to work with their suppliers all over the world in implementing the company codes of conduct or ethical business principles. The question is what goes wrong here? Interviews with toy workers provide evidence of the failure of a lot of code monitoring or ethical standards auditing, both internal and external. The bitter irony is that about 90% of the interviewed workers report that they do not know what company code of conduct or ethical business principles are.

Since 1996, the HKCIC, in collaboration with the Asia Monitor Resource Center (AMRC) and the Coalition for the Charter on the Safe Production of Toys, have released a number of reports on the working conditions of mainland toy factories that contracted manufacturing for the world’s top toy labels, including Mattel, Hasbro, McDonald’s and Disney1. Violations of the Chinese Labor Law, the ILO (International Labor Organization) core labor standards as well as the ICTI Code of Business Practice, are persistent in the export toy industry in mainland China. Nor is the failure of toy companies’ voluntary codes and the monitoring system a newly discovered thing. On top of wages and working-hours violations, the safety and health of millions of workers employed in the export toy industry in this country remains an important but long forgotten issue. Of the million-strong workforce employed in the toy industry, an absolute majority of them are migrant workers coming from inland provinces and most of them are women workers. Incidences of industrial accidents or the acquiring of chronic occupational diseases could mean deaths, loss of working ability or equally terribly, the carrying of chronic diseases back to the home provinces as these migrant workers finished their short service term in the foreign owned toy plants. Compensation for industrial injury or accidents is usually below the labor law standards. Treatment for injuries or occupational diseases is, in most cases, improper or limited. On top of them, the OSH problems are, very often than not, neglected by the workers themselves, the plant management and the trans-national toy companies that place orders. The result is repetition of human tragedies, many of which are not made known to the general public.

While the giant trans-national companies in the toy industry have been propagating their social responsibility to the international community, the responsibility of actually implementing the ethical business standards, including paying the costs and building infrastructure for observing such standards, are largely shifted to their global suppliers along the production chain. On the ground level, we witness rather the persistence of social irresponsibility.

The HKCIC believes that the toy retailers and brand name companies should be held responsible for the labor rights abuses and OSH problems of the toy workers employed by their supplier plants in mainland China. These mainland workers may not have a contract with Mattel, Hasbro, McDonald’s or Disney, but every day they are manufacturing semi-finished or finished products that bear the labels of these trans-national toy giants. The order placing practices of these trans-national companies (including the bid to the bottom pricing practice, zero inventory and just-in-time production) should be held largely responsible for the long working hours, low wages as well as safety and health hazards that are found at the supplying factory level. The practice of trans-national companies in contracting out social responsibility and industrial accidents via the global sub-contracting system will not be accepted by the international community that is increasingly concerned with labor and social standards.

The HKCIC believes that both the trans-national toy companies as well as their suppliers have the responsibility in seeing that the Chinese Labor Law as well as the voluntary codes of conduct or ethical business standards of the toy industry be implemented in real terms. The trans-national toy retailers and brand name companies that determine the pricing and delivery lead time of the actual manufacturing of toys should take up a larger share of liability. They should demonstrate their commitment by evaluating their order placing practices that, eventually are responsible for the labor rights abuses and OSH problems found at the supplying factory level.

The HKCIC demands that, both the trans-national toy companies and their suppliers,

1. Develop both long and short term plan of corrective actions, to address and eventually eliminate the occupational safety and health hazards found at the work place.
2. Comply with the Chinese Labor Law and improve the working conditions of toy workers.
3. Set up occupational safety and health committees with workers representation and participation at the factory level to monitor the safety and health conditions in the manufactures of toys.
4. That the Hong Kong Toy Manufacturers' Association and the Hong Kong Toy Council develop a plan of occupational safety and health education that aims at improving the consciousness of toy workers towards safety and health issues, as well as their legal rights. Such a platform should be open to NGO participation.

Statement on the Presentation and Usage of this Report

The HKCIC would like to make a clear statement here regarding the objectives, presentation and usage of this report.

1. This report is published to give a general illustration of the problems regarding the OSH and working conditions of toy workers that manufacture for the world’s top brand name companies, namely Hasbro, McDonald’s, Mattel and Disney.

The HKCIC, as well as concerned international communities, would condemn any penalizing actions, or gestures which would result in a penalizing effect, that might be taken up by the above 4 brand name companies towards the 20 supplying factories that are currently employing a 90,000 strong work force. Any utilization of the report information that results in a simple cut and run action by the concerned brand name companies that would lead to the closing down of the supplier factories and mass unemployment of the toy workers would be condemned and exposed to the international community.

In August 2000, McDonald’s consented to the termination of contract with City Toys, a premium toy supplier operating in Shenzhen, mainland China. The move was made after the release of HKCIC’s report on the gross violations of labor rights and South China Morning Post’s coverage of the use of child labor at City Toys. The cut and run act resulted in the closing down of 4 subsidiary plants of City Toys and the immediate lay off of tens of thousands of workers without due compensation. In a meeting HKCIC had with the Corporate Responsibility Department of the McDonald’s headquarters in HK in November 2000, HKCIC demanded reinstatement and compensation to City Toy workers. It was met with rejection and a clear statement from the McDonald’s representative, declaring that the City Toy workers were not McDonald’s workers. Having learned about how fragile a ground lies corporate responsibility, and not wanting to see a repetition of the same disaster, HKCIC has no choice, but to veil the names of the 20 supplying factories that are covered in this report. The supplying factories are named by alphabets as Factory A, Factory B etc. They could be identified with the toy labels they were manufacturing. It should be noted that such arrangement would, in no way, diminish the responsibilities the brand name companies have for their suppliers.

All the individual names quoted in this report are pseudo names. This is to avoid retaliation on individuals for expressing their opinions during the interviews.

In this report, reference to monetary terms are made first in the currency used in mainland China ie. RMB. Conversion to US dollars is made at an approximate exchange rate of 1USD = 8.3RMB.

Contents

I. The Hong Kong Toy Industry and the International Sub-Contracting System

II. Comments and Recommendations on the OSH and Working Conditions of 8 Supplying Toy Companies in Mainland China

III. Individual Company Reports

IV. Comparison on Company Codes of Conduct, the ICTI Code of Business Practice and the Chinese Labor Law

V. Concluding Remarks

Appendix - Occupational Safety and Health Questionnaire

I. THE HONG KONG TOY INDUSTRY AND THE INTERNATIONAL SUB-CONTRACTING SYSTEM

The Hong Kong toy industry started in the 1950s. In the beginning, the operations were small and depended heavily on manual labor. In 1967, the biggest factories in Hong Kong employed around 1,500 workers.

A. Playing the OEM Role

In the early seventies, the industry saw rapid development as production was diversified from stuffed toys and wind-up toys to battery-operated toys and later, electronic and even interactive toys. In 1977, Hong Kong had 1,629 plants producing toys and games. The number grew to 2,244 in 1982. From late seventies to early eighties, the industry saw a turning point as major multinational toy companies, such as Hasbro and Tonka, started to set up offices and move their production to Hong Kong. They set their eyes on Hong Kong because of the low production and labor cost. Gradually Hong Kong manufacturers played the OEM (original equipment manufacturing) role to US, Japan and European toy companies shifted to focus on design and innovation as well as the ownership of toy labels via mergers and take over. That gave Hong Kong manufacturers the opportunity to export to overseas market without bearing the marketing risks. A number of toy companies emerged to become OEM partners to big multinational toy companies.

B. Moving to Mainland China

In the early 80s, 2,200 toy factories employing 51,716 workers were found in Hong Kong. The number of workers dropped to 46,198 by 1987 and further to 3,437 in 1997 – a result of the rising production and labor cost in Hong Kong. The open door policy of China starting 1979 helped Hong Kong manufacturers solve the problem by shifting the production base of toys to the Pearl River Delta of Guangdong province of mainland China. Today, it is estimated that only about 2% of the total volume of Hong Kong’s toy export is made in Hong Kong. The rest comes from China. A survey done by the HKTDC in 1997 revealed that almost 95% of HK toy manufacturers had relocated their production facilities to the Chinese mainland. The Hong Kong Trade Development Council (HKTDC) reported that, about 3,000 HK toy companies were estimated to be operating in HK and the Chinese mainland2. The estimated number of workers employed by HK toy companies was around 3 million. Figures from the Hong Kong Census and Statistics department shows that export of the toy industry reached US$91.5 billion in year 2000.

C. The International Sub-Contracting System of Toys

The US, being the largest market for consumer goods in the world since the cold war, is also the host of the world’s biggest toy companies. Since the 60s, American toy companies have been sub-contracting the production of toys to Asian countries. Their first stop was Japan and in the 1970s, it was Hong Kong.

The manufacture of toys was then broken down into processes which allowed for an international division of labor and the emergence of trans-national toy companies.

A simplified production chain is drawn as such:

Concept – R&D – Design – Sample – Testing – Manufacturing - Marketing

Production processes that are less profitable were contracted out to wherever the cost is cheap. The higher end of the production chain, for instance design as well as R&D, are taken up by the trans-national toy companies because of higher value-added-ness and thus a better profit margin. The increasing importance of patent rights aggregates this uneven distribution of profit margins.

On the other hand, as trade becomes not only international but global, production (especially over-production) becomes more and more dependent on consumption. That necessitates good access to big overseas consumer markets for instance the US, Europe and Japan. The other end of the production chain, ie, distribution and marketing, also becomes increasingly important. Retailers, especially global chained retailers like ToysRus and Wal-Mart, dominate the picture3. According to the Toy Manufacturers of America in 1999, the average gross profit of toys taken by retailers is about 33%.4

The production chain of the toy industry, composing of sectors that have uneven value added-ness and different profit margins, is more a hierarchy than a chain.

Toy Retailers (eg ToysR’Us, Wal-Mart)

License / Brand Name Owners (eg Disney)

Trans-National Toy Manufacturers (eg Mattel, Hasbro)

Sub-Contracting Toy Manufacturers (OEM Toy Manufacturers)

The chain remains the same hierarchical when placed against the geographical background.

Retailers (US, Japan, Europe)

License / Brand Name Company (US, Europe, Japan)

Trans –National Toy Companies (US, Europe, Japan)

OEM Toy Companies (Hong Kong)

Production Facilities (Mainland China, Vietnam, Thailand, Mexico etc)

How is profit distributed down the hierarchy? How is responsibility, particularly social responsibility, shared down the hierarchy? If the globalization of (toy) production of trans-national (toy) companies is said to have created jobs to developing countries, why is it that only low-end, exploitative jobs are contracted out, and the profit hierarchy has not been changed at all? Who will be next after Hong Kong and China? Will the race-to-the-bottom-game end?

D. Changing Landscape

To acquire a larger market share and to remain competitive in the manufacturing of toys, aggressive trans-national toy companies start to either move upstream to buy more licensed products; or move horizontally to acquire other ODM toy companies. Since mid 1980s, Hasbro for instance, has been acquiring license companies and other toy companies such as Kenner, Parker Brothers, Tonka, Larami, MicroProse, Galoob, Tiger Electronics, Oddzon and Cap Toys, Bludbird and Atari etc. The company is also the licensee to a number of frenzy hit characters or series, like the Star War series, Telebubbies, Spice Girls, Pokemon, and recently Harry Porter. Mattel has acquired Fisher-Price, Tyco, and Pleasant Company etc.

Besides vertical integration, the toy industry is closely linked with the entertainment industry. Huge license fees are paid to giant entertainment corporations like Warner Brothers and Disney and to manufacture toys based on TV series and cartoon movie characters. In the last 20 years, a close link was built between the toy manufacturing industry and the fast food industry. Global fast food chains like McDonald’s comes into the scene. Premium toys are produced to promote the chain store’s business.

What happens is that the industry is controlled in a small number of giant players. They include trans-national toy retailers that dominate the marketing of toys in the world’s most important toy markets, a few entertainment or fast food giants that hold license to popular product lines or labels. And a number of prominent trans-national toy companies. The toy industry remains highly concentrated at the top of the pyramid. It is estimated that the top 50 toy companies in the US have captured about 90% of the market sales of the US, which is also the world’s single biggest toy market. These include names such as Mattel, Hasbro, Galoob Toys, Toy Biz … , to name but a few.5

E. Contracting Production

To take a more focussed look at the manufacturing sector of the production hierarchy, the sub-contracting of toy production takes place via various channels. Trans-national toy companies, toy retailers and license companies that own no production facility, may place orders with OEM toy companies through:

1. The local or regional buying office, eg Disney, Mattel and Hasbro
2. Agents or promoting companies, eg McDonald’s
3. Trading companies, eg Li & Fung also sources production for Disney
4. The importer

There are problems associating with different ways of contracting production.

1. Contracting production via a middleman may further squeeze the price down the chain. The lower the price the middleman offers, the higher the profit margin he can get. The middleman helps largely in racing the price to the bottom.
2. Profit maximization being the objective, the buying office (of a trans-national toy company) would "naturally" seek for the lowest price. The interests of the company’s buying office may clash with the social responsibility commitment of the mother company.

F. Trends in the Toy Industry

As global competition for greater market share and for cheaper production and labor cost continues, the toy industry has been re-engineered to meet the grand challenge. These changes will be directly responsible for worsened conditions for manufacturing toy workers.

1. Mergers and Acquisitions of Toy Companies
   In light of a rising trend of merging activities of trans-national toy companies, their bargaining power is further enhanced vis a vis the supplying companies. To survive, the supplying companies are forced to be more and more "competitive", in terms of price, quality, lead time etc.

2. The Retailers’ market"
   The greater concentration in the retail sector in the US and Europe, results in a continued squeeze on prices, while shorter life cycle of toys has increased the risk of product development6. In order to be more competitive, retailers need a small inventory and a responsive supply that can capture the whims of the market. The risk of inventory is gradually shifted to the manufacturers. Orders will be placed just before the shopping season begins.

G. Industrial Re-Engineering and its Relation to the Working Conditions of Workers in China

1. Just-in-time delivery

Small orders with short delivery lead-time are placed with manufacturers as buyers wait to see the market response. By adopting just-in-time inventory systems, overseas buyers may put more pressure on toy manufacturers for smaller orders and shorter delivery time. "It places the burden of inventory management on the toy manufacturers, complicating their already tricky timing exercise during the holiday season."7

The following table is about the delivery lead time given by the four trans-national companies, Mattel, Hasbro, Disney and McDonald’s to their OEM suppliers. The time is taken as between the placing of the order and the delivery of goods on board. Thus only the time spent on manufacturing the particular product is taken.

Table 1: Delivery Lead Time


No.	Product Type	Delivery Lead Time (in week)	Order Quantity
1	Action Figure	2	5040
2	Doll	2.5	7200
3	Figure	2.5	10800
4	Doll	4	11520
5	Electronic Toy	4.5	35160
6	Plush	5	8640
7	Electronic Plush	5	12960
8	Electronic Plush	4	11890
9	Action Figure	5.5	47800
10	Activity Toy	6	24000
11	Plush	7	5004
12	Plush	7	5004
13	Plush	7	6960
14	Plush	7	4008
15	Plush	5.71	4998
16	Plush	6.57	4998
17	Plush	5.71	4992
18	Plush	6.57	5004
19	Plush	5.71	4998
20	Plush	6.57	5004
21	Plastic Playset	4.14	12784
22	Electronic Robot	2	24996
23	Electronic Interactive Doll	4.43	50004
24	Electronic Interactive Doll	2.57	6000
25	Plastic Playset	4.71	20001
26	Plastic Playset	n/a	n/a
27	Plastic Playset	n/a	n/a
28	Doll	n/a	n/a
29	Activity Toy	n/a	n/a
30	Baby Playset	n/a	n/a
31	Plastic Toy	5	10008
32	Plastic Playset	6.57	25008
33	Toy Watch	2	10754
34	Wire Control Car	2	1200
35	Projector Dome	6.43	n/a
36	Plastic Toy	5	n/a
37	Plastic Playset	5	n/a
38	Action Figure	5	n/a
39	Action Figure	6	n/a
40	Plastic Toy	4	n/a
41	Plastic Playset	4	n/a
42	Plastic Playset	4	n/a
43	Plastic Toy	4	n/a
44	Plastic Toy	4	n/a
45	Plastic Toy	4	n/a
46	Electronic Interactive Doll	2	2100
47	Electronic Toy	2.14	5500
48	Electronic Interactive Doll	1.86	48000
49	Electronic Interactive Plus	1.43	4400
50	Electronic Interactive Doll	1	4000

(Source: toy manufacturers in Hong Kong)

Take the case of the production of electronic robot (no.22), only 2 weeks were given for an order quantity of 24996 pieces. Of course there are a lot of factors that are absent at this stage to help evaluating the delivery lead time, such as the production capacity of the supplier plant and the steps that are needed to produce the product. Yet, the figures still give us a glimpse on the tight production schedule of the toy industry and its workers. The following question should rather be directed to the 4 trans-national toy companies, namely Hasbro, Mattel, McDonald’s and Disney:

• How are orders placed with the suppliers?
• How do the 4 companies balance just-in-time delivery with the company commitment to comply with the Chinese Labor Law with regard to limiting working hours to not more than 40 a week?

2. Pricing

The pricing of a piece of toys, hard or soft, in general is composed of the following: labor, depreciation, raw material and overhead. In a buyers’ market that pit manufacturers against manufacturers, workers against workers and countries against countries, prices race to the bottom.

The following information shows the percentage of direct labor cost (take-home-pay for workers) over the retail price of a number of toy products produced by Mattel, Hasbro, McDonald’s and Disney in facilities in mainland China.

Table 2: Direct Labor Cost Percentage

No.	Product Type	Direct Labor Cost	Retail Price	Direct Labor Cost / Retail Price %
1	Action Figure	US$0.659	US$11.99	5.5
2	Doll	US$0.46	US$9.99	4.6
3	Figure	US$0.21	US$7.49	2.8
4	Doll	US$0.561	US$16.99	3.3
5	Electronic Toy	US$0.81	US$44.99	1.8
6	Plush	US$0.168	US$6.99	2.4
7	Electronic Plush	US$0.387	US$15.49	2.5
8	Electronic Plush	US$1.188	US$43.99	2.7
9	Action Figure	US$0.148	US$4.49	3.3
10	Activity Toy	US$0.105	US$14.99	0.7
11	Plush	US$0.367	US$9.99	3.67
12	Plush	US$0.368	US$9.99	3.68
13	Plush	US$0.36	US$10.99	3.28
14	Plush	US$0.382	US$9.99	3.82
15	Plush	US$0.175	US$6.99	2.5
16	Plush	US$0.175	US$6.99	2.5
17	Plush	US$0.175	US$6.99	2.5
18	Plush	US$0.175	US$6.99	2.5
19	Plush	US$0.267	US$9.99	2.67
20	Plush	US0.175	US$6.99	2.5
21	Plastic Playset	US$0.264	US$10.99	2.4
22	Electronic Robot	US$0.539	US$76.99	0.7
23	Electronic Interactive Doll	US$0.87	US$29.99	2.9
24	Electronic Interactive Doll	US$0.26	US$64.99	0.4
25	Plastic Playset	US$0.273	US$12.99	2.1
26	Plastic Playset	US$0.216	US$11.99	1.8
27	Plastic Playset	US$0.245	US$34.99	0.7
28	Doll	US$0.144	US$11.99	1.2
29	Activity Toy	US$0.14	US$19.99	0.7
30	Baby Playset	US$0.175	US$24.99	0.7
31	Plastic Toy	US$0.045	US$4.5	1
32	Plastic Playset	US$0.094	US$12.5	0.75
33	Toy Watch	US$0.035	US$1.99	1.76
34	Wire Control Car	US$0.264	US$27.2	0.97
35	Projector Dome	US$0.215	US$24.99	0.86
36	Plastic Toy	US$0.17	US$4.99	3.4
37	Plastic Playset	US$0.4	US7.99	5
38	Action Figure	US$0.323	US$7.69	4.2
39	Action Figure	US$0.172	US$5.39	3.2
40	Plastic Toy	US$0.517	US$10.99	4.7
41	Plastic Playset	US$0.32	US$7.99	4
42	Plastic Playset	US$0.407	US$7.99	5.1
43	Plastic Toy	US$0.17	US$3.69	4.6
44	Plastic Toy	US$0.192	US$3.99	4.8
45	Plastic Toy	US$1.78	US$4.69	3.8
46	Electronic Interactive Doll	US$0.831	US$2499	3.33
47	Electronic Toy	US$1.314	US$27.99	4.7
48	Electronic Interactive Doll	US$2.454	US$99.99	2.45
49	Electronic Interactive Plus	US$0.73	US$24.99	2.92
50	Electronic Interactive Doll	US$0.82	US$19.99	4.1

(Source: from toy manufacturers in Hong Kong)

None of the above cases show the four trans-national companies as paying more than 6% of the retail price of their products to the Chinese workers. In the most extreme case, only 0.4% or US$0.26 was paid to the workers for the electronics interactive dolls that were sold at US$64.99.

• Can Mattel, Hasbro, McDonald’s and Disney be sure that the less than 6% direct labor cost / retail price is enough to pay the minimum wage and legal overtime compensation to a Chinese worker that works 14 –16 hours a day in the peak season?

3. Job Insecurity

Seasonality is obvious in the toy industry and this applies to both the US and European market. The retailing system in the US and the toy business rely heavily on the holiday season of conscience. And Chinese workers work long hours just to support the December shopping craze. Lately, there is a tendency to push the holiday season to just a few weeks before Christmas. The holiday season of shopping is compressed due to keen competition and the reliance on just-in-time delivery. That means the peak season for toy production has a tendency to becoming shorter and drawn closer towards the end of the year. On the part of Chinese workers, it means more irregular and fragmented work as well as unstable employment. Visits to toy factories in China during the slack period give a stark contrast to the scenario in the peak season. Up to half or two-third of the workforce would be laid off during the slack season.

The table below shows the seasonal demand pattern for a total of 21 toy products of Mattel, Hasbro, McDonald’s and Disney in the year 2000. As shown, July – September is the peak season for toy production in the mainland facilities that produce the four labels. It should be added that on top of the seasonality is the popularity of the particular toy. The demand for interactive doll (no 48) demonstrates a big fluctuation. It rises from 2.66% in the second quarter to the peak of 84.88%. From there drops to 12.47% in the last quarter. Similar fluctuations can be observed with item 3, 24 and 34.

Table 3: Year Demand Pattern (Year 2000)


No.	Demand Pattern (in%)	Jan-Mar	Apr-Jun	Jul-Sep	Oct-Dec	Total
1	Action Figure	13.3	22.5	44	20.2	100
2	Doll	11.3	19	47	22.7	100
3	Figure	9	22	56.3	12.7	100
4	Doll	12.5	24	47.5	16	100
5	Electronic Toy	13.5	20	47.5	19	100
21	Plastic Playset	18.5	22.4	47.2	11.9	100
22	Electronic Robot	20	14.4	50.6	15	100
23	Electronic Interactive Doll	18.7	29.7	27.8	23.8	100
24	Electronic Interactive Doll	6.1	25.4	53.9	14.6	100
25	Plastic Playset	12	20.7	53.7	13.6	100
31	Plastic Toy	17.45	22.61	38.58	21.36	100
32	Plastic Playset	11.56	63.77	4.9	19.77	100
33	Toy Watch	20.59	30.81	24.81	23.79	100
34	Wire Control Car	35.27	2.72	37.41	24.6	100
35	Projector Dome	1.51	25.8	41.8	30.89	100
	N/a	10	18	55	17	100
46	Electronic Interactive Doll	10.33	6.08	63.09	20.5	100
47	Electronic Toy	5.95	10.51	68.87	14.67	100
48	Electronic Interactive Doll	0	2.66	84.88	12.47	100
49	Electronic Interactive Plus	14.26	13.41	63.93	8.4	100
50	Electronic Interactive Doll	9.51	34.47	35.9	20.12	100

(Source: from toy manufacturers in Hong Kong)

Sub-contracting workers are dismissed or "told to take a vacation" during the slack season. In most cases, they are not compensated. The seasonality of the industry makes these workers seasonal workers, depriving them the right to enjoy long-term benefits, such as pension and progressive training.

Too big a fluctuation in the yearly demand pattern is not advantageous to the development of a long term working relationship between the order-placing company and the suppliers, which is important to the implementation of the toy companies’ code of conduct.

• Will Mattel, Hasbro, McDonald’s review their yearly demand pattern with their suppliers? What will the four companies do, as said in all the four companies’ code of conduct, to work with the suppliers in implementing the company code of conduct?
• If the industry is becoming more seasonal, should the code of conduct of the four trans-national toy companies also cover the irregular or seasonal workforce?

4. Occupational Safety and Health Problems

II. Comments and Recommendations on the OSH and Working Conditions in 8 Supplying Toy Plants in Mainland China

This part is a summary of the research findings based on the interviews and finished questionnaire conducted with 93 toy workers employed by 20 manufacturing plants operating in Guangdong province of mainland China. The research was conducted from 9 August to 21 September 2001.

1. Research Objectives

   The Occupational safety and health problem at the work place remains a problem that receives less attention. By interviewing more than 90 mainland workers, the HKCIC aims to:

1. Understand the OSH problems and conditions associated with the manufactures of toys for export to the world’s leading toy companies.
2. Understand the toy workers’ awareness for OSH and related issues.
3. Understand the toy workers’ legal consciousness regarding labor rights.
4. Give a voice to the needs and aspirations of the toy workers.

2. Research Target

   i. Production plants
   93 workers from more than 20 operating plants of varying sizes were interviewed in this research. Amongst the 20 operating plants, the research team identified 8 toy corporations or companies to focus the study. 7 of them are Hong Kong capital investments whereas the other one is a South Korean company. The names of the 8 corporations and their subsidiaries will not be disclosed to protect the contracting factories and their workers. They will be named by alphabets but they can be distinguished in terms of their supplying relations with the 4 brand name toy companies. The biggest corporation amongst the 8 identified suppliers employed around 25,000 workers during the peak season, whereas the smallest one had a 300-strong work force. All the operating plants are located in industrial cities in the Pearl River Delta of Guangdong province, namely Shenzhen, Dongguan and Nan Hoi.

