While the Chinese media celebrates the opening of Shanghai Disneyland this week, claiming it to be a big boost to China’s recreation and real estate industries, Chinese workers who produced Disney's toys are protesting unjust treatment.
Thousands of factories move from China to southeast Asia each year to take advantage of even cheaper labour and rent.
At two Disney suppliers in Dongguan, Guangdong province, workers toil a gruelling 66 hours per week for $1.30 to $1.50 per hour, according to an underground investigation by China Labor Watch published this week. The workers are exposed to toxic chemicals without sufficient training or protective equipment.
According to the Economic Policy Institute, the United States lost 2.7 million jobs to China between 2001 and 2011, of which 2.1 million were manufacturing jobs. Now the transnational corporations are playing the same game in Asia, moving thousands of factories from China to southeast Asia each year, to take advantage of the even cheaper labour and rent. Disney, which earned $449 million in 2015 solely through the sale of consumer products, is following this same trend.
Race to the bottom
The case of the Mizutani factory in Shenzhen, China, is typical of this process of factory relocation. The factory produced stuffed toy souvenirs for Tokyo Disneyland. For the 18 years it was in operation, factory management committed severe violations of local labour regulations, including overtime pay and pension rules.
Even though its wage theft practices saved Mizutani a lot of money, thereby minimising production costs, Tokyo Disneyland still compelled the factory to move to the Philippines. In order to avoid paying severance to the Chinese workers, Mizutani tried to force them to resign by reducing their overtime hours, causing a huge drop in income. Workers responded with a protest strike in early January, but were suppressed by the police. In response, Mizutani forced 250 workers to leave the factory, providing compensation equivalent to 20% of severance payment.
The 230 remaining workers lost their jobs on 18 June 2015, when the boss suddenly announced the closure of factory. At that time, 196 of them signed a petition to the factory and the Disney company, urging both parties to negotiate with the workers. However, the workers did not receive any response and were kicked out of the factory dormitory, losing their work and living place all at once. By law the factory owed them a sum of $1.37 million in severance and social security contributions.
Disney regards the dispute as being solely between workers and factory management, having nothing to do with Disney at all.
Although its supplier has violated China’s Labour Contract Law and Social Insurance Law, Disney shows no intention of holding them responsible for their actions. Disney claimed that there is no ground to negotiate with the Mizutani workers because Tokyo Disneyland is a franchise operator and because it regards the dispute as being solely between the workers and factory management, having nothing to do with Disney at all. However, Disney receives a huge amount of royalties from Tokyo Disneyland each year, and its code of conduct requires all Disney suppliers to follow local laws, which were violated in this case.
The Mizutani workers have not given up. They visited government departments to file complaints about Mizutani’s violations. Three representatives held a protest in Hong Kong in September 2015. In February 2016, Mizutani finally authorised an HR consultant in Hong Kong to negotiate with the workers. But the compensation offered by the factory was less than 10% of the $1.37 million owed to the workers, and the workers rejected the offer. In April, labour organisations met with government representatives in Chiba, Japan, which is an owner of Tokyo Disneyland, to urge the local government to engage on the case. In May, groups in Los Angeles protested at Disney headquarters. As of yet, none of these parties have received any response.
Disney should abide by its own policies: Disney should investigate the case and fulfil its commitment to workers’ rights across the supply chain by urging Mizutani to properly compensate the laid-off workers. If Mizutani fails to provide the legally-required compensation, then Disney should bear the responsibility of failing to supervise its supplier attentively and compensate the workers directly.