CHOICE's toy industry survey

Our survey that safety is only part of the complex issues we face when buying toys for our children.
 
Learn more
 
 
 
 
 
  • Updated:6 Jun 2008
 

01 .Introduction

$name

In brief

  • Lead paint is toxic to our children, but it’s also toxic to the workers who make the toys in developing countries. We want all Australian consumers to be able to buy not only a safe toy but also an ethically-safe toy.
  • CHOICE surveyed the Australian toy industry to see which companies are leading the way on corporate social responsibility (CSR).
  • With CSR, companies become responsible for the impact of their activities on customers, suppliers, shareholders, employees and the environment.

Due to pressures from non-government organisations, the trade unions and consumer organisations like CHOICE, corporate social responsibility (CSR) has become an essential part of the international business landscape. But how seriously is it taken in the toy industry?

Late in 2007, when the toy industry came under fire from consumers for allowing unsafe toys onto our shelves, CHOICE conducted a test on the safety of toys and found plenty still for sale that were dangerous. At the same time, we also made a commitment on behalf of consumers to survey the toy industry to find out how seriously it takes its commitment to looking after the human rights of toy workers.

According to the Global Reporting Initiative, which is considered the best existing voluntary reporting framework for a company’s social, environmental and economic performance, when it comes to the manufacture of toys, any person or organisation that buys toys in bulk can have a significant influence over and impact on the supplier’s operations, and is therefore at least partially responsible for them.

Our survey aimed to find out which companies are exercising that responsibility.

 
 

Sign up to our free
e-Newsletter

Receive FREE email updates of our latest tests, consumer news and CHOICE marketing promotions.

 

02.CHOICE toy survey

 

Our survey

In conjunction with Amnesty International Australia, we surveyed toy companies on key CSR issues, asking questions about their toy production, safety standards and codes of conduct. Altogether we sent our survey to 61 toy companies that had an Australian contact listed on their toys. We had found the toys in nine major toy stores in Sydney.

We spotted another 160 toy brands that had only a brand name listed — no Australian contact details and sometimes not even on their website. So if something was wrong with one of these toys, you’d have problems finding someone to talk to.

Only 17 companies (28%) participated in our survey, most of whom (at least 12) import the bulk of their toys from China. We’d expected more — especially more of the market leaders — would have jumped at the chance to tell us about their efforts, if they were addressing CSR issues at all. The response rate to our survey was disappointing:
CHOICE_toy_survey

Genuine commitment

Some of the companies we surveyed showed genuine commitment to the issues and supplied information in support of their claims. For example:

  • “Target wants to ensure that products we sell are made or delivered in good and safe working conditions, national laws are obeyed and that the basic human rights of workers are respected.”
  • “If a factory is unwilling or unable to participate in the ICTI Care Process, Hasbro will not conduct business with this factory.”
  • “All our chemical and physical specifications are available in our Product Safety Handbook, which is delivered to our partners and suppliers when purchasing a new product.” (Lego)

Major recalls, but no response

Some of the companies at the centre of the recent toy recalls didn’t bother to respond to our survey, including Mega Brands (Magnetix toys), RC2 (Thomas and Friends toys ) and Mattel (Fisher Price and Barbie toys).

Mattel the world’s foremost toy company, snubbed our many attempts to encourage it to return the survey. Responding could have built up its reputation in the eyes of Australian consumers, considering it has a code of conduct and is known for its strict quality controls. But then, NGOs have long criticised the company for its reluctance to reveal where its toys are made in China.

Toys’R’Us is questionable too …
The company told us it wasn’t corporate policy to reply to or fill in surveys and only sent a summary emphasising its commitment to toy safety and compliance with relevant standards, its monitoring systems and selection processes for suppliers. But it failed to answer our specific questions.

And then there were the rest …
Like the wholesaler who assured us: “No, we don’t get involved with the manufacturer’s management policy [or] working conditions ... We are a small family business.” This attitude seems to be at the crux of the whole issue of responsible supply chain management.

The toy industry is complex — included in our survey were manufacturers, distributors, importers, wholesalers, retailers and any combination of these. There seems to be very little recognition among many of them of any responsibility for suppliers’ operations, or of the potential to influence them.

Many companies showed little interest in the survey, saying they were too small a company, were too busy to fill it in, weren’t really part of the industry, or just didn’t respond despite our repeated calls.

Toy safety

The majority (10) of the 17 respondents rely on certification from third-party laboratories in the country of manufacture to ensure the toys comply with relevant standards and regulations (this is common industry practice). Four do their own testing and two both require third-party certification and do random tests themselves. When the imported toys arrive in Australia, about half the respondents carry out no additional tests, while the other half do random checks.

The ICTI Care Process

This is the ethical manufacturing program set up in 2004 by the International Council of Toy Industries (of which the Australian Toy Association is a member), to ensure that manufacturers comply with the ICTI Code of Business Practice, and to help those that don’t on their journey to compliance.

ICTI maintains a 'Date Certain’ database of companies that have undertaken, from a certain date, to buy all their toys from factories that are in the ICTI Care Process (manufacturing factories that must fulfil audit requirements and be reviewed annually). Of the 453 companies currently in this database, 43 are from Australia, including four of our survey respondents; they’re listed in italics under CSR issues, below.

