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Disney Reinstates Pakistan to ‘Permitted Sourcing’ List

The Walt Disney Company is making branded merchandise in Pakistan once more—but there’s a catch.

Eight years after it pulled out of the South Asian nation, citing a desire to pivot production from the “highest-risk” countries, the House of Mouse will permit its vendors and licensees to procure products from facilities enrolled in the Better Work program, an International Labor Organization (ILO)-backed venture that partners with governments, factory owners and labor groups to promote safe and competitive workplace conditions.

The program kicked off in Pakistan following the signing of a Memorandum of Understanding between the ILO and local officials. Funding for the three-year pilot, which will cover a minimum of 120 factories, is being provided by Pakistan’s Export Development Fund, the European Commission and the Australian Department of Foreign Affairs and Trade.

“Integrating Pakistan with a compliant and sustainable global value chain is one of the major targets of the present government,” Abdul Razak Dawood, advisor to the prime minister on commerce and investment, said at the signing. “By supporting Better Work, the government has provided the foundation to help Pakistan’s garment and textile industry to improve management and reporting of social compliance as per international standards.”

Better Work said it will be collaborating with individual factories, as well as the brands and retailers they supply, to address workplace challenges and ensure a more “sustainable approach” to addressing them. The program will help the sector strengthen regulatory frameworks in line with ILO conventions, as well as tackle governance gaps and issues related to freedom of association, collective bargaining and inclusive social dialogue.

“Better Work is excited to add Pakistan as a new country program for Better Work,” Conor Boyle, head of development, learning and country programs, told Sourcing Journal. “This isn’t just a factory-level intervention, but an opportunity to engage with all industry stakeholders for shared actions to create a more competitive and inclusive industry. Challenges remain—and two areas of focus for us are improving worker-management dialogue and freedom of association—but working together to ensure decent working conditions is a challenge we relish.”

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A representative from Pakistan’s ministry of commerce told Sourcing Journal that licensees and vendors sourcing from the country will be required to provide Disney’s International Labor Standards (ILS) program with access to Better Work assessment reports and improvement data on the facilities producing Disney-branded merchandise, directly participate in Better Work as either a buyer participant or buyer partner and comply with other requirements as laid out in their licensee/vendor agreement and Disney’s ILS program manual.

“The government of Pakistan is committed [to] effective implementation of international conventions/regulations particularly on human and labor rights, strengthening of occupational health and safety standards and empowering the youth through education, training and employment,” the representative said. “In this perspective, various legislations to regulate production and protect the labor force have been introduced and implemented by Pakistan.”

The Memorandum of Understanding, the representative added, signifies Pakistan’s “commitment to improve working conditions and business competitiveness in textiles and apparel supply chains [and] to ensure an inclusive and sustainable development.” The country’s authorities hope the rollout of Better Work Pakistan will help it better appeal to generalized system of preferences schemes such as the European Union’s GSP-plus and the United States’ GSP.

Pakistan’s reinstatement to Disney’s permitted countries sourcing list comes a year after the entertainment powerhouse re-added Bangladesh following a similar exile in 2013. As with Pakistan, licensees and vendors sourcing from Bangladesh must choose factories aligned with the Better Work program. In addition, those facilities must participate in a safety initiative that is “acceptable to Disney,” according to a company factsheet. Though the collapse of Rana Plaza accelerated Disney’s decision to exit Bangladesh, it had already been mulling the decision after a 2012 fire killed 112 workers. Pakistan faced its own inferno that took the lives of more than 250 workers and injured 60 others the same year.

Disney said that it employs the World Bank’s Worldwide Governance Indicators as a primary resource to identify and compare areas of risk and determine where it should focus its monitoring resources and requirements. It also refers to the U.S. Department of Labor’s List of Goods Produced by Child Labor or Forced Labor and the U.S. Department of State’s Trafficking in Persons Report to “further refine our risk assessment and help prioritize oversight.”

“This data helps us generate our permitted sourcing countries list, which determines those countries’ licensees and vendors may source from in their production of Disney-branded products,” Disney wrote in the document. “We believe this index provides a consistent and transparent basis for these determinations and helps us to more effectively focus our resources, better manage the supply chain for Disney-branded products and meet our standards in a more reliable and consistent basis in locations more likely to make continuous improvements in working conditions.”

In April, UNI Global Union named Disney among a list of brands that are “marked in their absence” in the International Accord for Health and Safety in the Textile and Garment Industry, a successor to the Accord on Fire and Building Safety in Bangladesh. The agreement is planning to expand its oversight to one other country in the next year or so, with Pakistan among the contenders. Pakistan’s labor groups have long lobbied for an Accord-like pact of their own to hold brands and retailers legally accountable for workplace conditions. Disney did not respond to a request for comment.

“The International Accord is a model for supply chain accountability in the global garment industry, allowing brands to meet their due diligence commitments and protect millions of workers making their products,” said UNI Global Union general secretary Christy Hoffman. “If brands are serious about safety, they should sign up to the Accord as the proven mechanism to improve factory conditions, prevent incidents and save lives.”