The Barbie StoryMattel vs GreenpeaceCase studyReference no 711-048-1

This case was written by Subhankar Dutta, Amity Research CentersHeadquarters, Bangalore. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of amanagement situation. The case was compiled from published sources.

© 2011, Amity Research Centers Headquarters, Bangalore.No part of this publication may be copied, stored, transmitted, reproducedor distributed in any form or medium whatsoever without the permissionof the copyright owner.

Distributed by The Case Centre North America Rest of the worldwww.thecasecentre.org t +1 781 239 5884 t +44 (0)1234 750903All rights reserved f +1 781 239 5885 f +44 (0)1234 751125

e info.usa@thecasecentre.org e info@thecasecentre.orgcase centre

711-048-1

2

The Barbie Story: Mattel vs. Greenpeace

Author: Mr. Subhankar Dutta

Abstract: Mattel, the world’s largest toy company by revenue, was engaged in a controversy with environmental organisation Greenpeace for the manufacturing process of Barbie dolls (Barbie). Universally the most popular toy, Barbie, was invented and marketed by Mattel worldwide and its commendable sales performance earned a brand name for itself. However, Greenpeace accused Mattel for illegally using the timber, woods from Indonesian rainforests for packaging and wrapping purposes of Barbie dolls thereby alleging that such activities could severely affect the environmental sustainability in the region. The environment protection group further pointed out that because of the severe deforestation in the Indonesian rainforests, the lives of many endangered species like tigers, orangutans was at stake. Therefore, Greenpeace organised an environmental campaign against Mattel, pointing out a stern message against Mattel’s Barbie. Apart from that, Greenpeace accused Indonesian paper firm Asia Pulp and Paper (APP) for sourcing the packaging paper illegally to many companies in the world at the cost of Indonesian rainforests. Countering the Greenpeace’s accusation, APP remarked that its products met all the legal necessities for all countries, including Indonesia. Moreover, the company stated that it planned to attain 100% sustainable plantation of pulp wood by 2015. On the other hand, Mattel also released an official statement, indicating its agenda for maintaining sustainable environment and revealed further that the company was in dialogue with Greenpeace regarding the issue. So, it remained to be seen whether the future of Barbie was at risk due to the environmental implications.

Pedagogical Objectives

The case study helps to understand and analyse:

The Global Toy Industry Mattel’s Business Initiatives Dilemma between Manufacturing of Barbie Dolls and the Protection of Indonesian Rainforests.

Case Study

“One thing remains constant: our commitment to creating safe, high quality and innovative toys in a responsible and ethical manner.”1

– Robert A. Eckert2

Mattel, the leader in international toy market, was in news due to the allegation made by Greenpeace3 on environmental sustainability issues related with Barbie dolls’ (Barbie) packaging process. Barbie, the most famous toy in the world, was produced by Mattel and it generated tremendous popularity among the

1 “Playing Responsibility. Mattel. 2009 Global Citizenship Report”, http://www.socialfunds.com/shared/reports/1257221473_Mattel_2009_Citizenship_Report.pdf 2 Chairman and Chief Executive Officer of Mattel. 3 Greenpeace is a non-governmental environmental organisation with offices in over 40 countries and with an international coordinating body in Amsterdam, Netherlands. It focuses work on worldwide issues such as global warming, deforestation, overfishing, commercial whaling and anti-nuclear issues.

“© 2011, Amity Research Centers HQ, Bangalore. All rights reserved.”

711-048-1

3

children throughout the world. Sensing the pulse of the market, Mattel manufactured different types of Barbie thereby promoting itself as one of the major branded toy manufacturers in the world. However, Greenpeace alleged Mattel regarding the content used in the packaging process of Barbie. In its accusation Greenpeace pointed out that Barbie’s packaging products like timbers, woods were mainly sourced from Indonesian rainforests. As a result, Indonesian rainforests faced rapid deforestation and caused significant global climate change.4 Greenpeace also conducted a forensic test with the packaging products of Barbie and the result of the test confirmed its claim regarding Mattel’s sourcing of products from Indonesian rainforests.5

As a part of their sustainable environment policy, Greenpeace began to campaign against Mattel’s packaging process for Barbie. Therefore, the environment activists of Greenpeace released a banner at the Mattel’s headquarter in El Segundo, declaring a strict message against Barbie.6 Moreover, Greenpeace accused the Indonesian paper firm Asia Pulp and Paper7 (APP) for destroying the Indonesian rainforests.8

However, APP rejected Greenpeace’s allegation, releasing an audit which claimed that all the accusations made by Greenpeace were invalid and baseless.9 On the other hand, Mattel released one official statement, claiming that it engaged in a dialogue with Greenpeace on multifarious issues related with paper sources for its manufacturing process.10 Therefore, it remained to be observed whether the future of Barbie was in jeopardy because of the environmental implications.

