Presentation – Assogiocattoli Milan, Italy, June 23 rd , 2010 ICTI CARE PROCESS – UPDATE & OUTLOOK 2010

1. Presentation – Assogiocattoli Milan, Italy, June 23rd, 2010 ICTI CARE PROCESS – UPDATE & OUTLOOK 2010

2. Media Coverage – International Toy Industry • 22. December 2000 – Wall Street Journal “Santas & Sweatshops” • 23. December 2001 – LA Times “Debate over Fair Labor Tag spills over to Toy Aisle” • 16. December 2002 – Reuters“North Pole leans on South China for cheap Labor” • 24. December 2002 – Independent London“Sweat Shop Hell for China – worse than ever” • 19. December 2003 – AP Wire Service “Chinese Factory Workers tell of Trouble in Toyland” • 2. September 2004 – Reuters “A report by 2 US based non-government …”

3. 26. October 2004 – Swedwatch & Swedish Fair Trade Center “Serious Violations of Workplace Legislation behind Swedish Toy Imports” • 26. November 2004 – LA Times“Sweat, Fear and Resignation amid all Toys” • 10. December 2004 – Sky News“Scandal of China’s Child Workers” • 18. August 2005 SACOM – Students and Scholars against Corporate Misbehavior “Disney’s Children’s Books made with the Blood, Sweat and Tears of Young Workers in China” • September 2005 China Labor Watch “The Toy Industry in China: Undermining Workers’ Rights and Rule of Law” Media Coverage – International Toy Industry

6. What is the ICTI CARE Process? • A single, fair, thorough and consistent monitoring program for factories. • Transparent 7 step model to achieve and maintain compliance. • Provides education and training programs to assist factories in meeting growing challenges (pricing, quality, delivery time, resources, etc…). • Oversight by multi-stakeholder governance board comprising industry, civil society and NGO’s.

7. ICP - Governance Board (January 2010 in Hong Kong)

8. Governance Board – ICTI CARE Foundation Co-Chair: Alan HassenfeldCo-Chair: Maria Livanos Cattaui Industry Arnie RubinPeter EioGary HutchensAlan Munn T.S. WongGeorge Irwin Kenneth TingGeoff Massingberd Civil Society & NGOAmir DossalJane NelsonPär StenbäckWilliam ReesePaul Rice See: www.icti-care.org/who-we-are.html

9. Why companies support the ICTI CARE Process? • Stops duplicative efforts which result in multiple auditing of the same facilities. • Creates cost saving for participating supply chain partners (factories, toy brands and retailers). • One process gives more credibility, ensures transparency and encourages collaborative efforts. • Has reliable factory monitoring program. • Highly qualified accredited auditors. • Helps factories improve management practices through remediation and training programs.

10. Factory Monitoring – Status as of April 2010 • Registered Factories: 2.333 representing approximately 1.70 million workers • Seal of Compliance: 1.169 factories (76.2% categorized) • Class A: 90% • Class B: 8% • Conditional: 2% • Audits conducted: 799 • XXX regular audits • XXX QC audits • Audit Man-days: 2.208 • 2.165 regular audits • 106 QC audits • 756 • 43

11. Some Statistics – Seals of Compliance issued Number of Factories (Budget) YEARS

12. Some Statistics – Audits and Man-days Number of Audits/ Man-days (Budget) YEARS

13. Some Statistics – QC Audits Number of Audits YEARS

14. QC Audit Update 2010 • 2010Q1 2010: 31 QC Audits conducted 1 factory with NO critical findings 5 refused probationary agreement • Comparing QC audit result with regular audits – requesting investigation in case of differences • Removal of three auditors upon our specific request for quality and integrity issues

15. Some Statistics – Committed Toy Brands (Budget) YEARS

16. Growing Acceptance… • Date Certain (toy brands) • 622 toy brands have signed up – covering more than 75% of the global toy business! • Four National Toy Associations have made the Date Certain Commitment a firm condition for membership (Denmark, Germany, Sweden and the US). United Kingdom as of 01.01.2011; France and Spain considering it from 01.01.2012 • Convergence Program (retailers and licensors) • Dollar General (US) just signed MoU’s; MoU sent to Sainsburys (UK); Jumbo (The Netherlands) expected from 01.01.2011.

17. Brands and retailers See full list on www.icti-care.org And 630 more……

18. Education and Training • Factory Workers • GTZ Project on schedule (Factory Worker card in production; distribution to start in June 2010). • Factory Management • Existing material and program reviewed; search for additional training partners under way. • Auditor Training • Review of auditor syllabus; ongoing training (accreditation and refresher courses). • Buyer Training • Draft received from world largest retailer.

19. Education and Training Program

20. Education and Training Program Factory Worker Card:

21. ICP – Chinese Website 21

22. Kick off Meeting GTZ Project January 2010 in Beijing

23. Communication and Outreach • News Flashes issued in January, February and April • Added Chinese section on ICP website • Babson Case Study in progress • Meetings with factories, toy associations, audit firms, NGO’s and Government • ICP team to present at the British, European, French and Italian toy associations • 3 Seminars held at local Chinese toy associations

24. New ICP Technical Advisory Council Manufacturers Brands Retailers/Licensors Blue Box Hasbro Disney Jetta Mattel Sainsbury Lerado TOMY Top-Toy Thundertiger Vivid Imagination TRU Wynnewood Zapf Creation AG

25. Outlook 2010 • Launch of RFP for Audit Firms • Strengthen Auditor Training • Revision of ICP Audit Checklist • Selection and implementation of new IT Database System • Continue Communication and Outreach (news flashes, seminars, toy magazine articles, auditor guidance handbook) • Support Establishment of an Auditor Monitor Mechanism

26. Thank you for your attention!