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Labor Standards in Licensing and Product SourcingDisney's International Labor Standards (ILS) program is designed to evaluate and address the working conditions affecting people who make Disney-branded products around the world. The program thus applies to workplaces that are not owned by Disney and people who are not Disney employees. The ILS program is managed by employees and Cast Members who have sourcing or licensing responsibility throughout the company's operations and is supported by a core team of approximately 70 ILS specialists in 10 offices around the world. The ILS function reports to the Corporate Responsibility department and regularly reports to the Audit Committee of the Board of Directors. In the past 12 years, our ILS program has evolved. Like many other companies that started similar programs in the 1990s, we initially focused on establishing a core set of critical standards, working with licensees, vendors and factories to promote their implementation and assessing compliance. All of these actions gave us insight into common labor problems at factories around the world, as well as issues specific to particular countries and regions. But with a very large number of factories to monitor as our businesses and needs grew � a number that changes constantly as new factories enter the system and older factories move on to other work -- we learned there are limits on our ability to ensure sustained and consistent compliance. We have sought to understand the roots of the problem by working with external stakeholders as well as other brands, and we have begun to identify ways beyond traditional compliance approaches to promote ongoing, steady and responsible working conditions. While continuing factory assessments, we are dedicating resources increasingly to activities that lead more directly to improved conditions in factories within our sphere of influence. We have also expanded our participation in collaborative efforts that address systemic issues and seek to raise common standards. Working with Licensees and VendorsWe have a large portfolio of intellectual property (characters, stories, images, logos) that attracts a range of licensees and vendors interested in producing and marketing products bearing our characters, stories, songs and brand names. These products encompass a wide range of industries, including apparel, footwear, toys, published materials, food, CDs and DVDs, home furnishings and electronics, among others. We have granted rights to approximately 8,000 businesses to use our intellectual property in the manufacture of such products. In addition to many large companies and retailers, our licensees and authorized vendors include many medium-sized and small companies globally. Many Disney-branded products are not, in fact, manufactured by or for The Walt Disney Company. These are licensed products handled through our licensing operations in Disney Consumer Products, ABC, ESPN and other business units, which work with licensees, vendors, publishers and retailers to manufacture, distribute and sell branded products in operations not owned or operated by The Walt Disney Company. Our Studio Entertainment, Parks and Resorts, Media Networks and Disney Interactive Media Group businesses also source Disney merchandise for promotional purposes or for sale in retail outlets and other venues that we own, operate or license. We use the term "vendor" to refer to a supplier from whom we obtain products directly (for example, for sale at our theme parks), and "licensee" when we refer to other businesses who obtain the rights (a license) to produce and sell products bearing Walt Disney Company brands, characters or other intellectual property. 
For further discussion of the company's operations, including our supply chain, please visit the Content and Products section.  |