Global Toy Market: An Overview

Toy, one of the most common and popular universal products, possessed a vast market throughout the world. It was believed that the concept of toy was originated at the beginning of human civilization. The experts disclosed that nearly 2600 BC in ancient Sumer11, some objects (believed as toys) were found which were prepared like human and animal forms.12 Later, approximately 500 BC, the historical document revealed that yo-yos, a special type of toy made from wood, metal or painted terra-cotta, were found in ancient Greece.13 However, the experts believed that yo-yos were originally made in China at an earlier date.14 Moreover, the kite, a famous plaything, was found in China as a toy near about 1000 BC.15

Gradually, the toy market expanded throughout the world and the quality had also increased with the help of modern technologies and advanced scientific applications. International toy market, one of the booming industries in the world, recorded a surge in the sales of toys by 4.7% in 2010, amounting to $83.3 billion.16 (Exhibit I). The growth was reflected mainly due to the impeccable sales performances by the Asian countries, registering 9.2%, almost double the average total growth.17 In this respect the experts highlighted that the sales performance in the United States recorded the highest of approximately $22 billion.18 The other major countries which topped the list in accordance with their sales performance were Japan, China,

4 Vijayaraghavan Akhila, “Mattel CSR: Is it Over for Barbie?”, http://www.triplepundit.com/2011/06/mattel-csr-barbie/ 5 Taylor Michael, “Greenpeace accuses Barbie of destroying Indonesia”, http://www.reuters.com/article/2011/06/08/us-mattel-protest-indonesia-idUSTRE7571BZ20110608, June 8th 2011 6 ibid. 7 Asia Pulp and Paper (APP) is one of the largest pulp and paper companies in the world. It can produce about 2 million tons of pulp and more than 5 million tons of paper and packaging materials per year. 8 “Greenpeace accuses Barbie of destroying Indonesia”, op.cit. 9 ibid. 10 ibid. 11 Sumer was a civilization and historical region in southern Mesopotamia, modern Iraq during the Chalcolithic and Early Bronze Age. 12 “History of toys”, http://www.britannica.com/EBchecked/topic/601284/toy/274906/History-of-toys 13 ibid. 14 ibid. 15 ibid. 16 “World Toy Sales In 2010 Were $83.3 Billion, An Increase Of Nearly 5 Percent Over 2009”, http://www.npd.com/press/releases/press_110620.html 17 ibid. 18 ibid.

711-048-1

4

United Kingdom and France.19 In this regard the experts highlighted that these five countries accounted over 50% sales in international toy market.20 The sales performance of BRIC countries (Brazil, Russia, India and China) recorded a growth of 13% as well.21 In this regard the experts highlighted the sales performance of some of the major global toy manufacturers in 2010 (Exhibit II).

Exhibit I International Toy Sales in 2006-10 (In $ Billion)

Source: “Global and China Toy Industry Survey Report, 2011”, http://www.sino-report.com/b/wenti/wanju/20110418/192.html

Exhibit II The Sales Performance of Some Top International Toy Manufacturers in 2010

Company Sales Estimated by Experts for 2010

Actual Sales Attained in 2010

Increase in Percentage

Mattel $903.7 million $951.9 million 8% Hasbro $644.4 million $672.4 million 8% Lego N.A. 16 billion Kroner 37.3%

Compiled by the author from various sources

The industry experts further highlighted that Chinese toy industry was recognised as the largest toy manufacturer and exporter in the world.22 It manufactured over 2/3 of international toys thereby attaining $ 8.3 billion business turnover in 2010.23 Some of the major production and export bases of toys in China were Guangdong (specialised in electric and plastic toys), Jiangsu and Shanghai (specialised in plush toys), Shandong and Zhejiang (specialised in wooden toys).24 These Chinese provinces accounted for more than 90% of the annual sales of Chinese toys.25

Apart from China, European Union countries were also known as the main manufacturers of toys throughout the world. In this regard, the experts showed the market share of different popular toy categories in the European Union nations in 2009 (Exhibit III). The major countries in European Union which

19 ibid. 20 ibid. 21 “World Toy Sales In 2010 Were $83.3 Billion, An Increase Of Nearly 5 Percent Over 2009”, op.cit. 22 “Global and China Toy Industry Survey Report, 2011”, http://www.sino-report.com/b/wenti/wanju/20110418/192.html 23 ibid. 24 ibid. 25 ibid.

