Institute for Global Labour and Human Rights (Formerly National Labor Committee) 5 Gateway Center, 6F, Pittsburgh, PA 15222 , U.S.A. +1-412-562-2406 | inbox@glhr.org | www.globallabourrights.org

December 2011 Author Charles Kernaghan Research Charles Kernaghan, Barbara Briggs Cassie Rusnak, Elana Szymkowiak, and Victoria Lopez

HOLIDAYS BY HASBRO:

Transformers toy production at Jet Fair factory in China

TRANSFORMERS FROM HELL

Table of Contents

Executive Summary: Jet Fair sweatshop in China produces Hasbro’s Transformers .................................... i

Preface by Charles Kernaghan: Hasbro, Putting Lipstick on a Pig ............................................................... ii

Company Profiles.......................................................................................................................................... 1

Hasbro’s Christmas Workshop: How would you like your daughter or son to work here? .......................... 3

Filthy, Rat-infested Dorms; Workers Tortured by Bed Bugs ............................................................. 10

Factory Cafeteria ................................................................................................................................. 12

Hours: 70-plus Hours a Week ..................................................................................................................... 14

Hasbro Supplier in Blatant Violation of Even China’s Weak Labor Laws................................................. 15

Words Are One Thing. Reality Is Another. ................................................................................................ 16

Wages: $1.18 an hour and $204.34 a month ............................................................................................... 20

Executive Summary

Jet Fair sweatshop in China produces

Hasbro’s Transformers

Workers housed in filthy, over-crowded dorms, infested with rats and bed bugs. Workers report they

cannot sleep at night from the bed bug bites.

Workers describe factory food as “Pretty much like swine food.”

Workers allowed less than 9 minutes to assemble each Hasbro Transformer, for which they are paid

17 cents.

“We are drenched in sweat,” workers say. Factory temperatures soar to 104 degrees F in summer.

During peak season, workers toil 12-hour shifts, seven days a week, while earning a take-home wage

of just 92 cents an hour.

Workers undergo three body-searches each day, are not permitted to talk or lift their heads to look

around, and need permission to use the bathroom.

Hasbro is open to the hiring of 14 and 15-year-olds on a “case-by-case basis.”

Workers in the spray paint department fear they are being exposed to dangerous solvents.

There are no fire drills and some emergency exits are locked.

During the slow season, hundreds of workers are fired under false charges so management does not

have to pay their legal severance.

Workers are cheated of paid sick leave and maternity leave.

Workers describe their work as mindless, miserable, constantly monotonous, yet furious and

exhausting.

Preface by Charles Kernaghan

Hasbro

Putting Lipstick on a Pig

That is exactly what Hasbro executives are doing—putting lipstick on a pig—when they claim to have

voluntary corporate codes of conduct to guarantee the rights of the workers in China who make their

Transformers, board games and tricycles. On the other hand, when it comes to its toys, Hasbro’s

executives demand enforceable laws—intellectual property and copyright laws—backed up by sanctions

to protect their plastic Transformers. Anyone caught making a knock-off of a Hasbro toy will be

prosecuted and do real jail time.

What accounts for this schizophrenic split personality? Hasbro would never even dream of allowing its

toys made in China or elsewhere to be protected by voluntary codes of conduct. If it is not good enough

for a Transformer robot to be protected by Hasbro’s voluntary code of conduct, then why is it good

enough for the human beings who make the company’s toys, often under gross and abusive sweatshop

conditions while being paid pennies an hour?

Corporate codes of conduct were never really meant to enforce or protect workers’ internationally

recognized labor rights. This is one of the great scams that Hasbro and the other toy companies have

pulled on the American people.

It is this simple: Hasbro knows that in the global economy, there must be enforceable laws, backed up by

sanctions, to protect their trademark toys. Protecting the legal rights of workers, who are real, living

human beings, is of much less concern to Hasbro. In fact, Hasbro and the others much prefer that workers

are not afforded enforceable rights.

The so-called corporate codes of conduct are really the equivalent of counterfeit knock-offs themselves,

undermining the inalienable rights of human beings.

We want to ask Hasbro: Why is it that you demand enforceable laws to protect your toys, while refusing

to grant the human beings who make them the same legal protections? If Hasbro executives can answer

this question, I will profusely apologize to Hasbro and tear our report up into a thousand pieces.

On the other hand, if Hasbro’s executives remain stone silent, hiding behind their purposefully ineffective

voluntary codes of conduct, we will know they are deep into their scam.

