Environmental activists are keeping El Segundo-based Mattel firmly in their sights as they try to push the toymaker away from questionable logging practices in Indonesia that supply the boxes for Barbie dolls.
A few years back, Mattel recalled a million toys one of its suppliers in China had covered in lead paint. Stanford Business School lecturer Michael Marks says the supplier probably wasn't a duplicitous guy who'd cut corners. Further down the Chinese company's supply chain, someone sold it lead paint, to the shame of Mattel and the Chinese supplier.
"How could you be a better supplier than these guys were?" said Marks. "Long history of success with Mattel. A very established reputation for treating the workers well, like family. He winds up being put out of business and he winds up committing suicide, which is a pretty dramatic conclusion."
Marks says he wants students to understand that even good companies make mistakes, run into problems and have trouble sourcing supplies. Activist organizations like Greenpeace gloss over those nuances in ad campaigns like this one about Mattel's sources for cardboard packaging:
After Greenpeace publicized tests that found rainforest material in Barbie boxes, Mattel froze contracts with its Indonesian packaging suppliers. The toymaker hasn't granted interviews, it hasn't explained its future plans, and most importantly to Greenpeace, it hasn't acted alone.
"It's actually endemic to the whole toy sector," said Rolf Skar, a forests campaigner.
Skar says Greenpeace wants corrective action from Disney, Hasbro, Lego and Mattel because they're market leaders.
"Mattel is the biggest of the toymakers and they've been ignoring this problem for too long," Skar said.
The problem is logging, some of it legal in Indonesia, much of it made worse by lax enforcement, corruption and collusion with local officials.
The island where forensic tests traced Mattel's packaging is ground zero for bad practices, says the World Wildlife Fund's Linda Kramme. "Tropical forests in that region of Indonesia, especially the island of Sumatra, have a lot of pressure on them," Kramme said, "both in the pulp and paper sector and also for conversion to agricultural uses like palm oil."
Kramme says tropical hardwood forests are biodiversity hotspots. Trees store carbon dioxide, keeping greenhouse gases out of the atmosphere. Clearing them, she says, contributes to global warming.
"The biggest offender in that region is Asia Pulp and Paper and its affiliates," Kramme said. "It's part of the Sinar Mas group and they're making paper products, like packaging copy paper and toilet paper out of tiger habitat."
Asia Pulp and Paper denies that its logging is illegal. And Marks points out that Mattel probably makes thousands of products in hundreds of locations.
Toys are seasonal – manufacturers add suppliers for busy times and drop them when a product doesn't sell. Marks says that if Mattel wanted to make toys in Sumatra, few places would be in a position to supply boxes.
"Indonesia is not a country with a very well known supplier base like China is at this point," he said.
Governments haven't done well in promoting more transparency there. That's why Greenpeace has targeted Indonesia with a series of market campaigns.
Four years ago, the activist group took on Unilever, a Dutch-British consumer products company that makes household brands like Dove soaps. Unilever's vice president for sustainability, Gavin Neath, recalls a report called "Burning Up Borneo": "In that document Greenpeace made a series of allegations that were of a nature that were too serious to ignore," Neath said.
The group documented misuse in Indonesia. Neath says Unilever went to its suppliers and said, "These allegations have been made. We can't ignore them. You have to address them. And we would like to see from each of you a remediation plan."
That doesn't have to mean punishment, says Marks. He favors education, and positive reinforcement to make it stick.
"So, for example, spending time training the supplier and the supplier's suppliers. Putting in reward systems. No quality issues for a year, you get an extra bonus, that kind of thing," he said.
World Wildlife Fund's Kramme says her group prefers the carrot to the stick, too. It signed an agreement with Asia Pulp and Paper eight years ago to try to develop legal and accountable logging rules.
"We cut ties after six months because it was obvious that they weren't keeping even the commitments they had made through that collaboration," she said. "We have seen instances where companies we're working with turn around, but APP is not one of those companies."
Neath of Unilever says Greenpeace spurred his company to conduct an internal investigation. It stopped working with a company associated with Asia Pulp and Paper (and the Sinar Mas group) in Indonesia. He says Unilever officials hopes other companies take a cue from their actions.