711-048-1

5

registered the higher market share of toy sales in 2009 were UK, France, Germany, Italy, Spain and the Netherlands (Exhibit IV).26 Moreover, the experts pointed out that Europe's five largest toy markets’ (UK, France, Germany, Italy and Spain) revenue soared by 5% during the first half of 2010 whereas the growth of toy market in United States remained unchanged during the same period.27 In this regard Frédérique Tutt, EuroToys analyst at NPD28, quoted “With a strong first half like the one experienced in 2010, we are confident that 2010 will record solid single digit growth in Europe.”29 He further added that, “We are currently seeing growth in each of our five key markets, and consumers seem to react well to impulse categories perhaps indicating a greater confidence into economic recovery.”30

Exhibit III Market Share of Leading Toy Categories in the European Union Nations in 2009

Infant/Pre-School Toys 19.9% Games/Puzzles 12.7% Dolls 11.5% Outdoor and Sports Toys 10.7% Vehicles 10.3% Building Sets 7.7% Action Figures and Accessories 6.8% Arts and Crafts 6.1% Plush 5.0% Youth Electronics 2.7% All Other Toys 6.6% Total 100%

Source: “2009 FACTS AND FIGURES – Toy Industries of Europe (TIE)”, http://ec.europa.eu/enterprise/sectors/toys/files/factsheets/tie_facts_and_figures_2009_en.pdf

Exhibit IV Market Share of Top European Union Countries in 2009

UK 20.5% Other Main Countries France 20.1% Belgium 2.9%Germany 16.2% Sweden 2.8%Italy 8.6% Poland 2.4%Spain 7.9% Austria 2.2%The Netherlands 4.9% Denmark 1.9% Others 21.8% Ireland 1.7%Total 100% Finland 1.5%

Portugal 1.5%Greece 1.4%

Source: “2009 FACTS AND FIGURES – Toy Industries of Europe (TIE)”, http://ec.europa.eu/enterprise/sectors/toys/files/factsheets/tie_facts_and_figures_2009_en.pdf

The United States toy industry was also regarded as one of the top leaders in children’s entertainment products in the world. Various major factors such as product designing, advanced engineering and strategic marketing helped the toy industry in United States to attain leading position in the world.31 The experts highlighted that two largest toy manufacturing companies in the United States were recognised as Mattel

26 “2009 FACTS AND FIGURES – Toy Industries of Europe (TIE)”, http://ec.europa.eu/enterprise/sectors/toys/files/factsheets/tie_facts_and_figures_2009_en.pdf 27 Dungan Ronnie, “NPD figures show European toy market outperforming US”, http://www.toynews-online.biz/news/32783/NPD-figures-show-European-toy-market-outperforming-US 28 The NPD Group, founded in 1966, is the leading global provider of consumer and retail market research information for a wide range of industries. 29 “NPD figures show European toy market outperforming US”, op.cit. 30 ibid. 31 “U.S. Department of Commerce Industry Report – Dolls, Toys, Games, and Children’s Vehicles – NAICS Code 33993”, http://www.toyassociation.org/AM/PDFs/Trends/IndustryOutlook08.pdf

