By Christmas next year, most major toy brands, accounting for at least 60 per cent of the US toy market, will require their toys to be manufactured according to a code of conduct set by the International Council of Toy Industries (ICTI), said Thomas Conley, president of the Toy Industry Association of the US.
These companies, including the toy industry's top two, Mattel and Hasbro, would not buy from manufacturers not certified with the ICTI code, which covers pay, working hours and safety, Mr Conley said.
Hasbro chairman Alan Hassenfeld conceded the ICTI code was drafted in response to concerns over negative media coverage.
"We are under the gun to act responsibly now, not later. The world is watching us - US government bodies, NGOs," said Mr Hassenfeld.
Mr Hassenfeld believes the industry needs to face up to criticism and look to the benefits of acting responsibly.
"Anyone in the industry who thinks they are lily-white is living in a dream world. None of us, whether we like it or not, are innocent," he said during a recent visit to the Hong Kong Toys & Games Fair.
Mr Hassenfeld confessed his company was guilty of sins of omission, allowing wrongdoing without realising it. A Chinese manufacturer supplying to Hasbro was found to be violating labour rights by a non-governmental organisation last year, he said.
The NGO was at first reluctant to name the manufacturer, for fear the US toy giant would stop doing business with it and cause its workers to lose jobs. Hasbro made an agreement with the NGO to continue taking orders from that factory before the NGO named the company.
Hasbro then visited one facility of the manufacturer and found no violations. But the manufacturer had another facility where there were violations, as Hasbro's inspectors later found out.
"We were unhappy at being lied to, but we worked with the factory to solve the problems. We told them if they didn't comply in the next spot audit, we would not work with them any more," Mr Hassenfeld said.
"Will people cheat and try to pay tea money to get ICTI certificates? Yes. I'm not that naïve to believe it will not happen," said Mr Hassenfeld. "With ICTI, will we get rid of all violations? No, but we can make it a lot less."
Mr Hassenfeld said: "I see a big improvement if we all agree to work only with factories that are ICTI-approved and obey the laws of China. It's a legacy I'd like to leave."