With more than 100 companies standing behind its drive to ethically retool the toy manufacturing business, the International Council of Toy Industries’ CARE Process code of compliance has come a long way in a year. But the org now needs funding and an independent governing body to keep momentum up.

CARE is designed to regulate the toy-making process worldwide through a system of factory audits and cooperation from toy companies and retailers. A full 60 of the toy companies that have agreed to participate so far are from the U.S., and pooled together, they account for 70% of State-side toy sales. Including Hasbro and Mattel, CARE’s proponents have agreed to only source toys from factories that comply with the code by the January 2006 deadline – the ultimate goal being to stop non-certified shipments from making it into the U.S. market.

Hasbro chairman Alan Hassenfeld, who also chairs the foundation’s fundraising arm, says that while CARE is well-equipped to carry out the audit process, what it needs now is a transparent system for regulating its own follow-up actions and dealing with criticism and complaints coming from sources outside the industry. The ICTI is currently combing the upper ranks of private-sector lobby groups that weigh in on the issue of toy factory conditions in hopes of finding a co-chair candidate who can set this new body up by year’s end.

In the meantime, CARE needs to raise US$5 million over the next three years to establish its financial independence from the ICTI. Hassenfeld chipped in a personal donation of US$100,000 late last year, and he secured a US$300,000 commitment from the British Toy & Hobby Association and US$600,000 from members of the Hong Kong Toy Association earlier this year. Implementing the code is not an idealistic dream, he says. ‘This is a reality, and it’s a black mark on the industry if we don’t begin to govern ourselves in an ethical, humane and proper way.’ Hassenfeld plans to use this argument in May when he lobbies the Australian Toy Association and the TIA to pony up some cash.

According to CARE president and CEO Christian Ewart, the auditing process that began a year ago is ahead of schedule. To date, 280 factories have applied to be audited by one of six accredited firms, 155 audits are underway, and 92 seal of compliance certificates have been issued.

Ewart says the process will pick up more steam as the 2006 deadline approaches. But to speed things up in the meantime, CARE is launching an educational outreach effort to preach the benefits of compliance to manufacturers and retailers. These include maintaining business relationships with member companies, and cutting down on workplace injuries and manufacturing inconsistencies. CARE received an additional US$200,000 this year from the U.S. State Department to conduct these Chinese seminars in Q3 and Q4, and the European Union is holding similar conference sessions in China this June.

Ewart says manufacturers seem open to adopting the code so far, but some of this cooperative spirit might have more to do with pressure from lobby groups about working conditions in China, where 80% of the world’s toys are made, and bad press from annual news reports on ‘Santa’s Sweatshops.’ As for retailers, Ewart says U.K. chains Argos and Mothercare have agreed to reject non-compliant toys, and discussions with Wal-Mart are ongoing. For his part, Hassenfeld is optimistic about the movement’s achievements. ‘By 2007, I think most countries will be on-board,’ he says. ‘It’s really a domino effect.’