While the ICTI Care Process can be criticised for weaknesses in certain areas, industry-wide initiatives have generally been successful in contributing to improved labour conditions in Chinese factories and reducing the burden of audits on individual manufacturers.

CSR issues

 The companies that filled in our survey split into three levels of commitment to improving working conditions (italics indicate they’re on the ICTI Care ‘Date Certain’ database).

Source all toys from factories that operate under a code of conduct (company’s own or ICTI Care Process)
Hasbro Australia, The Lego Group, Target Australia (for the Coles Group of Companies, which includes Kmart), Funtastic (incl. JNH, Toy & Hobby, Dorcy Irwin, Judius), Hunter Overseas, Deerfield (uses only Disney suppliers), Moose Enterprise (is committed to sourcing only from ICTI factories from 2008, but isn’t on the database).

Source some toys from ICTI Care Process factories
Kids II Australia, Russ Australia, Woolworths (uses factory selection criteria and is developing a code)

No code of conduct
All Brands Toys & Collectibles, Kids Club/Merrigold Collections, NSR/ToyMonster, Toys’R’Us Australia, Ty Australia (uses certification required by its parent company), Wheelton & Associates/Fun’n Fashion (uses mostly Disney or Mattel suppliers), Wooden Toys and Dolls Houses/Timbertop Toys.

The following 44 companies sent no response or declined to participate in the survey
AKM Toys, Britz Marketing Australasia, Childsmart, Coco Australia, Colorific, Cork MCP (McPhersons), Crown & Andrews, David Jones, Educational Experience, Global Discovery Australia, Goldie, Head Start International, Hot Topic/Zac, Hunter Leisure, IS Gift (Independence Studios), Jasnor, Jolly Australia, Just Premiums, Kaleidoscope Australasia, Kate Finn, Kids Central / ELC Australia, Learning Can Be Fun, Mattel Australia, Mega Brands, Modern Brands, Myer, Peter Fish Toys, Playcorp, Playgro, Playworks International, RC2 / Learning Curve Australia, Rocket Box, TGA Unlimited, Timat Import, TNW Australia, Toy Traders, Toy Warehouse/Trans Austral Trading, TPF (The Promotions Factory), Tree Toys, U Games, Valiant, Vimwood Australia, Wild Republic (K&M Toys), Wotabout

04.China the biggest toy maker

 

Made in China

Three-quarters of the world's toys are made in China.

Working conditions in Chinese export factories have improved over the past decade, mainly in the areas of fire safety and protective clothing. However, two 2007 reports by US-based NGOs revealed abysmal conditions in the Chinese toy industry. China Labor Watch (CLW) investigated eight factories that made toys for Disney, Bandai, Sega and Hasbro; the National Labor Committee (NLC) looked at factories that made toys for Mattel, McDonald’s, RC2 and Wal-Mart.

But affecting far more workers in the Chinese toy industry are problems that are neither as visible as a dangerous workplace, nor as easily fixed. While China’s labour law is in fact more comprehensive than that of many OECD countries, enforcement is problematic and violations are widespread. Truly independent trade unions are rare.

“China is not transparent to us,” says Amnesty International Australia's Sophie Peer. “As freedom of speech is strictly limited, the full extent of human rights or labour rights abuses is unknown.”

Working conditions

China is the biggest toy maker, producing 70–80% of the toys in the world. The factories aren’t necessarily sweatshops — many have high-tech, modern equipment. However, such good physical conditions can often hide serious labour violations.

Most of China’s toy workers are young women migrants from the countryside, who often live in dormitories on the factory grounds. In some factories, the cost for accommodation and food is automatically deducted whether they live there or not, leaving the workers largely dependent on overtime to meet the costs for other basic necessities. They’re also often paid irregularly, less than local urban workers, and their wages haven’t kept up with rising living costs.

Toy workers often have to work long days in the peak toy season without appropriate pay — often for more than 80 hours a week – well above China’s legal limit. If they refuse, many factories impose fines for these and other ‘misdemeanours’, such as missing a day’s work or spending too long in the toilet.

It’s true that for many migrant workers, these jobs are better than alternatives in their home districts — but there are opportunities for western consumers to influence standards for the better.

Thank you

  •  Siobhan MacCarthy and Richard Boele from Banarra Sustainability Assurance and Advice, who evaluated the companies’ codes of conduct for us.
  • Serena Lillywhite of the Brotherhood of St Laurence (BSL), who’s familiar with Chinese manufacturing export plants by inspecting the supply chain of a BSL-owned optical frames business. Other China experts confirmed the conditions Serena observed there were very similar to those in toy factories.

05.Buying a safe and ethical toy

 

CHOICE verdict

Ensuring the safety of toys — and the rights of the workers who make them — is a complex task that requires the commitment of toy companies, governments and consumers.