   All the 20 and more plants were supplying to world famous brand name companies in the toy industry namely, Hasbro, Mattel, McDonald’s and Disney etc.

Table1: The 4 trans-national toy companies and their suppliers

2. Workers


A total of 93 workers (44% male and 56% female) were interviewed. They were working in different departments, both production and non-production. Their age ranged from 18 to 35. They came from different inland provinces in the mainland, including Sichuan, Henan, Hubei, Hunan, Guangxi, Jiangxi etc.

3. Research Methodology

The research aimed at giving a general picture of the OSH problems and consciousness of toy workers manufacturing for export, and equally importantly, to give a voice to the workers. All the interviews were done based on a 3-page questionnaire. As occupational safety and health issues involve not only infrastructures, but also management policy and workers’ consciousness, it is thus important to understand how workers view and frame the problems. Open questions were asked where appropriate. It is deemed that not only the statistics, but the way workers understand and frame the problems is also indicative of the level of their OSH consciousness which in itself is an important reference standard to evaluate the OSH provisions and policies carried out by the factory management. Whenever possible, the interviewed workers would be asked to assess and prioritize the most serious source of hazards at the work place. This should give a reference to factories and brand name companies in addressing the problems.

The drafting of the questionnaire is based on consultation with OSH experts in the US, India and Hong Kong. The questionnaire has three sections. The first part asks about specific OSH problems identified in different departments of a toy factory. Questions in the second part ask about other OSH infrastructures and policies executed at the work place. The last part looks at the interviewed workers’ OSH consciousness and awareness of their legal rights. The last question asks workers to indicate their interest in receiving more information and training on OSH issues.

4. Research Findings – Summary

   The following is an abstract of the research findings based on the 93 finished questionnaires. It gives a general picture of the OSH conditions found in the 8 supplying toy companies/corporations that manufactured for Hasbro, Mattel, McDonald’s and Disney during the research period.

   (A) OSH problems Encountered in Different Departments

   The Assembly and Packaging Department

   • Work Stress is the major OSH problem found in this department. The assembly and packaging department is the last department where all the pressure associated with various stages of production will be accumulated. This is particularly serious in the peak season. Interview findings showed that this department worked up as long as 12 –16 hours a day, if not overnight, during the peak season. To meet the tight delivery time and shipment schedule, long working hours is usually coupled with a high daily production quota thus scheduled. Failure to hit the production quota usually means overtime work (in a lot of cases, not duly compensated according to law) and unstable lunch breaks. In some cases workers had to finish their lunch and dinner breaks in a couple of minutes whereas in other cases, workers had to eat at the work place and go back to work immediately after lunch/dinner. Stomach and digestive problems were common due to work stress. In a lot of instances, workers felt under great pressure to get the permission from the supervisors to go to the toilet or to drink water.

   • Ergonomic problems associated with long and repetitive jobs found in this department include, stiffness, numbness, pain and physical weakness developed at various body parts of the body including shoulders, necks, waist and the lower bottom of the body. Workers assembling or packaging stuffed toys had skin allergy and sore throats as they inhaled the stuffing particles in the air. Temperature at the work place was another source of health hazards especially in summer, which is also the peak season. In Factory B, cases of workers collapse as they could not stand the long hours and the heat were reported.

   The Spraying and Coloring Department

   • A lack of safety and health training for new and current workers is a major problem found in this department. Spraying and coloring workers are persistently exposed to chemicals. Yet it is found that they were at most taught about the usage of the chemicals but not the hazards and proper treatment in case of chemical poisoning. The interviewed workers in this department had inadequate understanding of the chemical labels they came across. They could not tell whether the labels were correct or informative enough. None of the 22 interviewed workers could name the chemicals (including paints, thinner and other chemicals) they were using. Nor the usage, hazards and treatment in case of poisoning.

   • Most of the visited plants had ventilation system installed in the spraying and coloring department. Yet as workers were not equipped with proper knowledge, they could not tell whether the ventilation system could effectively lower the level of paint particles in the air. On the contrary, a lot of them complained about strong chemical smell and high paint particle level as indicated by either their body discomforts or the need to frequently change their cotton masks.

   • The inadequate provision of personal protective equipment (PPE) is another common problem. Three scenarios regarding this issue can be generalized. 1. The factory management did not deliver any PPE to the workers and workers were exposed to chemicals without protection at all. 2. PPE would be delivered and workers would be requested to wear whenever there is a factory inspection or social audit. The provision of PPE was more for show rather than the protection of workers. For the rest of the time workers were working under no protection at all. 3. In some of the plants visited, PPE was delivered once a week. But the workers reported that the cotton masks and cotton gloves were filled with paint particles or dirtied in one or two days’ time. That indicates either an excessive high chemical paint exposure or the employment of improper PPE. It should be noted that the PPE in use in the reported cases referred to cotton masks and gloves whose effectiveness in protecting workers against direct skin exposure, inhalation and chemical poisoning was called into question.

   • Interviews with the workers indicated a strong reluctance to wear the PPE, if delivered. The main reasons for that are inconvenience, feeling uncomfortable and the fear that wearing PPE would slow down the production speed and thus affecting the income. It should be understood that production stress, the daily production quota system, as well as the piece rate payment of wages are important reasons discouraging workers from wearing the PPE.

   • The availability of proper solvent for workers to wash their hands is another issue of concern. Workers could not wash away the chemical paint left on their hands with plain water. They did so with thinner of various kinds whose hazards they were totally ignorant of.

   • Bodily reactions to long hours of chemical exposure as reported by the interviewed workers include, dizziness, headaches, skin allergies, sore problems, vomits and a higher liability to acquire hepatitis B.

   • Other sources of safety and health hazards identified in this department include poor ventilation, high temperature (during summer) and noise pollution (associated with the spraying machines and the ventilation).

   • Long working hours, especially during the peak season, is a constant problem. Cases of working 12 –16 hours a day or even overnight during the peak season were reported. It should be noted that working long hours in the spraying and coloring department means being exposed persistently to chemicals thus creating double hazards to the workers.

   The Die-Casting Department

   • Mechanical injury is a constant source of hazard in the die-casting department. Accidents like cutting fingers can easily take place in the die-casting department if machines are poorly maintained, not properly guarded and proper safety training for workers is not provided. The interviewed workers were asked questions about machine guard and related operation problems. It is found that the die-casting machines operated by many interviewed workers were one-button rather than two-button controlled. Mechanical injuries can easily happen as workers use the other hand to place or hold the plastic or metal parts for molding. The danger aggregates when workers have to work fast during the peak season. Incidents of mechanical injury were reported in Factory A, B, and E. In one incident, the emergency button that cut off the power supply was located far from the injured worker’s work place and the worker had his fingers cut. The interviewed workers also expressed concern about operating unguarded machines.

   • Formal and proper training on the safe operation of machines is absolutely necessary for both new and current workers. In many of the interviewed cases, it is found that workers were verbally instructed about how to operate the machines not how to "safely" operate the machines. Few workers reported that safety machine instructions were posted.

   • Other hazards identified in this department include noise pollution and high temperature. Yet few workers reported that they were delivered PPE like ear plugs, face and eye masks. The other main problem is that workers showed reluctance in wearing the PPE. Fear of slowing down the production speed and affecting income, inconvenience and feeling uncomfortable are the major reasons for that.

   • Strong physique is required in this department and very often, male workers are employed. Factories would also arrange two or three shifts for workers. Workers work shorter hours. But the liability of having industrial injuries is high in the die-casting department especially without proper safeguards and training provision.

   The Sewing Department

   • Finger cut is a commonly identified industrial accident in the sewing department. The needle of the sewing machine can be easily broken when workers are operating in high speed. Accidents of this kind frequently take place in the peak season. No factory has machine guard installed in the sewing machines.

   • Noise pollution is another problem. The interviewed workers in some of the visited factories said they could hardly hear or talk to each other at the work place. No factory was providing regular ear tests or ear protection to workers.

   • Long working hours is identified by workers as a major hazard. Workers have to sit for 12 – 16 hours, sometimes overnight, repeating the same motif of work. Ergonomic problems like stiffened shoulders and waists, fatigue, body weakness and pained legs (to operate the handle of the sewing machine) are commonly found. The provision of standardized wooden seats might not fit workers of various heights. That might aggregate the ergonomic hazards workers thus suffered.

   The Silk Screening Department

   • Silk screening workers are exposed to chemicals. It was observed in the course of the interviews that the paint had got into the hands of the interviewed workers. Workers interviewed in this department did not understand the hazards of the chemicals and the thinner used.

   Tooling Department

   • The work place at the tooling department is usually noisy and the temperature high. Temperature of the tooling machine in operation can be as high as 200 or 300 degree C whereas temperature at the work place ranges from 33 –38 degree C. Exhaustion, high temperature as well as mechanical injury are common sources of hazards.

   Hole Pressing Department

   • Mechanical injury is identified as a source of hazards in this department. Absence of proper machine guard and a lack of proper training for workers could result in injuries especially when production pressure is intense during the peak season.

   The Trimming Department

   • Interviewed workers from this department were given a cutter to trim the edges of plastic toy parts. They were not equipped with proper gloves and could get cut from time to time, especially during the peak season. Lack of proper treatment could result in infection and other ulcerous diseases.

   (B) Other OSH Problems in General

   Fire drills and fire prevention

   • Amongst the plants visited, large-scale operations have regular (quarterly or yearly) fire drills at the work place. Still more has to be done. First, even for large-scale plants, the fire drills might not necessarily cover the dormitory. Second, in some factories, the fire drills were done by selective or random participation from each department (like asking part of the work force or the security guards to participate). It could be that the management did not want to disrupt production especially during the peak season. Yet, this undermines the meaning and effectiveness of fire drills. Third, fire drills were found to be effective since the participated workers said the drills helped them to identify the exits. But many of them did not know how to use the fire extinguishers. For smaller to medium sized plants, having infrequent or even no fire drill is a problem. Some of the interviewed workers, whether from large or small-scale plants, also reported storage of goods at the alleys. This was the case especially during the peak season or when there was no factory audit. What is reflected from the workers shows that fire prevention has to be persistently taken rather than a show for audits. And that there is a further need to strengthen the fire prevention consciousness at both the workers and the management level.

   Long Working Hours

   • Long working hours is a persistent source of safety and health hazards for all plants, big or small. The interviews were done in August and September. It was the peak production season and thus also the high-risk season for safety and health problems. As gathered from the interviews, most of the workers worked seven or six-and-a-half- day a week and 14-18 hours a day at most. The worst case reported overnight work and continuous overnight work. Long working hours led to exhaustion and lack of concentration that could lead to industrial injuries. What is more worrying is that long-hour work undermines the health and the body resistance towards various kinds of diseases and chemical poisoning. It leads to hidden and chronic health hazards. The implications call for grave attention as the work force in the toy industry is highly seasonal and mobile, workers might not be able to identify or prove the acquisition of occupational diseases once they left the factory.

   Faints and deaths

   • Faints are constantly reported in the workers’ interviews. Cases were reported to have happened in the assembly department of Company D, the spraying department of Company B, the tooling department of Company C, the hole making department of Company H and the spraying department of Company A. This constitutes not a small percentage for a random research. The fact that faints are common during the peak season should not undermine its grave implications. Possible reasons leading to faints at the work place can be long working hours, physical weakness, heat or chemical poisoning etc. In most cases, proper treatment and detailed diagnoses were not given, making it difficult to relate faints to work place hazards and to eliminate the source of hazards. Workers in general were told to take a rest, have some herbal ointment and go back to work. A general lack of proper diagnoses and medical documentation as well as a general negligence at both the workers and the management level calls for alarm.

   • Though not equipped with enough access to information to clarify, cases of unknown deaths were reported in the trimming department of Factory H during the research period. As understood by the interviewers, the causes of deaths were not known making it impossible for the family or the fellow workers to investigate whether the deaths were occupation related. It is understood that there might be a lot of reasons, both relating and not relating to the occupation, that lead to unknown deaths during a worker’s terms of service at a particular factory. Yet, the way the reported case of unknown death was handled was both illegal and unjust. The management did not want to spread the issue and a sum of compensation was given to the families. Without proper assistance and adequate legal knowledge, the families could not get due compensation according to law. Nor were they equipped with the means to demand or take an investigation on whether the death were occupation related. Whereas the rest of the work force was kept in the dark while the source of hazards was not eliminated.

   Medical Provision and Lack of an OSH Policy

   • Body check-up

   Regular body check-ups (yearly or twice a year) took place in the large-scale plants that were visited. It varied from factory to factory whether the check-ups were paid by the management or the workers. What cannot be accepted is that some of the factories, even large-scale ones, used body check-ups as a screen test to remove workers (current or new) that were weak or sick. These workers would be blatantly fired, "advised" to quit or simply told by the management to take a "long vacation". What these factories doing is illegal and irresponsible as the Chinese Labor Law states that workers that have acquired diseases or illnesses during the terms of service should be protected, not fired.

   • Factory clinic

   Large-scale factories had factory clinics, but not for smaller scale ones. In general workers had to pay a subsidized medical fee. Workers would be sent to the hospital in case of industrial injuries.

   • OSH policy

   None of the factories visited had an OSH policy or an OSH committee that workers could name of. It can be seen in the above parts that a systematic documentation of the medical and injury records is urgently needed. A record of both workers’ medical histories as well as that of the factory’s OSH hazards and accidents can help both parties to identify, report, investigate and eliminate hazards. It also helps both parties to give and receive proper and legal treatment.

   Women’s health

   • A large proportion of the work force in the toy industry is female labor. In many instances, women workers have to pay a high price in exchange for a job in the factory. The Chinese Labor Law as well as the "Regulation on the Protection of Female Workers" states clearly the rights of women workers to legal protection during the menstruation period, pregnancy, maternity and breast-feeding period. Yet none of these provisions was implemented for rank and file women workers in all the 20 plants covered in the research. The fact that both the workers and the management did not have the awareness for gender specific rights and provisions calls for urgent attention and improvement. As reported in a case, it was generally accepted that the pregnant worker would "naturally" quit the job when she was about to give birth.

   (C) Legal Rights Knowledge and Awareness of Workers

   The following figures give an idea of the legal rights understanding of the 93 workers that were interviewed.

   Table 4:

   Questions:	Yes, I know	I’ve heard about it	No, I don’t know
   1.Do you know the legal minimum wage of the town you are working in?	10%	0	90%
   2.Do you know the legal working hours ceiling of the town you are working in?	4%	1%	95%
   3.Do you know how much compensation you can get if you are industrially injured?	0	1%	99%
   4.Do you know anything about the Chinese Labor Law?	8%	25%	67%
   5.Do you know anything about the "Regulation on the Protection of Female Workers"?	0	1%	99%
   6.Do you know anything about the "Law on the Protection on Teenagers"?	1%	1%	98%
   7.Do you know anything about code of conduct?	9%	1%	90%
   8.Do you want to get more information and training on OSH issues?	Yes, I want. 82%	I have no opinion. 16%	No, I don’t want. 2%

   • The Chinese Labor Law is the relatively more well-known or well-heard-of piece of labor rights provision amongst the interviewed workers. But the percentage is still low, less than 25%.

   • Company code of conduct as put forth by trans-national corporations and in this case, all the four world-famous brand name toy companies, is, disappointingly poorly known amongst the interviewed workers. Only 10% of the interviewees said they knew or had heard about company code of conduct. This is a big slap in the face for the trans-national companies that have spent millions of dollars promoting and propagating their company code of conduct which they claim, can protect third-world workers along the production chain.

   • A significantly high percentage of the interviewees (80%) showed positive interest in acquiring more information and training on OSH issues. This represents a voice and a desire for more education and rights protection, contrary to the casual argument that mainland workers coming from poor inland provinces had low educational level and were too pragmatic and utilitarian to care about their rights.

   • It is found that without proper legal rights education, workers have a lot of wrong interpretation and confused understanding about their rights and relevant labor rights provisions. A large proportion of the interviewees took legal minimum wage as the lowest pay they had ever received. Similarly, they confused company code of conduct with factory regulations. This totally works against the intended objectives of having a company code of conduct. In many instances, workers could not even tell what brand name product they were manufacturing. Nor could they distinguish and see the relationship (both business as well as ethically binding) between the trans-national companies that placed orders and the supplying factory that they had an employment relationship with. Without proper training and education in this regard, code of conduct cannot work effectively as a tool to protect the interests of grass-root workers. And the supplying factory can take advantage of workers’ ignorance to give a sham to code of conduct or ethical business standards.

   • Inadequate understanding of their legal rights has more implications as workers in general equate labor rights with proper payment, working hours and other benefits. A serious lack of consciousness for laws on women worker protection, teenager protection, OSH protection and industrial injury compensation means that workers do not understand their rights to healthy and safe work and that health and safety are regarded as marginal issues compared to work pay. This reflects in a lot of the interviews as workers could only tell the pay day but nothing about the treatment and sources of assistance that they could turn to in case of accidents or injuries. They expressed a vague understanding and reliance on the management to take care of everything if misfortune knocked on the door. Such a mentality and such a serious lack of rights consciousness is both worrisome and dangerous.

   (D) Comments and Recommendations

   1. OSH at Three Levels
   • The OSH issue is a complicated issue. It relates not only to the nature of the industry and physical factors, such as the physical set up of the work place, the machines in operation and the raw materials used. It is also highly related to administrative and management policies including work flow management, personnel management and factory information documentation etc. Thirdly, the OSH issue cannot be separated from education and training, both for rank and file workers as well as the management.
   • The first rule on OSH and related issues is always prevention and not aftermath treatment. To develop a preventive plan requires identification, investigation, analysis, documentation and evaluation. And that it should be done in a consistent and interactive manner.
   • Three levels of hazard control are distinguished: engineering control, administrative control and personal protective measures. It should be emphasized that to prevent, it is more important to first reduce the risk and hazard level at the work place and gradually replace it with a healthier work environment. Taking personal protective measures is always the last resort. Yet the general response from the management would be putting the blame on the poor consciousness and reluctance of workers to wear PPE. This argument puts the cart before the horse and cannot be accepted.

   The HKCIC demands that the supplying factories/toy companies covered in this report start a thorough investigation of the OSH hazards and devise a progressive plan to ratify OSH problems at all the three levels ie engineering, administrative and personal protection level.

   2. Ratifying long working hours
   • The research findings show that long working hours and huge work stress under the piece rate pay system and the production quota system are two general and major sources of hazards to safety and health, be it large or small scale factories. And it is the situation for the toy industry as a whole, especially during the peak season.

   • The HKCIC demands that the factory management of the 8 supplying companies that are covered in this report, review and re-arrange the work flow and work force management.

   • At the same time, the 4 brand name toy companies, namely Hasbro, Mattel, McDonald’s and Disney should also review and re-schedule the production lead time they give to all their supplying factories.

   • The HKCIC believes that one cannot go without the other. Both the order-placing toy companies and the supplying factories should work together in this particular area.

   3. Establish a systematic approach to OSH issues

   • As gathered from the workers’ interviews, none of the visited factories seems to have developed a systematic and coherent approach to prevent, identify, report, investigate, ratify and document OSH and related problems. None of the factory visited had an OSH committee to specifically handle the matter.

   • This is true not only at the supplying factory level. It applies also to the 4 trans-national toy companies. Cases of failure of code of conduct auditors, whether internal or external, to spot the problems can be found in detailed factory reports put under Part III.

   • The HKCIC demands that the 8 supplying companies set up OSH committees to develop a systematic approach to OSH issues. The formation of this OSH committee should have rank and file workers participation. (for details about the OSH committee, see Part IV)

   • The four brand name toy companies, namely Hasbro, Mattel, McDonald’s and Disney, should take up the responsibility to support and give assistance, including technical, informational and financial ones, to their suppliers to ratify safety and health problems and to prevent and control safety and health hazards. Without substantial commitment, a better OSH code or more factory audits are nothing but a sham only.
   4. Formal OSH education and training for both workers and the management

   • A lack of formal safety and health training is a chief factor directly responsible for industrial accidents or injuries and chronic occupational diseases. Mechanical injuries like cutting hands and fingers, as well as chemical poisoning are two common OSH problems associated with the toy industry. They can be more effectively controlled if formal training and education is given to workers. All the 8 supplying toy companies fare poorly in this area. It should be reminded that providing education and training to workers by no means imply that the management can shift the responsibility to the workers. Without proper engineering and administrative control, a mere provision of OSH education and training has no substantial meaning.

   • The HKCIC deems that both the supplying factory and the brand name toy companies, namely Mattel, Hasbro, McDonald’s and Disney, should support and cooperate in launching formal OSH training for both workers and the management.

   5. Regular Medical Check-Ups and Documentation

   • Medical check-ups can help the factory management to identify and trace the sources of hazards to eventually control and eliminate them. It is not a means to screen, remove and penalize sick workers.

   • Regular check-ups should be provided to the whole work force. A personal as well as factory-level medical history record should be kept. Workers should be educated about the significance of such a recording system.

   • Medical check-ups cannot be isolated from a coherent OSH approach that coordinate resources and investigates the linkage between symptoms and occupation related hazards and diseases.

   6. Safety and Health Protection for Women Workers

   • Gender specific training and legal rights education should be given to both the management and the rank and file women workers. Both parties should learn that women workers enjoy legal protection in particular areas.

   • Pregnant workers should not be arranged to take up dangerous or high-risk jobs.

   • It is recommended that the medical provisions can be more gender specific and more assistance should be given to women workers during the "4 periods" – menstruation, pregnancy, maternity and breast-feeding period – according to the labor law.

   7. Measures to be taken at specific departments

   The Assembly and Packaging Department
   

   • Long working hours and work stress are two major problems in this department.
   
   
   • It is demanded that both the supplying factory and the 4 brand name toy companies work together for a better lead time schedule that gears towards reducing overtime hours and improving unstable working hours.
   
   
   • It is recommended that more breaks be arranged between the two lunches
   
   
   • Workers should be given lunch breaks of reasonable length for them to eat and take proper rest.
   
   

   The Spraying Department
   

   • Constant exposure to chemicals is a major hazard in this department.
   
   
   • Education and training on the name, composition, hazards and proper treatment of the chemicals used should be given to the workers.
   
   
   • Chemical labels should contain information such as the names, composition, hazards, use instructions, and proper treatment. They should be written and put in a clear and easy to read manner.
   
   
   • The supplying factories should replace hazardous chemicals with ones that are less hazardous to health.
   
   
   • An OSH committee should keep a record of the hazardous chemicals used, explain to the workers, and deliver appropriate PPE that offers effective protection to specific chemical poisoning to workers.
   
   
   • Engineering control measures should review and improve ventilation system at the work place.
   
   

   The Sewing Department
   

   • Noise pollution and ergonomic problems are identified in this department.
   
   
   • It is recommended that more breaks be given between the two lunches.
   
   
   • Regular ear test be given to workers to keep record of the hearing problems of the workers.
   
   
   • The factory management should review the work floor plan to avoid an over-crowdiness of workers and sewing machines at the shop floor.
   
   

   The Molding Department
   

   • Mechanical injury is the major hazard.
   
   
   • Proper machine guidance and maintenance should be kept.
   
   
   • Formal safety training is urgently needed for both current and new workers.
   
   
   • OSH education should be given to workers to strengthen their safety awareness and awareness for their rights protection in case of industrial accident.
   
   
   • An industrial accident record should be kept. The information is useful for further engineering control and safety education purposes.
   
   
   • Working long hours should be avoided in the molding department. A better management system of the work flow that aims at minimizing accidents not maximizing production should be put in place.

   ---

   III. INDIVIDUAL COMPANY REPORTS

   III.1) REPORT ON THE OSH AND WORKING CONDITIONS OF COMPANY A

   The following report is structured as such:
   

   1. Company information
   
   
   2. Research Sample
   
   
   3. Overall Conditions on Occupational Safety and Health (OSH) in Company A
   
   
   4. Overview on the Working Conditions in Company A
   
   
   5. Report on Factory A1
   
   
   6. Report on Factory A2
   
   
   7. Report on Factory A3
   
   
   8. Report on Factory A4
   
   
   9. Report on Factory A5
   
   

   1. Company Information

   Company A is a Hong Kong based enterprise. It was established in the 1980s and was listed in the Hong Kong stock market. Just like other Hong Kong toy companies, Company A receives OEM orders and is an important vendor to a lot of toy retailers and brand companies all over the world.

   Subsidiaries
   Company A has a number of subsidiary plants located all in the industrial areas of Guangdong province, including Punyu, Dongguan and Shenzhen. It is estimated that these plants employ a total of more than 10,000 workers.

   Products
   Products manufactured by Company A include battery operated toys, electronic toys, plastic toys, pre-school toys, educational and infant toys, premium toys, as well as stuffed or plush toys and dolls. Europe and the US are two major markets.

   Major Clients
   Company A is the major supplier to a number of toy brand companies including Hasbro, Mattel/Fisher-Price, Tomy, Unimax, Galoob, Takara, Bluebird, Asahi, IDT, Ohio Art, Toy Biz etc.
   

   Business Performance
   Company A consistently recorded a sales performance of over HK$1 billion in 1990s. A prominent proportion of that came from toy production.
   

   Research on Company A was conducted by visiting and interviewing workers employed in 5 subsidiary plants of Company A. They are:

   1. Factory A1 (Shenzhen)
   
   
   2. Factory A2 (Pun-yu)
   
   
   3. Factory A3 (Dongguan)
   
   
   4. Factory A4 - (Pun-yu)
   
   
   5. Factory A5 - (Dongguan)
   
   
   2. Research Sample

   The following research was conducted from July to September 2001. 24 workers from the above 5 subsidiary plants of Company A were interviewed. They included supervisors, non-production and production workers, coming from different departments including assembly, spraying, quality control, metal component, injection molding, pressing, packaging, testing, welding, trimming and finishing department. The information of the interviewed workers are categorized as follows:

   Sex	Female	Male
   Number	12	12

   Age range	16-20	21-25	26-30	Above 30	Not sure
   Number	4	9	7	2	2

   Terms of service	Under 1 year	1-3 years	Above 3 years
   Number	11	10	3

    

   3. Overall Conditions on Occupational Safety and Health (OSH) in Company A

   It is found in our investigations and interviews that there are serious occupational safety and health hazards in the subsidiary plants of the company. These include both accute hazards and chronic occupational diseases. There is a serious lack of safety and health understanding and knowledge on labor laws and relevant regulations on the part of workers. At the same time, the management is reluctant to disclose and address safety and health problems. The hazards identified in the investigation are summarized as follows.