711-048-1

6

and Hasbro.32,33 In addition Mattel was considered the number one toy manufacturer and marketing company in the world.34 It marketed some of the top global branded toys such as Barbie, Ken dolls, Fisher Price, Hot Wheels, Matchbox and possessed licenses for Barney, Sesame Street, and Star Wars.35 On the other hand, Hasbro marketed popular toys like Milton Bradley, Parker Brothers, Playschool, and Wizards of the Coast.36 The experts highlighted one important fact that the products of top U.S toy companies were generally manufactured abroad and most of the U.S toy manufacturers incorporated significant U.S norms on those products in terms of product designing, marketing, research and development, and corporate support functions.37 The experts further disclosed that half of the U.S toy manufacturing companies were located in states like California, New York, Ohio, Pennsylvania, Illinois, Colorado, Florida, Michigan, Missouri and Maryland.38 On the other hand the experts highlighted that the retail sales of U.S toy industry recorded $21.87 billion in 2010.39 In this regard Anita Frazier (Anita), industry analyst, the NPD Group, quoted “Looking forward to 2011, there is much optimism coming off the strong holiday performance for toys.”40 She further added that, “From our KIDS tracker, we know that toys are one of the top categories kids are spending their holiday gift cards on. With an improving economy, several movie releases, and a wide array of innovative product coming to market, 2011 looks to be another solid year for toy sales.”41

In India the growth of toy market seemed very promising as well. The experts observed that the country’s toy industry accounted for nearly INR 60 billion in 2011.42 In this regard Virbhadra Singh, Micro, Small and Medium Enterprises (MSME) minister of Government of India, quoted “Toys and games have been a part of Indian legacy and culture. The Indian civilisation has given several practical games to the world two of them - Chess and Ludo – are most commonly played.”43 He further added that, “These games are associatedwith Indian mythologies as well. Earlier they were called Parcheesi and Shatranj.”44 The minister revealedone important fact that the country possessed approximately 24 million people below the age group of 10and these substantial numbers of children could be the potential buyers of toys and games in the country.45

Therefore, the future of toy market in India looked very bright in terms of selling toys to the prospectivebuyers. In addition the Indian toy manufacturers initiated to launch environment-friendly safe-toys in future.In this regard in 2011, Raj Kumar, President of Toy Association of India46 (TAI), quoted “This year is goingto mark a strong comeback for the Indian industry as the entire industry is really focused on manufacturing'safe toys'. Green toys will be one of the important agendas as exhibitors will display a range of eco-friendlytoys and games.”47 With the collaboration of Germany, Indian toy industry planned to manufactureenvironment-friendly toys. In this respect Sonia Prashar, Director of Indo-German Chamber of Commerce48

marketing and trade fairs, quoted “As Germany is the global leader in environment-friendly technology andsolutions, the German companies can provide innovative solutions in reducing waste, providing greenmaterial for toys, knowledge on toy safety standards.”49

32 Hasbro is a multinational toy and board game company from the United States of America. It is one of the largest toy makers in the world. 33 “U.S. Department of Commerce Industry Report – Dolls, Toys, Games, and Children’s Vehicles – NAICS Code 33993”, op.cit. 34 ibid. 35 ibid. 36 U.S. Department of Commerce Industry Report – Dolls, Toys, Games, and Children’s Vehicles – NAICS Code 33993”, op.cit. 37 ibid. 38 ibid. 39 “U.S. Toy Industry Retail Sales Generated $21.87 Billion In 2010”, http://www.npd.com/press/releases/press_110127.html 40 ibid. 41 ibid. 42 “Government assures support to toy industry to compete with China”, http://articles.economictimes.indiatimes.com/2011-07-02/news/29730576_1_toys-indian-origin-china 43 ibid. 44 “Government assures support to toy industry to compete with China”, op.cit. 45 ibid. 46 The Toy Association of India (TAI) is an apex body represented by 600 industry members from all over India and accredited by government of India (Ministry of MSME). 47 “Indian toy industry to go green”, http://in.news.yahoo.com/indian-toy-industry-green-132848494.html 48 Indo-German Chamber of Commerce (IGCC) is one of the most important institutions to promote Indo-German trade relations. The chamber was founded in 1956. 49 “Indian toy industry to go green”, op.cit.

711-048-1

7

So, the toy industry seemed to be one of the prosperous sectors in the international business. The emergence of modern toys with advanced technology and environment-friendly nature attracted millions of prospective buyers throughout the world.

