Chinese factory workers producing toys for Hasbro, Disney, and Mattel and are being subjected to "nightmare" working conditions in the run-up to Christmas, an investigation has alleged.
The report, titled "A Nightmare for Workers," shows findings from campaign groups China Labor Watch, ActionAid, CiR, and Solidar Suisse, who sent undercover investigators to four factories that produced toys sold at Walmart, Costco, Target and other international retailers.
Four factories were investigated between April and September this year.
Workers endangered
Investigators found there were serious violations at the factories which were endangering workers.
In peak production season, employees were working up to 175 overtime hours per month. Chinese labour law restricts monthly overtime to 36 hours per month, but the report alleged factories would often ask local governments to implement a "comprehensive working hour scheme" to override existing legislation.
Workers were also not being given the legally required 24-hour safety training before commencing work, meaning they were unaware of how to protect themselves from toxic chemicals. The investigation also showed that employers were failing to provide them with the necessary safety equipment to prevent contact with those chemicals.
According to Solidar Suisse, workers often handled chemicals such as benzene, which has been linked to poisoning and leukaemia.
Investigators also found that workers were being forced to sign blank employment contracts and were provided with poor living quarters, which often housed eight people in one room with unsanitary facilities and no hot water.
Companies respond
Hasbro confirmed in an email that its products were produced at two of the facilities referred to in the report.
"The allegations in the report are not substantiated by Hasbro's extensive monitoring and audits conducted throughout 2018, and both suppliers are in good standing with Hasbro's robust ethical sourcing requirements," a spokesperson told CNBC.
In an emailed statement to CNBC, a Target spokesperson said it took the allegations seriously, adding: "We expect all vendors supplying products to Target to uphold our standards and treat everyone with respect, dignity and equality."
Costco declined to comment on the report.
Spokespersons for Disney, Mattel, and Walmart were not immediately available for comment when contacted by CNBC.
The report also named Danish toy production company The Lego Group to have been associated with these factories but a spokesperson from Lego told CNBC via email that the Group does not use any of the suppliers featured in the report.
Corporate price pressure
Price pressure from multinational companies was a huge hurdle to improving Chinese workers' rights, according to the report.
"International brand companies are not accepting responsibility for the rights abuses in their supply chain," it claimed. "To meet their targets, they (use) short-term contracts with a fierce price competition and change orders on a very short-term basis. Every year many companies will request toy factories to increase their production quotas while decreasing the costs of production."
In the Wah Tung factory, an employee producing Disney's Princess Sing and Sparkle Ariel Doll would have a daily quota of up to 2,500 toys per day. They would work 26 days a month, earning $435 per month plus one cent for each doll produced. The Ariel doll currently retails on Amazon at $34.97 in the U.S.
Clarification: The story was updated to clarify a response from The Lego Group on being named in the report for its involvement with the four Chinese factories.