   1. Lack of safety and health training

   Most of the workers did not receive formal on-the-job safety and health training. They were told to observe and follow what their seniors were doing. Their only source of information on production process and factory rules came from supervisors or fellow workers. Yet safety and health hazards were missing from these informal couching. They were told how to use the chemicals but not the names or the hazards of these chemicals. Nor was there proper labeling on the chemicals. The interviews reported workers using thinner and solvents to wash paints on their hands which later caused skin diseases and allergies. In some of the subsidiaries, personal protective equipment was delivered to workers (according to some workers, that was to impress auditors or visitors). Lacking safety and health consciousness, they did not understand the importance of wearing protection equipment. The management would rather turn a blind eye to the problem and very often, it became too late when workers finally realized the costs they had to pay.

   2. Long working hours and safety and health

   Occupational hazards brought by high temperature, sound pollution, chemical exposure and repetitive body movement would get serious when workers had to work under such an environment for long hours. It is one thing written in the Chinese Labor Law that workers should work 8 hours a day, 5 days a week and not more than 3 overtime hours on average a day. It was another thing in reality when most of Company A's workers labored up to 14, and at most 18 hours a day if not overnight, and 7 days a week during peak season.

   Long working hours function with the piece rate system and a high daily production quota to achieve the biggest squeeze on labor. By paying the piece rate and setting a high quota, workers have to work long hours (in order to finish the quota fixed by the management) and work quickly at the same time (otherwise they would be penalized by not getting over time compensation if the quota is not reached). Whereas paying the time rate will have workers wanting to work over time but not as efficiently.

   Long working hours, a constant deprivation of rest and sleep is a dangerous factor that first means longer exposure to industrial hazards. Second, the level of hazard alertness of the workers would be lowered thus throwing them to higher risk of industrial injury. Third, prolonged fatigue undermines the health of workers making them vulnerable to chronic diseases or ergonomic problems which may not be detected during their service terms in the factories.

   Long working hours may be caused by the order placing practices of retailers and brand name companies. They should bear the responsibility in causing the seasonal fluctuation and shorter and shorter delivery time giving to the manufacturers. To ratify the problems, the retailers and brand name companies should also should review their order-placing schedule and give a reasonable delivery time to the vendors. Meanwhile Company A should review the working hour schedule and give more breaks and rests to the workers.

   3. OSH problems are serious in the spraying department

   The OSH problems in the spraying department of the subsidiaries of Company A are serious. The spraying department was the department most complained about by the interviewed workers. Problems such as high temperature, poor ventilation, long working hours, sustained exposure to chemical paints, inadequate personal protective equipment and lack of OSH consciousness of workers, are stringent. In some of the subsidiaries, workers reported that the management did nothing to improve their conditions. Hazardous chemicals were not substituted with less hazardous ones, no resources were put for mechanical re-engineering, nor were personal protective measures adequate. The cotton masks and gloves delivered could not prevent poisonous chemicals from getting into workers' hands and skins. Nose bleeding and faints were found at the work place especially during the peak season.

   4. Body Check-up serves other ends

   Regular body check-ups were provided in certain subsidiary plants of Company A while in some subsidiary plants, workers had to pay for them before getting the job. Yet it was found that body check-ups could be abused as screen tests to recruit "healthy" workers and remove sick ones. Current workers or new recruits could be fired or rejected if they were physically weak or found to have acquired diseases. It seemed that the management of the Company was more concerned with its production being disrupted by having weak or sick workers rather than the health of workers.

   5. A general lack of OSH awareness and policy on the management’s part

   In some subsidiaries of Company A, there was no regular fire drill at the work place and dormitories. Even if fire drills are conducted few times a year, engineering and management control is also important in implementing fire control. These include using non-inflammable materials, keeping a good storage of materials and semi-finished parts, good ventilation and the right temperature at the work place. More so, persistent education to both workers and the management on fire consciousness, especially during the peak season should be given more priority. More care should be given to consciousness building work for both workers and the management of Company A.

   Besides fire, a general lack of OSH consciousness was found on the management level. In certain departments and subsidiary factories, personal protective equipment (PPE) would be delivered. But an evaluation on the engineering and management control over industrial hazards is needed and measures be adopted to remove or contain the hazards. Otherwise it is just shifting the responsibility to the workers by focussing on PPPE only and workers are blamed for not wearing them.

   6. Workers had low OSH consciousness

   The following is a statistical analysis on the legal and OSH awareness of 24 workers interviewed from Company A.

   Questions	Yes, I know	I've heard of it	I don't know
   What is the minimum wage of the town you are working in?	4%	0	96%
   What is the ceiling of working hours in the town you are working in?	0	0	100%
   If you have acquired occupational diseases, do you know how much compensation you are entitled to?	0	4%	96%
   Do you know anything about the Labor Law?	12%	25%	63%
   Do you know anything about the Regulation on the Labor Protection of Women Workers?	0	0	100%
   Do you know anything about the Law on the Protection of Teenagers?	4%	0	96%
   Do you know anything about code of conduct?	0	0	100%
   Do you want to get more information and training on OSH?	Yes. 79%	I don't have an opinion. 13%	No. 8%

   The above figures show a serious lack of understanding on laws and regulations on the part of the interviewed workers. The most well known law was the Chinese Labor Law and still less than 40% of the interviewed workers said they knew or had heard of it. Not being equipped with legal knowledge, workers often had distorted understanding of their rights. In one case, a female worker was asked if she knew anything about the Regulation on the Protection of Female Workers. Her reply was "Yes, I do. It tells us that female workers have to quit their job when they are pregnant." Such a distorted understanding of laws and workers’ rights reflects how illegal management practices and abuses of labor rights are taken as the rule of life.

   Company codes of conduct, which were claimed to have been implemented by retailers and brand companies that laid orders with Company A, were alien things to the interviewed workers. It is ironic to compare the amount of resources these retailers and brand companies put to propagate their own codes of conduct to the media and consumers of their home countries with that devoted to educate production workers about these codes of conduct. If codes of conduct are not meant to be public relation gestures, it is high time that workers be equipped with it as a tool for changes that they have a part to play in.

   Despite their poor knowledge on the issue, 80% of the interviewed workers wanted to have more OSH education and training. But a general helplessness and apathy was expressed. Answers like these were given. "You think you can get it when you want? No way!", "It makes no difference, what can a worker expect?", "I don’t know how long I can stay in this factory. I might be leaving tomorrow, who knows?" This reflected their dissatisfaction about the OSH conditions they were under but were either afraid or feel helpless to put that into expression or action. Industrial seasonality is also a great hindrance to conducting OSH training to workers. Workers would rather sacrifice their health and safety to earn a bit more before they are laid off.

   4. Overview on the working conditions in Company A

   Over the years, high quality and quick delivery are the competitive edges of Hong Kong toy OEM companies, including Company A, in the world’s major toy markets. Toy retailers and the brand companies demand only safe toys, high quality and timely delivery at the expense of the working conditions, and in particular, the health and safety of toy production workers. Hong Kong toy OEM companies therefore has also paid little attention to the safety and health infrastructure of their plants. Despite its size, Company A is in no exception. If big OEM companies like Company A has difficulty in complying to the labor and safety and health standards, it is hard to imagine that smaller counterparts can.

   1. Wages
   
   To give a matrix, the highest pay a production worker earns in the peak season amongst the 24 interviewed workers in Company A is compared with that in the low season. A production worker having worked 14 - 18 hours a day and 31 days in the peak season of July and August would get RMB500 - 700 (USD40 - 87.5) a month. In low season, the worst case amongst the 24 interviewed workers got only RMB200 - 300 (USD25 - 37.5) a month. A case was reported in which an hourly salary of as low as RMB0.8 (USD0.1) was paid. This violated the requirement of paying the minimum wage at local townships. Details can be seen in individual factory reports.

   Most of the production workers in Company A were paid by piece rate. They were not paid the legal compensation rate for overtime work. In some subsidiary plants, the pay record system was not clear and workers did not know exactly how their wages were calculated. Wages remained a major area of complaint during the investigation. As in many other enterprises, there was a one-month lag in delivering wages to the workers. This pull them back from quitting their jobs or taking leave during the peak season.

   2. Working hours
   
   On the one hand Company A was placed with a lot of orders from retailers and brand companies, most of them were placed in a few months’ time before the Christmas season. On the other hand, that also means that workers have to work long hours during the peak season. In one case, workers were laboring continuously for long hours for 100 days without a break in order to finish the Christmas order. To beat the lead time, lunch time was squeezed. In Factory A2, instances of workers being locked up to have their lunch at the plant were reported. Long working hours not only violates the Chinese labor law, it poses serious damage to workers' health.
   3. Freedom of association
   
   It was reflected in this investigation that workers' right to strike and associate was not respected in Company A. A wild cat strike was reported in one subsidiary plant, Factory A5, in 2001. Workers in Factory A5 were all dismissed. Besides, none of the subsidiary plants of Company A has a trade union. It is a big irony to see that on the one hand all the core clients of Company A, for instance Hasbro and Mattel, support freedom of association. And that the Chinese Labor Law states that workers have the right to associate and represent their rights. Yet Company A is acting in violation of this particular clause.
   4. Other welfare
   
   Most of the interviewed workers that most of them did not sign contract with their employers and were not insured properly according to law. It is a surprise given the big size and production scale of Company A. Besides, complaints about food and lodgings remained a most frequently raised topic amongst the interviewed workers.
   5. Report on Factory A1

   Location: second industrial zone of Shenzhen, Guangdong province.
   Factory A1 has two plants, the old and the new plant. They are located in the same neighborhood. The following report was done by interviewing workers from both the old and the new plants of Factory A1.

   1. Working conditions

   1. Wage violations
   

   • Production workers in Factory A1 were paid by piece rate.
   
   
   • In addition to the piece rate wage, production workers received a full attendance bonus of RMB50 (USD 6.02) and a living allowance of RMB 50 (USD6.02) a month.
   
   
   • Three examples gathered from different departments were cited to illustrate the wage violation found in Factory A1.
   
   
   1. A worker from the pressing department worked 31 days in July 2001. He got RMB750 (USD90.36) as the July salary. That included the bonuses and allowance. He knew that he was given RMB2.25 (USD0.27) as the over time hourly compensation. But it was not a fixed over time rate.
   
   
   2. A worker from the assembly department said his salary ranged from RMB380 to RMB800 (USD45.78 to USD96.39) between the slack and peak season, allowance and bonuses included. As he understood it, he was not given over time compensation on Saturday and Sunday.
   
   
   3. A QC supervisor got RMB 1000 –1500 (USD120.48 – 180.72) a month during the peak season. This supervisor was paid by time rate. He normally worked 26 days a month and had 3 over time hours a day (more during peak season).

   By the time of the visit (July – September 2001), the legal minimum wage for the second industrial zone of Shenzhen was RMB440 (USD53.01) a month. It was based on a 40-working-hour week, and 20.92 working days per month basis (approved by the Chinese government). Reducing the legal minimum wage to hourly pay, the legal minimum hourly pay should be RMB2.6 (USD0.31). Over time rate on weekdays should be 150% of the normal hourly rate, ie RMB3.9 or USD0.47 per hour. 200% of the normal hourly rate on the weekly legal rest day which usually is Sunday, ie RMB5.2 or USD0.63 per hour. And 300% on statuary holidays, ie RMB 7.8 or USD0.94 per hour.

   Although we did not know the exact number of working hours of the three workers, a simple hourly pay comparison with the legal minimum pay standard helps to illustrate the wage violation. The pressing worker claimed to have received an over time rate of RMB2.25 from Factory A1. He should get a legal over time pay of RMB3.9 an hour for over time work on week days. What he got for over time compensation was even lower than the regular minimum hourly pay rate (RMB2.6 per hour). He had no rest day in July. And he was not paid the legal over time rate for working on the weekly legal rest days (RMB 5.2). This was the same for the assembly worker. Of the three cases, only the QC supervisor had a higher chance of being paid the legal rate according to law.

   2. Working hour violations
   
   Workers from Factory A1 had not taken any rest day for the past four months. During this peak season, they started working from 08:00 to 21:00 and had two lunch breaks of one hour each. That means they worked 13 hours a day during this peak season. Over time work started after 21:00.

   It is stated in the Chinese Labor Law that workers work 40 hours a week and not more than 36 over time hours a month or 3 over time hours a day. Workers should have one day off each week. Factory A1 obviously violated the Chinese Labor Law on working hours.

   3. Others
   
   
   • No contract was signed with production workers.
   
   
   • For workers that had contracts, they were not given any copy for reference.
   
   
   • There was a one-month lag in delivering wages.
   
   
   • It was not clear whether the management had insured the workers. The interviewed production workers were not aware of any deductions for insurance from their wages.

   2. OSH conditions in Factory A1

   • The Pressing Department
   
   
   • No formal training was given to the workers. The supervisors would verbally explain about machine operations to production line workers.
   
   
   • Some of the pressing machines were operated with one button. Workers are prone to higher injury rate with one-button machine operation.
   
   
   • Some pressing workers worked on shifts of 11 hours each. There was no break besides the two lunches. Having worked long hours, workers that took the night shift would doze off at the work place, thus further increasing the danger.
   
   
   • Temperature at the work place was high, about 42-43 degree C. But workers could have access to drinking water.
   
   

   Lack of training and long working hours are two risk factors that can lead to injury in the pressing department. The interviewed workers in the pressing department expressed concern about the high temperature and air quality.

   • The Assembly Department
   
   
   • No formal training was offered. Supervisors gave verbal explanation to new workers on how to perform their jobs.
   
   
   • The assembly workers worked an average number of 13 hours during the peaks season. The number of working hours was high and breaks are little. In some occasions, they had to work overnight.
   
   
   • Workers complained of great work stress. When they had finished their daily work, they had waist and shoulder ache for having sat for long hours making repetitive movement.
   
   
   • Workers used thinner and other unknown solvents to clean machines as well as excessive paint stain on their hands. They seldom put their gloves on and they did not know the hazards of the thinner they used.
   
   
   • The glue used to stick iron and magnetic components had strong chemical smell. Workers could not name the glue nor its hazards.
   
   
   • Workers operating the injection machine said noise pollution was serious. They had to use their hands to hold the semi-finished products and use their legs to press the button. It required great concentration and their hands would be pressed if they were distracted or too tired.
   
   
   • In summer the work place could get stuffy with poor ventilation and a high level of dust.
   
   

   Long working hours caused ergonomic problems. Lack of knowledge and protection on chemical poisoning was another potential hazard.

   • The Packaging Department
   
   
   • No formal training was offered.
   
   
   • Workers worked from 07:30 to 23:30 during the peak season. There was no break besides the two lunches.
   
   
   • Workers had to stand and perform their job.
   
   
   • Interviewed workers said they were exhausted after standing more than 10 hours without a break.
   
   
   • Complaints were also made about the stuffy air at the work place.

   Long working hours causing ergonomic problems as well as work stress were major sources of hazard in the packaging department.

   • The Die-Casting Department
   
   
   • An industrial accident was reported in July 2001. A die-casting worker had two knuckles of his finger cut by the die-casting machine. The injured worker was told to take rest at the dormitory and was given RMB15 (USD1.875) a day as living allowance. The management paid for the medical expenses but not any compensation to the injured worker. According to the regulations on compensation on industrial injury in the Chinese Labor Law, the amount of compensation is determined after an assessment and injury rating. The management of Factory A1 just paid the medical fees and an arbitrary allowance which is in violation of the labor law. The injured worker had not recovered by mid September. No further assessment and rating for compensation was made.
   
   
   • The interviewed workers recalled that they had long overtime work the night the accident took place. They criticized that the power switch of the machine was too far away from the operating worker thus making it difficult for him to cut off power immediately when the accident happened.
   
   
   • The operating machines gave loud noise. Yet workers did not wear the ear protection delivered by the management saying that it was uncomfortable and inconvenient to their work.
   
   
   • Temperature was high and machines were packed together, making the work place particularly hot and noisy.

   The OSH problems found in this department were largely related to machine operation, namely machine safeguard, maintenance and sound pollution. Improvement should look into the engineering aspect and the management aspect to see how exposure to the risky environment can be minimized.

   Factory A1 should establish an OSH and injury documentation system. Training should be given to workers. Workers should get access to knowledge about safety machine operation and their legal rights in case of industrial injury.

   • The Spraying Department
   
   
   • No formal training was offered. The supervisors only reminded workers not to get the paint into their mouth and not to use thinner to wash their hands.
   
   
   • The interviewed workers did not know the names or the hazards of the chemical paint they were using.
   
   
   • Cotton gloves and masks were delivered to the workers. Workers explained that the piece rate work required them to work quickly and "wearing gloves and masks would slow down the speed". Low wages and production pressure were the main reasons for not wearing them. Cotton equipment would get dirty with paint at the end of the day. Workers either had to wash the cotton masks and gloves by hands everyday or they waited for new delivery every other few days. Interviewed workers did not think the cotton equipment would give them much protection.
   
   
   • An interviewed worker said she felt dizzy and had headache from time to time. New workers not used to the chemical smell could faint at the work place. Whereas stomach problems and dizziness were common symptoms amongst old workers. She recalled a woman worker being fired after fainting two times at the work place last October. Because of that, workers did not want to report their sickness. The interviewed worker would rub some ointment in case she felt dizzy during work.
   
   
   • Although the supervisors had verbally warned workers against using thinner to wash their hands, many workers would still do so as there was not much alternative. Some workers developed skin allergies and skin diseases because of that.
   
   
   • This department had been busy for months as the peak season had come. They worked from 07:30 - 23:00 everyday. They were off only on Sunday night.

   Chemical poisoning is a potential hazard in the spraying department. The management of Factory A2 had not taken a positive and open attitude to identify and remove hazards as well as equipping workers with the knowledge and means against chemical poisoning.

   • OSH infrastructure in Factory A1
   
   
   • Fire extinguishers could be found in both the old and the new plants. But there was no fire drill at the work place and dormitory.
   
   
   • Interviewed workers from the pressing and packaging department said they did not know where the exits were when fire took place. Another worker from the metal department commented that the work place was too packed with machines and the alleys were blocked. "It does not make a difference (where the exits are), anyway, you go where you go."
   
   
   • The factory did not have an OSH department. In case a worker felt sick, the management would not investigate if that was related to their occupation.
   
   
   • There was no body check-up for production workers whereas supervisors or above could go for a yearly blood test.
   
   
   • There was no factory clinic. Workers paid for their own medical expenses.
   
   
   • The factory management would arrange for cool drinks once or twice a week for some departments.

   3. Workers' Consciousness on Labor Laws and Related Regulations
   
   The following is a statistical analysis on 9 interviewed workers from Factory A1 on their understanding of the Chinese Labor Law and related regulations.

   Questions	Yes, I know	I've heard of it	I don't know
   Do you know the legal minimum wage of the town you are working in?	0	0	100%
   Do you know the ceiling on working hours in the town you are working in?	0	0	100%
   Do you know how much compensation you can get if you acquire occupational diseases or injuries?	0	15%	89%
   Do you know anything about the Chinese Labor Law?	22%	22%	56%
   Do you know anything about the Regulations on the Protection of Women Workers?	0	0	100%
   Do you know anything about the Law on the Protection of Teenagers?	0	0	100%
   Do you know anything about code of conduct?	0	0	100%
   Do you want to get more information about OSH and related training?	Yes, I do 78%	I don't have an opinion. 11%	No, I don't. 11%

   4. Words from the workers

   • A male worker from the die-casting department, Xiao Wang
   
   
   "Wages in this factory is very low. It's RMB1.4 (USD0.175) for women workers for an hour. They get RMB2 (USD0.25) an hour for overtime work. For male workers, we get RMB12.5 (USD1.56) a day. During the peak season, we worked at least 3 hours overtime. That is the case from Monday to Saturday. We don't have to work overtime on Sunday night. We have not taken a day off for months now. In the worst case we have to work overnight. But after all these, RMB 600 - 700 (USD75 - 87.5) is all I get. That includes everything, overtime rate and allowances. We "take vacation" when there is no order. The food at the dormitory is poor and workers have to eat outside. My wife and I rent a 7-square-meters squatter nearby. We eat, sleep, cook, sleep and bath inside this small cube. It costs us RMB70 (USD8.75) a month. We spend another RMB200 (USD25) a month on food. Including every other petit expenses, we have to spend RMB400 - 500 (USD50 - 62.5) a month. You can tell how much is left of my wages. And we have to save money for the low season when nobody can tell how much work there is to do. I just learn from my colleagues that we will take a long vacation starting October …."
   • A female worker from the spraying department, Ah Hua
   
   
   "We labor till 23:00 at night these days. Back to the dormitory, you have to take turns to take a shower, wash your clothes and you can sleep only at around 2am. The other morning you have to get up at 6:30am for breakfast and go to work at 7:30am. How can we have enough sleep?" "The chemical smell is strong at the work place and you can see paint dust everywhere. I wanted to throw everyday when I first came. I never stopped having stomach ache and dizziness in the first month." "Our work is counted by piece, so everybody wants to finish as many as possible. We had a better price for our job last year. It is much worse this year. I went to work everyday and I got only RMB 600 - 700 (USD72.29 – 84.3) a month. For a lot workers, the average is just RMB400 - 500 (USD48.19 – 60.24) a month. And we pay for our food and lodgings. If it were not for sending my son to school, I would never work in the spraying department."

   VI. Report on Factory A2
   Location: industrial district of Punyu City, Guangdong province
   Number of workers: about 4000, approximately 70% are male workers.

   1. Working Conditions

   1. Wages
   
   The biggest complaint was about wages. There was no pay roll and no pay scale. Not knowing how their pay was calculated and not being able to appeal to the management, workers felt that the pay system was unfair and the wage variations between production workers was big. Besides, Factory A2 did not always deliver wages on time. It could cause financial stress to workers as their wages were already low and they lived on a meager level. "We would skip lunches if we do not have money. We would borrow from friends and survived till the pay day."

   Wages were low. Below are three examples on wages delivered in a month during the peak season in the assembly department:
   Worker A got RMB 340 or USD40.96 (from 08:00 - 20:00 every day for 31 days). Worker B got RMB 302 or USD36.39 (from 08:00 - 23:00 everyday for 26 days). Worker C got RMB 400 or USD48.19 (from 08:00 - 23:00 for 28 days and in one day he worked till 04:00 am). The above wages did not include food and lodgings to be deducted.

   The legal minimum wage for Punyu City was RMB450 or USD54.2 by August 2001. The legal minimum daily rate should be RMB21.4 (USD2.58) counting on a 20.92 working day per month basis which is used by the Chinese government. The minimum hourly rate should then be RMB2.7 (USD0.33).

   We take the case of worker C and try to calculate what he should get in comparison what he actually received. Worker C worked 28 days in that month. He worked, up to 23:00 every day (ie 4 over time hours a day). On one day he had over time work till 04:00 (ie 8 over time hours) and let’s assume it is a regular week day. There are 22 working week days in July. The number of his over time hours (on week days) should be 21 x 4 + 8 = 92 hours. And the OT rate for week days is 150% of the regular pay rate, that is RMB2.7(regular rate) x 150% x 92(OT hours on week days) = RMB372.6. The remaining 6 days are holidays and still he worked 12 hours (8 regular hours and 4 OT hours) on holidays meaning 72 OT hours on weekly holidays. 200% of the regular pay should be given to him for working on weekly holidays. His compensation for OT work on holidays should be RMB2.7(regular rate) x 200% x 72 (OT hours on holidays)= RMB388.8. His total income including over time compensation for both week days and holidays should be RMB372.6 + RMB 388.8 + RMB400 = RMB1211.4.

   2. Working hours
   
   This is an example on 19 August 2001 (Sunday): workers were not allowed to go out during lunch time. The management brought lunch boxes to the work place. Workers ate at the work place and went back to work immediately after lunch.

   Workers complained about long overtime hours. Workers in the assembly department had to work till 24:30 and overnight during peak season. When the department had to rush production, workers had to take turns to go to the washrooms. Female workers complained that they had to wait long before it came to their turns. There was no break besides the two lunches.

   3. Others
   
   
   • No contract was signed with production workers in Factory A2.
   • Production workers were not insured.
   • Food and lodgings were poor. There was a time last year when two people had to squeeze and share a bed in the dormitory.

   2. OSH Conditions in Factory A2

   • The Assembly Department
   
   
   • Workers worked an average of 13 hours a day during the peak season. At most, they worked till 24:30 and even overnight. At one time, they were made to eat at the work place and go back to work immediately.
   
   
   • No formal training was offered.
   
   
   • Workers reported that small injuries like having their fingers pressed by machines or cut by the grinding machines were common.
   
   
   • Glues were used in the assembly department but they could not name them or their hazards. Gloves would be delivered to some of the workers. The rest would receive them whenever there were factory audits or visits.

   • The Welding Department
   
   
   • Workers welding the iron parts would get burnt from time to time. Gloves would be delivered to them when there were factory audits or visits.
   
   
   • High temperature in this department was another source of hazards.

   • The Trimming Department
   
   
   • Workers used knives and cutters to trim the semi-finished products. The utensils would cut their hands and fingers. Yet they were seldom delivered gloves.
   
   
   • No formal training or education on how to minimize injury was given.
   
   
   • Long working hours (from 08:00 to 23:00 or 24:00 during peak seasons) led to workers fainting at the work place.
   
   
   • Workers complained that the work place was too stuffy especially during the summer peak season. Too many workers crowded at the work place and two cases of heat poisoning were reported in the assembly department this July.

   3. OSH infrastructure and provisions at Factory A2

   • The management demanded that workers took an annual body check-up. But that was paid by the workers and it cost them RMB40 (USD5) each.
   