Mattel’s Barbie: A Snapshot

Mattel50, the largest toy company in the world, was founded by Ruth, Elliott Handler and Harold "Matt" Matson in 1945.51 The company established its headquarters in El Segundo, California.52 As of 2009 Mattel expanded business operations in 43 countries and territories, employed around 29,000 people and sold products in more than 150 nations.53 Mattel was a publicly-traded Fortune 500 company and was listed on the NASDAQ under the symbol “MAT”.54

Through its various business initiatives, gradually Mattel became the largest manufacturer, designer and marketer of toys and family products throughout the world. The company was famous for producing best-selling international toy brands like Barbie, Ken dolls, Hot Wheels, Matchbox, Radica and Tyco R/C.55 Apart from such globally-recognised toys the company manufactured Fisher-Price brand of toys, including Little People, Power Wheels and a broad collection of entertainment-based toy products.56 The experts highlighted that in 1950s Mattel sold mainly wooden and musical toys.57 Later in 1959, the company came to the limelight by promoting Barbie dolls at the Toy Fair in New York and became the popular toy manufacturing company in the world.58

Apart from its toy manufacturing business, the management of Mattel looked forward to associate with various corporate social responsibility (CSR) programmes. In this respect Robert A. Eckert, Mattel Chairman and Chief Executive Officer, quoted “We believe that making Corporate Responsibility an independent function will ensure greater accountability and oversight of our product quality, social compliance and environmental commitments.”59 As a result, the company adopted some corporate responsibility values in the organisation (Exhibit V).

50 Mattel is a combination of Elliott and Matt's names. 51 Patten Van Denise, “Mattel - A Company Profile”, http://collectdolls.about.com/od/barbiemodern/p/mattel.htm 52 “Playing Responsibility. Mattel. 2009 Global Citizenship Report”, op.cit. 53 “Playing Responsibility. Mattel. 2009 Global Citizenship Report”, op.cit. 54 ibid. 55 ibid. 56 ibid. 57 “Mattel - A Company Profile”, op.cit. 58 ibid. 59 “Playing Responsibility. Mattel. 2009 Global Citizenship Report”, op.cit.

711-048-1

8

Exhibit V Corporate Social Responsibility Mission of Mattel

Mattel’s Corporate Play Values Application To Corporate Responsibility Play to grow By committing to a sustainable future through efforts

to work smarter and reduce the company’s impact on the environment.

Play with passion By volunteering in Mattel’s communities and helping underserved children experience the joy of play.

Play fair By continually encouraging the Mattel organisation to align decision-making with the company’s values.

Play together By working with employees, partners, vendors and regulators to bring the world safe toys that grown-ups trust and children love.

Source: “Playing Responsibility – 2009 Global Citizenship Report”, http://www.socialfunds.com/shared/reports/1257221473_Mattel_2009_Citizenship_Report.pdf

The experts highlighted that Mattel was honoured for partnering with six reputed charities in the world which helped the company for making meaningful contribution to the welfare of the children throughout the world (Annexure I).

The experts further identified that Mattel gained maximum popularity throughout the world by manufacturing Barbie (Annexure II). The Barbie was originated by Ruth Handler (Co-founder of Mattel) in 1959.60 The conventional Barbie was made like the teenage fashion model. Later, the company manufactured over 125 different types of Barbie on different characters.61 After observing the craze for Barbie throughout the world the experts revealed that 90% of girls aged between 3-10 owned at least one Barbie.62 Moreover, Barbie represented 50 different nationalities around the world.63

Universally, the standard height and weight of Barbie were observed as 11.5 inches and 7.25 ounces respectively.64 In addition the experts identified some supersize Barbie dolls which were created similar to the size of a small child.65 Ken66, another most popular doll produced by Mattel, was 12 inches tall and Skipper (recognised as Barbie’s little sister) was nearly 10 inches tall as well.67 Some of Barbie’s friends and relatives such as vintage Francie and Casey possessed shorter heights (at 10.5 inches) than Barbie.68 The experts unveiled further that nearly all Barbie dolls were made of vinyl with an attempt to provide a soft feeling to the customers.69 However, very few of the Barbie dolls were made of hard vinyl and porcelain.70 The experts found another interesting fact that the manufacturer used synthetic fiber as the hair of the Barbie.71 In this regard the experts pointed out that in 1961 the red hair was applied in the Barbie’s production process for the first time.72 It was further noticed that in 1980, Mattel introduced the first African American and Hispanic Barbie to the worldwide consumers.73

The experts observed that Mattel sold the first Barbie for $3 in 1959.74 In the same year, near about 300,000 Barbie dolls were sold in the market.75 Moreover, in 1992 Mattel experienced huge sell for the

