Mattel to Report on Factory Conditions

Mattel Inc. today will release its first corporate social responsibility report, offering some new details about problems the company has had at its overseas factories and Mattel’s timeline for addressing them.

The El Segundo-based toy maker has been considered a leader in monitoring conditions in its foreign factories and has been praised for being one of the few U.S. manufacturers to release independent auditors’ detailed reports on life at those facilities.

But Mattel has also been criticized by some activists who say the company has been too slow to document and fix the problems.

The 28-page report -- one in a wave from companies hoping to demonstrate to consumers, shareholders and labor activists that they are ethical manufacturers -- is mostly a compendium of the company’s efforts in product quality, factory conditions, environmental and safety policies and philanthropy.

But it also offers a broader glimpse into Mattel’s struggles to reform conditions, including disclosures that:

* Mattel’s internal monitoring of working conditions at the nine facilities Mattel owns or co-owns revealed seven to have what the company called “highly critical findings” -- which could include violations such as improper payment of workers, involuntary overtime and denial of appropriate holidays or days off. The company said all were corrected by the end of 2003.

* Internal monitoring of 77 of Mattel’s contract manufacturers showed 36 had “highly critical findings.” Twenty of the manufacturers have unresolved problems.

* Independent audits of Mattel-owned factories found 24 violations of the company’s labor standards and 21 environmental health and safety violations, all of which have since been corrected.

* Independent audits of contract manufacturers found 117 labor code violations and 249 environmental health and safety standard violations.

The report did not identify the specific violations found by the independent auditor but said the problems were expected to be corrected by the end of the year. None of the audits found what the company termed “zero tolerance” violations, such as child labor or forced labor.

Mattel also said that its board of directors would begin overseeing the company’s corporate social responsibility initiatives.