   
   • In the body check-up that took place in the second half of last year, more than 100 workers were found to have acquired hepatitis B. They were fired and were delivered their wages but without legal compensation. This year 50-60 workers were found to have hepatitis B and they were fired too. An interviewee commented, "They told you to take a rest, we all know it means you are fired."
   • There were regular fire drills at the work place.

   The management of Factory A2 took no measures to investigate if mass acquisition of hepatitis B was related to work or other hygiene problems. The management took the irresponsible way out by simply firing them and without legal compensation. This is a case of labor rights violation as well as an evasion of the responsibility of the management for the safety and health of their workers.

   4. Workers' Consciousness on Labor Law and Related Regulations

   The following is a statistical analysis on the legal consciousness of five interviewed workers from Factory A2.

   Questions	Yes, I know	I've heard about it	No, I don't know
   Do you know the legal minimum wage of the town you are working in?	0	0	100%
   Do you know the working hours ceiling of the town you are working in?	0	0	100%
   Do you know how much compensation you can get if you have occupational diseases or injuries?	0	0	100%
   Do you know anything about the Labour Law?	0	80%	20%
   Do you know anything about the Regulations on the Protection of Female Workers?	0	0	100%
   Do you know anything about the Law on the Protection of Teenagers?	0	0	100%
   Do you know anything about code of conduct?	0	0	100%
   Do you want to get more information about OSH and OSH training?	Yes, I do 80%	I don't have an opinion. 20%	No, I don't. 0

   Some of the interviewed workers remarked that if the training was free, they wanted it. Otherwise they would not go for it. Another one made this comment, "I might leave when I can't stand anymore. Or I might just be fired tomorrow. I don't care."

   5. Words from Workers

   • A male worker in the trimming department, Xiao Qiao
   
   
   "We sleep very little. When we came back to our dormitory, it was after 12am. There were only two bathrooms on the dormitory floor. It took three hours (till 3am) before all of us could finish our shower. It pissed us off if there was no water. You could not take a shower. You could not wash your face and brush your teeth the next morning. We are all exhausted. We can take a half-day rest after working overnight. But that is not enough." "It is difficult to ask for a day leave when we have to rush production. Even if you are so lucky to have a day off, you are not allowed to stay in the dormitory. We can only go outside and sleep under the trees."
   • A female worker in the assembly department, Xiao Tong
   
   
   "We have seen people fainted at the work place. That's expected. We are tired, we get low pay, we don't eat well, we can't sleep well, we want to save every penny we've got… A lot of us young girls just buy an ice-cream or a slice of water melon for lunch. You just don't want to eat being so tired and under such heat."

   VII. Report on Factory A3
   Location: Dongguan City, Guangdong province
   Number of workers: 8000 - 100,000 workers. More than 70% are women.

   1. Working Conditions

   • Contract
   
   
   • It was not sure how big the proportion of the workforce had signed contracts with the management. But workers commented that the contracts were more for show to auditors than to protect their rights. If anything happened, workers might still not know how they could use the contract to claim their rights.
   • It was difficult for workers to quit and they could only get 40% of their pay if they did so.

   • Working hours
   
   
   • Most of the workers worked from Monday to Sunday in peak season. They could get a day off on Sunday night. An interviewed worker said the management had warned her not to tell the real working hours during factory audits or visits. She was threatened with being fired if she did so.

   • Wages
   
   
   • Cleaning workers, clerical workers and supervisors or above were paid by time rate. All production workers were paid by piece rate.
   
   
   • The interviewed workers felt helpless as they said that workers could not understand the wage calculation. They did not know the grand production of the production line nor the unit price of the different kinds of products they produced. Nothing was listed on the pay stuff except their ID number and the amount of wages for the month. There was no way to check and verify their pay.
   
   
   • On average, production workers' salaries ranged from RMB500 or USD60.24 (assembly department) to RMB600 or USD72.29 (testing department). That could drop to RMB300 or USD36.14 during the slack season.
   
   
   • Take an example: A female worker in the assembly department worked 27 days in June, 10-12 hours a day, got RMB686 or USD82.65. She did not know how that was calculated. She was paid by piece rate. There was a daily quota to finish and she could not leave until she had finished the quota. She did not know if she was paid any overtime compensation. The RMB686 salary she got included RMB30 (USD3.61) full attendance allowance and a RMB30 (USD3.61) deduction for lodgings. The factory did not provide for food and she had to spend around RMB200 (USD24) on food and other petit expenses.

   The legal minimum wage in Dongguan was RMB400 (USD48.19) by the time of the research. Take the government reference of 20.92 work day per month as the basis, the minimum daily pay in Dongguan should be RMB19.1 (USD2.3) and the minimum hourly pay should be RMB2.39 (USD0.28). Let’s assume that the 27 days she worked were normal week days. She worked an average of 3 over time hours a day (she reported working 2 to 4 over time hours a day). The over time compensation rate for her in the month would be RMB2.39 (minimum hourly pay) x 150% x 3 x 27 = RMB290.3. Adding that to the minimum wage of RMB400, she should get RMB690.3

   In this particular case, Factory A2 was paying the minimum wage to this female worker. After paying for food and other expenses, the pay she got might not be a sustainable living wage. But whether the minimum was paid (in this case) or not (in the case of other subsidiary plants), the pay scale and legal knowledge on minimum payment was not known to workers in general. In no way can they tell if their rights are respected or violated.

   • Living Conditions and Medical Provisions
   
   
   • 16 people stayed in a room in the dormitory. The dormitory was cleaned and sterilized once a week. Couples had to stay outside.
   
   
   • Workers could go to the factory clinic and they paid for the medical expenses.
   
   
   • There was no pay for sick leave and thus workers in general would not take sick leave. They would just buy medicines from pharmacies if they felt sick.
   
   
   • Workers were insured and RMB30 (USD3.75) was deducted each month.

   • Monitoring of Code of Conduct
   
   
   • Most of the interviewed workers had not heard about code of conduct. Only one interviewed supervisor knew about it. He said code(s) of conduct would be implemented just 10 days or so before a factory audit. And there was a special department dealing with records and auditing related business. Take the case of a client’s audit, the management would have learned about it 10 days before. The management would tidy things up and couched workers to give the right answers during the audit. Things would go back to "normal" after the audit.

   2. OSH Conditions

   • The Assembly Department
   
   
   • A worker remembered having attended a training course when she first entered the factory. But that was basically an introduction on factory regulations and fire prevention. It was nothing about safety and health.
   
   
   • Workers in this department worked from 08:30 - 22:30 everyday during the peak season. In the worst case, they worked till 3 and 4am.
   
   
   • They had two lunch breaks of 1 hour and 45 minutes respectively. There was no other break aside from those.
   
   
   • Workers were exposed directly to thinner and other chemical solvents when they were cleaning the finished toy products. But neither could they name the chemicals, or their hazards.
   
   
   • The management would deliver cotton gloves but they did not want to wear them saying that they were hot and uncomfortable.
   
   
   • Workers said that long working hours was the major problem in this department. Work stress was great as they had to finish 3000 pieces each day before they could leave. And they were not paid the compensation rate. They said that during factory audits, things would be a bit better. But it was back to "normal" when the audit was finished. This shows how code of conduct is implemented or effective only during the time of factory audits.

   • The Spraying Department
   
   
   • During the peak season, workers in the spraying department normally worked 13 hours a day not including the two lunch breaks. As for overtime work, it went up to as late as 2am if the production schedule was really tight.
   
   
   • The interviewed workers remembered being told about the names and usage of the chemicals but not the hazards or prevention and treatment of chemical poisoning.
   
   
   • Most of the chemicals did not have labels or instructions informing readers about first aid measures in case of chemical poisoning.
   
   
   • Cotton gloves and masks would be delivered before a factory audit or visit. But workers reflected that the chemical paints could still get into their skins even with the cotton gloves on.
   
   
   • The management had warned the workers not to wash the paint with thinner. But some workers still did so because they had no other alternative. The chemical paints on their hands could not be washed away by plain water and soap.
   
   
   • A clerical worker told the interviewer that the management would switch to using other more expensive chemicals when there was a factory audit and visit. It would be replaced with cheap ones that they had been using when the audit was finished.
   
   
   • There was a ventilation system at the work place but the air still had a strong chemical smell.
   
   
   • New workers could not get used to the smell. They felt dizzy and wanted to throw. An old worker in the department showed the skin allergies she had acquired on her two arms to the interviewer. She could not tell if they were related to her job.
   
   
   • Fainting at the work place happened since the working hours were long. The latest case of faint happened on 25 August 2001. Fainted workers were told to take a rest and went back to work after a while.
   
   

   The practice of the management of Factory A3 in shifting chemicals violated the right of workers to a safe work place as well as their right to know what hazards they were being exposed to. It also shows how code of conduct is weak in implementation in protecting the safety and health of workers.

   • The Pressing Department
   
   
   • Noise pollution was serious in this department.
   
   
   • The smell of melted plastic was strong.
   
   
   • Temperature was high. The pressing machines were packed together and the operating machines further accelerated the temperature.
   
   
   • Workers did not receive formal training. Senior workers and engineers would explain the machine operation to new workers. There was nothing on safety issues.
   
   
   • Ear protection and masks were delivered when there was a factory audit or visit. An interviewed worker was told that the ear protection was expensive and they were not meant to be delivered for 'ordinary times' meaning when the factory was not being audited.
   
   
   • Pressing workers worked in three shifts of eight hours each. They had no break besides the two lunches. Interviewed workers all said that working continuously for eight hours under such a high temperature and noisy environment was exhausting. Breaks are needed despite the three shifts in the pressing department. An assessment of the hazards of the working environment and the conditions of workers is needed.

   • The Sewing Department
   
   
   • Workers in this department had waist pain, sore shoulders and stiff necks in general. Everyday when they were off their work, they felt exhausted and their bodies ached all over. They sat working for long hours, had their head bent, and their shoulders and two hands repeating the same movement everyday.
   
   
   • Workers in this department said exhaustion, eye stress, stiffness, numbness, pain and other ergonomic problems were the major hazard.

   3. OSH Infrastructure and Provisions at Factory A3
   
   
   • There were regular fire drills at the work place and the dormitory. Workers said they knew the fire exits but not exactly how to use the fire extinguishers.
   • Workers did not know from which department could they seek help on OSH related problems. According to the interviewed workers, a sick worker would be "advised" to take rest. But no investigation on whether workers' illnesses were related to their job was made.
   • The factory would have body check-up for new workers. Every 6 months, the factory would have a body check-up for workers. That included blood pressure test, eye test, but not included hearing test.

   4. Workers' Consciousness on Labor Law and Related Regulations
   
   The following is a statistical analysis on the legal consciousness of the 7 interviewed workers from Factory A3.

   	Yes, I know	I've heard about it.	No, I don't know
   Do you know the legal minimum wage of the town you are working in?	0	0	100%
   Do you know the working hours ceiling of the town you are working in?	0	0	100%
   Do you know how much compensation you can get if you have occupational diseases or injuries?	0	0	100%
   Do you know anything about the Labor Law?	14%	0	86%
   Do you know anything about the Regulation on the Protection of Female Workers?	0	0	100%
   Do you know anything about the Law on the Protection of Teenagers?	14%	0	86%
   Do you know anything about code of conduct?	0	0	100%
   Do you want to get more information about OSH and related training?	Yes, I do. 86%	I have no opinion. 14%	No. I don't. 0

   Remarks: When asked if workers felt that the OSH protection was enough at Factory A3, three of them said ordinary workers did not have enough information to tell and judge about OSH issues. One interviewee commented, "Even if it (OSH protection) is not enough, how can it be changed in a factory as big as this?"

   5. Words from Workers
   
   
   • A female worker from the packaging department, Xiao Nan
   
   
   "There is a lot of overtime work in this factory. We work 10-15 hours a day. I've been admitted for more than 4 months and I got two days' leave only. I got RMB600 - 800 (USD75 - 100) a month. I pay for my food and I rent a place at RMB30 (USD3.75). My two younger brothers are in school and I come to work here to support them. But the wages is so low that I have difficulty even to support myself. That's why I haven't sent a penny home." "I have never thought that working in a factory means laboring non-stop from day to day. I 'd quit for a better factory if there is one."
   • A female assembly worker, Xiao Kai
   
   
   "I've been here for more than a year. The highest salary I got was RMB800 (USD100). For that, I had to work till 12am or later every day. The lowest I got was RMB200 (USD25). That was delivered after the Chinese New Year. We had a bad time this Chinese New Year. We got our December wages (of year 2000) only after the Chinese New Year (end of January 2001). Workers in some departments were delivered lunch coupons over the Chinese New Year, whereas others got nothing. We had no wages and no lunch coupons for more than 2 months. We had no money to send home for the New Year, we did not even have money to eat. I learned that some workers from my plant had to pick up remains in the canteen. We are still angry about it. How can you treat workers like this?"

   VIII. Report on Factory A4
   Location: Punyu City, Guangzhou, Guangdong province

   1. Working Conditions

   • Average wages for production workers ranged from RMB400 - 600 (USD48.19 –72.29).
   
   
   • Production workers were paid by piece rate. In the trimming department for instance, workers got RMB1.6 (USD0.19) an hour and RMB2.1 (USD0.25) an hour as over time compensation.

   This was in violation of the minimum wage of Punyu, which was RMB450 (USD54.21) a month. The daily minimum wage of Punyu should be RMB21.5 (USD2.59), based on the government reference of 20.92 working days per month. The minimum hourly wage should then be RMB2.7 (USD0.33). Factory A4 was in violation of the local minimum wage and over time compensation payment.

   • Workers in the trimming department for instance did not have a single day off during July. This was also in violation of the one weekly rest day provision as stated in the Chinese Labor Law.
   
   
   • No contract was signed with production workers.
   
   
   • Workers did not know if they were insured.

   2. OSH Conditions in Factory A4
   • The Assembly Department
   
   
   • Long working hours caused physical exhaustion to workers.
   
   
   • Work stress was great as workers had to finish a daily quota as many as 2000 - 3000 pieces a day. They could not leave before finishing the quota.
   
   
   • The supervisors would allow for one worker each time to go to the washroom or to drink water.
   
   
   • Workers had to sit working for more than 12 hours a day during the peak season. There was no break besides the two lunches.
   
   
   • Workers from this department also complained about the noise pollution when machines were in full operation.

   • The Welding Department
   
   
   • New workers were taught how to weld iron and metal components. There was no formal training regarding OSH and no personal protective equipment was provided for welding workers. Workers would burn their hands as they used the iron welders.
   
   
   • Noise pollution. Some of the machines in this department gave a loud noise in operation. Only the QC workers wore ear protection.
   
   
   • Drinking water was accessible for workers at the work place.

   • The trimming department
   
   
   • Workers would cut their hands and fingers using knives to trim the semi-finished products. They were not delivered protection equipment.
   
   
   • No OSH training was offered to them.

   3. OSH Infrastructure and Provisions at Factory A4

   • New workers had a body check-up when they entered the factory. Regular check-up was provided every year.
   
   
   • There was a medical clinic. Workers paid for their medical expenses and the management would pay for treatment in case of occupational injuries.
   
   
   • There were fire drills at the work place and in the dormitories.

   In general, the interviewed workers were worried that chemical poisoning and exhaustion due to long working hours would adversely affect their health.

   4. Workers' Consciousness on Labor Law and Related Regulations The following is a statistical analysis on the legal consciousness of three workers interviewed from Factory A4.

   Questions	Yes, I know	I've heard of it	No, I don't know
   Do you know the legal minimum wage of the town you are working in?	33%	0	67%
   Do you know the working hours ceiling of the town you are working in?	0	0	100%
   Do you know how much compensation you can get if you have occupational diseases or injuries?	0	0	100%
   Do you know anything about the Labor Law?	33%	0	67%
   Do you know anything about the Regulation on the Protection of Female Workers?	0	0	100%
   Do you know anything about the Law on the Protection of Teenagers?	0	0	100%
   Do you know anything about code of conduct?	0	0	100%
   Do you want to get more information about OSH and related training?	67%	0	33%

   Remarks: When asked about the regulation on women worker protection, an interviewed worker replied, "I know, it says pregnant women have to resign." (Remark: The Chinese Labor Law says just the contrary.) When asked about whether they wanted more OSH information, a worker replied, "You think we can have it if we want? It's not possible."

   IX. Report on Factory A5
   Location: Dongguan City, Guangdong province
   Number of workers: 700 - 800 workers, about 60% are female workers
   

   Working Conditions in Factory A5

   1. Wages
   

   • It was written on the recruitment ad of the factory that a worker could get RMB550 (USD66.3) a month. All the interviewed workers said it was a big lie. A production worker got an average of RMB300 - 500 (USD36.1 – 60.2) a month subject to departmental variations. There was no other allowance or subsidy.
   
   
   • This is an example in the assembly department. A worker worked every day from 08:00 to 22:00 in April 2001. She took no leave, was never late for work and she got only RMB330 (USD39.76). She vaguely knew that she got about RMB0.8 or USD0.1 an hour.
   
   
   • No over time compensation was paid to production workers.
   
   
   • Workers from Factory A5 also complained that there was more than a month's lag in delivering wages.

   2. Working hours

   • In the peak season, workers worked 12-17 hours a day and 7 days a week. The number of overtime hours ranged from 4 - 9 hours during the peak season. Interviewed workers said they had two holidays only (on 1 May and 1 July) since the beginning of this year.

   3. Penalty

   • Workers were not allowed to quit especially during the peak season. They had to give up as much as 40 days' salary if they did so (the factory would deliver wages in 40 days' lag and very often workers could not get their last pay before they left the factory). As it was difficult for workers to get an approval for leave or take a rest during the peak season. They would just not go to work and by doing so, they had to pay a penalty of three days' salary for being absence from work.
   
   
   • There were a number of other penalties if workers were found to have violated factory rules.

   4. Incidents of strike and stoppage of work
   
   
   • In May this year, workers in the die-casting department took a wild cat strike in protest of low wages. An interviewed worker said that the management took action to fire all the workers that took part in the strike. When the Labor Bureau came for an investigation, the factory asked workers to leave from the backdoor for fear that workers might complain during the investigation. The interviewed worker was amongst the workers that were made to leave during the Labor Bureau's investigation.

   5. Others
   • 14 people stayed in a dormitory room. A female worker said there was only one toilet and bathroom on each dormitory floor. The sanitation was horrible as too many people were sharing one toilet facility.
   
   
   • No contract was signed with production workers nor were they insured.

    

   III. 2) REPORT ON THE OSH AND WORKING CONDITIONS OF COMPANY B

   The following report is structured as such:

   1. Company Information
   
   
   2. Working Conditions in Company B
   
   
   3. An Overview of the OSH Conditions in Company B
   
   
   4. Workers' Consciousness on Labor Law and Related Regulations
   
   
   5. Words from Workers

   I. Company Information

   Established in 1993, Company B is one of the biggest OEM toy producers in Hong Kong. Going back to history, company started off initially as a small toy workshop in Hong Kong in the 1970s. Today, the annual sales performance of the company is estimated to be over HKD 1 billion a year. In the 1980s, Company B was contracted to manufacture Cabbage dolls, the most popular toy that created a swirl wind in the US and European market in mid 80s. From then on, Company B expanded its business to Shenzhen in mainland China. The company has a number of subsidiary plants in the mainland, employing more than 10,000 workers. The company is a key supplier to a number of toy retailers and brand companies.

   Products

   The chief products of Company B are plastic toys, electronics and electrical toys, plush toys, and die cast cars etc. US and Europe are two major markets. By the time the research was done from July - September 2001, the company was producing dinosaurs, Barbie dolls and die cast cars.

   Core clients

   The core clients of Company B include Hasbro, Mattel, Disney, Playskool, Fisher-Price etc. In 1999, Company B was contracted to produce the Star War series. In the early 1990s, Company B acquired the licensee to produce the Snoopy line.

   Subsidiary Plants

   The corporation has three subsidiaries for toy production. They are all located in the second industrial zone of Shenzhen, Guangdong province.

   1. Factory B1
   2. Factory B2
   3. Factory B3

   The following is an overall report on the working and OSH conditions of the three subsidiary plants of Company B. A rough estimation is that there are more than 10,000 workers employed in the three plants of Company B. They come from different provinces like Hunan, Hubei, Guangxi and Jiangxi province.

   Table on information of the interviewed workers from Company B

   Sex	Female	Male
   Number of workers	8	7

   Age range	16-20	21-25	26-30
   Number of workers	9	5	1

   Terms of service	Under one year	1-3 years	More than 3 years
   Number of workers	8	5	2

    

   2. Working Conditions in Company B

   1. Overall Conditions in Company B

   • As one of the top OEM toy manufacturing company in Hong Kong, the working conditions of Company B are no better than those in the small factories.
   • It was found that workers worked an average of 14-18 hours a day and 31 days a month in the peak season of 2001.
   • The average wages of a production worker recorded in this period was around RMB500 - 700 (USD60.24 – 84.33) a month. That would drop to as low as RMB200 - 300 (USD24.10 – 36.14) during the slack season. The company did not pay the legal minimum wage of the second industrial zone of Shenzhen which was RMB440 (USD55) by September 2001.
   • There were problems with wage calculations, deductions, penalties and wage delivery time.
   • Long working hours was a serious problem. Workers did not have a single day off for months during the peak season. This, not only violates the regulations on working hours in the Chinese Labor Law, it also threatens the safety and health of workers.
   • There is no maternity protection for female production workers. Not only is this a violation of the labor law, the unequal treatment between production and non-production workers is discriminatory.

   1. Wages

   • Starting in May 2001, Company B had been recruiting new workers. The recruitment ad offered RMB320-600 (USD38.55 – 72.29) to workers during the probation period. After that a worker could get RMB700 (USD84.34) or above. The factory would provide for food and lodgings. Applicants must have finished junior high school education. Yet the real pay a production worker could get was lower than the advertised.
   • Wage calculations varied between departments and different plants in Company B. It was also dependent on the unit price of the products. It was therefore difficult to deduce a single way of wage calculation. The following are a few examples.
   • Case One - A female worker from the spraying department got her July (2001) salary in mid August at RMB560 (USD67.47) before deducting food and lodgings. It included RMB60 (USD7.23) allowance for full attendance. She worked for 60-80 over time hours in that month.
   • Case Two - A female worker in the metal parts department got RMB12 (USD1.44) a day and RMB2 (USD0.24) an hour for overtime compensation.
   • Case Three - A female worker from Factory B3 got her July (2001) salary by mid September. She got RMB700 (USD84.34) in July after working 31 days from 08:00 - 24:00 ie. 16 hours a day. She did not work on Sunday night. Not including lunch breaks, it was estimated that she worked up to 92-96 hours a week. Her hourly pay was roughly estimated to be RMB1.7 (USD0.20).

   The legal minimum wage of the second industrial zone of Shenzhen was RM440 (USD53.01) a month. Based on the government reference of 20.92 working days a month, the legal daily minimum wage should be RMB21 (USD2.53) and the minimum hourly pay should be RMB2.6 (USD0.31).

   If the number of over time working hours of female worker in case one was taken as 60 in July 2001, her over time compensation should be RMB2.6 (legal hourly rate) x 150% (legal over time rate) x 60 = RMB234 (USD28.19). Adding that to the minimum wage of RMB440, plus RMB60 for full attendance, her July salary should be RMB734 (USD88.43) before food and lodging deduction. Factory B violated the legal minimum wage payment, the legal working hours limit and the unreasonable delivery of wages as stated in the Chinese Labor Law.

   In case two, the worker received a daily pay of RMB12 (ie an hourly pay of RMB1.5) and an over time rate of RMB2 from the factory. This was also a clear violation of the minimum pay of the local township. This is the same for case three. What the workers in the two cases received for over time compensation was even lower than the legal minimum pay, not to mention the legal over time compensation rate.

   • Production workers were paid by piece rate. It said in the recruitment ad that "you get more the more you work." The truth was workers had to finish a daily quota. Otherwise their wages would be deducted. Absence from overtime work or taking a leave without permission, even on state holidays, would result in wage deduction.
   • In some of the subsidiary plants of Company B, there was a 40 to 45-day lag in delivering wages to workers making it difficult for workers to quit their jobs as they might want to.
   • The interviewed workers from Company B also complained about the wage variation even for workers working in the same line and on the same job. They did not know how their wages were calculated. Nor was there any way for them to counter check their wages and the pay scale.

   .

   1. Working hours

   • The working hours of the assembly workers in Factory B3 were as such: 08:00 - 12:00 13:30 - 17:30 18:30 - 22:30. In the peak season, workers had to work till 1or 2am. This was so in August 2001 and there was not a single day off. The Chinese Labor Law allows for 40 working hours a week and not more than 36 over time hours a month. Yet, workers in the subsidiary plants of Company B worked for nearly 100 hours a week, more than 2 times of what is allowed for in the labor law. The number of overtime hours in some of the subsidiary plants mounted to 120 hours a month, 3 times of what is allowed for in the labor law.

   1. Contract and Insurance

   • Contracts were signed with supervisors or above but not production workers.
   • Supervisors or above were insured but not production workers.
   • Workers recalled that starting from last year, the management started insuring workers on industrial accidents and that some production workers had contracts. But they did not know whether themselves had a contract or were insured.

   Remarks: It is a common practice for foreign investment enterprises in Guangdong province to sign contract and insure only part of the workforce. The reason is that the enterprises fear that disclosing the true size of the workforce to government departments would subject them to various kinds of charges and administrative fees. That's why it is found that in the same factory, some workers may have contracts and insurance while others not.

   1. Food and lodgings

   • A dormitory room in Factory B2 was about 30 square meters. 16 people stayed in one room. There was ventilation in dormitory rooms but no storage for private belongings was provided. Hot water supply in the dormitory of Factory B3 was poor causing a lot of inconvenience as workers had to wait long queues to get hot water.
   • Female workers from Factory B3 expressed worry about their security as the female dormitory floors were cleaned by male cleaning workers.
   • RMB30 (USD3.75) was deducted for lodgings.
   • RMB90 (USD11.25) was deducted each month for food ie RMB1.5 (USD0.1875) for each meal. But a lot of workers preferred eating at stalls outside the factory and that cost RMB1.5-2 a meal.