60 Bellis Mary, “The History of Barbie Dolls”, http://inventors.about.com/od/bstartinventions/a/The-History-Of-Barbie-Dolls.htm 61 ibid. 62 “By the Numbers BarbieMedia_com - The Best Doll Ever”, http://www.barbiemedia.com/?subcat=24 63 ibid. 64 “By the Numbers BarbieMedia_com - The Best Doll Ever”, op.cit. 65 Patten Van Denise, “Barbie Dolls”, http://collectdolls.about.com/od/barbiemodern/p/barbiedolls.htm 66 The Ken doll was named after Ruth Handler's son and was introduced two years after Barbie in 1961. 67 “Barbie Dolls”, op.cit. 68 ibid. 69 “Barbie Dolls”, op.cit. 70 ibid. 71 ibid. 72 “The History of Barbie Dolls”, op.cit. 73 ibid. 74 ibid.

711-048-1

9

specially manufactured Totally Hair Barbie, featuring hair from top of its head to toes.76 The experts noted further that more than 1 billion fashion apparels were developed for Barbie and its friends since 1959.77 As a result, 105 million yards of fabric was used into making Barbie and friends’ fashion materials thereby recognising Mattel one the major apparel manufacturers in the world.78 In the first quarter of 2011, the experts found that the sales of Barbie increased 14% thereby supporting Mattel to enhance the overall sales to 8%.79 In this respect the experts highlighted that Mattel’s sales grew to $951.9 million in the same period.80 Observing such growth trend in Barbie as well as Mattel’s business outlook, Gerrick Johnson, an analyst at BMO Capital Markets81, quoted “They are in the early stages of a cyclical upturn. Barbie just looks so much better.”82

Manufacturing Barbie Dolls – Environmental Implications

Mattel, the manufacturer of the most popular Barbie dolls, faced the allegation as a major environment-destroyer by environment-protection organisation Greenpeace.83 In its accusation Greenpeace pointed out that Barbie’s packaging products such as woods were mostly sourced from Indonesian rainforests.84 Using of woods and timber contributed rapid deforestation in Indonesian rainforests, affecting the environment significantly.85 As a result, some endangered animal species like tigers, orangutans faced serious ecological threat in the region.86 In this regard Bustar Maitar (Maitar), Head of Greenpeace's campaign to save the forests in Indonesia, in Jakarta, quoted “Barbie is trashing rainforests and pushing critically-endangered wildlife, like tigers, towards extinction.”87 He further cautioned Mattel regarding the matter by quoting “Mattel, which makes Barbie, must stop wrapping the world's most famous toy in rainforest destruction.”88

With the help of investigators, Greenpeace conducted forensic testing and revealed that Barbie’s packaging materials came from Indonesian rainforests.89 Therefore, Greenpeace urged Mattel to stop using illegally extracted woods from the Indonesian rainforests in their future operations.90 Although Greenpeace requested Mattel for the same, still it conducted an environmental campaign against Barbie’s manufacturing process. In this regard the experts highlighted that the green group activists of Greenpeace unfurled an embarrassing banner at Mattel’s 15-story El Segundo headquarter (Exhibit VI).91 The banner showed the picture of a scowling Ken doll with the message “Barbie: It's Over. I Don't Date Girls That Are Into Deforestation.”92 In addition, the green group, mostly famous for defending whales, quoted “Unwrap the glossy pink box and you’ll find Barbie’s dirty secret.”93 The group further added “Her packaging is made from the rainforests of Indonesia, which are being ripped down for quick profits.”94 In this regard the experts

