US: Walt Disney bans Pakistan and Bangladesh production
Disney-branded products will no longer be sourced from Bangladesh and Pakistan
US-based Walt Disney Company (WDC) has gone ahead with its threat to phase out the sourcing of Disney-branded products from Bangladesh and Pakistan over concerns the countries no longer meet its guidelines on working conditions.
Another three countries - Belarus, Ecuador and Venezuela - have also been removed from the company's updated list of 'Permitted Sourcing Countries'.
The plans were reported on just-style last year, with Pakistan sourcing to be phased out by March 2014. It has been estimated the move will lead to the loss of annual export orders worth around US$150m from the country.
The Walt Disney Company's International Labor Standards Program (ILS) uses the World Bank's worldwide governance index (WGI) as the main tool to assess relative country risk, along with data from the International Labour Organization's (ILO) Better Work programme and the International Finance Corporation (IFC).
"As part of an on-going review of our policies and procedures, we have made adjustments to our sourcing guidelines that will help us better manage the challenges associated with a complex global supply chain and meet our ILS objectives," the company said.
"We have decided to consolidate production of Disney-branded products in a more limited number of Permitted Sourcing Countries and have instructed our licensees and vendors to transition the production of Disney-branded goods out of the highest-risk countries.
"As a result of this refined approach, production of Disney-branded products will no longer be permitted in 44 countries where production has previously been allowed under very limited circumstances. This includes five countries where there may be current Disney-branded production: Bangladesh, Belarus, Ecuador, Pakistan, and Venezuela."
It added: "We have made this change to more effectively focus our resources, better manage the supply chain for Disney-branded products, and meet our standards on a more reliable and consistent basis in locations more likely to make continuous improvements in working conditions."
The company claims to be the world's largest licensor, with Disney-branded consumer products being produced by thousands of independent licensees and vendors working with tens of thousands of manufacturing facilities around the world.
The company's sourcing countries are based on three groupings: those with a WGI ranking of over 65%; those with a WGI ranking of 31% but with an acceptance of International Labour Standards (ILS) audit; and countries with a WGI ranking below 31% but implementing the ILO/IFC's Better Work programme.
Pakistan scored just 19 points in the WGI, six points below the threshold level.
Countries that demonstrate improvements as reflected in the World Bank Governance Indicators or that adopt the ILO/IFC's Better Work programme will be considered for future inclusion on the Permitted Sourcing Countries list, the Walt Disney Company notes.
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