Independent Monitor Completes Audit of Mattel Suppliers in China

Jan 27, 2004, 00:00 ET from International Center for Corporate Accountability

    NEW YORK, Jan. 27 /PRNewswire/ -- The International Center for Corporate
 Accountability (ICCA) today released audit results of manufacturing facilities
 of major Mattel, Inc. suppliers in China.  The ICCA reports were commissioned
 by Mattel (NYSE:   MAT) as part of Mattel's commitment to upholding its Global
 Manufacturing Principles (GMP) code of conduct.  They are intended to provide
 an unbiased, third party analysis of working conditions in Mattel's
 manufacturing facilities.
     While voluntary audit reports of Mattel-owned manufacturing facilities
 have been published since 1999, today's report marks the first effort to
 broaden the scope of the analysis to include the facilities of Mattel's major
 vendors.  The current audit covers 12 manufacturing facilities in China that
 are among the major suppliers of Mattel, constituting approximately 50 percent
 of Mattel's total vendor business in China in terms of dollar amount.
     Dr. S. Prakash Sethi, chairman of ICCA and University Distinguished
 Professor, Zicklin School of Business, Baruch College, commented, "With the
 conclusion of this audit, ICCA has determined that while supplier facilities
 face many challenges, Mattel's GMP has been instrumental in motivating
 facilities to achieve or even surpass compliance standards in safety,
 maintenance, employee communications, payroll and working conditions.  We were
 especially pleased to see significant progress between an initial visit to the
 plants two years ago and when we returned to conduct the formal audit."
     Sethi noted, "Mattel is the first and only global consumer products
 company to apply a required standards system to both its own manufacturing
 facilities and those of its major vendors, and to independently monitor and
 publicly disclose the results.  It is our desire that more companies adopt and
 uphold such standards in their manufacturing facilities worldwide, as it is an
 extremely important initiative that can benefit workers everywhere."
     "I'm proud of the progress made by our vendors and am also proud of
 Mattel's efforts in leading this effort.  This audit has also fulfilled the
 vital function of helping us to identify important areas of performance that
 demand improvement," said Tom Debrowski, executive vice president of worldwide
 operations for Mattel.  "That is why we commission these regular audits -- now
 that the challenges are known, we can work with our vendors to ensure they
 make the appropriate changes to come into compliance with our GMP standards.
 Suppliers understand that compliance is not an option, it is an absolute
 requirement if they want to continue doing business with Mattel."
     Summary of Report Findings
     Following is a summary of the findings of the ICCA report released today:
      -- Manufacturing facilities visited by ICCA have shown significant
         improvement in a number of areas, and the current audits indicate that
         Mattel has committed considerable resources to advise and assist its
         vendors in order to improve their level of compliance with Mattel's
      -- The minimum worker age of 16 is strictly enforced; investigators did
         not find any workers under the age of 18.
      -- There has been definite improvement in payment of minimum wages.  With
         one or two exceptions, all plants were found to be in compliance for
         payment of legally mandated minimum wages for regular and normal
         overtime working hours.
      -- Areas showing significant improvement include safety of the workplace,
         dormitories and canteens, workers' access to all levels of management,
         and lack of discrimination or promotion based on sex, race or ethnic
      -- Some plants showed inadequacies pertaining to environmental issues,
         including disposal of wastewater and poor ventilation.  Improvements
         are also needed with regard to worker safety training and proper use
         of personal protective equipment.
      -- Areas needing improvement include availability of records to verify
         that workers who performed overtime work on rest days received either
         double pay or a day off, and consistent application of regulations
         with regard to fringe benefits such as maternity leave and paid annual
      -- Most facilities exceeded the maximum overtime hours limits for peak
         production periods (called consolidated work hours), authorized by the
         local labor bureaus.
     Mattel is pleased with the progress made by vendors under the rather
 difficult competitive manufacturing and procurement environment in China, and
 recognizes the challenges that lie ahead in bringing all vendors into full
 compliance with GMP.  To achieve this goal, Mattel will work with suppliers,
 and in consultation with ICCA, to design and implement a plan of action to
 correct deficiencies to set the stage for continuous improvements in all of
 its overseas facilities and operations.  This plan should be finalized within
 the next 90 days.
     "We strive to continually improve our facilities, both Mattel-owned and
 supplier-owned, and for our actions and results to be transparent.  In this
 way we uphold our commitment to our GMP and to fully responsible corporate
 conduct," Debrowski said.
     The full text of the ICCA report can be viewed on ICCA's Web site at and on the Mattel corporate Web site
 located at
     Mattel's Global Manufacturing Principles (GMP), launched in November 1997,
 form the cornerstone of the company's ongoing commitment to responsible
 manufacturing practices around the world.  Adherence to GMP seeks to ensure
 that wages, working and living conditions and employee access to management
 are just and fair, as well as to assure protection of the environment.  As
 part of Mattel's GMP, the company's primary suppliers are also subject to
 compliance with the standards set in the GMP.  Mattel contracted with ICCA to
 perform regular audits of its owned manufacturing facilities and those of its
 major suppliers.  ICCA's responsibility is to evaluate and publish findings on
 these manufacturing facilities' compliance with GMP.
     ICCA's audit protocols are designed to verify vendors' compliance with
 Mattel's GMP standards in a manner that is comprehensive, objectively
 measured, interpreted in a meaningful manner and independent of any other
 consideration except the compliance standards specified in the GMP.
     About ICCA
     Directed by Dr. S. Prakash Sethi, the International Center for Corporate
 Accountability (ICCA) is a not-for-profit, independently incorporated
 organization comprised of a council of experts in labor issues worldwide.
 ICCA encourages and assists multinational corporations in creating,
 implementing and arranging independent monitoring of codes of conduct.  As an
 academically-affiliated organization, associated with the Zicklin School of
 Business of Baruch College-The City University of New York, ICCA also
 undertakes independent field research on aspects of corporate governance and
 accountability that normally fall outside the purview of corporate boards of
 directors, and engages in dialogue with a wide range of stakeholders.
     About Mattel
     Mattel, Inc. is the worldwide leader in the design, manufacture and
 marketing of toys and family products.  The company's best-selling brands
 include Barbie(R), Hot Wheels(R), Fisher-Price(R) and American Girl(R).  With
 headquarters in El Segundo, California, Mattel has offices and facilities in
 36 countries and sells its product in more than 150 nations throughout the
 world.  The company's website can be found at

SOURCE International Center for Corporate Accountability