Hasbro has had an active process to enhance compliance with workplace standards since the early 1990’s. This process includes three key focus areas: communication, verification, and improvement.
Communication of Standards
Hasbro uses written and verbal communication tools as well as formal and informal training sessions to communicate our requirements to factories. Each factory considered for Hasbro work is provided with information on our Global Business Ethics Principles and the International Council of Toy Industry (ICTI) CARE Process. In China, as part of our initial review and evaluation process, Hasbro staff will meet with each potential new vendor to facilitate an understanding of Hasbro’s program and its requirements. This provides a forum for Hasbro to hear from the factory about its approach, challenges, and best practices in manufacturing ethics and safety.
Hasbro also offers training seminars directly to business partners and supports third party training sessions. In our communication approach we seek to foster a deeper understanding of the standards and the motivation behind them – moving factories beyond simply meeting a checklist of compliance items towards identifying their own areas for improvement.
Verification
Written and verbal communication of standards must be enhanced and enforced through onsite audits. Hasbro requires factories making Hasbro products to be inspected regularly and these audits are often conducted without prior notice to factory management. Monitoring is conducted through external auditors and by experienced local Hasbro staff. Audits include document review, worker interviews, and physical plant inspections. Since 1994, Hasbro and its monitors have conducted over 2,391 manufacturing facility inspections, including over 436 inspections in 2006.
Physical Inspection
Monitors will conduct a physical inspection of all areas of the factory. This includes but is not limited to manufacturing areas, back-office operations, areas and dormitories.
Record Review
As part of a typical audit, factory records are reviewed in order to assess the level of compliance with all standards. For example, auditors may ask to see time cards, payroll records, factory policies, worker orientation materials, personnel files, worker contracts, accident records, fire drill log records, production/shipment records, as well as many other forms of documentation. Factories are required to keep all records on site and available for inspection and to allow access to all above-mentioned records if they wish to do business with Hasbro.
Employee Interviews
Auditors will select workers, supervisors, and managers of their choosing for interviews. The interview process is always confidential, and factory management is not informed of the information provided by individual employees. Interviews may be conducted on or off the factory premises, and is normally in a private location.
As a requirement of doing business with Hasbro, factory managers must commit to ensuring employees selected for interviews do not incur any negative consequence as a result of their selection for interview. Retaliation against workers for sharing information with auditors is a serious violation of Hasbro’s code and cause for termination of the business relationship.
Improvement
When areas of non-compliance are found, factory management is informed of the issues and they are required to provide Hasbro with an approved corrective action plan (CAP) to address the findings and prevent future instances of non-compliance. A follow-up inspection will then take place to ensure the CAP has been implemented. The level of severity of non-compliance will determine whether or not the factory is allowed to receive orders and/or ship product. Hasbro’s goal is to assist our third party factories in improving conditions and successfully addressing any sub-standard areas. We are able to accomplish this objective in the large majority of cases; however, when a factory demonstrates that it is either unable or unwilling to make the necessary improvements, our practice is to terminate our relationship with that supplier.