Nothing will change in the global sweatshop economy until workers are guaranteed access to the

enforceable labor rights protections that are afforded under internationally recognized labor rights

standards—no child labor, no forced labor, freedom of association, the right to organize and form

independent unions, the right to bargain collectively and access to decent working conditions.

The American people have the right to hold corporations accountable and demand that human beings

have at least the same enforceable legal protections as a Hasbro toy.

Our economy belongs at least as much to the American people as it does to the corporations. Together,

we have the right to remake our economy with a human face.

Company Profiles

Jet Fair Industrial Ltd

He-Jing Industrial Area

He-ping Village, Fu-yong Town

Bao-an District, Shenzhen City

Guangdong, CHINA

Phone: 0755-33806688

Fax: 0755-33670988

Hong Kong funded factory, established

in 1993.

There are approximately 3,000 workers at Jet Fair, the vast majority of whom are migrant workers from

the Guangxi region and Henan Province. The factory hires men and women, between the ages of 16 and

40, with women accounting for over 60 percent of the total workforce.

Jet Fair has nine factory buildings with four floors each along with five dormitories. Most of the

production at Jet Fair is for well-known toy companies like Hasbro, Wal-Mart and others. It also exports

to Japan. Along with toys, the factory also exports electronic products such as electric toothbrushes.

Common toys produced at Jet Fair include toy cars, small remote-control airplanes, and robots. The

majority of the production for the last several months has been Transformers models for Hasbro.

Hasbro

1027 Newport Avenue

Pawtucket, RI 02862

Phone: (401) 431-8697

Fax: (401) 727-5544

Hasbro reported $4 billion in revenue in 2010,

with an operating profit of $587 million.

In 2010, Mr. Brian Golden, Hasbro’s president, paid himself $23.15 million.

The vast majority of Hasbro’s toys are manufactured in 46 factories in China.

In 2011, we tracked at least 39 shipments from the Jet Fair Industrial factory in Shenzhen, China to

Hasbro.

The popular Transformers toys are a profit source for Hasbro. In the second quarter of 2011,

Transformer sales boosted Hasbro’s profits by 23 percent.

Source: Hasbro 2010 Annual Report

A photo of Hasbro Transformers Prime First Edition Series

Bumblebee figure smuggled out of Jet Fair factory in late 2011.

Hasbro’s Christmas Workshop

How would you like your daughter or son to work here?

The second floor of Building A is for the

Assembly Department.

There are approximately 70 workers in each

assembly line. In late November 2011, Lines

#2 and #4 were producing Transformers

Bumblebee Series for Hasbro.

Management sets a mandatory production

goal of completing 480 Transformers per hour

per line. The workers sit at small work

benches—which are old, dirty and dusty—

with their hands flying to reach their goals.

There is very little space, since the work

benches are crammed together. The workers

cannot even stretch their backs without banging

into the desk behind them.

The workers are strictly prohibited from raising their heads to

look around. The work pace is very intense and no one is

allowed to talk.

In many positions, workers do not even have the time to go to

the bathroom. When it is busy, which is most of the time,

workers are yelled at if they try to go to the toilet. The lucky

ones who can use the bathroom have to get permission from

the lineman, and surrender their ID badges. Only two people

at a time can use the bathroom, and toilet breaks are limited

to three or four minutes.

Workers describe the work as terribly monotonous, flying

through the same motions over and over again, all day long,

non-stop. There is not a single break during working hours.

Photos of Hasbro Transformers Bumblebee figure taken on

assembly line in late 2011.

The workers cannot talk, listen to music or use their cell phones.

Managers are never satisfied and constantly harass the workers.

In effect, each worker must complete 6.86 Hasbro

Transformers per hour, or one every 8.75 minutes, for which

they are paid just 17.4 cents.

In the summer months, the workshop is extremely hot. There is

no air conditioning, and the 13 fans per assembly line only

manage to push around the steaming hot air.

Hasbro has managed to turn the assembly of toys into a mindless,

miserable and constantly monotonous yet furious series of hand

motions, while being paid below-subsistence wages.

Hasbro’s Corporate Code of Conduct reads well. For example, the toy workers at the Jet Fair factory are

guaranteed: “Freedom of Association—Hasbro recognizes all employees’ right to choose (or not) to

affiliate with a legally sanctioned organization or association without unlawful interference.”

The only glitch is that there are no independent unions in China. The Chinese government does not allow

it. So Hasbro can whistle away regarding Freedom of Association, but the workers in China have no right

to organize a genuine independent union.

Nineteen Years Old and Going Nowhere

“I work at the Assembly Department on the second floor of Building A.