   1. Medical provisions

   • It was difficult to take leave especially during the peak season. Workers would rather take medicine from a local pharmacy than ask for a sick leave. A worker in the spraying department recalled her experience of getting only a four-hour-leave when she had a high fever. She went back to work afterwards. Back to the work place, she had to finish the quota of the day as everybody else did, otherwise her wages would be deducted. Another worker from the same department reported that at one time, the management deducted one day's salary from her when she went to the factory clinic for her skin allergy. The medical fees were paid on her own.

   1. Penalty

   • Company B had a list of factory rules and regulations that were not conveyed to workers when they entered the factory. According to Article 19 of the Chinese Labor Law, labor disciplines should be written down on the contracts.
   • They knew about these rules and penalties only when they violated one or two of them. Here are few examples of factory rules and penalties. Staying up too long at the washrooms would be fined for RMB5-20 (USD0.625 - 2.5). Yet, a production worker on average earned only RMB12.5 (USD1.56) a day. A fine of RMB5 (USD0.625) would be imposed for not wearing the uniform. Absence from work would cost a worker one day's salary plus RMB20 (USD2.5) a day. The subsidiary plants of Company B violated the Chinese Labor Law which stated that the employer should not impose unreasonable or arbitrary penalties on workers.

   2. Overall OSH Conditions in Company B

   The following is a report on the overall OSH conditions at the three subsidiary plants of Company B. 15 workers from different departments and plants were interviewed.

   • The Spraying Department

   • No OSH or formal training was offered to workers.
   • A senior worker said they were instructed on how to use thinner, acetone, ethylene trichloride and other chemicals but not on preventive measures or treatment in case of chemical poisoning.

   • Workers could not name the chemical paints or their hazards and the management did not explain anything about that. An interviewed worker commented, "Who would be so stupid to tell you these things (hazards)? What happen if people are scared and quit their jobs?"

   • Personal Protective Equipment (PPE)

   • A spraying worker would wear a glove on the hand that held the semi-finished products and the un-gloved hand would be holding the spraying machine. When they had to work fast, they would not wear any glove lest slowing down the speed.
   • Chemical paints would get onto the hands even if gloves were worn. It was difficult to wash the paint with plain water. Workers would use other chemical solvents they could not name or tell their hazards to wash the paint stains. They did not know other alternatives although they understood that it was not a good way of cleaning their hands.
   • The management delivered cotton masks to spraying workers but workers were not sure if the cotton masks could protect them from taking in the chemicals. Paint and chemical dust could still get into their mouths and all the interviewed workers said they could only assume that wearing cotton masks were better than nothing.
   • An interviewed supervisor said the management would make sure that everybody wore gloves and masks when auditors from Hasbro and Mattel visited the plants.

   • Dizziness, sore throat and skin diseases were reported. Interviewed workers said the smell of acetone was particularly strong and the air was stuffy at the work place. The air outside the plants smelled particularly good to them everyday when they were off work. "I feel like a bird leaving its cage."
   • Having worked long hours in the stuffy work place, female workers felt physical weakness. And cases of faint were reported at the work place. The latest case recalled by an interviewed worker took place in December 2000. The management paid the hospital fees for the worker but she was dismissed some time after that.

   • The Painting Department

   • Workers in this department used 4 pens of different sizes to paint the small parts or joints of the semi-finished toys. No OSH training or instructions of whatever kind was given to them.

   • They did not know what chemicals were being used. Nor could they tell their hazards.

   • There was no labeling on the chemical paints and nobody had told them anything about the hazards of chemical exposure.

   • Workers were not given any PPE eg. gloves to wear. To perform the job which required delicacy, it was impossible for their hands and fingers not to get in touch with the paint.

   • The interviewed workers reported some common job-related illnesses they had like skin allergies, skin diseases, physical weakness and dizziness. Some of them said they wanted to throw after working long hours.

   • The Assembly Department

   • No formal OSH training was offered.
   • Chemical solvents were used in this department to clean the finished products. But the workers did not know their names and the hazards.
   • Cotton gloves were delivered to workers.

   • Workers worked long hours in this department during the peak season. A welding worker working in the assembly department of Factory B3 said she worked sitting there for as long as 13-15 hours during the peak season. When there were a lot of orders, it was normal for them to work from 08:00 - 23:30. At worst, they stayed up till 1 - 2am.
   • There was no break other than the two lunches. The management would deliver drinking water to them three times a day. When there were too many orders to finish, workers had only 30 minutes for lunch and had to get back to work right after that. Workers had to take turns and get a permit for going to the washrooms.

   • The major source of work stress came from the work flow arrangement and the pay system. Wages was calculated based on the grand production of a team. The team had to finish a fixed quota everyday otherwise the whole team had to work overtime. If the team could not finish the quota within eight hours, the workers' clock machine cards would record 7 working hours for the day although the whole team might have to stay up and work till they finished the quota. In this way, workers were subject to a lot of stress and pressure that came both from the supervisors and their peer.

   • A female worker making die-cast cars recalled having worked till 3am at one time. She could never get enough sleep and she had developed stomach problems and sore eyes because of all the stress. To assemble die-cast cars, she used a particular kind of glue and that caused discomfort to her eyes. Her hands would also be cut by the sharp edges.
   • Strong chemical smell and the over-crowdiness in the old plant also put workers in an uncomfortable working condition. Cases of heat poisoning took place in Factory B3.

   • The Die-Casting Department

   • No OSH training was offered.

   • A case of industrial injury was reported in March 2001. A worker was arranged to try operating the die-casting machine shortly after recruitment. He had two fingers cut. The management paid several thousands RMB and dismissed him. No compensation was made. This is in violation of the Chinese Labor Law and related regulations on compensation for industrial injuries and injury rating for handicapped workers. Compensation to injured workers should be made after an investigation and injury rating made by the Labor and Social Security Bureau.

   • Workers worked in two 12-hour shifts in this department. To keep the machines running, workers took turns to take their lunches. Lunch breaks were short of about 20 - 30 minutes. Works stress and short lunch break could be a source of hazards to workers' health.

   • OSH infrastructure and provisions at Company B
   • Absence of an OSH policy and documentation system

   Cases of industrial accidents were reported during the investigations. It was difficult to verify these cases in this research as the management of Company B did not have an OSH department to document and investigate accidents and occupational diseases. It becomes difficult to trace the causes as evidences and records cannot be collected. Nor was access to information open to workers. Given that the OSH conditions in Company B were not satisfactory and varied a lot between different subsidiary plants, there is an urgent need to establish a safety and health recording system as well as a compensation system that abides to the labor law. It is important that rank and file workers can get access to the safety and health records of the factory as well as information that informs them of their legal rights. A systematic safety and health education was called for here in Company B.

   • Fire control

   • Fire control measures varied between the three plants. Factory B3 was the least satisfactory as workers could not tell the fire exits, nor could they understand fire drills very well. "Fire exits? Any road is an exit when there is fire."
   • In Factory B2, there was an annual fire drill held at the work place but not the dormitory. Yet the interviewed workers failed to tell the fire exits. A worker from factory B2 pointed out that early this year, a small fire broke out when semi-finished products piling near the drying machine dropped into the heated liquid chemical that were used to clean the molds. This worker commented that the chemicals should be covered and there should be a more systematic control on the storage of semi-finished products. They should not be placed near high temperature machines or flammable chemicals.
   • A senior worker from Factory B1 said they had two fire drills each year and each of the three plants would send 20 people to attend. In 1998, a fire broke out not long after the fire drill and this worker recalled that those that had been drilled were more alert than the others. But there were too many workers making way for the exits. This worker criticized that too many goods were piled up at the alleys and exits. And the way the chemicals were treated also had problems. Thinner contained in barrels were just left at the work place or exposed without proper cover. This worker feared that given the large size of workers in the company, a fire accident could bring disasters.

   • Infrastructure

   • Conditions in Factory B3 were far from satisfactory compared with the other two. The plant building was old, the shop floor was crowded, temperature was high (around 38 - 41 degree C in summer) and the ventilation poor. It was easy for workers to acquire skin diseases or faint at the work place. This August was particularly bad as workers in Factory B3 had to work till 2am almost everyday.

   • Body check

   • The management would arrange for a body check-up for new workers. But it looked more like a screen test to pick the more able-bodied workers. Weak ones or those that had other diseases would not be recruited.

   • Industrial Injury and compensation

   • Regarding industrial injuries, the management would pay for the medical expenses. Minor industrial injuries like having fingers cut by sharp edges or pressed by machines were common. The lack of an industrial accident documentation further made it difficult for workers to prevent injury and to claim their rights.

   • Women worker protection

   • When asked if there was any protection for pregnant workers, all the interviewed workers said pregnant workers had to resign and leave. This is in violation of the Chinese Labor Law as well as the Regulation on the Protection of Women Workers. Not equipped with legal knowledge, workers in Company B had a distorted understanding about their maternity and other women workers' rights. Only supervisors or the above rank could have a three-month maternity leave.

    

   • Summary of OSH problems in Company B

   • Both accute and chronic hazards to workers' health and safety were identified.
   • Heat poisoning, fainting, injuries and ergonomic problems were identified.

   • Chemical hazards was identified as a big problem. Many of the interviewed workers could name the chemicals but could not tell their hazards or ways to prevent and treat chemical poisoning.

   • Long working hours and heavy workload was another major source damaging the health and safety of workers. The Chinese Labor Law controls the number of working hours to 40 a week and that of overtime hours to not more than 2 per day. The reality was that workers in the three plants worked 7 days a week and up to 14 - 18 hours a day during the time of the investigation. This largely increases the risks of industrial accidents and injuries.

   • There was a lack of OSH training and education. Workers had low legal and OSH consciousness. Reluctance on the part of the management of Company B in addressing OSH problems and disclosing OSH figures and information only increases further the risks and poses a long term threat to the safety and health of workers in Company B.

   2. Workers' Consciousness on Labor Law and Related Regulations

   The following is a statistical analysis of 15 interviewed workers from the 3 plants of Company B on their OSH and legal consciousness.

   Questions	Yes, I know	I've heard of it	No, I don't know
   Do you know the legal minimum wage of the town you are working in?	7%	0	93%
   Do you know the working hours ceiling of the town you are working in?	0	0	100%
   Do you know how much compensation you can get if you have occupational diseases or injuries?	0	0	100%
   Do you know anything about the Labor Law?	14%	33%	53%
   Do you know anything about the Regulations on the Protection of Women Workers?	0	0	100%
   Do you know anything about the Law on the Protection of Teenage Workers?	0	0	100%
   Do you know anything about code of conduct?	0	0	100%
   Do you want to get more information and training on OSH?	60%	40%	0

   • 60% of the interviewed workers wanted to know more about OSH issues. But at the same time they did not have much expectation for any change. "Just like the Labor Law, it's good to have it but it may not be able to protect us." One female worker said she had never heard about occupational safety and health. She had a vague impression that the labor law could protect their rights.

   • Only one of the interviewees knew about the legal minimum wage. For others, they thought legal minimum wage referred to "the lowest wage one had ever got".

   • Less than half of the interviewed workers said they knew about the labor law. None of the workers knew about the other regulations concerning labor rights. Workers had no idea how to use these laws to defend their rights. And the company offered no legal education to equip its workers in this area.

   • Company B is the core supplier to many of the world's top toy retailers and brand name companies. Yet none of the interviewed workers had heard about code of conduct. What is implied is that code(s) of conduct is more a management and business issue rather than one that empowers workers' consciousness and rights.

   2. Words from Workers

   • A male interviewee from the delivery department, Xiao Xiang

   "Our plant contracts production to more than 10 other sub-contracting factories almost everyday. We also sub-contract orders to other factories. My responsibility is to deliver these contracted goods. It's no big deal working till mid-night and what can the labor law do about it? We are even asked to lie to the auditors, so what? Tell me which factory is not doing the same? This is the life for us workers. Of course I want to earn more. But it's just too exhausting. I'd rather give up the full attendance allowance and take a leave. I wish I can have a day off."

   • Another male interviewee from the delivery department, Xaio Su

   "I have grand parents, parents and a younger brother at home. My family has ten acres of land. But I didn't want to waste my time in the rural village, so I came to Guangdong. The highest wages I got this year was RMB440 (USD53). Except for a day leave and a Saturday that I did not have to work overtime, I had been working till 11pm or after mid-night that month. It's too exhausting."

   "This factory plays tricks. If we cannot finish the quota, our working hours would be deducted. At one time my time record marked 6 hours when actually I worked till 12am. Being insulted by the supervisors is a common thing. My supervisor always complains that I am slow. My job is tiring as I have to pack, carry goods and clean up things. I have never been lazy but I have never had a good time with my supervisor. My colleagues feel bad for me for I have no dignity."

   "When I'm back to the dormitory after a long day's work, I have to wait till 3am to take a shower. What's more ridiculous, we have only 2 washroom for 40 people in our department. My supervisor scolded me again for going to the washroom." "My family is poor but I can't find an extra penny to send home. It seems that all these hardships do not make much sense …."

   • A female worker from the spraying department, Xaio Feng

   "We work long overtime hours like dogs when the factory has a lot of orders. We are told to take vacation when there is nothing to do. And we have to pay RMB120 (USD14.46) for food and lodgings even if we have no work to do leaving us with RMB200 -300 (USD24.10 – 36.14) to survive the slack season."

   "It is after mid-night when we are back to the dormitory. And it makes you feel even more tired seeing a long queue in the bathroom. By the time I go to bed, it is already 2am and at 8am the next day, I am already at my work place. It's the same everyday. It's very exhausting."

   • A female interviewee from the assembly department, Xaio Yiao

   "The major problem is fatigue. My shoulders were stiffened and aching after days and nights of work. We have very little time to take rest. I don't complain about working hard. It's expected because we need to earn money. But what happens now in this factory is that I'm tired to death and I haven't earned much. It makes everything meaningless. I know I don't have anything to do if I go back home…. I don't care much about safety and health issues. I don't know what that means."

   • A female interviewee, Xiao Wei

   "I've worked for more than a year now. The highest wages I've got was RMB700 (USD84.33). On average I get RMB500 - 600 (USD60.24 – 72.29) a month when we have plenty of orders; and RMB300 (USD36.14) during slack season. My husband also works in Shenzhen. He is a driver and earns RMB1500 (USD180.72) a month. My kids are left with my parents at home. My husband and I come from poor village where nothing can be grown from our lands. We have to leave our home. We live separately because we don't have enough money to rent a flat. We meet every Saturday. My salary is meager and I can't save much. In toy factories, you get a better income only during peak season. When the slack season comes, you can't even survive with what you get, not to mention keep any savings."

    

   III.3) REPORT ON THE WORKING AND OSH CONDITIONS OF COMPANY C

   This following report is structured as such:

   1. Company information
   
   
   2. General working conditions in the subsidiary plants of Company C
   
   
   3. Overall OSH conditions in the three plants of Company C
   
   
   4. Workers consciousness on Labor Law and related regulations
   
   
   5. Words from workers of Company C

   1. Company Information

   Company C is a Hong Kong based enterprise majoring in the production of electronic toys, plastic toys, die-cast toys, stuffed toys and gift toys. The chief clients for Company C are Hasbro and Wal-Mart. The company has more than 5 subsidiary plants located all in Guangdong province of China. The company also has overseas plants outside mainland China. The total number of employees is estimated to be around 20,000.

   The four subsidiary plants visited are:

   1. Factory C1 – near Guangzhou, Guangdong province
   2. Factory C2 – near Guangzhou, Guangdong province
   3. Factory C3 – near Guangzhou, Guangdong province
   4. Factory C4 - near Guangzhou, Guangdong province

   The following report was done by interviewing 13 workers from the four subsidiary plants of Company C. Information about the interviewed workers is as follows:

   Sex	Female	Male
   Number of Workers	12	1

   Age range	Under 20	20-30 years old	Above 30 years
   Number of workers	2	9	2

   Terms of service	Less than 1 year	1-3 years	Above 3 years
   Number of workers	3	6	4

   1. General working conditions in the subsidiary plants of Company C

   Plant C1:

   - C1 had about 200 - 3000 workers

   - The schedule of working hours in Factory C1 found by the time the research was done was as such: 08:30 - 12:00 13:00 - 17:00 Over time started from 17:30 - 23:30

   - A rough estimation of average daily working hours during the peak season was estimated to be 10 - 13 hours.

   - Over time work would be prolonged to as long as 23:30 during the peak season.

   - Workers were paid by time rate during the probation period and shifted to piece rate after that.

   - A rough estimate of their wages between slack and peak season varied from RMB300 (USD36.14) to RMB1000 (USD120.48).

   - Workers had old age insurance, RMB 36 (USD4.34) was deducted per month.

   Plant C2

   - C2 had about 3000 workers.

   - Workers worked 7 hours each day.

   - The number of overtime hours were not more than 3 per day.

   - Workers were paid by time rate at RMB2.57 (USD0.31) per hour. An overtime rate of 150% the normal pay rate was paid

   - Workers got a weekly day off on Sunday. During the peak season, when workers had to work on Sunday, they would be paid 200% the normal hourly pay and 300% on national holidays.

   - Workers reported an average income of about RMB500 (USD60.24) per month. The factory did not provide for food. RMB40 (USD4.82) was deducted for lodgings each month

   - RMB 68 (USD8.19) was deducted for applying the temporary resident permit

   - 12 workers shared one room in the dormitory.

   - The interviewed workers said that the living condition was acceptable in this factory.

   Plant C3

   - C3 had about 3000 - 4000 workers.

   - The interviewed workers reported that they worked an average of 70-80 overtime hours a month during the peak season. Working on Saturday was counted as over time.

   - Workers were paid by piece rate. The interviewed workers said an over time allowance of RMB1.3 per hour was given. But the wages fluctuated between the slack and peak season from RMB200 (USD24.10) to RMB 500 (USD60.24) in average. Senior and proficient workers could get about RMB1000 (USD120.48) during the peak season.

   - There were a number of deductions to be made from their salaries: RMB27 (USD3.24) for temporary residence permit, RMB40 (USD4.82) for family planning fee to the government, RMB25 (USD3.01) for labor administration fee and RMB120 (USD14.46) for management fee. Not much was left to a worker's monthly salary after all the deductions.

   - The factory did not provide food and lodging to workers.

   - Normally, a production worker that shared a flat with others has to pad about RMB100 (USD12.05) for rent, RMB20 (USD2.41) for water.

   Plant C4

   - C4 had about 3000 - 4000 workers

   - The number of normal working hours in C4 were 7, from 08:00 - 11:00 11:45 - 16:00.

   - Overtime work started from 16:30 - 21:00. But sometimes workers were requested to have no dinner break and worked straight from 16:00 to 19:00.

   - Wages are paid on time rate of RMB2.57 (USD0.31) an hour.

   - Overtime rate was paid at 150% the normal hourly pay on week days and 200% on Sunday. Workers could get Saturday and Sunday off outside the peak season.

   - Workers were paid an allowance of RMB250 (USD30.12) per month during low season.

   - They received an average income of RMB500 - 800 (USD60.24 to 96.39) per month.

   - The factory did not provide for food and lodgings. Workers paid RMB40 (USD4.82) each month for lodgings and RMB2.7 per meal.

   - RMB23 (USD2.77) would be deducted each month for applying the temporary residence permit and RMB35 (USD4.22) each month for pension.

   2. OSH conditions in Company C

   General Conditions

   - No occupational training for workers was offered to new or current workers.

   - No medical check up was provided for new or current workers. This violates the Chinese Labor Law (chapter 6) which states that workers, especially those working under hazardous environment, should be provided with regular body check-up service.

   - Production workers were not insured for industrial accident. In case of industrial injuries, the management would pay for the medical expenses. The subsidiary plants of Company C did not have an OSH policy or any documentation accessible to workers on chemical usage, safety and health as well as injury records at the work place.

   - An annual fire rehearsal was conducted at the subsidiary plant level but the dormitories were not covered. Interviewed workers said they knew how to make way for the fire exits but not how to use the fire extinguishers.

   - Long working hours is a problem especially during the peak season. It is an underlying source of hazards to the safety and health of workers.

   - Chemical poisoning is found to be a risk factor in Company C. According to Article 15 of the ILO convention on regulation of industrial chemical usage (1990), the employer has the responsibility to inform employees about the hazards of the chemicals used at the work place as well as assist employees to get access to such information. Regular training and education on the safe usage of chemicals should be provided to employees. Mainland China has signed such an ILO convention. The Chinese Labor Law and relevant regulations also stated the responsibility of employers in protecting workers from hazards in general and chemical poisoning in particular. Interviews with workers from Company revealed that no training on chemical usage and hazards were provided and no personal protection equipment was delivered. This is acting in violation to the Chinese Labor Law and the ILO convention.

   • The Injection Molding Department

   • No occupational training on machine operation was provided to the workers. New recruits were asked to follow and learn the operation of machines from the seniors.

   • Temperature was high at about 33 -38 degree C in summer. Water was sprayed and fans were installed to relieve the heat. Besides that, there was no other ventilation system. Temperature of the molding machines went up to 200 - 300 degree celsius in full operation. Workers could be burnt easily.
   • The management delivered two pairs of gloves each month. Most of the workers did not wear them because of the heat and inconvenience.

   • The injection molding machines were automatically operated. The machines, especially the grinding machines gave out loud noise in operation. Only some workers were delivered ear cuffs.

    

   • There was a strong chemical smell in the air when the plastic was heated and molded. The use of thinner and cleansing alcohol in a poorly ventilated work place made workers feel sick and some even fainted under the heat.

   • Workers felt body discomfort, dizziness, tiredness from repetitive body movements and exhaustion working under high temperature. Cases of faints were reported at the work place.

   • The interviewed workers identified heat stress as the main source of hazard in this department.

   • The Spraying Department

   • There was no training or instructions on the names or the hazards of the chemicals used in this department. Most of the interviewed workers said they did not know what chemicals were used. Nor could they tell the hazards of the chemicals.

   • Cotton masks were delivered. Masks could be delivered every half a month, once a year or three times a year, as it varied from plant to plant. It seemed that Company C did not have a standard policy on OSH and PPE provision.
   • The interviewed workers said that even with the masks on, the paints would still get onto their skins. It called into question whether the cotton masks were effective in protecting workers against the particular chemicals that was in use.
   • Cotton gloves were provided too. Workers felt it inconvenient wearing the gloves. If paints got into their hands, they would wash the paint away with thinner. But they could not tell whether the thinner was non-hazardous to their health.

   • No other break was given besides lunch and dinner.
   • The management would deliver cold drinks to workers once a week during summer. But interviewed workers said they seldom left their work to go for drinking water, especially when the production pressure was intense.
   • Workers felt that the workplace was fairly hot in summer.
   • The air was filled with chemical smell and workers reported dizziness and throat discomfort.

   • The interviewed workers said that chemicals and heat are two major problems in this department.

   • The Assembly Department

   • Workers used glue to stick components together. Except for a few occasions, most of the workers did not wear gloves, eye protection or mask. The glues, thinner and other chemicals could get into their skins, hands, eyes and respiratory system.

   • Work stress was great. The investigation learned that a daily production quota of 5000 to 10000 pieces was set by the time the interviews were done. Workers had to work overtime if they could not finish the quota. Workers dared not leave their work and go to washrooms or drink water.

   • The number of overtime work varied between different departments and subsidiary plants, depending on the size and kinds of orders that were placed. It varied from 2 or 3 hours to 6 hours a day. But generally speaking, a worker at the assembly department was estimated to sit working for 10 - 13 hours. They had ergonomic problems such as fatigue, pain, as well as numbness and stiffness over their shoulders, neck, waist, legs and eyes.

   • Workers in this department identified chemical exposure and long working hours as the major problems.

    

   1. OSH and Legal Rights Consciousness of Workers in Company C

   Below is a statistical analysis on the OSH and legal rights consciousness of 13 workers interviewed from the 4 subsidiary plants of Company C.

   	Yes, I know	I’ve heard about it	No, I don’t know
   Do you know the legal minimum wage of the town you are working in?	20%	0	80%
   Do you know the legal working hours ceiling of the town you are working in?	0	10%	90%
   Do you know how much compensation you can get if you are industrially injured?	0	0	100%
   Do you know anything about the Chinese Labor Law?	0	10%	90%
   Do you know anything about the Regulation on the Protection of Female Workers?	0	0	100%
   Do you know anything about the Law on the Protection of Teenagers?	0	0	100%
   Do you know anything about code of conduct?	0	10%	0
   Do you want to get more information and training on OSH related issues?	Yes, I want 90%	I have no opinion 10%	No, I don’t want

   • More than 80% of the workers knew nothing about the Chinese Labor Law and there was a lot of misunderstanding and misinterpretation of the labor law. Workers generally associated the labor law with inspection from the Labor Bureau. A considerable number of them took the legal minimum wage as the lowest wage they had ever received. None of them had heard of the regulations on the protection of women workers and the law on protecting teenagers.

   • A lot of the interviewees took code of conduct as another piece of factory rules. Without being aware of the client companies' code of conduct, it was difficult for workers to use these codes to improve their working conditions. More so, mistaking code of conduct as factory rules implied that company code of conduct could be misused by the factory management to impose extra demands to workers for compliance and not necessarily using the code to give better protection to workers' rights.

   • When asked about their understanding of women workers protection with regard to the maternity rights, most of the interviewees thought that it was not feasible. As they understood it, pregnant workers had to resign on their own. While Company C failed to give maternity and women workers rights protection to its workers, it could be seen from this example how workers had been mistaking the violations of workers' rights and the labor law on the part of the management as the rule of life.

   • Regarding their rights to compensation and medical treatment in case of industrial injury, the interviewees believed that the management would take the financial responsibility and hospitalize the injured worker. Again, without being properly equipped with legal rights consciousness, workers could not know what rights they were entitled to and whether the management was complying to the labor law.

   • 90% of the interviewees welcomed free education and training on OSH protection. They thought that the management had to give consent and assistance to that.

