19 April 2011 | Angeline Albert
The Walt Disney Company is one of several corporations trying to tackle poor code of conduct compliance by some licensed suppliers or their vendors.
It teamed up with Hasbro, Mattel, MTV Networks, NBC Universal and Time Warner to quiz licensed suppliers on labour issues including health and safety in factories, wage payments and working hours.
A total of 126 companies responded to the survey. The results revealed that many licensees believe costs, audit fatigue and a lack of resources for monitoring and resolving issues are key barriers to code of conduct compliance in the supply chain.
Under the licensing model, Walt Disney, which owns its brands, has a contract with licensees to produce its goods. Some licensees don’t make the products themselves but contract third parties to do so. As a result, oversight of social and environmental conditions in factories can be challenging.
A number of the licensed suppliers responding to the survey called for more compliance training for their providers and more help from their procurement teams to reward compliant vendors.
One licensee said: “It is difficult to provide realistic incentives to a supplier who is non-compliant. Procurement is not willing to promise more business or go into long-term contracts with suppliers. Poor performance will get you kicked out of the supply chain, but top performers are not always rewarded.”
Walt Disney’s 2010Corporate Citizenship report, out this month, said as a result of the findings of the labour survey, the working group of companies delivered an online training programme to help suppliers to improve social compliance in the supply chain. Last year 70 representatives from licensee organisations were given the training. They were also given access to the training programme so they could in turn use it to teach their suppliers.