No plans to sue Mattel: official

PUBLISHED : Tuesday, 06 November, 2007, 12:00am
UPDATED : Tuesday, 06 November, 2007, 12:00am

The head of the fair-trade bureau in Guangdong denied yesterday that it was planning to sue US toy giant Mattel for the adverse impact of its recent massive recalls of mainland-made toys on China's exports, saying any such decision rested with individual manufacturers.

Chen Lipeng , director of the bureau, which is under the provincial Department of Foreign Trade and Economic Co-operation, said the mainland media had misunderstood his earlier remarks about exploring the possibility at a recent international legal forum. He said the bureau needed to study the issue only to be prepared in case affected manufacturers asked for advice.

'Whether to file a lawsuit against Mattel is a business action. It's absolutely inappropriate for the government to intervene in this,' Mr Chen said. 'As the head of the related department, we can provide relevant information, such as legal advice, but we are not in a position to sue.'

Stressing that the government would not encourage or discourage manufacturers to take legal action, he said any assistance that the bureau offered would be in line with World Trade Organisation principles.

Criticising Mattel's action, he said it had not only affected its relations with the Chinese manufacturers that it worked with, but had also had a negative impact on exports of mainland-made products and toys made in Guangdong. Other manufacturers were also worried that Mattel's decisions would affect their exports to other countries, he added.

Mattel launched worldwide recalls of more than 21 million mainland-made toys in a five-week period starting on August 1, many because of too much lead in the paint. Although it later apologised for damaging China's reputation because some had been recalled needlessly, industry insiders say the damage has already been done.

Mr Chen said no manufacturers had contacted the bureau to inquire about the possibility of legal action, and the bureau had not discussed the recalls with affected toy manufacturers. The Guangdong Toy Association said its members and other toymakers had no plans to sue Mattel for compensation.

Chai Kwong-wah - managing director of Lepo Toys, which has offices in Hong Kong and factories in Shenzhen - said manufacturing costs had risen because of the more stringent tests on the products imposed by China's quality-control authorities following the recalls. However, he said it was unlikely that manufacturers would take legal action because any such move would cost them their major client.