   1. Words from Workers

   • A male interviewee, Xiao Chi

   "Everyday, we work under high temperature of about 33 – 38 degree C in the molding department. The molding machines are noisy and hot. The air is filled with strong chemical smell. And I have to repeat the same movements, open the machine, put in the plastic, press the machine, take out the plastic ….. A lot of us cannot stand the heat, the smell and the noise, and some of us faint."

   • A female interviewee, Xiao Dong

   Xiao Dong comes from Hunan province. She has worked in the spraying department for more than 6 years. She is quick and earns RMB800 - 1000 (RMB100 - 125) a month. But Xiao Dong has to support her family. Her husband came to Guangdong province to work but could not find a job as he was considered "old". Her husband is in his forties now. Xiao Dong has a son that is of school age. Xiao Dong cannot afford to send him to schools in Guangdong province because of the high school fees. Besides, as a migrant worker, she has to pay a number of fees to the government, like the temporary residence permit fee, the family planning fee, labor administration fee and other management fees etc.

   Having worked over the years in the spraying department, Xiao Dong is in touch with chemicals and thinner everyday. She said she got used to them. She knows that these chemicals were poisonous but not exactly what and how. Some of her colleagues complain about sore throat and other sickness. She begins to feel worried now. But what worries Xiao Dong more is her "old age". She will pack and leave for home when no factory will take her anymore one day.

    

   III. 4) REPORT ON THE WORKING AND OSH CONDITIONS OF COMPANY D

   The following report is structured as such:

   1. Company information
   
   
   2. General working conditions in Company D
   
   
   3. Overall OSH conditions in Company D
   
   
   4. Worker consciousness on Labor Law and related regulations
   
   
   5. Words from workers of Company D

   1. Company Information

   Company D is a top OEM toy company in Hong Kong. The company won great success in early years by manufacturing girls toys and stuffed toys. Production then was expanded to infant toys, pre-school and educational toys, electronic toys, inflatable toys or beach items, plastic toys, premium & novelty items, stuffed or plush toys and dolls and polyresin items. Company D supplies to a number of prominent toy brand companies including Hasbro. The company had an annual sales of over HK$1 billion over the past years. The company has a number of subsidiary plants in major industrial cities in Guangdong province.

   Subsidiary plants of Company D

   • Plant D1 (mainly produces stuffed toys)
   • Plant D2 (mainly produces plastic and electronic toys)
   • Plant D3 (mainly produces plastic and electronic toys)
   • Plant D4

   The following report is based on interviews with 12 workers from two subsidiary plants of Company D, namely Plant D1 and D2, both located in the second industrial zone of Shenzhen, Guangdong province. The interviews were taken from July to September 2001. It was also the peak production season.

   Information about the interviewed workers are as follows.

   Sex	Female	Male
   Number of Workers	8	4

   Age range	Under 20	20-30 years old	Above 30 years
   Number of workers	1	7	4

   Terms of service	Less than 1 year	1-3 years	Above 3 years
   Number of workers	4	3	5

   Working conditions

   • Plant D1

   1. Wages

   It was learned from interviewed workers from Company D that their wages were composed of the following parts.

   Table on wage composition and wage fluctuation in Company D (August 2001)

   Working day	Daily rate RMB10.3	Over time hourly rateRMB2.4	Over production bonus	Food to be deducted per month	Actual monthly pay
   Work days in peak season	28 - 31 days	4 - 8 hours	0 - RMB50	RMB30	RMB600 - 800
   Work days in slack season	20 - 25 days			RMB30	RMB200 - 300

   The legal minimum wage in the second industrial zone was RMB440 (USD53) by the time of the interview. Based on the government reference of 20.92 work day per month, the daily minimum rate should be RMB21 (USD2.53) and the minimum hourly rate should be RMB2.6 (USD0.31). Based on the legal minimum hourly rate, over time rate on week day should be 150%, ie RMB3.9. Company D did not pay the legal daily rate or the legal over time compensation rate. Payment to workers during the slack season was also below the legal minimum wage.

   • On the pay stuff was written the exact amount of a worker’s monthly salary. But workers did not know the pay scale, the pricing or the wage calculation scheme. It was difficult for them to counter check their pay.

   1. Working hours

   • Workers were working long overtime hours up to as late as 12 - 2am by the time the interviews were done. They worked from Monday to Sunday with no day off. Working on Sunday was counted as overtime work.

   1. Contract and social security provisions

   • Only part of the workforce had signed contract with the employer. The

   interviewed production workers did not have contracts with the company.

   • The interviewed production workers were not insured for social security. The proportion of insured workforce could not be verified

   1. Living conditions

   • Workers staying in the old dormitory complained that the living conditions were not satisfactory. The dormitory was worn out and the supply of running water was not good. 18 people shared a dormitory room with bath and toilet facilities.

   5. Labor disputes

   • A stoppage of work was reported in a subsidiary plant of Company D in year 2000. Workers were dissatisfied with the production quota and overtime compensation system. Overtime compensation was given only when workers had finished the fixed quota. Workers protested against the high production quota. They would have their wages deducted if they failed to finish the quota. There were also problems in the overtime hour calculation. Workers thus had a stoppage of work. In the end, the management adjusted the overtime rate to RMB 3.9 (USD0.47), effective from August 2000.

   • Plant D2

   • Wages for production workers was RMB21 (USD2.53) a day. After deducting food and lodgings, it was RMB11.4 (USD1.37) a day. The overtime compensation rate was RMB2.63 (USD0.32) an hour. It was lower than the legal over time compensation rate for the second industrial zone of Shenzhen, ie RMB3.9.
   • During the peak season, workers might have to work till mid-night.
   • Training was arranged for new workers. Factory rules and basic safety regulations were explained.
   • Food and lodgings were provided and charges were deducted from workers' salaries.
   • The interviewed workers reflected that conditions in Factory D2 was better than in Factory D1.

   OSH Conditions in Company D

   The following is an overall report on the OSH conditions at Plant D1 and D2.

   • The Sewing Department

   • Noise pollution in the sewing department was serious. Workers could not talk or listen to each other at the work place. It took some time for their hearing to return to normal when they were off work. No ear protection was given.

   The current maximum noise pollution exposure limit in mainland China is 90dBA based on an 8-hour working day and 40-working-day a week. The interviewed workers were not provided with any ear protection and they reported temporary hearing obstacles after work. This raised the alarm of their exposure to a noisy working environment that might have exceeded the national exposure limit. An assessment of the noise level should be undertaken.

   • Work stress was another major problem. Workers were paid by time rate. The daily production quota was high. Workers had to sew as quickly as possible to finish the quota. It was easy for the needle of sewing machine to get into their hands when they sewed at a high speed. It was more tiring with fur stuffed toys as they had to sew from inside out.

   • Ventilation was not good at the work place especially during summer.

   • There was no break besides the two lunches. Workers sat working for 13 and 14 hours a day during the peak season. The wooden seats had no back support and the height of the seat might not match with the sewing machines. All the interviewed workers said their elbows were pained, their waist stiffened and legs numbed when they were off work. Workers of weak body build up could faint after long working hours.

   The sewing department required workers to sit for long hours, performing repetitive movements. Ergonomic problems will be developed leading to chronic health deterioration or other occupational diseases. Workers claimed that noise pollution, long working hours and work stress were the major problems in this department.

   • Die-Casting Department

   • New workers were instructed verbally about the safe operation of machines. But there was no formal safety training.
   • Engineers would come to check the machines every morning. Workers were asked to sign their names before they started their work.
   • The machines were lubricated and that reduced the noise level. But no ear protection was delivered.
   • The die-casting machines were one-button controlled instead of two. Workers would use the other hand to fix the component part and they could have their hands pressed.
   • Workers worked two shifts and regular hours.
   • The interviewed workers complained that temperature at the work place was high.

   • The Assembly Department

   • Workers were given a fixed quota to finish each day. If they could not finish the quota, they had to work overtime. Overtime work could run up to 2 to 3am. Work stress was a problem. There was no break besides the two lunches.

   * By the time of the visits, workers worked an average of 14 - 16 hours a day.

   It could be longer if they had to rush for shipments. All the interviewed workers said they did not have enough rest.

    

   • Workers felt that their waists were stiffened and their elbows ached after long hours of work. Ergonomic problems were identified.

   • When workers were producing furry toys, the work place would be filled with fur particles. They wore no masks and they would have throat discomfort after a short while.

   • Some workers used thinner to clean the components and the machines. They did not know anything about the chemicals.

   The number of working hours in the assembly department during the peak season exceeded the national standard. Complaints from the interviewed workers in this department focussed on long working hours and work stress. Ergonomic problems as well as chronic occupational diseases would be developed.

   • The Silk Screening Department

   • A female worker that had worked in the department for years did not know what chemicals was used for silk screening. She was not instructed on the hazards or the treatment in case of chemical poisoning.

   • Chemical smell was strong in this department.

   • Cotton masks and gloves were delivered but workers generally did not wear them finding it inconvenient to have gloves on and work.

   • The paints would get onto their skin and they would first use thinner to wash away the paints and with detergents for a second time. But the color and stain was still left on their hands indicating that the paints might have stayed or got into their skins.

   • Workers might felt dizziness and other body discomfort but they were not sure whether that was related to their job.

   Article 15 of the ILO C170 Convention on safe usage of industrial chemicals (1990) stated that the employer should inform workers about the hazards of the chemicals being used. The employer should also assist employees to get access to relevant information and provide regular safety and health training to employees on chemical usage. Chemical poisoning in the silk screening department is a major risk factor as workers would be exposed to a lot of chemical paints, thinner and solvents under long hours. Company D gave no protection to workers in this department nor did they provide training and information to prevent them from chemical poisoning.

   • OSH Infrastructure and Provisions in Company D

   • There was an annual fire drill at the work place and the dormitory in both plants. Most of the interviewed workers knew the fire exits but not how to use the fire extinguishers.

   • None of the two plants have a specialized OSH department.

   • As regards welfare and medical provisions, the interviewed workers did not know whether they were insured for industrial accidents and old age insurance. Workers' rights to compensation in case of industrial injury or occupational diseases were not protected.

   • Workers had to go to hospitals and paid RMB52 (USD6.5) for a body check-up before they entered the factory. The management did not pay for anything.

   • No regular body-check-up was provided in both plants. There was no medical provision or factory clinic. Workers had to pay for their own medical expenses. They could get a sick leave only if they could provide a medical record from the local hospital. In case of industrial accidents, the management would pay the medical fees.

   Chapter 6 of the Chinese Labor Law states that the employing unit should provide regular body check-up f or workers engaging in hazardous work.

   Workers' Consciousness on Labor Laws and Related Regulations

   The following is a statistical analysis of the 12 interviewed workers from Plant D1 and Plant D2.

   	Yes, I know.	I've heard of it.	No, I don't know.
   Do you know the legal minimum wage of the town you are working in?	0	0	100%
   Do you know the working hours ceiling of the town you are working in?	0	0	100%
   Do you know how much compensation you can get if you have occupational diseases and injuries?	0	0	100%
   Do you know anything about the Labor Law?	8%	16%	76%
   Do you know anything about the Regulations on the Protection of female Workers?	0	0	100%
   Do you know anything about the Law on the Protection of Teenagers?	0	0	100%
   Do you know anything abut code of conduct?	0	0	100%
   Do you want to get more information about OSH and related training?	Yes, I do. 80%	I have no opinion. 20%	No, I don't. 0

   Workers from Company D had poor legal and OSH consciousness. They had poor knowledge about the labor law and related regulations. Company codes of conduct is like an alien thing to workers and it raises doubt as how they can protect workers interests when workers could not tell if they were complied or violated.

   • On the other hand, about 80% of the workers wanted to know more or receive training on safety and health after the interviews were done. This shows that workers are not apathetic to their safety and health conditions if they can have access to the means of improving it.

   Words from Workers

   • A female interviewee, Xiao Hoi

   "I worked in a foreign invested toy factory years ago. A fire took place in that factory and a lot of female workers were killed. I am very sensitive to safety issues. Last time the light bulb at the work place was burnt, I was so scared that I ran for the stairway. My colleagues laughed at me. Yes, I might be over-sensitive. But it can be very dangerous if a fire breaks out."

   • A senior female worker at Plant D2, Xiao Wang

   "Only management staff had maternity leave. We, workers on the production line went to work as usual even if we are pregnant. And you will quit, as everybody else does when you are about to give birth. The management would quickly give an approval."

   • A female interviewee , Xiao Chen who had worked 6 years shifting between the two factories.

   "There is nothing written on the pay stuff. I've worked for so long and I don't know how they calculate and deduct our wages. If you go to the accountant, you have to test your luck."

   • A female interviewee from the assembly worker, Xiao Rou

   "We are working late till 1 or 2am. We have to take turns to take shower before we go to bed. At 7am, we get up and it's another work day."

    

   III. 5) REPORT ON THE OSH AND WORKING CONDITIONS IN COMPANY E

   The following report is structured as such:

   1. Company information
   
   
   2. General working conditions in Company E
   
   
   3. Overall OSH conditions in Company E
   
   
   4. Worker consciousness on Labor Law and related regulations
   
   
   5. Words from workers of Company E

   1. Company Information

   Company E is a Hong Kong based company. The company has two subsidiary plants in Guangdong province. Plant 1 is located at Dongguan City and plant 2 is at Shenzhen.

   Founded more than 10 years ago, Company E manufactures plush toys, plastic toys, premium and gift toys. Its biggest client is McDonald’s and Plant 1 mainly supplies Happy Meals premium toys to McDonald’s in the US. Company E designs, manufactures and packages toys. The annual sales of the company reaches HK$170million a year. The asset of the company is estimated to be HK$140million.

   Production Flow

   1. Plush Toys

   • Conceptualization and sample – counter sample – die-cut mold – die-cut patterns & materials – sewing – stuffing – finishing – assembly – packing – final inspection – delivery.

   1. Plastic Toys

   • Conceptualization and Sample – prototype – mold – injection – decoration – assembly – packing – final inspection – delivery

   The following report was compiled based on the interviews done with workers from Plant 1 located in Dongguan. Plant 1 manufactures both plastic and stuffed toys for McDonald’s.

   There were approximately 3000 – 4000 workers working in the two subsidiary plants of Company E. They came mainly from inland provinces like Sichuan, Hunan, Hubei, Guangxi, Guangdong and Anhui etc. About 60 – 70% of them are women. Their age range from 18 to 30.

   2. Working Conditions

   1. Working hours and wages

   • The calculation of wages varied between departments. Production workers were paid by piece rate.
   • The following are a few examples on payment found in this plant.
   • Case one: A worker from the spraying department received his July salary in early September. He worked 31 days in July and 5-6 hours over time a day. He got RMB600 (USD72.3) after deducting RMB125 (USD15.06) for food and lodgings from his salary. He was paid by piece rate and no over time pay was given.
   • Case Two: An assembly worker worked roughly 100 over time hours in July. After deducting food and lodgings (RMB125), she was left with RMB400 - 500 (USD48.19-60.24) as July salary. In slack season, she could get only RMB200 (USD24.10). In case no production order was placed, no extra allowance was given to her.
   • Case three: Workers in the QC department was paid by a time rate of RMB16 (USD1.93) a day. His hourly rate was RMB2 (USD0.24). For over time work, he would get an over time compensation rate of RMB1.8 per hour, which was even lower than his regular hourly pay.
   • Case four: Payment varied from less than one hundred RMB to several hundred RMB in the tooling department depending on the skill level of the workers. No over time compensation was given even during statutory holidays.

   The legal minimum wage in Dongguan by the time of the interview was RMB400 (USD48.19). Workers should get a minimum daily pay of RMB19.1 (based on the government reference of 20.92 working days a month) and a hourly minimum wage of RMB2.39. None of the above cases complied to the minimum pay standard of Donnguan.

   • Sick leave was not paid.
   • Workers received a pay roll that recorded the monthly wage but with no breakdown. Workers did not know how their wages were calculated.
   • There was a one-month lag in delivering wages. Workers normally received their salary one month later. This effectively pre-empted workers from quitting their jobs.

   3. McDonald’s Code of Conduct

   • By the time the interviews were done in September 2001, it was learned that workers from the spraying department were arranged to work the night shift from 6pm to 6pm. As understood from the interviewed workers, the delivery lead time given by McDonald’s was so short that it was impossible for the factory to meet the schedule. Workers from the spraying department were scheduled to take the night shift. Workers were exhausted by the new arrangement. They were not compensated at all. Long overnight work increased the risk of industrial injury and caused new safety and health problems to the workers.

   • The problem here lies more with McDonald’s harsh procurement policy. It is clear from this case that the short deliver time demanded by McDonald’s is directly responsible for the labor abuses committed to the workers of the company. The supplier has to finish the order within the short lead time, while at the same time "comply" to the company’s code of conduct. The pressure imposed by McDonald’s on its supplier is immediately shifted to the workers, causing abuses of their rights and new hazards to their safety and health.

   The question is, does it bother McDonald’s that the terms and conditions offerd by the buying agents might conflict with the very code of conduct of the corporation? While McDonald’s insists that it is the responsibility of the suppliers to comply with its code of conduct and that McDonald’s is committed to work with its suppliers to implement the code, the procurement policy of McDonald’s makes its own code a hypocritical gesture only.

   4. Contract and insurance provisions

   • Production workers signed no contract with the management.
   • Not every new worker was provided with body check when they were recruited.
   • RMB60 (US$7.23) was deducted from the salary of production workers for social insurance. But because there was no breakdown in the pay roll, the interviewed workers could not tell what kind of insurance or social security provisions they were paying for.
   • There was a factory clinic and workers paid for their own medical fees.

   4. Penalty

   • It was difficult to get approval for taking leave, even sick leave, from the factory management. Workers had to give up a day’s salary if they took a leave. Three days’ wages would be deducted for being absent from work for 1 day. This held workers back from taking any leave.
   • Penalties of various scale were charged. To take an example, workers would be fined RMB30 – 40 (US$3.61 – 4.82) for dozing off at the work place. That equaled to 2 to 3 days’ salary for a lot of production workers.

   4. Monitoring McDonald’s code of conduct

   • Workers were cautious when asked about McDonald’s. An interviewed worker in the sewing department knew that their client, McDonald’s had a code of conduct. "McDonald’s code of conduct was posted on the wall. That is a show only. For outside inspection. The management would falsify when the inspector comes. Who dares to …" She was signaled by her colleagues and refused to tell more. "In fact this factory is not bad compared to others."
   • It was learned from other workers that the management had warned its workers against disclosing anything about the factory conditions to outsiders. The management would instruct workers with a set of frequently asked questions whenever there was an audit.

   It is an irony to see that before the company code of conduct brought any real benefits to the workers in the vendor factory, more pressure was laid onto the workers as they were threatened and couched by the management to give the "right" answers to the clients' auditors. This fear for retaliation was adamant amongst workers that it inhibited workers from articulating and claiming their rights.

   2. Occupational Safety and Health Conditions in Company E

   Plant 1 manufactures both plastic and stuffed toys. The investigation mainly focused on the tooling and spraying department where safety and health problems were more accute.

   1. The Tooling Department

   • Plant 1 manufactured molds that supplied to other departments. Molds were made from steel and other metals. About 30 - 40 workers were working in the tooling department. High temperature and much noise was produced in this department. But workers were not provided with any ear or eye protection. The finished mold was hot, heavy and had sharp edges. This became another source of hazards as workers, not wearing appropriate metal gloves, could be cut easily by the sharp edges.

   2. The Spraying Department

   • Chemical exposure

   Workers knew that they were exposed to different kinds of chemicals and thinner everyday. But they were not informed about the hazards of these chemicals; nor were they instructed how to properly handle these chemicals.

   • PPE

   Paint dust level was high and the chemical smell was strong at the work place. A ventilation system was in place and workers were equipped with both cotton and cartridge masks. But the cartridge masks were heavy and created other discomfort, like dizziness, to workers. They were worn only when requested by the management during factory inspection. When there was no inspection, workers normally wore cotton masks.

   • Cotton gloves were also provided but not many workers wore them as they found that wearing gloves would slow down their speed. They used thinner to wash away the paints on their hands.

   • Temperature

   Workers also reported high temperature at the spraying department and some workers felt dizzy and other body discomfort staying up long under high temperature.

   • Health hazards

   The interviewed workers said they suffered from health problems like fainting, vomiting, dizziness, loss of appetite, fatigue and body weakness. They attributed these health problems to long working hours, stress as well as chemical exposure.

   • General OSH conditions and infrastructure

   • The factory had regular fire drills at the work place.

   • The management did not have an OSH department to deal with safety and health issues.

   • Workers had to get permission for going to toilets and drinking water. Workers found such an arrangement inconvenient especially during summer when the temperature at the work place was high.

   • Long working hours - Plant 1 workers worked an average of 15.5 hours a day for the whole week during peak season. There was no day off. Fatigue and lack of sleep was another important source of hazards.

   • The interviewed workers were asked why they did not wear the personal protection equipment provided by the management. They said that wearing protective equipment like the charcoal masks, ear plugs and cotton gloves made them feel even more uncomfortable. More importantly, wearing these provisions would slow down their speed. Production workers were paid by piece rate, meaning you earned more if you worked fast enough. They had to give up either higher income or safety protection.

   The factory management of Company E did provide PPE to workers. Yet a more positive approach would be conducting an evaluation of the hazards and risk factors at the work place and improve the OSH conditions from engineering and management control of hazards. Relying on workers' wearing PPE is both passive and misleading as it is the responsibility of the employers to provide a safe and healthy working environment to the employees. Too much reliance on the provision of PPE in replacement of a fundamental eradication or containment of the hazards finally could result in placing the blame on the reluctance of workers to wear PPE only.

   • Industrial injury

   • While the interviews were done with workers from Plant 1, a case of industrial injury was reported at Plant 2.
   • It was reported that in 1998, a new worker who had been recruited for five days had his right elbow cut when he was operating a molding machine. The injured worker did not know that the machine went out of order as he operated it. He was rated by the Social Security Department as a 4th grade handicap. The injured worker later engaged in a two-year lawsuit against the factory for compensation. He got RMB26,000 (US3250) in court on 10 October 2000. The monthly salary for this worker in the molding department was RMB490 (US61.25) per month before the injury. This injured worker went back to his hometown in Sichuan when the lawsuit finished.

   This case illustrated first of all a lack of OSH training to workers could lead to injury to the workers. They might lose their working ability for life. Company E did not give enough protection or training to its workers and in the end the worker paid the cost. From the length of time this lawsuit had dragged, it can be seen how difficult it is for a migrant worker that comes from inland province to claim back their legal rights in court. The injured worker had to stay for 2 years, without job and salary, and without working ability, in Shenzhen while the lawsuit was under procedure. A lot of workers did not have the financial means to bring a lawsuit against the employers nor could they afford the long wait while living on nothing in the cities. They would not take up a lawsuit to claim their rights and compensation. Some of them would accept whatever amount of money the employer offered them. While others simply would put the blame on themselves and went back to their home towns. Even for those that had successfully claimed compensation, the damage done to their bodies was permanent. If they lost their working ability for life, a meager compensation would not be enough for them to survive the rest of their life. It is therefore of utmost importance that the employers should take up preventive measures to protect the OSH conditions of their employees.

   2. Workers' Consciousness on Labor Law and Related Regulations

   Reported below is the statistics on the OSH and legal consciousness of 5 workers working in Plant 1 of company E.

   	Yes, I know.	I’ve heard about it.	No, I don’t know.
   Do you know the legal minimum wage of the town that you are working in?	20%	0	80%
   Do you know the working hour ceiling of the town you are working in?	20%	0	80%
   Do you know the amount of compensation you can get if you are injured in an industrial accident?	0	0	100%
   Do you know anything about the Labor Law?	0	0	100%
   Do you know anything about the Regulation on the Protection of Female Workers?	0	0	100%
   Do you know anything about the Law on the Protection of Teenagers?	0	0	100%
   Do you know anything about code of conduct?	20%	0	80%
   Do you want to get more information and training on occupational safety and health?	Yes, I want. 100%	I have no opinion. 0	No, I don’t want. 0

   Workers from plant 1 of Company E had poor knowledge on OSH and the labor law. Although 20% of them had heard of code of conduct, they were refrained from discussing it. More education on the legal rights of workers is needed for workers in this Company.

   6. Words from the workers

   1. A female interviewee from the spraying department

   "The working hours are long and pressure great in this factory. My team has to finish 45000 units everyday. During peak season, it is the normal case for us to work over time till midnight everyday. We have no day off. At present, all of us are scheduled to take the night shift because the management has already started producing a new product line before the order is placed. Recently, we work from 6pm to 6am. This is to avoid the inspection of the client. The re-scheduling makes us very tired. We can’t help dozing off at the work place and we will be fined RMB30 – 40 (US$3.61 – 4.82) for that."

   2. A male interviewee in the storage department

   "Our wages are already low during low season. The unit price gets lower and lower and we, piece rate workers, get only RMB200 – 300 (US$25 – 37.5) a month." "We don’t know how they calculate the wages. Piece rate or time rate? You can never tell how it comes down to the few dollars you receive. What can we do about it?"

    

   III. 6) REPORT ON THE WORKING AND OSH CONDITIONS IN COMPANY F

   The following report is structured as such:

   1. Company information
   
   
   2. Report on Plant F1
   
   
   3. Report on plant F2
   
   
   2. Company Information

   Company F is a Hong Kong based company. The company has two operating plants, namely Plant F1 and Plant F2, both located in the second industrial zone of Shenzhen, Guangdong province. Plant F1 officially supplies to McDonald's. But Plant F1 would split the orders of McDonald's and sub-contract production to the other subsidiary, Plant F2, for production.

   Location

   Plant F1 – second industrial zone, Shenzhen, Guangdong province

   Plant F2 – second industrial zone, Shenzhen, Guangdong province

   Product

   Games, non-electronic toys, plastic toys, pre-school toys, educational and infant toys, premium and novelty items, plush toys, and roto casting.

