News

Independent Monitor Completes Fourth Audit of Mattel Manufacturing Facilities in Thailand, Malaysia and Indonesia

NEW YORK-(Business Wire)-October 3, 2008 - The Sethi International Center for Corporate Accountability (SICCA) today released results from audits of Mattel, Inc. manufacturing facilities in Thailand, Malaysia and Indonesia. The SICCA reports were commissioned by Mattel as part of Mattel’s commitment to upholding its Global Manufacturing Principles (GMP) code of conduct. The reports provide an unbiased, third-party analysis of working conditions in the company’s manufacturing facilities, and are part of an ongoing independent audit program conducted every three years by SICCA. These facilities have been previously audited by SICCA in 1999, 2002 and 2005.

“Our audit showed that Mattel’s facilities in Thailand, Malaysia and Indonesia devote considerable attention to efficient operations, safe working conditions and employee welfare,” said Dr. S. Prakash Sethi, chairman of SICCA and University Distinguished Professor, Zicklin School of Business, Baruch College. “Mattel’s continued overall compliance demonstrates that the company and its managers in overseas factories take seriously their commitments to uphold the operational standards mandated in the GMP.”

Key Findings:

Achievements

All facilities maintained a fair environment, with freedom of association and the right to join a lawful organization available to all employees.
Employee access to and communication with management was generally good.
All of the facilities provided safe and clean dormitories with good food service.
Although not required by Mattel’s GMP, all four facilities provide recreation and non job-related training opportunities for employees, such as English-language and computer courses.
All plants were found to be in compliance for payment of legally mandated minimum wages, social insurance and related benefits.

Improvement Challenges

SICCA expressed concern that the facilities are not fully utilizing the automated swipe card system to clock out at the end of each shift.
At several plants, some employees expressed that they felt pressured to accept overtime hours.
Audits showed some inadequacies pertaining to environmental issues (water quality, noise and temperature levels, storage of hazardous materials, air emissions and ventilation) and facility maintenance.

Individual Plant Reports

Mattel Bangkok Ltd. (Thailand)

For Mattel Bangkok (MBK), “overall observations were quite positive with regard to worker treatment, working conditions and maintenance of plant facilities.” SICCA’s audit did indicate, however, that some female employees reported a pregnancy test during their pre-employment medical screening. Mattel investigated this report and verified that the plant does not conduct such a test. Mattel is currently seeking additional information from the temporary employment contractor regarding historical practices and has communicated that practice is inconsistent with its GMP.

Mattel Malaysia Sdn. Bhd. (Malaysia)

MMSB is described in its report as “by far the best and user-friendly among all the factories audited by SICCA.” SICCA did find that recruitment fees were being deducted from employees’ pay, which is inconsistent with Mattel’s GMP. Mattel has agreed that this shouldn’t be a payroll deduction. Effective immediately, MMSB will be responsible for this fee.

Mattel Development & Tooling Sdn. Bhd. (Malaysia)

SICCA found that “MDT practices generally meet, and even exceed, GMP standards. MDT also has a comparatively good record with regard to payment of wages, calculation of regular and overtime hours and maintaining a work environment free of discrimination.” Nevertheless, SICCA noted that some workers expressed concerns about pressure to accept overtime and recommended that Mattel investigate these concerns and reinforce the voluntary nature of overtime hours.

PT Mattel Indonesia (PTMI)

PTMI is “in general compliance with most of the GMP standards.” One issue that is already being addressed is PTMI’s dormitory policy, which is being revised. As of Dec. 31, 2008, all employees will have the option to choose to live in the dorms or in the local community. In addition, as of the end of the year, dormitory rooms will be reconfigured to reduce the number of residents per room while maintaining GMP personal space standards.

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 SICCA to perform regular audits of its owned manufacturing facilities and those of its major suppliers. SICCA’s responsibility is to evaluate and publish findings on these manufacturing facilities’ compliance with GMP. SICCA’s audit protocols are designed to verify supplier 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 SICCA

Directed by Dr. S. Prakash Sethi, the Sethi International Center for Corporate Accountability (SICCA) is a not-for-profit, independently incorporated organization comprised of a council of experts in labor issues worldwide. SICCA 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, SICCA 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 Mattel family is comprised of such best-selling brands as Barbie®, the most popular fashion doll ever introduced, Hot Wheels®, Matchbox®, American Girl®, Radica® and Tyco® R/C, as well as Fisher-Price® brands, including Little People®, Power Wheels® and a wide array of entertainment-inspired toy lines. Mattel is recognized as one of 2008’s "100 Best Companies to Work For" by FORTUNE Magazine. With worldwide headquarters in El Segundo, Calif., Mattel employs more than 30,000 people in 43 countries and territories and sells products in more than 150 nations. Mattel’s vision is to be the world’s premier toy brands — today and tomorrow.