Mattel's efforts at social responsibility

By Los Angeles Times

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GUANGDONG PROVINCE, China — Mattel began monitoring factories almost two decades ago, when it focused on issues of health and safety, and greatly expanded the notion of what it should be accountable for in the mid-1990s.

It was a time when activists around the world were stepping up campaigns against Nike, Gap and others for allegedly using sweatshop labor outside the United States.

For Mattel, the stakes were particularly high. A worker-abuse scandal such as the one that tarred Wal-Mart Stores' Kathie Lee Gifford clothing line in 1996, when activists found that items were made by children working in deplorable conditions, would be especially disastrous for a maker of kids' toys. Negative headlines would scare off customers and spook Wall Street.

"There isn't a reward for doing the right thing," noted Sean McGowan, a toy-industry analyst with Harris Nesbitt in New York. "But there is a penalty if you get caught doing the wrong thing."

Mattel later added a "social compliance" component to its program, which included a strict set of rules about working hours, wages, factory conditions and age requirements.

The company formalized these standards in 1997 when it established the Mattel Independent Monitoring Council, a nonprofit group of observers financed by the company but administered through the Zicklin School of Business at Baruch College, part of the City University of New York.

The group, now called the International Center for Corporate Responsibility, was charged with monitoring factories and publishing detailed reports as a check on Mattel's internal audits. Critics have questioned the monitors' independence. For its part, Mattel points out that it is the only major toy company to release outsiders' findings.

(Its largest competitor, Hasbro Inc., has said that all its contractors must comply with International Council of Toy Industries ethics guidelines, modeled largely on Mattel's program, by the end of 2005. But Hasbro does not make public its independent auditors' reports.)

Beyond scrutinizing its vendor plants, Mattel also has built its own first-rate facilities, complete with comfortable living quarters for its work force.

The factory floor at Mattel Die-Cast China in Guanyao is bright and airy. Instead of the usual snaking assembly line, where workers perform the same task over and over and over, many MDC employees move around to different stations, often making an entire toy themselves; this helps eliminate painful repetitive-stress injuries.
 
MDC's residence halls are more modern and nicer than dorms at top Chinese universities. In their off hours, workers crowd into the television rooms on each floor or play badminton on outdoor courts. Some head to the gym or to computer centers to practice lessons they learn in free classes offered on site.

The quality of life here is written on the face of nearly every MDC worker: They smile, a rare expression at other plants.

"People can sense the difference if you're pushing them for the bottom line or for themselves," said Rug Burad, the general manager of the plant, where Matchbox and Hot Wheels cars originate.

"You want them to be their best so they produce the best. That's the priority."