   Past labor abuse records

   • Since 1998, industrial injuries and accidents records had been reported.
   • September 1998 - Workers went to the Social Security Bureau to complain the factory for not insuring workers and no compensation was made in case of big accidents and injuries. When the bureau sent an investigation to the factory, the factory guards barred the officials from entering the factory. In the end, the management submitted to the demands of workers under public pressure.
   • Company F was found to have been keeping false records for company audits. In general conditions in F2 were much better than F1. Plant F2 would receive orders from clients while sub-contracting some of them to Plant F1. But all these were done with full knowledge of the client and its buying agent. While Plant F1 failed to meet the audit requirements of its clients, compliance in Plant F2 was half of the picture only as further sub-contracting between the two companies was the practice.

   The following report was done by interviewing 19 workers from both plants of Company F. Their information is as follows.

   Sex	Female	Male
   Number of Workers	7	12

   Age range	Under 20	20-30 years old	Above 30 years
   Number of workers	8	10	1

   Terms of service	Less than 1 year	1-3 years	Above 3 years
   Number of workers	7	10	2

    

   Report on Plant F1 of Company F

   10 workers from Plant F1 were interviewed. 3 of them were female and 7 were male. There were 8 workers from the spraying department and 2 workers from the trimming department. Of the 10 interviewed workers, 5 were under 20 years old whereas 5 were between 20-30 years old. 5 of them served less than 1 year and the other 5 served between 3-5 years in Factory F1.

   General Working Conditions in Plant F1

   There were about 2000 workers in plant F1 by the time of the investigation. The recruitment ad said the factory was recruiting workers between 18 - 27. No contract was signed.

   • Wages

   • More than 80% of the interviewed workers complained against the wage calculation.
   • Production workers were paid by piece rate and time rate. But time and piece rate would be switched depending on the batch of orders the plant was placed with.
   • It was reflected from interviewed workers that the management would pay by piece rate when there were a lot of orders, and time rate during the slack time.
   • The unit price of piece rate work was kept with the management, and workers had no idea about the pay scale.
   • Piece rate workers had to finish the daily production quota, if not, they had to work overtime to finish it without compensation But the management would raise the quota so that it became more and more difficult for workers to finish the quota.
   • For example, workers in the assembly department had to finish 45 batches of toy pens within the "official" working hours at first. That was raised to 60 and 70 later. Workers had to rush and still they could not finish the quota within eight hours and had to work overtime without being paid proper compensation rate.
   • It was difficult for workers to appeal or check their wages if they found problems with it.
   • RMB190 (USD22.89) was deducted for temporary residence permit.
   • Production workers on average had RMB300 - 500 (USD36.14 – 60.24) a month. Yet the management would falsify the pay record and on paper, workers got a monthly pay of around RMB600 - 900 (USD72.29 – 108.43). What the workers actually earned was not earn enough for their survival.

   • Working hours

   • The normal working schedule at Company F was as follows: 08:00 - 12:00 13:30 - 17:30. Overtime work during peak season: 18:30 - 21:30. It could be as late as 24:00 or 27:00 when they had to rush for shipments.
   • The spraying department took two shifts and each shift was 10 hours long. The night shift started from 21:00 to 07:00. There was a 30-minute break in between.
   • Usually the assembly department had to work long hours when they had to meet shipment dates. Workers reported working till 3am. But they were told to take vacation when there was no work to do.
   • Normally, Sunday would be off. But not a single day was off during the peak season.

   • Fraud

   • The factory had a set of false pay rolls and false time cards to deal with social audits.
   • Production workers did not have to punch the clock machine. Only supervisors or above rank did so.
   • As appeared on the pay rolls, a worker might get RMB600 - 900 (USD72.29 – 108.43) a month. The reality was that the worker might get just RMB 300 - 500 (USD36.14 – 60.24) a month.
   • Workers had to sign their names on both real and false pay rolls. But they were not given any copy.
   • The management would couch workers to give "correct" answers to auditors.

   Occupational Safety and Health Conditions in Plant F1

   • The Spraying Department

   • Workers in this department said they did not know what chemicals were used nor could they tell the hazards.
   • The chemical smell at the work place was strong and there was a lot of paint dust.
   • The carbon masks they wore would be filled with paint dust every one or two days. But the management would only deliver new ones once a week.
   • Workers used the gloved hand to hold the semi-finished toys and the other un-gloved hand to hold the spraying machine. But the paint would still get onto their skins and into their hands.
   • They would wash their hands with thinner. The thinner had very strong chemical smell but it washed the paint stains away very quickly. The supervisor told workers that the thinner was not harmful to human beings. Their hands felt dry after being washed with the thinner. They could not tell if the thinner was hazardous.
   • Workers had sore discomfort, felt dizzy and wanted to throw after being exposed for long to the chemical paint.
   • Noise pollution was another problem in the spraying department. Workers could not talk to or hear each other when the spraying machines and the ventilation fans were in operation. No ear protection was delivered.
   • Work stress was strongly felt by the workers. Plant F1 workers were producing plastic toy trains at the time of the investigations. The daily production quota was 4000 -5000 cars a day. Workers wanted to finish the quota as soon as possible because they knew that they could not get any compensation for overtime work and that they could not leave without finishing the quota.
   • Besides the two lunch breaks, they did not have chance to take a rest. Their waist and shoulders were stiffened and pained at the end of the day.
   • In the latest body check-up, quite a number of workers were found to have hepatitis B.

   • OSH Infrastructure and Provisions at Plant F1

   • There were fire drills at the work place and dormitories.
   • No formal OSH training was offered to workers.
   • Plant F1 did not have a specialized OSH department to address occupational diseases and injuries.
   • The interviewed workers did not know if they were insured or not.
   • The management arranged for medical personnel to have body check-up for workers every year. But workers had to pay for the fees.
   • Anybody failed in the body check-up would be fired or "advised" to leave. No compensation was given.
   • There was a factory clinic and RMB5 (USD0.625) was deducted from their monthly pay.

   Workers' consciousness on the Labor Law and Related Regulations in Plant F1

   The following is a statistical analysis on the legal consciousness of 10 interviewed workers from Plant F1.

   Questions	Yes, I know	I've heard of it.	No, I don't know
   Do you know the legal minimum wage of the town you are working in?	0	0	100%
   Do you know the working hours ceiling of the town you are working in?	0	0	100%
   Do you know how much compensation you can get if you have occupational disease or injuries?	0	0	100%
   Do you know anything about the Labor Law?	0	0	100%
   Do you know anything about the Regulation on the Protection of Women Workers?	0	0	100%
   Do you know anything about the Law on the Protection of Teenagers?	0	0	100%
   Do you know anything about code of conduct?	0	0	100%
   Do you want to get more information on OSH and related training?	Yes, I do 70%	I have no opinion 30%	No, I don't 0

   A lot of the interviewed workers had primary education level, they knew almost nothing about OSH and labor laws. The management was the only source of information on such issues.

   4. Words from Workers of Plant F1

   • A female interviewee from the Furnishing Department, Xiao Li

   "Our department did not have much work to do and that's why I got very low wages. It is about RMB300 (USD37.5) a month. I cannot save even one penny after working 3 months now. I don't know how the wages is calculated. If you go to the line supervisor, the line supervisor would ask you to the floor supervisor. The floor supervisor would then ask you to go the accountant. Anyway, you don't get any where."

   • A male interviewee form the Spraying Department, Xiao Ting

   "The management told us to lie to auditors. They asked us to tell the auditors that we had RMB800 - 900 (USD100 - 112.5) a month when we had only RMB300 - 400 (USD37.5-50) a month. They asked us to tell the auditors that we worked 8 hours and not more than 3 overtime hours a day when in fact we had more than 3 overtime hours everyday. They asked us to tell the auditors that we had four days off in a month. The truth is we have never had a single day off for months now."

   • Another male interviewee from the Spraying Department, Xiao Gor

   " Our wages is low and the calculation of wages a mess. The supervisors and the leaders were picking up things and yelling at people the whole day. We were not treated as human beings. We had young female workers leaving because they could not stand the yelling and language abuse. Even the security guards did not respect us. They would use fists not just hands. And the factory would just turn a blind eye. Anyway we are always wrong. The management had many ways to give you a bad time. You would not be fired because they have to compensate you. You would be told to "take a leave". But you can't go anywhere but you have report duty at anytime they like. If you fail to do so, they have a good excuse to fire you without paying any compensation."

    

   Report on Plant F2 of Company F

   9 workers from Plant F2 were interviewed. 4 of them were women and 5 were men. There were three coming from the spraying department, 3 from the assembly department and the other 3 from the pressing and other departments. In terms of age distribution, 3 were under 20 years old and the other 6 were between 20-30 years old. 5 of them had served less than 1 year at Plant F2. 3 had served 1-2 years and 1 had served 2-3 years in Plant F2.

   1. Working Conditions in Plant F2

   • General

   There were about 2000 workers in plant F2. Most of them came from An Hui, Sichuan, QuiZhou provinces. The factory would recruit only 18 years or above.

   • Wages

   • Most of the interviewed workers did not know how their wages was calculated as they did not know the unit price of the products.

   • Workers were paid time rate during slack time. The hourly rate was RMB1.63 (USD0.33). The legal minimum wage of the second industrial zone was RMB440 (USD56.4) by the time of the interview. Based on the government reference of 20.92 working days a month, the minimum daily pay should be RMB21 (USD0.37) and the minimum hourly rate should be RMB2.6 (USD0.34). Plant F2 was delivering wages in violation of the local minimum wage.

   • Starting form July 2001, workers from plant F2 were told that they would be paid RMB440 (USD53) for their basic wages. Take the July wages as an example. The management would ask workers to sign two sets of pay stuff. The wages written on the false pay stuff was RMB 600 - 800 (USD72.23 – 96.39). But in fact workers got only RMB200 - 500 (USD24.01 – 60.24) in July. Assembly workers in July got even as low as RMB100 - 400 (USD12.05 – 48.19) because of less orders being placed with the factory.
   • Workers could appeal to nowhere if they found problems with their pay.
   • Production workers did not have to punch the clock machine so they had no idea how many hours they had worked.

   • Working hours

   • The pressing department had two shifts: 08:00-20:00 and 20:00-08:00. Each shift had 12 hours. Deducting one hour for lunch, workers of the pressing department had 3 overtime hours a day. They had RMB440 (USD53) as basic wage. The overtime rate was RMB2.63 (USD0.32) an hour. An average of their salary was RMB 600 (USD72.29) a month.

   • For other departments in general, the working schedule was: 08:00-12:30 13:30-17:30. Overtime work started from 18:30 - 21:30. There were not many orders by the time of the investigations. Workers were off their work at around 21:00. But if the orders were big, workers worked late till 24:00 or 26:00 and no day off will be taken.

   • The packaging and assembly department had the most "flexible" hours. They worked without stop during peak season. They "took vacation" during slack time.. No wages would be delivered during the slack season.

   • Food and lodgings

   • RMB140 (USD16.87) was deducted for food each month. But the workers complained that they were fed with vegetables and did not have much to eat. A lot of workers would eat outside thus increasing their financial burden.
   • Another RMB35 (USD4.22) was deducted for water and electricity at the dormitory. 12 people stayed in one room.

   1. OSH Conditions in Plant F2

   • General OSH conditions

   • There was an annual fire drill at the work place.
   • Plant F2 did not have an OSH department to plan training, design engineering and management control and document OSH related records.

   • No OSH training was given to new workers nor were current workers provided with relevant education.

   • The factory provided an annual body check up to workers. Workers had to pay RMB60 for it. But the body check up was more a screen test for the management to fire physically unhealthy workers. Weak workers or workers found to have failed in the body check up would be fired, advised to leave or take a long vacation.

   • In the body check up done in April 2001, a lot of workers were found to have acquired hepatitis B.

   • As the factory did not insure workers on health or industrial injury (nothing was recorded on the pay stuff), it would be difficult for workers to claim their rights when they found themselves to have acquired occupational diseases.

   • The Spraying Department

   • Some of the spraying workers said the chemicals had labels that listed the names and components of particular chemicals. There were also warnings against using thinner to wash stained hands. But no formal training on proper chemical usage was given to workers.

   • Since workers had to use their hand to paint small parts and joints, it would affect the quality if they wore gloves. That's why workers in general did not wear gloves.
   • Workers thought that chemical exposure was the major source of hazards in this department.

   • The Assembly Department

   • Workers had to work long hours of 11 or more a day, not including lunch hours.
   • There was no break. Workers had to take permits to go to the washroom.
   • Except for some sections, most of the assembly workers would not wear gloves because that was inconvenient to their work.
   • For the rest of the workers, they were not given any other personal protective equipment.
   • Workers identified work stress as the major source of hazards in this department.

   Chapter 6 of the Chinese Labor Law states that it is the responsibility of the employers to provide a safe and healthy working environment to the workers. In case hazards were identified, the employers should take measures to remove or contain the hazards by engineering and management control. Demanding workers to wear protective equipment is a passive measure and it is easy for the employer to shift the responsibility to the reluctance and negligence of the employees for not wearing the PPE.

   • The Pressing Department

   • Male interviewees said that new workers were instructed about how to use the machines and other safety issues.
   • The pressing machines were operated with two buttons. A safety instruction was put up.
   • Only workers working at particularly noisy sections were given ear protection.
   • The dust level at the storage section was the greatest. Workers there wore eye masks, ear protection and masks.
   • High temperature was also a source of much discomfort especially during summer.
   • Workers in this department identified noise pollution and high temperature as the main hazards.

   1. Workers' Consciousness on the Labor Law and Regulated Regulations in Plant F2

   9 workers from plant F2 were interviewed and an analysis is given as below.

   	Yes, I know	I've heard of it.	No, I don't know
   Do you know the legal minimum wage of the town you are working in?	30%	0	70%
   Do you know the working hours ceiling of the town you are working in?	30%	0	70%
   Do you know how much compensation you can get if you have occupational disease or injuries?	0	0	100%
   Do you know anything about the Labor Law?	105	20%	70%
   Do you know anything about the Regulation on the Protection of Women Workers?	0	10%	90%
   Do you know anything about the Law on the Protection of Teenagers?	0	10%	90%
   Do you know anything about code of conduct?	55%	0	45%
   Do you want to get more information on OSH and related training?	Yes, I do 80%	I have no opinion 20%	No, I don't 0

   The code of conduct of McDonald's was posted. The interviews also showed that workers claimed that they knew code of conduct and relevant labor laws. But as commented earlier, knowing about code of conduct does not mean that workers are empowered to make use of the codes to protect their rights. It takes more education, both to the management and the workers to create an environment free of fear and retaliation at the work place before the codes can be effectively implemented. As regard training and education, most of the interviewed workers expressed an eagerness to participate.

   2. Words from Worker in Plant F2

   • A male interviewee in the Spraying Department, Xiao Bei

   "My wife used to work with me in the same department. She went back home to take care of our child early this year when we did not have enough work to do and our wages were too low. It is not any better now. I got only RMB200 - 400 (USD25 -50) left after deducting food and lodgings. I haven't sent money to my family for 6 months now. Last year we had a stringent life and we were able to save RMB1300 (USD162.5). We were so happy. But it was not so this year."

   "I have started working here and there since 15 years old. I heard people saying that you could earn more in Guangdong. But it was worse. I have worked for three years in the spraying department, I always suspect that the paints are poisonous. I have sore discomfort ever since I've started working in this department."

   "We never know how the wages is calculated. There is no pay stuff and no way to check. We were given a table (of wages) to look at for a few seconds before signing our names for claiming our wages. We get what they give us."

   • A male technician in the engineering department, Xiao De

   "The major client of plant F2 is McDonald's and a lot of things are stricter than before. Of course every time when auditors from McDonald's come, the management would "prepare" something. To speak the truth, no factory can get a pass if the auditors really act strict"

    

   III. 7) REPORT ON THE OSH & WORKING CONDITIONS OF COMPANY G

   The following report is structured as follows.

   1. Company Information
   
   
   2. General working conditions in Company G
   
   
   3. OSH conditions in Company G
   
   
   4. Workers consciousness on Labor Law and related regulations

   1. Company Information

   Factory location: Second industrial zone, Shenzhen, Guangdong province

   Ownership of Capital: South Korea

   Production: OEM Plush toys for export

   Clients: McDonald’s, Disney Park, Cega, Warner Brothers

   7 workers from Company G were interviewed from July to September 2001.

   2. Working Conditions in Company G

   3. Long Working Hours
   • The following is a one-week record of the long working hours in the sewing department of factory G.

   Sewing department of Company G from 8 – 13 July, 2001

   8 July 2001	Overnight
   9 July 2001	Overtime work till 2am
   10 July 2001	Overtime work till 4am
   11 July 2001	Overnight
   12 July 2001	Overnight till 11am, 13 July 2001

   • Workers were supposed to come back to work in the afternoon of 13 July 2001. It was later called off by the management as no worker could get up and come back to work after a week’s overnight work.
   • The interviewed workers reported working an average of 150 – 160 over time hours a month without day off during peak season. They could get one day off during slack season. Company G has the greatest number of working hours amongst the factories covered in this report. It exceeds about 2 times the national limit on the number of working hours, which is 40 hours a week and not more than 36 over time hours a month.
   • The electronic department also worked long hours till 2-3am in August 2001.
   • Besides the 1.5-hour lunch break and the one-hour dinner break, workers had to work continuously without any small break. The production schedule was highly stressful and workers would be scolded or embarrassed by the supervisors for going to the toilets for too long. Workers said many of them could not stand the extremely long hours and wanted to quit their jobs.

   1. Low wages

   • Production workers in company G were not compensated for overtime work.
   • 100 RMB (US$12.05) for food and 50RMB (US$6.02) for lodgings was deducted per month.
   • Case one: By the end of August 2001, an assembly worker got his July salary of RMB788 (US$94.94), food and lodgings deducted. He worked for 26 days in July. He had overtime work for 3 to 7 hours everyday (the earliest time he was off from work in July was 9pm, the latest was 2am).
   • The legal minimum wage of the second industrial zone of Shenzhen by the time the interview was done was RMB440 (USD53). Take the government reference of a 20.92 working days per month, the daily minimum wage should be RMB21 (USD2.53) and the minimum hourly wage should be RMB2.6 (USD0.31). The legal over time compensation rate per hour should be 150% of the normal hourly rate, which is RMB3.9 (USD0.47). In a conservative estimation, let's take the number of over time working hours as an average of 5 per day for 26 days in this case. The over time compensation should be RMB513 (USD61.8). Adding that to the legal minimum wage of RMB440, these workers should at least get RMB953 (USD114.8) in July 2001. Company G had violated the legal minimum pay and the working hour limit of the local township.
   • Workers also complained about errors in the calculation of hours and wages. The hour record was the most complained about. Workers had less working hours on their time record than the number they had actually worked. The clock machine was adjusted to give a false record. For instance the punch machine would take 24:00 as 21:00. Workers were underpaid for their over time work and the falsification would make verification difficult.

   1. Contract and insurance

   • The interviewed workers had signed contracts with the management but copies of the contracts were not given to them.
   • Only part of the workforce was insured for industrial injury. The proportion of insured workers amongst the workforce could not be verified.

   1. Code of Conduct

   • Of the seven interviewed workers, only one interviewee (a non-production worker) had heard about code of conduct. Most of the production workers did not know anything about it. The interviewee said McDonald’s and Disney’s codes of conduct were posted on the wall but nothing would be done about it not until an audit was to take place. The management would falsify records and made other arrangements for the audits and inspection.

   Occupational Safety and Health Conditions in Company G

   1. General Conditions

   • The interviewed workers told the interviewers that the fire drills were just for show to auditors and inspectors. Workers were more worried about possible fire hazards associated with the storage of flammable stuffing materials at the work place.
   • The interviewees were also worried about their safety on their way to work.

   Workers had to cross a road as they walked from their dormitory to the production plant and that exposed them to car accidents. In the past, car accidents happened. Cases of workers being knocked down by motor bikes on their way to work were reported. The motor-cyclists left without compensating the injured workers. Workers had reflected their concern to the management but the management refused to take responsibility claiming that the accidents were not related to production.

   • However, it is stated in the Chinese Labor Law that the employer has to insure workers for traffic accidents on the way to and from work. The employer has the responsibility to ensure workers' safety and give them assistance when accidents happen.
   • The management practice of delivering wages to workers at night during the peak season was another issue of concern. Such a practice exposed workers to high risks of robbery.

   1. Sewing Department

   • No OSH training was given to workers.
   • Long working hours leading to ergonomic problems was the major hazard. Workers said the lower part of their bodies was stiffened and numb at the end of the day. It felt like their legs were theirs no more. Their shoulders and necks were pained and stiffened. Continuous overnight and long working hours was extremely exhausting.
   • A daily production quota was set and working hours would be deducted if they could not hit the quota within the required time. Workers had to work overtime without compensation till the quota was reached. Work stress was huge and this coupled with long working hours was the biggest source of hazard in the sewing department.
   • Cotton gloves were delivered to the workers but most of the workers did not put them on. What workers feared most was failure to reach the daily production quota rather than safety and health hazards. Wearing gloves could slow down their speed and failure to reach the production quota could lead to deduction of working hours and lower wages. The management should review the production schedule rather than just requiring workers to wear personal protective equipment.
   • Workers in the stuffing department said the work place was dusty and the ventilation poor. Temperature ran high during the summer peak season.

   Worker Consciousness on Labor Law and Related Regulations

   The following reports some statistical figures on the legal and OSH consciousness of 7 interviewed workers.

   Questions	Yes, I know.	I’ve heard about it.	No, I don’t know.
   Do you know the legal minimum wage of the town you are working in?	0	0	100%
   Do you know the working hours ceiling of the town you are working in?	0	0	100%
   Do you know the amount of compensation you can get if you are injured in an industrial accident?	0	0	100%
   Do you know anything about the Chinese Labor Law?	0	57%	43%
   Do you know anything about the Regulations on the Protection of Female Workers?	0	0	100%
   Do you know anything about the Law on the Protection of Teenage Workers?	0	0	100%
   Do you know anything about code of conduct?	28	0	72%
   Do you want to know more information and training about occupational safety and health?	Yes, I want. 100%	I have no opinion. 0	No, I don’t want. 0

   • Amongst the interviewed workers, only one non-production workers knew about code of conduct. According to them, the codes were posted on the wall but not implemented during the time when no factory audit took place. The situation in Company G shows how code of conduct is an exercise for the management only. It could have no relevance to the workers. The working conditions, despite the "implementation" of a code of conduct of McDonald’s and Disney’s, had not been improved. Unless the workers are involved in the implementation and monitoring of the codes, it remains as an empty piece of paper only.

   • Workers from Company G showed a serious lack of OSH and legal consciousness. The interviews found that all of them wanted to receive education and training on OSH protection. They were not apathetic to their rights and safety and health if they had the access to improving that.

    

   III. 8) REPORT ON THE OSH & WORKING CONDITIONS OF COMPANY H

   The following report is structured as follows:

   1. Company information
   
   
   2. General working conditions in Company H
   
   
   3. OSH conditions in Company H
   
   
   4. Workers consciousness on Labor Law and related regulations

   1. Company Information

   Company H is located in Dongguan City, Guangdong Province. Company H is a Hong Kong investment. The production plant in China manufactures stuffed toys. Its chief clients were McDonald's, Wal-Mart, Hello Kitty and Disney (not an official licensee)

   2. Working Conditions in Company H

   Company H employed about 300 workers by the time of the visit. They come from different provinces like Sichuan, Hunan and Quizhou etc. Most of the work force is female. Workers are aged around 18 – 28.

   I. Working conditions

   1. Low wages

   • Wages for production workers were calculated on piece rate. No over time compensation was paid.
   • Workers were given no pay roll. They signed their names and got salaries from the management. It was difficult for them to counter check their pay. And they had no knowledge about the wage calculation.
   • Great wage variation was found between workers. Senior workers got as much as RMB800 - 1000 (around USD96.39 – 120.48) while junior workers got as low as less than RMB100 (USD12.05) after deduction of food and lodgings.
   • Take the case of a male hole-maker who worked 19 hours everyday (not including supper time) till 2 to 3am, and 7 days a week. He earned around RMB500 (USD60.24) a month. That means he earned less than RMB19 (USD2..29) for 19 hours a day and less than RMB1 (USD0.12) an hour.
   • Another male hole-maker shared his example. He worked till 11pm every night in May this year. What he got was RMB240 (USD20.9) after deduction of food and lodgings.
   • The legal minimum wage of Dongguan by the time of the visit was RMB400 (USD48.19). In both cases, the company had not given due over time compensation to workers nor did the company pay the minimum wage.

   1. Delay payment of wages

   • There was a 45-day lag in delivering wages to the workers. By the time we interviewed the workers around end of July, workers just received their May wages. This was to defer them from quitting the job at will. Workers said they dared not run away no matter how hard it was at this factory because they did not want to give up their held wages.

   • New workers had to pay a down payment of RMB80 (USD9.64).

   1. Long working hours

   • Workers started working at 7:30am everyday. The number of working hours ranged from 13 to sometimes more than 20 hours a day. This is the situation for most time of the year without a distinction of peak and low season. The "normal working hours" was 9. The rest was counted as over time.
   • Workers could have lunch and dinner time of one hour. That would be shortened to half an hour when they had to meet the shipment date. Workers had to swallow their lunch in couple of minutes and started working immediately.
   • No other break was given between lunch break. Extremely long working hours exhausted the workers. Work stress was great and workers had to get a permit to go to the washroom.
   • A time record kept from 9 - 13 August, 2001 showed that workers finished their work from as "early" as 12:40am to as late as 04:00am. They came back to work as usual the next day. Nobody had enough sleep. Faints were frequently reported at the work place.
   • Workers had to work long hours to hit the production quota set by the factory. That ranged from 600 to 1000 pieces per day.
   • In terms of day off, only one day off was taken from June to August this year meaning workers had worked consecutively for more than 100 days by the time with any break.

   1. Living conditions

   • Workers paid RMB60 (USD7.23) for food every month. But the interviewed workers found that the food was unpalatable. RMB 20 (USD2.41) was deducted each month for water and electricity.
   • The factory had a 6-storyed dormitory. Eight double bunch beds were placed in each room. Sometimes 2 people had to share the lower bunch meaning that at worst 24 people would be squeezed in a room. Workers complained about the over-crowdiness and poor living conditions.

