Walt Disney Co. and McDonald's Corp., whose supply chain has drawn criticism, quietly released a long-promised report on a pilot project to improve labor conditions in China.
The project, involving 10 factories in southern China that make products for McDonald's restaurants and Disney licensees, tested a new approach for addressing such chronic problems as substandard wages, excessive work hours and few days off.
The May 7 report, posted on Disney's website without a formal announcement from the company, found progress at all the factories, which made footwear, toys and other products. The report's completion was touted by organizations that worked with the companies to improve global working conditions. The report is silent on whether Disney or McDonald's plans to implement the new approach more broadly.
Oak Brook, Ill.-based McDonald's issued a statement saying its suppliers know how seriously it takes worker welfare, adding, "We're committed to continuous progress." Burbank-based Disney reiterated its commitment to the safety of workers and said it was taking "steps designed to increase the scope of our program." Neither company would provide executives to discuss the report.
Representatives from several of the seven socially responsible investor groups and nonprofit organizations that participated in the six-year project said they would call on Disney, McDonald's and other companies to embrace these new methods for improving workplace conditions in China.
"We encourage not just McDonald's and Disney but any company that picks up this report to think about this," said Adam M. Kanzer, managing director of Domini Social Investments, which manages $1.5 billion in assets. "Particularly companies in the starting blocks. There are companies just starting to monitor their supply chains. Why not learn from the success of others?"
The initiative, dubbed Project Kaleidoscope, was conceived in 2002 amid growing investor concern about factory conditions in southern China. Both Disney and McDonald's have strict codes of conduct that set requirements in health and safety, work hours and compensation.
But the report acknowledges that conventional methods of enforcement such as audits provide only a snapshot of factory conditions. They don't necessarily lead to long-term fixes.
