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CSR Meets PR Again

Apple has had a PR battle on it hands since news of factory conditions at its China contractor were recently reported in the British newspaper (see here [1]), but now McDonalds is also facing problems. This time an actual battle is involved.

According to a report in Forbes, over a thousand workers at a toy-making contractor (owned by Merton in Hong Kong) that supplies McDonald’s (as well as Disney, Mattel and others) have rioted over low pay and working and living conditions. The report suggests that the contractor in Dongguan (Guangdong province) has been flaunting laws on overtime, minimum wages and holiday pay. The report refers to information from China Labor Watch investigation which says:

McDonald’s has disputed the claims, and responded that the riot was not over working conditions, but over the firing of an employee. Either way, it seems there was a lot of resentment, and that the situation got out of control.

An early PR statement from McDonald’s that they were “looking into this matter” is not very inspired, but is a reminder that “looking into” suppliers is a good idea…but not just when they are pitching for business. It is essential that suppliers and partners are monitored and audited over time to ensure compliance. Not just for the sake of corporate PR, but if that is a driver for change, then it is not a bad place to start.

Please contact us to discuss any risk, due diligence, audit (or PR) issues you would like to address.

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Updated 28/07/06