Ethical Performance
inside intelligence for responsible business


toy firms make headway on factory certification

April 2005

An ‘ethical manufacturing programme’ started by the global toy industry in 2002 appears to be on course to meet its monitoring targets.
Across China – where 75 per cent of the world’s toys are made – 250 factories are now in the process of reaching certification under an initiative set up by the International Council of Toy Industries (ICTI), a confederation of 18 national trade associations whose members sell 95 per cent of the world’s toys.

Beginning with China, the ICTI set a target of certifying 800 large factories by 2007 against the ethical business principles it established four years ago.

Six auditing firms – Benchmarks, Bureau Veritas HK, CSCC, the Hong Kong Quality Assurance Agency, Intertek and SGS – are monitoring manufacturing sites on fair pay, working conditions, child labour and other matters.

‘We’re well on our way to achieving the target,’ claimed David Hawtin, director-general of the British Toy and Hobby Association, a member of the ICTI. Of the 250 toy factories being checked, 65 have reached certification, and the ICTI will now appoint a ‘governance board’ of members outside the toy industry to oversee monitoring.

‘We want to distance ourselves from the process to prevent accusations of the fox guarding the hen house,’ said Hawtin. ‘The board will take decisions and give credibility.’

The ICTI is raising money to fund the board and is seeking a chair and seven or eight board members. Maria Livanos Cattaui, secretary-general of the International Chamber of Commerce, is expected to head the board.
Ian Anderson, technical director at SGS, said auditing work was ‘picking up pace quickly and will meet its targets’. However, he conceded that ‘the sheer size of the task is huge’ and warned that many of the problems that auditing will reveal ‘won’t be cured overnight’.

Although the programme is targeting China’s 800 most important toy-making sites, about 2800 Chinese factories of varying sizes have toy export licences. The ICTI says that the world toy market, including video games, was worth $69billion (£42bn) in 2000.

Results of audits, including recommendations for corrective action, are sent to the ICTI and the factories concerned. Further audits are then conducted where necessary. Every certified factory is re-audited annually.
One of the main problems unearthed during the process has been excessive overtime, partly to handle a rush of orders towards the end of the year because 60 per cent of toys are sold at Christmas.

‘Nobody knows what this year’s top-selling toys will be,’ said Hawtin, ‘and that puts pressure on the supply system. Retailers can play a role by spreading the load and not turning orders on and off. It’s all very well having an ethical trading policy but if the buyers are flying in the face of that, then there is a contradiction.’

Once the Chinese sites have been fully monitored, the ICTI hopes to extend the work – known also as the ‘CARE process’ – to other countries.

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