   1. Social insurance and contract

   • The interviewed workers had no idea whether they were insured or not.
   • As found from the interviewed workers, a large part of the production workforce did not have contract with the employer. For those that claimed they had signed a one-year contract but they were not given any copies of it. If workers are not given copies of the contracts and do not understand how the contract can protect them, signing contract is just an exercise for auditors or government officials rather than a guarantee of rights for workers.

   1. Taking leave

   • Getting permission from the management to take leave was difficult. Workers that wanted to go to the doctor had to squeeze their lunch time to do so.

   1. Penalty

   • A fine was imposed if faults were found on products. It was the same for failing to meet the daily quota. The interviewed workers did not understand well the scale of punishment. The penalties further increased the work stress to the workers.

   1. Welfare

   • Workers were not provided with any welfare or medical provision at all.

   1. OSH conditions in Company H

   1. The Hole-Making Department

   • No training was given to the workers.
   • A hole-making worker had to use his feet to press the hole-making machine to make holes, while his hands were used to fix the semi-finished product in place. The worker had to coordinate both hands and feet well and with care. In case the worker felt tired or was in bad conditions after long hours of work, his hands could be easily pressed by the machine.
   • The factory did not provide any iron gloves for the workers.

   • The dust level (from stuffed materials and the surface of dolls) was high at the work place. No mask of any sort was given to the workers. There was no ventilation system except some fans and the air was stuffy. Workers would have respiratory diseases or skin allergies being exposed to for long hours in such a working environment.

   2. Stress and long working hours

   • Stomach problems were common amongst workers due to long working hours and pressure from work.
   • Other ergonomic problems such as stress and pain over the neck and shoulders were common as they were required to perform repetitive movements for long hours everyday.
   • The interviewed workers were worried that long working hours weakened their bodies. They caught diseases easily and would faint at work.

   2. Fire Control

   • There was no fire drill at the work place. The interviewed workers were not aware of fire control measures. It is dangerous as the factory produces stuff toys and workers could not tell if the storage of inflammable materials meet safety standards. Long working hours that lowered the alertness of the workers further increases the danger.

   2. Medical provision and check up

   • The factory never provided body check up for workers. Nor did they buy any industrial accident insurance for workers.

   5. A reported case of death

   According to Hong Kong Commercial Daily's coverage (a Hong Kong newspaper) on 17 April 2001, a female worker, Wang Cei Xiang was sick in the middle of her work. She died the next day. "The labor regulations in that province (meaning Guangdong province) is not strict enough. Some of the local departments stand by the employers rather than the employee. Workers thus are maltreated by their employers … their situation is apprehensive." (quoted from Hong Kong Commerical Daily 17/4/2001)

   Wang Cei Xiang, named in the above news coverage came from Quizhou province to work in this toy factory in Dongguan City, Guandong province, Wang was 27. On 28 March 2001, Wang fainted at the work place. The factory management refused to lend money to her younger brother for taking Wang to the doctor. Her brother borrowed money from fellow workers and took her sister to the nearest sanitation center (the medical people you find there are not registered). People at the sanitation center suggested them going to the hospital. But that would cost them at least several hundreds. Her brother had no other means to seek for medical treatment. He planned to take her sister back home. To everybody's shock, Wang died the next day in the bus as she was on the way home. Wang was not taken for a check and her cause of death was not known. But her relatives all related it to her job as she had been working long hours at the factory without taking proper rest. The factory denied responsibility. At the intervention of the Labor Bureau, the factory management agreed to pay RMB11,000 (USD1375) to the family. Her case was not considered as a case of industrial death.

   We cannot verify the cause of death in Wang's case. But Wang's case was reported in both the Hong Kong newspaper and the local media. In the first place, Company H did not provide a safe and healthy working environment to its workers. When Wang fainted at the work place, the management did not provide any assistance or medical provision to her. Wang could not get access to any medical or financial resources. After Wang’s death, the management did not investigate the case acting both in detriment to the rights and interests of both Wang’s family and the rest of the employees in Company H. Not knowing how to claim their legal rights, Wang’s family could just accept what the management offered.

   Wang’s case is a grave example of labor rights violations in Company H. Wang’s death should be an alarm to all the manufacturers and the trans-national toy companies that negligence of safety and health issues, long working hours can lead to grave consequences.

   2. Legal and OSH consciousness of workers in Company H

   • Worker’s OSH and legal consciousness was low in company H. The interviewed workers heard nothing about the national labor law or relevant regulations protecting workers and women’s rights. They did not know what code of conduct was. The legal knowledge of workers in Company H is the poorest amongst all the companies covered in this report.
   • Regarding OSH, the interviewed workers could not tell whether their deteriorated health condition was related to their work or not. They did not know their rights to compensation if they had acquired occupational diseases or injured in industrial accidents.
   • Workers in Company H were exhausted by working excessively long hours and receiving low wages. They did not have the space to care about anything. However after the interview, all the interviewed workers expressed a strong desire to learn more about their legal rights and OSH related training.

    

   IV. Comparison on Company Codes of Conduct, the ICTI Code of Business Practice and the Chinese Labor Law

   The following table lists the relevant sections on safety and health of the company code of conduct (or ethical business principles) of the four brand name toy companies, namely Hasbro, McDonald's, Mattel and Disney, that are covered in this report. The safety and health sections of the International Council of the Toy Industry's (ICTI) Code of Business Practice as well as the Chinese Labor Law also are enlisted to compare with the company codes.

   Table on the comparison of company codes, ICTI - COBP and the Chinese Labor Law

   Hasbro, Inc. Global Business Ethics Principles	4. Health and Safety Employers shall operate their facilities (and, where provided, dormitory living facilities) in such a way as to ensure that all employees have a health and safe environment. Hasbro and its suppliers and business partners will work together to promote an awareness of health and safety issues, including issues surrounding fire prevention, emergency evacuation, proper use of safety equipment, basic first-aid and the proper use and disposal of hazardous waste materials.
   McDonald's Co., Code of Conduct for Suppliers	Workplace Environment Suppliers shall provide their employees with safe and healthy working and, where provided, living conditions. At a minimum, potable drinking water, adequate, clean restrooms, adequate ventilation, fire exits and essential safety equipment, an emergency aid kit, access to emergency medical care, and appropriately lit work stations must be provided. In addition, facilities be constructed and maintained in accordance with the standards set by applicable codes and ordinances.
   Mattel, Global Manufacturing Principles	7. Workplace Safety There must be trained or certified safety professionals and a written safety program must be developed. Combustible materials must be properly handled with special precautions taken in spraying and mixing areas. Machines with revolving or moving parts must be guarded and employees will receive special training on the use of this machinery. Hazards must be eliminated where possible. Employees must be provided and trained on the use of Personal Protective Equipment where hazards cannot be fully eliminated. Mattel will identify all hazardous materials and properly train employees on the appropriate procedures for handling these materials. Safety training must be conducted for special work categories (industrial trucks, electricians, maintenance, painters, molding operators, etc.) Employee exposure to chemicals and vapors must be below legal requirements or Mattel Standards whichever is the most stringent. In special cases where ventilation cannot eliminate the exposure, respiratory protection will be used and employees trained. All accidents must be investigated and corrective actions documented. All locations must continuously reduce accident rates and have specific targets on reductions. 8. Health In locations where there are more than 1000 employees, there must be an on site medical facility for routine medical treatment and work-related injuries. In locations where there are less than 1000 employees treatment must be available to employees within 15 minutes if there is not a clinic on site. The facility must have lighting which meets Mattel's standard or local requirements, whichever is higher. Temperatures must be measured during hot and cold seasons and if they exceed local or Mattel standards corrective actions must be taken. Noise must not exceed 85dBA. Hearing protection must be used in any areas that exceed this limit. If the local limit is lower, the lower limit will be used.
   The Walt Disney Company, Code of Conduct for Manufacturers	Health and Safety Manufacturers will provide employees with a safe and healthy workplace in compliance with all applicable laws and regulations, ensuring at a minimum reasonable access to potable water and sanitary facilities; fire safety; and adequate lighting and ventilation. Manufacturers will also ensure the same standards of health and safety are applied in any housing that provide for employees.
   International Council of Toy Industries (ICTI), Code of Business Practices (revised 8 June 2001)	2. Workplace that toy factories provide a safe working environment for their employees and comply with or exceed all applicable local laws concerning sanitation and risk protection; that the factory is properly lighted and ventilated and that aisles and exits are accessible at all times; that there is a adequate medical assistance available in emergencies, and that designated employees are trained in first aid procedures; that there are adequate and well-identified emergency exits, and that all employees are trained in emergency evacuation; that protective safety equipment is available and employees are trained in its use; that safeguards on machinery meet or exceed local laws; that there are adequate toilet facilities which meet local hygiene requirements, and that they are properly maintained; that there are facilities or appropriate provisions for meals and other breaks; if a factory provides housing for its employees, it will ensure that dormitory rooms and sanitary facilities meet basic needs, are adequate ventilated and meet fire safety and other local laws; that no metal or physical disciplinary practices are employed.
   People's Republic of China, Labor Law (1995)	Chapter VI: Occupational Safety and Health Article 52 The employing unit must establish and perfect the system for occupational safety and health. Strictly implement the rules and standards of the State on occupational safety and health, educate laborers on occupational safety and health, prevent accidents in the process of work, and reduce occupational hazards. Article 53 Facilities of occupational safety and health must meet the standards stipulated by the State. Facilities of occupational safety and health installed in new projects to be rebuilt or expanded must be designed, constructed and put into operation and use at the same time as the main projects. Article 54 The employing unit must provide laborers with occupational safety and health conditions conforming to the provisions of the State and necessary articles of labor protection, and provide regular health examination for laborers engaged in work with occupational hazards. Article 55 Laborers to be engaged in specialized operation must receive specialized training and acquire qualifications for such special operations. Article 56 Laborers must strictly abide by rules of safe operation in the process of their work. Laborers shall have the right to refuse to operate if the management personnel of the employing unit command the operation in violation of rules and regulations or force laborers to run risks in operation; laborers shall have the right to criticize, report or file charges against the acts endangering the safety of their life and health. Article 57 The State shall establish a system for the statistic, reports and dispositions of accidents of injuries and death, and cases of occupational diseases. The labor administrative departments and other relevant departments of the people's governments at or above the country level and the employing unit shall, according to law, compile statistic, report and dispose of accidents of injuries and deaths that occurred in the process of their work and cases of occupational diseases.

   Comments:

   1. Hasbro's Global Business Ethics Principles

   • The Hasbro code on health and safety is weak and vague. Hasbro commits only to "work together to promote an awareness of health and safety issues" with its business partners. To promote a health and safety awareness is just a preliminary step. The company has not committed to remove or eradicate safety and health hazards that are identified in the production facilities of its vendors.
   • The Hasbro code has set no standard on safe production and healthy working environment.
   • The commitment of Hasbro to its vendors/suppliers is not clear. As the section on safety and health puts it, "manufacturers shall operate facilities in such a way as…", Hasbro does not demonstrates any pro-active commitment to assist its vendors/suppliers to achieve the safety and health goal.

   2. McDonald's Company Code of Conduct for Suppliers

   • The McDonald's code has set a minimum standard on a number of items like "potable drinking water, adequate, clean restrooms, adequate ventilation, fire exits and essential safety equipment, an emergency aid kit, access to emergency medical care and appropriately lit work stations." These could be understood as minimum standards to the manufacturing industry but not specific to the hazards of toy production. There is no provision on how to remove or control hazards related to the toy industry.
   • The commitment of McDonald's to the suppliers is not clear as it is written that "suppliers shall provide their employees with safe and healthy working and, where provided, living conditions." It largely shifts the responsibility to the suppliers. And that commitment to safety and health is the commitment of the suppliers to their employees not that of McDonald's to its suppliers together with their employees.

   3. Mattel's Global Manufacturing Principles

   • Compared with the other company codes, Mattel has the most comprehensive standards on the safety and health of toy production.
   • Standards are set for specific hazards associated with toy production. Hazardous areas like chemical exposure, embustible material storage and machinery safeguards are covered. Standards are set on medical provisions, lighting, temperature and noise pollution.
   • Mattel's GMP includes a program that has different components in establishing a procedural approach to meet the safety and health standards and to reduce accident rate. These include a written safety program, safety professionals, identification of hazards, elimination of hazards, use of protection equipment, training, investigation and documentation.
   • The training component in Mattel's GMP covers the not only the safety personnel or professionals, but the employees of the suppliers at large (see 7c, 7e, 7f and 7g).
   • What needs further clarification and programming is the target of Mattel's commitment. Different from the other three companies, Mattel owns its production facilities as well as contracts production with vendors or suppliers. Mattel defines the GMP "to guide Mattel and each of its business partners' operations in implementing GMP." And "Mattel will work closely with all business partners to ensure that corrective actions are completed in a timely manner." (provision 11). Mattel commits to act in a pro-active manner, to implement the safety and health standards not only of its own facilities but also its vendors/suppliers'. In provision 7e, the company makes further commitments as "Mattel will identify all hazardous materials and properly train employees on the appropriate procedures for handling these (hazardous) materials." Yet it is not clear if this strong commitment to training is applicable only to the employees of Mattel's own facilities, or that it also commits the company to training for the employees of its vendors and suppliers. No program or information is publicized with regard to the implementation and the applicability of the above training commitment.
   • The Mattel Independent Monitoring Council (MIMCO) has defined a program in phase to monitor Mattel's own as well as its vendors/suppliers' facilities. It should be emphasized that monitoring is one component only. HKCIC shares with Trocaire and the Irish Congress of Trade Union's comment on MIMCO audits that "there must be worker ownership of the aims, process and outcome of monitoring. Worker empowerment must be part of the process and the aims of the monitoring initiative. A necessary part of acceptance of this principle is that successive amendments or even a future redraft of the GMP by workers and their representatives, Mattel management, the monitoring council and labor rights organizations may be necessary to transfer ownership to all key stakeholders." (January 2000).
   • HKCIC holds the position that the principle of workers' participation and the multi-stakeholder approach should be applied not only to Mattel, but all other companies, in the implementation, monitoring and training on company code of conduct. The worker participation and multi-stakeholder element should be integrated into Mattel's monitoring and training component.

   4. The Walt Disney Company's Code of Conduct for Manufacturers

   • The health and safety section of Disney's is weak and not specific to toy production. References are made only to the provision of potable water, sanitary facilities, fire safety, lighting, ventilation and housing only. No standard or program is defined in specific to controlling the hazards of toy production without which it raises doubt to the implementation of such a loose and non-specific health and safety code.
   • Similar to Hasbro and McDonald's, the Disney code is written in a manner that shifts the responsibility of providing safety and health conditions to the manufacturers only. By using language such as "manufacturers will provide", "manufacturers will also ensure that", responsibility and commitment becomes that of the manufacturers to their employees only. Disney's commitment first to the manufacturers and second to the employees vanishes behind the rhetoric.

   5. The ICTI Code of Business Practices

   • The ICTI - COBP is weak and not specific to hazards commonly found in toy production. No standard on the safe operation of the industry is set. The provisions covered largely concern sanitation, housing, food provision and other living conditions. Whereas provisions on emergency exits, safety equipment and machinery are general and not targeting at specific risks and hazards associated with the manufacturing of toys.
   • There is no program goal nor is there an approach defined to guide the industry in identifying, eliminating and containing hazards and providing protective equipment to employees.
   • The training component, which is essential to effective implementation of safety and health principles, is totally absent in the ICTI - COBP.
   • The ICTI - COBP has no position that would include workers' participation at any level. The importance of workers education and workers participation has no place in the ICTI - COBP.

   5. The Labor Law of the People's Republic of China

   • The OSH section of the PRC labor law states a systematic approach to achieving safety and health at work. It requires that "the employing unit must establish and perfect the system for occupational safety and health." Employers are required to implement the standards, prevent accidents, reduce hazards and educate laborers on safety and health.
   • Regular health examination for employees engaged in work with occupational hazards is required.
   • The law also gives employees the right "to criticize, report or file charges against the acts endangering the safety of their life and health." The right to disobedience is protected as "laborers shall have the right to refuse to operate if the management personnel of the employing unit command the operation in violation of rules and regulations or force laborers to run risks in operation."
   • It is in the spirit of the OSH section of the Chinese Labor Law to involve employees in monitoring and participating in the OSH policy and program of the employing unit. The law requires both a top down and bottom up approach to achieving safety and health standards at the work place.

   5. Concluding remarks

   • It can be seen from this comparison that there are variations amongst different company codes and institutional standards on OSH issues. The company codes of Hasbro, McDonald's and Disney are weak and non-specific to toy production and the language is vague and misleading as they sound more like protecting the company rather than the employees of the vendors/supplier/manufacturers. The responsibility of the companies to their vendors/suppliers/manufacturers should be stated in unambiguous language.

   • All the four companies should state clear a pro-active approach that commits to assist in more substantial terms their vendors/suppliers/manufacturers in implementing their respective codes. This is of essential importance as in this report it is shown that the industry has structural problems, particularly regarding pricing and delivery time that contribute to non-compliance, rather than compliance, to labor rights and OSH code provisions. Toy companies should take the initiative to address these fundamental problems before any labor or OSH principles can be implemented in full.

   • The ICTI - COBP does not play the role of setting OSH standards for the toy industry. No program is defined to guide the industry in implementing the labor and OSH principles. More importantly, the ICTI should take the lead in turning the industry towards a worker-oriented approach to the implementation of labor and OSH principles. The principle of workers' participation and workers' education should be integrated in such an approach.

   • The codes of conduct of all four toy companies as well as the ICTI - COBP commit to comply with national labor laws. The spirit of workers' participation that underlies the Chinese Labor Law should be upheld in the local application of these codes. Programs on workers' monitoring and workers' education should be properly drawn in the implementation program of these companies and institutional codes in mainland China.

    

   V. Concluding Remarks

   This report has illustrated the following issues regarding the toy industry:

   1. Hasbro, McDonald’s, Mattel and Disney, are selling their toy products by sub-contracting production to toy companies and operation facilities in mainland China, many of them are owned by Hong Kong toy companies.
   2. The four trans-national toy companies dominate the global toy industry. The measures taken up by the four giants to stay competitive in the global market, namely price to the bottom, just-in-time delivery and inventory control, are found to be adversely affecting the working ass well as safety and health conditions of the mainland workers of their suppliers.
   3. The findings of this research raise serious doubts on the effective implementation and monitoring of the company code of conduct or ethical business principles of Hasbro, McDonald’s, Mattel and Disney at the supplier level. The four companies have weak codes on safety and health.
   4. To improve the working conditions at the supplier level, the four companies should take the lead in re-engineering their global sourcing practices towards one that sustains code implementation and one that respects the labor rights of the production workers.
   5. To improve the safety and health issues, it is important that workers be involved and education and training be given.

    

   The Hong Kong Christian Industrial Committee demands that, both the toy companies and their suppliers,

   1. Develop both long and short term plan of corrective actions, to address and eventually eliminate the occupational safety and health hazards found at the work place.
   2. Comply with the Chinese Labor Law and improve the working conditions of toy workers.
   3. Set up occupational safety and health committees with workers representation and participation at the factory level to monitor the safety and health conditions in the manufactures of toys.
   4. That the Toy Manufacturers' Association and the Hong Kong Toy Council develop a plan of occupational safety and health education that aims at improving the consciousness of toy workers towards safety and health issues, as well as their legal rights. Such a platform should be open to NGO participation.

   Mr. Alan Hassenfeld, Chairman and CEO of Hasbro Inc., said in the World Economic Forum’s Annual Meeting at Davos in 2001, "With the internet and globalization, everybody is able to find out what is wrong with your business. So if you have something to hide you’d better correct it really quickly." We totally agree with Mr. Hassenfeld’s words as well as his openness in accepting, de facto, the monitoring of multinational companies by the mutli-stakeholders.

   It is time for the four toy giants, namely Hasbro, McDonald’s, Mattel and Disney to move beyond rhetoric. They should take the lead to create a more hospitable environment for the implementation of their codes at the supplier level. They should involve not only the suppliers, but workers and local labor groups in a multi-stakeholder approach in improving the working as well as safety and health conditions and consciousness of toy workers in mainland China.

    

   Appendix

   Questionnaire on the Occupational Safety and Health Conditions and Consciousness of Toy Workers in Foreign Invested Enterprises in Mainland China

   Hong Kong Christian Industrial Committee

   August to October 2001

   Part One - Personal Particulars

   Name of interviewee:

   Sex:

   Date of Birth:

   Name of factory worked in:

   Date of employment:

   Department worked in:

   Employed as:

   Duration of employment:

   Monthly wages:

   No of working hours a week:

   Part Two - OSH conditions at the work place (according to department)`

   Molding Department

   • Is there any occupational training on machine operation upon employment?
   • Is there any written safety instruction on the machine you operate? Do you understand it?
   • Is the molding machine a one-button or two-button operation?
   • Is the work place noisy when machines are in operation? Are you provided with ear protective equipment? Do they work?
   • Are you aware of cases of machine injury? Does the department keep a record on that?
   • Does work place have a high dust level? Is there a ventilation system? Does it work?

   Spraying Department

   • How much do you know about the chemical paints you are using? Can you tell the hazards of these chemicals?
   • Are you informed or trained about what chemicals are used and what are their hazards?
   • Do you wear any personal protective equipment when you spray paints? Does the paint get into any parts of your body during work?
   • How do you cleanse the paint that gets onto your body? Do you use thinner or other solvents? Can you tell their names?
   • Can you describe the smell of the chemical paints you use? Do you wear any mask? What of masks?
   • Is there a ventilation system at the work place? Is it effective to lessen the chemical smell at the work place?
   • How long have you worked at this department? Have you ever developed the following illnesses: allergy, skin diseases, respiratory problems, dizziness?
   • Are you aware of cases of occupational diseases related to chemical poisoning in this department?

   Assembly Department

   • Were you given occupational training when you were employed?
   • How long do you have to stand during work in a day? Are there any break other than the two lunch breaks?
   • Which part(s) of your body has developed sickness or suffered from injuries since working in this department? What kind of body exercises/muscles movement does your job require you to perform?
   • How noisy is the work place? Are you provided with personal protective equipment?
   • Does your job require you to touch chemicals? Do you know the chemicals or solvent you are using? Do you wear any protective gloves?
   • How much do you understand the hazards of the following chemicals: thinner, acetone, benzene?
   • Is the work place dusty? Is there a ventilation system installed? How effective is it?
   • What is the daily production quota in this department during peak season? What happen if you fail to beat the quota? Have you developed any stress-related illnesses?

   Sewing department

   • Have you received any occupational training before or after employment?
   • How long do you have to sit working a day? Is there any break besides the two lunch breaks?
   • Which part(s) of your body has developed sickness or suffered from injuries since working in this department? What kind of body exercises/muscles movement does your job require you to perform?
   • Is it too dark or too bright at your work place? Do you have any eye or body stress after a day's work?
   • What is the daily production quota in this department during peak season? What happen if you fail to beat the quota? Have you developed any stress-related illnesses?

   General OSH conditions

   • Are there fire rehearsals at the work place and in the dormitories? How often?
   • Do you know how to get to the fire exits when a there is a fire?
   • How high is the temperature at your work place? Can you get access to water and drinking water during work?
   • Are you aware that chemicals or flammable materials are stocked at the work place or in the dormitories?
   • What do you think is the biggest hazard(s) at your work place?
   • Do you have an OSH department or committee in this factory?

   The OSH related policy of the factory

   • Does the management provide body check-up for employees? How often?
   • Does the management pay for injuries or occupational diseases related to work? In full payment?
   • Are workers in this factory insured on occupational diseases and injuries?
   • Does the management sign contract and give a copy to workers?

   Part Three - OSH consciousness of workers

   • Do you think the personal protective equipment provided by the factory is adequate or working? Why is it not working?
   • Do you wear protective provisions during work? If not, why?
   • If you feel sick, what do you do? How much is the body sickness related to work?
   • Can you tell the minimum wage and the maximum working hours of the city/town you are working in?
   • If you have acquired occupational diseases or injuries, do you know how much compensation you are liable to get according to law?
   • Have you heard of the Labour Law?
   • Have you heard of the Regulation on the Labour Protection of Female Workers?
   • Have you heard of the Law on the Protection of Teenagers?
   • Have you heard of code of conduct?
   • Do you want to get more information or training on OSH issues related to your work?

   ---

   1Two reports, namely "Labor Rights Report on Hong Kong Invested Toy Factories in China No.1" and "Labor Rights Report on Hong Kong Invested Toy Factories in China No.2"edited by AMRC for Coalition for the Charter on the Safe Production of Toys were released in 1996 and 1997 respectively. "The Working Conditions of the Toy Industry in China" written and edited in the same collaborative effort was released in 1999. In August 2000, the HKCIC released a report on McDonald's, named "McDonald's Toys - Do They Create More Fun or Exploitation". Later in the same year, HKCIC released the "Beware of Mickey" report on the conditions of Disney workers in China. In December, the AMRC released a report on the monitoring system of Mattel, named "Monitoring Mattel: Codes of Conduct, Workers and Toys in Southern China".

   2P1, "Practical Guide to Exporting Toys for HK Traders", March 1999, published b HKTDC Research Department.

   3In 1996 and 1997, ToysR'Us was the biggest traditional toy retailers in the US, taking up a market share of 18.9% and 18.4% respectively. This was followed by Wal-Mart that had 15.3% and 16.4% market share. The situation changed in the past two years. Wal-Mart surpasses ToysR'Us to become the biggest toy retailers in the US market.

   4P.29, "Practical Guide to Exporting Toys for HK Traders", March 1999, HKTDC Research Department.

   5P21 "Practical Guide to Exporting Toys for HK Traders", March 1999, HKTDC Research department.

   6Trade Watch, April 2000, HKTDC Research Department.

   7P7, Practical Guide to Exporting Toys for HK Traders, March 1999, TDC Research Department.