“It’s really frantic to work on the assembly line. The items keep coming fast. We need to

work nonstop, with both hands flying. My back hurts from working too long without getting a

break.

“Once in a while I lift up my head and I find myself looking into the fierce and swift eyes of

those who have nothing to do [i.e. managers]. When they are in a bad mood, they scold us

with really filthy language, which I don’t even want to repeat. Lately the manager has been

giving me trouble. A defective product was not mine, but the manager blamed me. I’m only

19 years old. I feel like crap when I’m scolded all the time.

“I pay for food and living expenses and don’t have any money left at the end of the month. I

don’t have money to send back to my parents, and I can’t ask them for money. I hope I can

find a better factory.”

Photos of Hasbro Transformers Prime

First Edition Series Bumblebee figure

taken on assembly lines at Jet Fair in late

2011.

Body Searches Three Times a Day

One would not necessarily associate toy making

with body searches three times a day. But the Jet

Fair workers are body searched when they leave

the work shop for lunch, again when they leave

the workshop after their shift is over, and again

when they leave the factory compound. Factory

security guards carry out the searches.

The Pot Calls the Kettle...Spotless

Wal-Mart Applauds Hasbro’s Commitment to Corporate Social

Responsibility!

“Wal-Mart applauds Hasbro’s long-term commitment and accomplishments in

corporate social responsibility,” said Laura Phillips, Wal-Mart’s senior vice

president of Toys and Seasonal Merchandising. “As Hasbro builds upon its

industry leadership position in environmental sustainability and product safety,

we are hopeful that industry players will adopt similar ambitious goals.”

Dec. 8, 2011 Pawtucket, R.I. Hasbro Press Release

Source: Hasbro Corporate Social Responsibility

“We are Drenched in Sweat.”

─104 degrees─

“I’ve worked at this department [pressing] since I started. It’s

been two years.”

When asked by an interviewer, “Is it hot in the summer?” she

responded:

“What do you think? There are so many machines, melting

plastic, all throwing off such high temperatures all in one

workshop. It is very hot in summer. It often gets to over 40

degrees Celsius [over 104 F]. We are drenched in sweat. Our

clothes get wet.

There are fans, but the temperature is just too high. The fans

don’t help. There is also lots of noise, but there is no

protective gear to cover our ears.”

─Hasbro worker

Tell This to Chinese Sweatshop

Workers

at Jet Fair

“Transformers characters like Optimus Prime

inspire us to be adaptable in the face of new

challenges... and diligent in our quest to conquer

the evil Decepticons!”

─Hasbro

Shipper Consignee

Jet Fair Industrial Ltd.

He Jing Industrial Estate

Block 21, Qiao He Road

Shenzhen, 44 518103

People’s Republic of China

Hasbro Inc.

1020 SH Morgan Parkway

Pooler, GA 31322

U.S.A.

ATTN: Warehouse Manager

Shipment Detail

Country of Origin: China Estimated value: $67,324.14

Port of Departure: Yantian Weight: 12,408.00 KG

Port of Arrival: Savannah TEUs: 3.96

U.S. Destination: Savannah Quantity: 4,182.00 CTN

Arrival Date: 12/01/2011 Carrier: MITSUI OSK LINE

Commodity Description

Container: TCNU7212774 Quantity: 2652

4182 CTN SHIPPING UNITS 1 - 45 96 DRY CONTAINER(S) SAID TO CONTAIN CONTAINER

TEMU8013400 SEAL 055291A 3060.0 PC 1530 CTN HTS 95030000 PLASTIC TOYS ITEM NO.