On safety, CHOICE thinks we need a national product safety system and a general safety provision in law that clearly imposes pre-market responsibility on producers and importers. The huge recalls last year showed that big blunders with disastrous consequences can slip through, and highlighted the shortcomings of our current product safety system. Companies must ensure their toys meet all relevant safety standards, which may require an upgrade of quality-testing procedures or a rethink of a design. And if problems do arise, they must act promptly (with a voluntary recall, for example).

On responsible supply chain management, companies must be proactive and accountable. They need to understand and map all parties involved in the production of their toys and of the conditions in the country of manufacture and on the factory floor. A comprehensive code of conduct, compliance with national laws and international standards, an independent auditing system, a well informed workforce and transparency in their dealings with the public will all go a long way towards achieving these aims.

As consumers, we need to be aware of the risks that toys can present to our children (see You can buy a safe toy, below). For many consumers it’s also important to act to promote sustainable production in countries we import from, including effective environmental laws, fair wages and better working conditions. We can contribute to organisations such as Amnesty International, Brotherhood of St Laurence or Oxfam, which campaign to improve human rights and working conditions.

Buying Fairtrade products is an approach that works for products like coffee and chocolate --- see our report for more on this. For toys (and clothing and electrical goods) complex supply chains can make this harder, but we can still have an impact through our purchasing decisions and by letting the major-brand companies know directly what we think.

Lastly, we can pressure our own government for action both on standards for toy safety and overseas labour conditions.

How to buy an ethical toy

Neither current codes nor certification of compliance is good enough for you to be certain you’re buying an ethical toy, but these tips will increase your chances.

  • Avoid toys that don’t disclose the name and contact details of the importer and/or manufacturer.
  • Does the brand-name company or the importer have ethical sourcing principles in place? Check its website or ask — the more persistent the inquiries, the more likely they are to listen.
  • Prefer toys manufactured by companies that have a robust code of conduct or that are committed to the ICTI Care Process.
  • Avoid anonymous toys at ridiculously low prices — they’re more likely to be unsafe as well as sourced from the less ethical end of the market.

You can buy a safe toy

All toys for children under three must meet the mandatory standard AS/NZS ISO 8124.1:2002. They mustn’t contain any small parts that are a choking hazard, or produce any when subjected to various tests designed to simulate normal use and abuse (such as dropping, pressing or pulling).

When buying a toy, consider:

  • The age of the child, and how they’ll use the toy.
  • The size of the toy — if it fits into a 35 mm camera film canister, it’s too small for a young child.
  • The design and shape — there should be no small parts that could come off, no sharp edges, points or pinching hazards.
  • Is it so loud it could damage hearing?

Our report on toys has more information, or go to the ACCC website and type ‘safe toys for kids’ in the search box for a comprehensive guide.

CSR initiatives are most commonly implemented through corporate codes of conduct. Three of our 17 survey respondents (Coles, Hasbro and Lego) have their own code and seven are sourcing all or some their toys from ICTI Care Process factories --- follow this link for the details.

The table below shows how these codes compare to the Ethical Trading Initiative (ETI) Base Code. (We also included Disney’s code of conduct because it’s a major company.) ETI consists of retailers, brands, trade unions, charities and campaigning organisations that work together to tackle the complex questions posed by ethical trade. Its Base Code sets minimum requirements for labour standards. While none of these codes fully meets the minimum requirements of the ETI Base Code, the companies that have a code or ethical trading guidelines in place ought to be commended for at least having these issues on their agenda.

Ahead of the competitors

 The Lego Group seems to be well ahead of its competitors in terms of engaging with and understanding the complexity of the issues. However, only 3% of its toys are made in China, the rest in Denmark and the Czech Republic, where it might be easier for Lego to ensure acceptable conditions and a robust regulatory environment exists. Lego is also the only company in our survey that’s a signatory to the UN Global Compact, which asks companies to “embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the environment and anti-corruption”.

One point all codes fail to address sufficiently is ‘regular employment’, which is of particular concern in China where migrant workers are all too often employed on temporary contracts. Most codes (all but Lego’s) also fail to actively engage with the critical issues of working hours and appropriate wages that meet basic needs. They either make recommendations that have no teeth, or refer to law. Many employers, however, circumvent the law, using ‘bonuses’ for extra hours worked.

  Does the code equal or exceed the ETI Base Code on the following issues?
Code (in alphabetical order) Forced labour Child labour Health and safety Wages and benefits Working hours No discrimination Regular employment Harassment and abuse Freedom of association and collective bargaining
Coles Ethical Sourcing Code Yes Partly Mostly Partly Partly Mostly No Yes Mostly
Disney Code of Conduct Yes Partly Partly No Partly Yes No Yes Partly
Hasbro Global Business Ethics Principles Yes Partly Partly No Mostly Mostly No Mostly No
ICTI Code of Business Practice (A) Yes Mostly Mostly No Partly Partly No Yes Yes
Lego Code of Conduct Yes Yes Yes Mostly Mostly Yes No Yes Partly
 

Table notes

(A) This code is used by the following survey respondents: Funtastic, Hunter Overseas, Kids II Australia, Moose Enterprise, Russ Australia, Woolworths and, at times, by Hasbro and Lego instead of their own code.