75 ibid. 76 ibid. 77 “By the Numbers BarbieMedia_com - The Best Doll Ever”, op.cit. 78 ibid. 79 Chang Andrea, “Barbie looks good, but Mattel's first-quarter profit is down”, http://articles.latimes.com/2011/apr/16/business/la-fi-0416-mattel-earnings-20110416 80 Skariachan Dhanya, “Barbie helps Mattel win market share; shares rise”, http://www.reuters.com/article/2011/04/15/us-mattel-idUSTRE73E1NW20110415 81 BMO Capital Markets is a North American financial services provider that offers corporate, institutional and government clients access to a complete range of products and services. 82 “Barbie helps Mattel win market share; shares rise”, op.cit. 83 “Greenpeace accuses Barbie of destroying Indonesia”, op.cit. 84 ibid. 85 ibid. 86 Merchant Brian, “Evidently, Barbie Digs Deforestation: Greenpeace Exposes Mattel for Using Unsustainable Packaging”, http://www.treehugger.com/files/2011/06/barbie-digs-deforestation-greenpeace-mattel-packaging.php 87 “Greenpeace accuses Barbie of destroying Indonesia”, op.cit. 88 “Evidently, Barbie Digs Deforestation: Greenpeace Exposes Mattel for Using Unsustainable Packaging”, op.cit. 89 “Greenpeace accuses Barbie of destroying Indonesia”, op.cit. 90 “Evidently, Barbie Digs Deforestation: Greenpeace Exposes Mattel for Using Unsustainable Packaging”, op.cit. 91 ibid. 92 ibid. 93 “8 Greenpeace Activists Arrested At Mattel HQ”, http://losangeles.cbslocal.com/2011/06/07/8-greenpeace-activists-arrested-at-mattel-hq/ 94 ibid.

711-048-1

10

highlighted that such strong protest led by Greenpeace activists triggered of a global movement against Mattel with regard to paper packaging purportedly derived from Indonesian rainforests.95

Exhibit VI Banner Posted by Greenpeace at Mattel’s Headquarter

Source: Merchant Brian, “Evidently, Barbie Digs Deforestation: Greenpeace Exposes Mattel for Using Unsustainable Packaging”, http://www.treehugger.com/files/2011/06/barbie-digs-deforestation-greenpeace-

mattel-packaging.php

In addition the experts pointed out that El Segundo police arrested eight protesters in front of the Mattel’s headquarter.96 Fire trucks came down the spot and the whole area was cordoned off.97 The experts further disclosed that Mattel employees were seen very curious about the happenings and they thronged around the windows of the office building, capturing photos with their mobile phones.98 Moreover, the experts unveiled that the environmental group carried out thorough ‘in country’ investigation with necessary data thereby pointing out that Mattel, together with other toy companies such as Disney99 used packaging products developed by Indonesian paper firm Asia Pulp and Paper (APP).100 Hence, Greenpeace accused APP for destroying the Indonesian rainforests.101 In this regard Maitar, Greenpeace Indonesia forest campaigner, quoted “APP is bad news for Indonesia's forests. It treats Indonesia as nothing more than a vast disposable asset, grabbing rainforests that are vital to forest communities.”102 He continued further that, “Mattel and other toy companies like Disney have a responsibility to support clean, low carbon development. They should drop APP right now and instead support responsible Indonesian producers.”103 In its report ‘Pulping the Planet’, Greenpeace pointed out that “Corporate brands are silent partners to forest crime.”104 As a result it advised other APP customers to initiate a zero-deforestation policy in their business agenda as a major part of CSR activities.105

95 “Evidently, Barbie Digs Deforestation: Greenpeace Exposes Mattel for Using Unsustainable Packaging”, op.cit. 96 ibid. 97 ibid. 98 ibid. 99 The Walt Disney Company (Disney) is the largest media conglomerate in the world in terms of revenue. The company is best known for the products of its film studio, the Walt Disney Motion Pictures Group. 100 “Greenpeace accuses Barbie of destroying Indonesia”, op.cit. 101 ibid. 102 “Greenpeace says Barbie is forest vandal”, http://news.yahoo.com/s/afp/20110608/sc_afp/indonesiaforestryenvironmentuscompanymattelsinarmas 103 ibid. 104 “Mattel CSR: Is it Over for Barbie?”, op.cit. 105 ibid.

711-048-1

11

However, APP discarded Greenpeace’s allegation, stating that its products met the legal requirements for all countries, including Indonesia.106 In this regard Aida Greenbury, Managing Director for sustainability in APP, quoted “I was quite shocked that they attacked us. We are proud to use recycled paper and we are trying to promote the use of recycled paper.”107 Further, in a statement APP remarked that they followed the environment-friendly laws very strictly and did not entertain any unreasonable or groundless demands from any foreign-based NGOs in this regard.108 Moreover, APP released an audit, portraying against the allegations made by Greenpeace as baseless and invalid.109 In addition APP revealed that it planned to achieve 100% sustainable plantation of pulp wood by 2015.110

On the other hand Mattel released a written statement to Reuters in Los Angeles, showing its serious concerns regarding the issue. The company stated further that it engaged in communication with Greenpeace on several paper sourcing issues related with environmental sustainability.111 In this regard Mattel promoted the statement, quoted as “Playing responsibly has long been an important part of Mattel’s business practices, as evidenced by our Corporate Responsibility activities during the past decade. Over the past months, we have been in communication with Greenpeace on a variety of paper sourcing issues. We are surprised and disappointed that they have taken this inflammatory approach … We will continue to assess our paper sourcing and packaging improvements as we move forward.”112 Therefore, it remained to be observed whether the future of Barbie was in stake due to the environmental implications.