287487220 US HTS CODE 9503.00.0073 P.O. NO. 451044358 TRA MV3 ULTIMATE OPTIMUS PRIME

HUB SHIP TO CODE 990921 QTY 3060PCS / 1-1530CTNS SHIPPING UNITS 1 - 40 96 DRY

CONTAINER(S) SAID TO CONTAIN CONTAINER TCNU7212774 SEAL 055292A 18512.0 PC 2314

CTN 676.0 PC 338 CTN HTS 95030000 PLASTIC TOYS P.O. NO. 451037303 ITEM NO. 98452942F

TRA DELUXE GENERATION ASST US HTS CODE 9503.00.0073 SHIP TO CODE 990921 QTY

18512PCS / 1-2314CTNS PLASTIC TOYS P.O. NO. 451044358 ITEM NO. 287487220 TRA MV3

ULTIMATE OPTIMUS PRIME HUB US HTS CODE 9503.00.0073 SHIP TO CODE 990921 QTY 676PCS

/ 1-338CTNS VENDOR CODE ZC-1063TM SHIP TO CODE 990921 ACCORDING TO SHIPPER, "THIS

SHIPMENT CONTAINS NO WOOD PACKAGING MATERIAL" CARRIER HAS NOT VERIFIED THIS

INFORMATION.PLEASE REFER TO THE APPROPRIATE CERTIFICATION FOR DETAILS. SC

NO.8023898A11

Container: TEMU8013400 Quantity: 1530

4182 CTN SHIPPING UNITS 1 - 45 96 DRY CONTAINER(S) SAID TO CONTAIN CONTAINER

TEMU8013400 SEAL 055291A 3060.0 PC 1530 CTN HTS 95030000 PLASTIC TOYS ITEM NO.

287487220 US HTS CODE 9503.00.0073 P.O. NO. 451044358 TRA MV3 ULTIMATE OPTIMUS PRIME

HUB SHIP TO CODE 990921 QTY 3060PCS / 1-1530CTNS SHIPPING UNITS 1 - 40 96 DRY

CONTAINER(S) SAID TO CONTAIN CONTAINER TCNU7212774 SEAL 055292A 18512.0 PC 2314

CTN 676.0 PC 338 CTN HTS 95030000 PLASTIC TOYS P.O. NO. 451037303 ITEM NO. 98452942F

TRA DELUXE GENERATION ASST US HTS CODE 9503.00.0073 SHIP TO CODE 990921 QTY

18512PCS / 1-2314CTNS PLASTIC TOYS P.O. NO. 451044358 ITEM NO. 287487220 TRA MV3

ULTIMATE OPTIMUS PRIME HUB US HTS CODE 9503.00.0073 SHIP TO CODE 990921 QTY 676PCS

/ 1-338CTNS VENDOR CODE ZC-1063TM SHIP TO CODE 990921 ACCORDING TO SHIPPER, "THIS

SHIPMENT CONTAINS NO WOOD PACKAGING MATERIAL" CARRIER HAS NOT VERIFIED THIS

INFORMATION.PLEASE REFER TO THE APPROPRIATE CERTIFICATION FOR DETAILS. SC

NO.8023898A11

This Customs information for a shipment to Hasbro from Jet Fair factory of December 1, 2011 indicates that Jet Fair

was producing Hasbro Ultimate Optimus Prime figures for Hasbro, sold by Wal-Mart and other retailers.

Filthy, Rat-infested Dorms;

Workers Tortured by Bed Bugs

The company dorms are filthy, overcrowded and unhealthy. Twelve workers share each dorm room,

sleeping on six narrow bunk beds. There are 31 rooms on each floor, housing 186 people. Trash is

strewn everywhere in the hallways, which are infested with rats. The workers often bring food back from

the cafeteria, but if it is too horrible to eat, they throw the leftovers in the trash bins in the hallways. The

bottom halves of the bathroom doors are rotten, as are some of the dorm room doors.

In the summer, the dorms are stiflingly hot. Each room has two fans, which provide little if any relief.

The rooms are so damp and humid that when the workers wash their clothing and hang it up in the dorm,

it takes at least two full days to dry.

The dorms are infested with bedbugs, which torture the workers. But the company has done nothing to

address and correct the infestation.

Interviewer: “Why do you have so many

bug bites?”

Young woman: “Those are from bed bugs in

the dorm while I try to sleep

at night. They are like lice on

a cow.”

Interviewer: “Are there many?”

Young woman: “At lot! The bed bug bites

are still there, and I got more.

They are very itchy. I can’t

stand the itchiness. I can’t sleep at night and I’m tired at work the next day. I

bought all sorts of medicine, but it didn’t work.

Theft is also common in the dorms. Many workers report having their personal belongings stolen,

including money and even fruit, cups of noodles and detergent. Security guards at the dorms are no help

and may even be the ones stealing the workers’ few possessions.

Workers pay 85 RMB ($13.36) per month in dorm utility costs.

Workers Are Trapped in the Filthy Dorms

An interviewer asked a young woman worker, why didn’t she move out of the filthy and infested dorm?

Young woman Hasbro worker:

“I want to. That way there wouldn’t be any more bed bug bites. But living

outside would cost at least 300-350 RMB ($47.16-$55.02) including utilities. I

don’t care much about food, but it would still cost 400 RMB in total ($62.87).

Fifty ($7.86) for phone service, 50 RMB ($7.86) for internet, 100 RMB ($15.72)

for snacks and fruit, and 200 RMB ($31.44) for clothes. That’s 1,200 RMB

($188.63) in total. I only make 1,300 RMB ($204.34) a month, and if I meet with

some friends, then I won’t have any money left. I can’t afford the rent.”

