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The Walt Disney Company (Company) is committed to the promotion and maintenance of responsible international labor practices in its licensing and direct sourcing operations throughout the world. Toward this end, we have implemented a wide-ranging International Labor Standards (ILS) program centered on the Company's Code of Conduct for Manufacturers (Code). The practices outlined in the Code are reinforced through our monitoring activities, as well as key programs designed to provide and support education and cooperation, and an increasing emphasis on collaborative efforts.
Established in 1996, the Code sets forth our requirements for manufacturers of Disney-branded merchandise with respect to working conditions, compensation and benefits, working hours, nondiscrimination, health and safety, association and collective bargaining, environmental protection, compliance with law, monitoring of compliance and publication of the Code itself. The principles embodied in our Code are consistent with core conventions of the International Labor Organization (ILO). The Code has been translated into more than 50 languages and distributed to tens of thousands of licensees, vendors, factories and individual workers.
Implementation of our ILS program is subject to review and guidance by our International Labor Standards Group, formed in 1996. The Group consists of senior executives from the Company's corporate and business operations, as well as personnel directly responsible for the day-to-day conduct of the ILS program. The group is responsible for the overall direction of the ILS program, as well as assessment of ongoing educational, monitoring and remediation efforts by our own ILS team and by our licensees and vendors. In addition, the Group makes recommendations with respect to the development of strengthened policies and procedures on a Company-wide basis, including cooperative efforts with interested nongovernmental organizations. ILS activities are also reviewed with the Audit Committee of the Company's Board of Directors on a quarterly basis.
We believe that the successful implementation of our ILS program requires ongoing effective education and training of both our own employees and those of our licensees and vendors, as well as the operators of factories engaged in the production of Disney merchandise. Accordingly, we give high priority to communication and cooperation in order to promote understanding of and compliance with our requirements. Meetings and training sessions have thus become an essential part of our ILS effort. Since the inception of the program, we have hosted thousands of training sessions around the world with licensees, vendors, factories and business units, in large groups and small, and on a one-to-one basis.
We recognize that simply promulgating a statement of principles is not enough and that a code must be rigorously enforced. Toward this end, Disney commenced direct factory monitoring activities in 1997, using professional independent auditors. We augmented this external effort in 1998 with the addition of our own internal monitors, which helps us ensure consistency and quality in our monitoring activities. We believe this combination of internal and external monitoring most effectively enforces the provisions of the Code and promotes compliance with its terms. To date, we have conducted tens of thousands of factory audits and are currently monitoring in more than 50 countries around the world. Each audit involves not only a close inspection of a factory to examine working conditions, but also a review of compensation and benefit records and private interviews with factory workers.
In support of our monitoring efforts, we have developed an extensive company-wide databank that enables us to consolidate and actively manage the information gathered through our ILS program. This system maintains records on approximately 40,000 factories, more than 6,000 licensees and vendors and the many company business units operating in countries around the world. It further enables us to recognize emerging issues and problems in particular regions, and to focus our priorities on areas of highest risk.
The Company continues to advance its labor standards and related monitoring efforts through a collaborative monitoring project in China which includes a group of faith-based and socially responsible institutional investors.
When our factory audits, or information otherwise brought to us by third parties, reveal noncompliance with our Code, we seek to work with the factory concerned to remedy the situation. In most cases, we encourage the facility to develop a remediation plan to bring its operations into compliance with the Code so that manufacturing of Disney merchandise can continue. In cases where the operators of a particular facility do not develop such a plan, or fail to implement it, we will terminate our authorization of use of the factory for Disney merchandise. Except in cases of egregious violations, however, our preference is to try to bring a facility into compliance, rather than terminate it.
The economic, social and political factors that can contribute to adverse working conditions in factories around the world are obviously too broad and powerful for any one company to overcome. While we believe our ILS program is a sound approach to the promotion of responsible working conditions, we also believe that cooperation and communication among all constituencies interested in this important area offer the best long-term prospects for successful implementation of positive labor conditions. Accordingly, we encourage broad-based efforts to develop further ways to strengthen global labor standards. Click here for examples of our stakeholder collaboration efforts.
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