Disney Cuts and Runs from Shah Makhtum: An Appeal in Europe

September, 04 2003 Share

From 5 June 2003
To 10 September 2003

DISNEY plays the part of Uncle Scrooge in BANGLADESH


"If you're not happy we're leaving". This is the threat brandished by multinationals when workers at their subcontractors in the textile and toy industry make demands. It is a threat that they sometimes carry out, with the pretext of applying their code of conduct. Disney is regularly concerned. The "public friend number 1" is known to relocate its production sites every time workers employed by Disney subcontractors demand their rights. In the most recent known case, Disney broke its contract with a factory in Bangladesh after the workers drew up a list of demands. Since then, all necessary measures have been taken to guarantee workers' rights, but the multinational refuses to return.

For eight years, 60-70% of the clothes made at the Shah Makhdum factory were for Disney stores. Yet the workers' lot was everything but a fairy tale: up to 102-hour working weeks without a single day's rest; compulsory silence; pressure by foremen that went as far as physical assault; insufficient, badly maintained toilet facilities; unbearably hot workshops; and lastly, no right to organize.

Disney performed twelve social audits at the sub-contractor to check whether it complied with the company's code of conduct. Yet inspectors from the multinational said they noticed nothing abnormal; on the contrary, they encouraged their suppliers to work with this production site. 
Then in October 2001 young workers (1) from the company publicly demanded that their rights be observed. Their claims were modest:

- One day's rest per week;
- A stop to different forms of repression and physical and psychological harassment;
- Regular payment for hours worked and no more excessive overtime;
- Compliance with the law regarding maternity leave.

They received no response to their demands. Shortly afterwards, in February 2002, orders were suddenly withdrawn from the company when Disney broke the contract.The multinational claimed that new quality control measures had demonstrated the supplier's inadequacies.  



A first in Bangladeshi industry


Under pressure from local organizations and an international campaign, especially in the United States, the owner of the company made the requested changes and the company almost became a model. Work space was doubled. The factory was cleaned and repainted, new lights were installed and the toilets were repaired. Workers obtained a day's rest per week as well as public and religious holidays. Harassment was stopped and the workers were treated respectfully. A small health service was opened and employees are now paid on time. 

To guarantee their compliance with international labour standards, the owners of Shah Makhdum made an unprecedented move by agreeing to open their firm to independent control by an NGO recognized by everyone, the Bangladesh Center for Workers Solidarity. This was an ideal opportunity for Disney to promote human rights in the 3,800 textile sub-contractors employing 1.8 million workers in Bangladesh.


Of course, Shah Makhdum is not owned by Disney, nor is it its direct sub- contractor. In line with standard practice in this industrial sector, it was a licensee, Jerry Leigh, that had a contract with the Shah Makhdum factory and that broke its contract. But Disney cannot get off so lightly. With all its direct and indirect sub-contractors, this industrial and financial giant controls the business of tens of thousands of production sites and keeps a tight rein over its empire. This is not the first time it has acted this way; other production sites have already been closed for the same reasons, in very similar circumstances.



Production sites relocate

In the late 1990s Disney left the free-trade areas of Haiti for Asia and especially China (2). In 2000, denounced by associations in Hong Kong, for the same reasons, the multinational broke its contracts with its subcontractor City Toys(3). To justify its attitude it referred to its code of conduct. In reality, it uses this code to put pressure on workers who defend their rights, by threatening to close their company and deprive them of work a very real threat since it has actually done so several times.  

But the situation at Shah Makhdum in Bangladesh is new. This time the owner made the necessary efforts, agreed to an independent audit, and thus provided full guarantees that the famous code of conduct would be observed. It will be able to maintain this effort only if its former contractor agrees to work with it again. 

If Disney refuses to work with its sub-contractor in Bangladesh, it is because it does not want a precedent involving an independent audit. The multinational now faces a very simple choice. It can sign a contract with Shah Makhdum so that everyone wins. Otherwise 352 workers will lose their jobs and an historical opportunity will be lost. This time everyone's responsibilities are clearly defined. 

So Disney, Snow White or nasty stepmother? 


Some edifying figures

Shah Makhum workers demand 0.34€ an hour. Even at that price, if we take the example of a shirt:


The wage of a worker in Bangladesh is 0.7% of the price of the shirt paid by the consumer;
To sell that shirt, Disney spends 25 times more in advertising than in the worker's wages;
The same worker would have to work for 210 years to earn what Michael Eisner, CEO of Disney, earns in one hour;
The budget of Disney Corporation is four and a half times that of Bangladesh.  

Mobilization in the U.S.

Several U.S. organizations have mobilized strongly, especially the National Labor Committee. It is this movement that forced Disney a few years ago to adopt a code of conduct and that is now struggling for its effective application.

Campaign: what to do

You have a choice. Either:

- Use the letter below addressed to the CEO of Disney Europe
- Write your own letter
- Or use the postcard to Uncle Scrooge (you could also give it to someone you know to sign) This text is simply a suggestion; you can change the wording.

NB: Don't forget to add your name and address and to sign the letter.
Reaction time: as soon as possible but until September 2003 would be alright if the extra time enables more people to join the campaign.


Mr Philippe COEN, CEO 
Walt Disney Company Europe 
50 Avenue Montaigne 
75008 Paris 

Dear Sir,

I have been informed by Réseau-Solidarité (10 quai de Richemont, 35000 Rennes, France) of the situation of workers at the Shah Makhdum factory in Dhaka, Bangladesh.

This company worked for Disney for eight years. When workers at the company demanded their rights, your multinational, under the pretext of applying its code of conduct, broke its contracts without trying to meet the workers' demands.

The factory has now taken the necessary steps to improve working conditions, as a visit to the site will confirm.

I therefore urge you to request your CEO Michael Eisner to reestablish commercial relations with the Shah Makhdum factory.

Yours faithfully,

[Name + signature]


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To publicize our campaign, we have printed a "letter to Uncle Scrooge" and to the CEO of Walt Disney-Europe on a card, a copy of which is enclosed herewith.

We suggest you distribute these "letters to Uncle Scrooge" so that as many people as possible participate in this campaign.

You can also order the document "Codes de conduite des multinationales" if you would like more information on issues relating to the codes of conduct of multinational corporations.

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  • I would like to receive ....... "Letter to Uncle Scrooge" cards
  • I would like to support this campaign financially and enclose "". Euros
  • I would like to order ".. document(s) "Codes de conduite des multinationales : outils de progrès social ou coup de pub" and enclose ".. x 10 Euros.