Factory Cafeteria

“The food is pretty much like swine feed.”

-Hasbro worker

The workers’ cafeteria is located on the first and second floors in Building C. Workers cue up to receive

their food on the first floor, then carry it up to the second floor to eat. The workers are unanimous in

stating that the food is “horrible” and “appalling.” One worker summed up the quality of the food as

follows: “The food is pretty much like swine feed.”

For breakfast, the workers are served rice

vermicelli in a thin, watery soup, without oil, from

a huge caldron. The food is not only bad, but it is

not filling. The workers have to wait at least five

hours before they get a break for lunch.

Lunch is almost always the same, two vegetables

(one of which is always cabbage), served with thin

egg soup. Again, the portions are very small and

there is no oil.

Dinner is as bad as lunch. It is only on Mondays

and Fridays, twice a week, that the workers can eat fish. There is never any special food, even for

national holidays.

Workers told our interviewers that they can only dream of having a chicken drumstick to eat.

The workers have to pay 195 RMB ($30.65) per month to eat in the company cafeteria.

100+ Degree Temperatures

In the Pressing and Smelting Departments,

temperatures can become unbearably high in the

summer. On the first floor in Building E, there

are 76 plastic injection molding machines which

throw off a huge amount of heat. Temperatures

in summer can reach 100-plus degrees

Fahrenheit. Ceiling fans just blow around the

stagnant hot air.

Spray Paint Department

In the Spray Paint Department, workers believe they are

exposed to large amounts of solvents which can cause

harm. The company distributes cheap respiratory masks,

but it is so extremely hot in the summer that the workers

cannot stand to wear them.

Workers Concerned about Electronic

Workshop in Building B

The Electronics Department is located on the

third floor of Building B. Most of the job

positions require soldering tin. The workers are

concerned that the solder may be contaminated

with lead, which could be extremely harmful.

To date, management has taken no preventive

measures to guarantee the workers are not being

exposed to dangerous metals.

Hours: 70-plus Hours a Week

During the five-month peak season—July, August, September, October and part of November—the

workers routinely put in 12-hour shifts from 7:50 a.m. to 8:00 p.m., seven days a week.

The standard shift is from 7:50 a.m. to 8:00 p.m., with an hour break for lunch. (The workers are

compelled to begin their shift ten minutes early, at 7:50 a.m., for which they are not paid.)

The workers receive a one-hour lunch break from 1:15 to 2:15 p.m.

Monday through Saturday, the workers toil 11 hours a day, and then put in at least five hours on Sunday.

The peak season norm is to work at least 71 hours a week, and 308 hours a month. This includes 31

hours a week of overtime, which exceeds China’s legal limit on overtime by 273 percent!

The slow season is December through June, when there is very little overtime, which also means the

workers are earning just the bare-bones subsistence level wage. The only way workers can save money is

to work overtime.

The standard shift is 6.7 hours a day, six days a week, which comes to 40 hours a week and 173.16 hours

a month. (The International Council of Toy Industries (ICTI) Care program has determined that a “6-day

workweek model” is legal in China.)

Workers who are single are unable to save money. Married couples who are both working can save an

average of about 200 RMB ($31.44) a month if they are very economical and thrifty, squeezing every

penny. In the course of a year, a couple can save around $377—or $188.63 each. In three years, with

both of them working, they might be able to save $1,131.

For years, all overtime was mandatory at the Jet Fair factory. It was only in 2011 that workers could

request to be excused from overtime work. If the supervisor agreed, the worker could take off. If not, she

had to work.

.

Could Newt Gingrich Be Lobbying Hasbro?

Hasbro is also exploring the benefits of gainfully employing 14 and 15-year-olds to make

their toys in developing countries.

According to Hasbro’s “Global Business Ethics Principles”: “Workers under sixteen

may be considered on a case-by-case basis when hired in accord with International

Labor Organization (ILO) Convention 138.”

It was only a short while ago that presidential candidate Gingrich suggested that high

school janitors should be fired so young students could pick up mops and start learning

the work ethic

Hasbro Supplier in Blatant Violation

of Even China’s Weak Labor Laws

Jet Fair factory management ignores China’s Labor Code.

Workers paid late: Workers sign a labor contract which stipulates that they will be paid on the

seventh of every month. But the actual payday is always after the 17th. (By law, workers are to be

paid once a month and must receive their wages within the first week of the following month.)