106 “Greenpeace accuses Barbie of destroying Indonesia”, op.cit. 107 “Greenpeace says Barbie is forest vandal”, op.cit. 108 “Greenpeace accuses Barbie of destroying Indonesia”, op.cit. 109 ibid. 110 ibid. 111 ibid. 112 “8 Greenpeace Activists Arrested At Mattel HQ”, op.cit.

711-048-1

12

Annexure I Mattel’s Partnerships with Six Charitable Organisations

Partnership Organisations

Course of Involvement

Mattel Children’s Hospital University of California, Los Angeles (UCLA)

Since 1998, Mattel donated more than $30 million to address the health and well being of more than 100,000 children every year. In addition, the company provided toy donations and its employees volunteered their time. In 2008, to celebrate the 10th anniversary of the partnership, Mattel pledged an additional $2 million over five years. This continued support would help to open the world’s first nano-pediatrics center for exploring the use of nano-technology to progress the future of personalised medical treatment for children.

National Association of Children’s Hospitals and Related Institutions (NACHRI)

In partnership with NACHRI, Mattel helped the health and well being of children and supported programs that could prevent, manage and treat childhood obesity. For recent past, the company made an annual donation of more than half a million dollars worth of toys, including Fisher-Price mobiles and Barbie dolls to children. These children battled against serious illnesses in 220 member children’s hospitals and pediatric units across the United States and in Canada, China, Italy and the United Kingdom.

Children Affected by AIDS Foundation (CAAF)

Since its foundation in 1993 by a Mattel employee, the company continued to help this organisation, which impacted thousands of children affected by AIDS, including orphans. Since 2005, the Mattel Children’s Foundation funded CAAF’s Latin America and Caribbean program in 16 countries. Mattel executives and employees also volunteered their time to provide leadership and to support CAAF’s ongoing operations.

Save the Children

Since 2005, Mattel worked closely with Save the Children to improve school preparedness in the United States, Africa, El Salvador and the Philippines. Additionally, Mattel provided emergency relief to support children impacted by natural disasters, such as the 2007 Southern California wildfires, the 2008 China earthquake and the Myanmar cyclone.

Special Olympics

For five years, Mattel partnered with Special Olympics to empower individuals with intellectual disabilities through sports and to advance acceptance, respect and inclusion in communities. Mattel employees around the world involved in local Special Olympics events that provided opportunities for athletic competitions and strengthened self-esteem and respect while having fun. In 2007, more than 2,000 employees volunteered as part of Team Mattel with their local Special Olympics programs and in 2008 that number grew to more than 4,000 employees supporting events in more than 30 locations.

Make-A-Wish Foundation

In 2007, Mattel added the Make-A-Wish Foundation as its sixth Signature Partner, building on a 10-year relationship in Los Angeles. Dedicated to enriching the lives of children with life-threatening medical conditions, the Make-A-Wish Foundation evolved into the largest wish-granting organisation in the world, active in 34 countries. Mattel supported $100,000 in the first year for wish-granting activities; donated 6,000 unique Barbie dolls and 6,000 custom Hot Wheels cars for every new wish child in the U.S.; and specific wishes carried out for children who were fans of Mattel toys. The company also worked with Make-A-Wish to grant wishes for children around the world. In 2009, Mattel’s support for Make-A-Wish was launched globally including the donation of 26,000 unique toys to new wish children, with the total value of the company’s global partnership exceeding $500,000.

Source: “Playing Responsibility – 2009 Global Citizenship Report”, http://www.socialfunds.com/shared/reports/1257221473_Mattel_2009_Citizenship_Report.pdf

711-048-1

13

Annexure II The Image of Traditional Barbie Doll

Source: “Barbie Doll”, http://www.imagegossips.com/wp-content/uploads/2010/10/Barbie-Doll.jpg