No fire drills, and some emergency exits are locked: The factory does not conduct fire drills in the

workshops or in the dormitories. Some emergency exits are locked—for example, on the second

floor of Building A, in the middle of the floor. Nor have the workers been trained in how to operate

the fire hydrants or fire extinguishers.

Management refuses to pay the legal severance pay: Any worker who has been employed for at

least one year at the factory is due one month’s severance pay if the worker is terminated by

management. (A common practice is to terminate workers on false charges.)

By law, the workers have the right to: -Paid sick leave -Denied by management

-Paid maternity leave -Denied by management

-Paid marriage leave -Denied by management

-Paid funeral leave -Denied by management

Cheated of vacation pay: Workers who have been at the factory for over one year are eligible by

law to receive five paid vacation days. But no one ever receives them.

Shortchanged on Medical and Social Security Insurance: Jet Fair factory management purchases

medical insurance only for some of its employees, and deducts 4 RMB (63 cents) every month from

their pay.

Management ignores other legally required Social Security programs.

Hasbro worker: “The contract says all workers shall join the social insurance programs. However,

the company deducts 4 RMB (63 cents) for medical insurance while we do not get insurance cards.

The company told us to apply for a card ourselves, but nobody knows where to apply for one. So

many employees do not have an insurance card.”

Words Are One Thing. Reality Is Another.

“We strive to conduct business throughout our supply chain in accordance with the highest ethical

standards. As a values-based company with a strong family heritage, we value the safety, wellness and

dignity of every worker. We work closely with our third party factories and licensee factories to ensure

that all Hasbro products are manufactured in safe and healthy environments that respect workers’ rights.

We require factories to be monitored to verify compliance in areas such as proper wage payments, health

and safety, and the absence of child or forced labor.

Hasbro teams in China, Hong Kong, the U.K., and the U.S. work directly on our global manufacturing

ethics program, led by the Senior Vice President of Quality Assurance, a key member of our Corporate

Social Responsibility (CSR) Committee.” (Source: Hasbro Corporate Social Responsibility)

How to Cheat Workers

Management relies on “Strategy 101” to trap and cheat the workers. When work orders slow down—for

example when the Christmas rush is over—management has to find a way to fire hundreds of workers,

while at the same time cheating them of any legal severance pay they are due. Under China’s labor laws,

any worker who has worked at least one year is legally due a severance pay of one month for each year

worked.

Conveniently, the company has never distributed information regarding factory regulations for employees.

Nothing is posted on factory bulletin boards regarding these rules. When management needs to fire

hundreds of workers without paying any legal severance, they accuse the workers of not wearing their

identification badges or their proper uniforms. Male workers can be fired for having long hair. Women

may be terminated for wearing skirts. Workers who ride bikes into the factory compound can be canned.

Each year, hundreds of workers are fired without compensation for violating factory rules no one has ever

heard of.

Workers who refuse to be duped and treated like fools, who demand to be paid at least their legal

severance, can find themselves taken to a room where they are beaten by security guards. The offending

workers are then fired without any of the benefits due them for the crime of fighting.

Such beatings of workers by security guards were common for years. It has only been in this year, 2011,

that physical assaults have diminished in frequency. But some beatings still take place.

Another way to get rid of pesky workers is to transfer them to the Spray Paint Department which,

according to the workers, is the most dangerous and difficult job—and when they refuse, management

fires them without compensation.

This violates China’s Labor Contract Law, Article 87, that employers must pay severance when workers

are dismissed.

Phony Government Union Does Nothing

Workers know nothing about the “union.” It does not function and means

less than zero to the workers.

The overwhelming majority of workers are naive and innocent, knowing

nothing about the legal rights they supposedly have. There is no training or

education at the factory regarding worker rights.

“China’s Labor Law Is “Merely a Formality. It is Just for Controlling Workers,

While Companies Can Always Find Excuses to Avoid the Law.”

Interviewer: “How did you get here?

Worker (young man): “I wanted to intern at an electronics factory but didn’t find any. I saw a hiring

banner at this company. Two thousand six hundred RMB ($408.69) per month

and up is okay as a wage. New Year is coming. And I heard that toy factories

are fun and less tiring. So I ended up here.”

Interviewer: “What do you think after you started here? Is your pay that high? Are working

and living conditions and wages better than those of the factory you interned

at?”

Worker: “So much worse! Here employees basically get around 1500 RMB ($236 a

month). Accommodations and food are not covered, and the food is awful.

There are just two vegetables for every meal, and no meat at all. We have

cabbage for almost every single meal. Either cabbage or white radish, with no

oil in the dishes and the portion is so small. We hardly feel full. And there are

no recreational areas, no library or cultural or educational places. We can only

go back to the dorm after work. And the dorms are unsanitary.

Interviewer: “Do you think the implementation of the Labor Contract Law [in 2008] helps the

workers?

Worker: “I heard that the Labor Contract Law makes things better for workers, but

factories do not enforce it.”

According to this chart of organizational

structure at Jet Fair Industrial Ltd., the

company has a “Union Committee” of five

committee members and over 4,000

employees, an “Employee Committee” of

seven committee members and over 2,500

female employees and a “Communist

Youth League of China Local

Committee”.

Interviewer: “Does the company sign labor contracts with the workers?”

Worker: “Yes. I applied on one day and the following day at 8:00 a.m. in the morning,

they brought me to the training room to sign it. A recruiter told all the

applicants that we should write whatever he said. After we filled out the

contract, we started working at our new positions alongside senior workers. I

feel like signing this contract doesn’t do much. The contract says payday is the

7th

of every month, but the actual payday is after the 17th

. The contract says all

workers shall join the social insurance program. But the company deducts

four RMB [63 cents] for medical insurance, while we do not get insurance

cards. The company told us to apply for a card ourselves, but nobody knows

where to go to apply for one. So many employees do not have an insurance

card.

“About the labor law, most of the people know nothing about it and don’t know

how to defend our rights. The law is merely a formality. It’s just for

controlling the workers, while companies can always find excuses to avoid the

law.”

Recruitment referral fee is

strictly prohibited in this

factory. Employees who

have paid referral fee can

file a complaint to workshop

directors or managers.

11 days of national

holidays in a year.

Photography is not

allowed in workshops.

Violations will be

investigated.

One day off for every seven days.

Complementary time for work

hours on Sundays.

Overtime is all

voluntary. Those who

wish to opt out from

overtime can fill out a

notice form to their

linemen.

According to Labor

Law, employees who

want to resign can get a

resignation form from

and apply to directors

one month in advance.

Wages

$1.18 an hour and $204.34 a month

The base wage is 1,300 RMB a month, or $204.34.

Base Wage (1,300 RMB per month)

$ 1.18 per hour

$ 47.16 a week (40 hours)

$ 207.34 a month

$ 2,452.14 a year

Overtime is paid at 150 percent of the base wage, or $1.80 an hour. Overtime on Sunday is not paid as

double time. When workers toil on Sunday, they are not paid, but can instead take comp time, which is

not legal.

It is unheard of in China, but workers at the Jet Fair factory are paid just the minimum wage. All other

factories pay several bonuses, such as a full-attendance bonus, a stipend to work the night shift, a

seniority award, or a position stipend for those who work in dangerous or unhealthy conditions, such as in

a spray paint department or in smelting and soldering departments.

The single benefit provided at Jet Fair is that employees who have worked over a year receive a 300 RMB

($47.16) stipend.

After deductions for food (195 RMB, or $30.65); dorm utilities (85 RMB, or $13.36) and medical

insurance (4 RMB, or $0.63), the workers have a take-home wage of 1,016 RMB ($159.70) per month,

which amounts to $36.85 a week and 92 cents an hour.

The Consumer Price Index (CPI) in China is averaging around six percent, which is definitely eating into

any nominal wage gains. (In the U.S., the CPI for urban consumers is around 3.5 percent.)

One worker told us: “Although the minimum wage increases every year, it definitely does not catch up

with the increase in the cost of living. Factories in Guangdong seem to always pay workers according

to the minimum wage. We can only maintain a minimum basic standard of living. I’m afraid I’ll

never make a decent living in my life!”

The Longer You Work, the Worse It Gets!

Ms. “X” is considered a senior employee at the Jet Fair factory. She started working at the factory in

March 2006, and has now been at the factory for five-and-a-half years. In these five-and-a-half years of

work, her life has only gotten worse. She started out working on the assembly line, but since she is

nearing her forties, management knew they could switch her to the most hated job in the factory—the

spray paint department. Everyone knows it is hazardous to constantly breathe in the paint fumes.

Her husband works and lives on a primitive construction site. Ms. X visits him once a week on Saturday

afternoon. They splurge and spend $1.73 to $1.88 to buy some inexpensive meat to make a soup. They

have a small cooking pot.

The other six days, Ms. X stays in the dorm. After work, she sits in the dorm and knits. She is very

frugal, as she and her husband save whatever money they earn to send to their son.

Interviewer: “Do you get seniority rights?”

Ms. X: “No. I’ve worked here for so many years. I get nothing but 300 RMB [$47.16]

bonus each year. Nothing else. I get paid the same as a new worker. Just 1,300

RMB [$204.34 a month]. There is nothing I can do. I’m old, so it’s hard to get a

job. My son is still in school.

I would like to stop working in a foreign city and suffering so much.”

In China, everyone knows that if you work in the export factories producing for the U.S. or Europe, you

will be worn out by the time you are 40 years old.

A pay stub of November

2011 smuggled out of the

Jet Fair factory.

What Hasbro Says May Not Be What Hasbro Does

“We have a deep-rooted commitment to treating our employees humanely and with

dignity and respect. We promote the same virtues for factory personnel at our third party

and licensee factories. The Hasbro Code of Conduct, Hasbro Global Business Ethics

Principles and International Council of Toy Industries (ICTI) Code of Business Practices

guide our ethical processes in both our owned and non-owned manufacturing facilities.”

“We treat employees with dignity and respect, and we expect the same of our vendors.”

“Hasbro’s deep commitment to corporate social responsibility (CSR) reflects our desire

to play a part in building a safe and sustainable world for future generations.”

“Health and Safety – Facilities shall ensure that all employees have a healthy and safe

environment, including in dormitories, where provided.”

“Abuse: Discrimination – Facility employees shall be treated with dignity and respect.”

“Freedom of Association – Hasbro recognizes all employees’ right to choose (or not) to

affiliate with legally sanctioned organizations or associations without unlawful

interference.”

“Monitoring – Hasbro shall have the right to conduct periodic on-site visits of working

and living conditions, including audits of production records and practices? of wage,

hour and payroll information maintained by facilities, to review and ensure compliance

with these principles.”

#320960450/CPG series race car version (English version) carton label

Material: K3A

Measurement: 14*11 ¼ * 7 ¾ (L*W*H outside) This is production measurement.

Printing: 3C (black GCMI 90 /PMS Black + purplish red GCMI 49 / PMS PURPLE+804Orange)

Code: 00653569621652

Packing: (8pcs/CTN)

32144 / 33291 = 5:3

Date: 2011-3-22

Addition information for carton label

(1) “This end up” and the arrow in the front and back carton label should be black.

(2) Each side has white characters with purplish red background.

TOYS

(3) Each side has white characters with black background.

ACTION FIGURES

Name of the product “TRA MV3 DELUXE ASST” should be purplish red.

A carton label instruction of an

order for toy race cars.

Photo of a cancelled order smuggled out of the Jet Fair factory in August 2011. The order was for “Newborn series three-in-

one deluxe”, to be shipped to Hasbro Inc. in the U.S. See next page for translation.

[Translation]

JET FAIR INDUSTRIAL, LTD.

Shipping Order

TO: [NAMES] DATE: 8/5/2011

FROM: PAKRICK NG

CC: JUTCHISON LOGISTICS

Shipping Notice Number: 111331 Client: TOMY

Client PO NO.: 0458058153 (0451034544) Commodity Report: Commodity inspection

Product Name and Number Quantity Quantity

(PCS)

Quantity of

Boxes

Each box

(N.W)

Each box

(G.W.)

Each box

(CBM)

Total

Measurement

(CBM)

1. 379720000 Newborn series

three-in-one deluxe (English)

4 4260 1065 2 2.51 0.0389 41.375

2.

3.

Destination: U.S.A.

“HASBRO brand”

Total 4,260 1,065 2,130 2,673 41.38

Carton label:

**See the attached for carton label**

To: Huang, Jian-Chang

Upon client’s request, please hand over the attached

COC certificate to the driver when loading shipments.

(Please contact Patrick if you do not receive the

attachment.)

A certificate issued by the client is required for item

379720000. Please contact me to confirm whether the

certificated is included after loading and before closing

the doors.

1) Booking No.: LINE-CHO-

2) S.S.: A VESSEL

CLSG: 15 AUG 2011

SHIPPING WINDOW: 15 AUG 2011

****to NVO storage Ltd.

[address]

TEL: (755) 2520-0658 / FAX: (755) 2520-1042

Shipping method: LCL [less than container load)

Container count and measurement:

Shipper: HUTCHISON LOGISTICS Arrival time: 08:00 AM

Shipping Date: 8/15/2011 Departure port: Yantian

Please process commodity

inspection ASAP.

Institute for Global Labour and Human Rights

(formerly National Labor Committee)

5 Gateway Center, 6th Floor, Pittsburgh, PA 15222, U.S.A.

Office +1 412.562.2406 | Fax +1 412.562.2411

inbox@glhr.org | www.globallabourrights.org