Disney Audit Guide 2026: Brand Compliance, Ethical Sourcing

The Walt Disney Company’s International Labor Standards (ILS) Program and Supply Chain Code of Conduct set the rules every licensee and vendor must follow to produce Disney-branded products. This guide explains how the Disney audit works, what the Minimum Compliance Standard (MCS) requires, how to obtain a Facility and Merchandise Authorization (FAMA), which audit programs Disney accepts, and what happens when violations are found.

Who this applies to: Any licensee, vendor, manufacturer, or subcontractor that produces, processes, finishes, assembles, labels, prints, or packages products, components, or materials in physical form that contain, incorporate, or apply Disney intellectual property — including ABC, ESPN, Lucasfilm, Marvel, National Geographic, and Pixar.

What Is the Disney Audit (ILS Program)?

The International Labor Standards (ILS) Program is Disney’s program to foster safe, inclusive, and respectful workplaces wherever Disney-branded products and their raw materials and components are produced. It is a core part of The Walt Disney Company’s responsible supply chain efforts.

Compliance rests on two connected pillars:

• The Supply Chain Code of Conduct (“the Code”) — adopted in 1996 and updated in 2022, it sets Disney’s expectations on human and labor rights, environment, ethics, and product safety. It is available in multiple languages at impact.disney.com.
• ILS Audits — labor standards inspections used to verify that a facility meets the Minimum Compliance Standard (MCS) before and during production of Disney-branded products.

As a licensee or vendor, you are responsible for ensuring that Disney-branded products are produced in compliance with the Code and the ILS Program. The ILS Program Manual (Revised January 2024) governs these requirements.

Disney Supply Chain Code of Conduct: Core Requirements

The Code requires facilities to post a copy of it in the local language in a place readily accessible to employees at all times. Key obligations include:

The Minimum Compliance Standard (MCS)

To be authorized for Disney-branded production, every facility must meet and maintain, at a minimum, the Minimum Compliance Standard (MCS) — the minimally acceptable level of compliance with the Disney Code. To comply with the MCS, a facility must demonstrate the absence of MCS violations, which Disney considers the highest-priority and most serious labor standards issues.

A facility must also provide unrestricted access to complete and accurate information, including all physical locations, relevant documents, on-site and off-site employer-provided housing, and the opportunity for private and confidential worker interviews. Disney may adjust the MCS periodically and will reject an ILS Audit Report it reasonably believes was fraudulently obtained.

Examples of MCS violations include (but are not limited to):

• Forced labor: workers penalized for refusing overtime; restricted dormitory access; recruitment fees not reimbursed to workers.
• Child labor: employment of underage workers; inability to verify minimum age due to missing proof-of-age documents; unsafe return of underage workers.
• Health & safety: locked or obstructed emergency exits; insufficient emergency exits; failure to conduct regular evacuation drills.
• Supply chain management: subcontracting Disney-branded production without Disney’s written consent; influencing workers to give untruthful responses; failing to provide accurate records or auditor access.

Step-by-Step: How to Get Approved to Produce Disney Products

Step 1: Select Facilities in Permitted Sourcing Countries (PSC)

You may only source Disney-branded products, components, raw materials, and blank items from Permitted Sourcing Countries (PSC). Disney uses the World Bank’s Worldwide Governance Indicators (six elements) to evaluate country risk and establish the PSC list. Some PSC require ILS Audits; others do not. Products made in or sourced from any non-PSC country are not permitted.

Step 2: Declare Every Facility with a FAMA Application

Before beginning any Disney-branded production, you must declare each facility — including all subcontracted facilities — to Disney ILS by submitting a Facility and Merchandise Authorization (FAMA) Application in a timely manner. A FAMA Application is required regardless of which PSC the facility is in.

Step 3: Obtain a FAMA Before Production

After Disney reviews and approves the FAMA Application and any required ILS Audit Reports, Disney issues a FAMA. Only a FAMA issued by Disney demonstrates authorization to use a particular facility. You may not begin Disney-branded production until you receive a FAMA for that facility. A FAMA is valid only for the licensee or vendor it is issued to and expires on the earlier of: revocation by Disney, expiration/termination of your agreement with Disney, or one year from issuance.

Step 4: Conduct and Submit a Qualified ILS Audit Report

For facilities in PSC where ILS Audits are required, you must submit a qualified ILS Audit Report demonstrating MCS compliance before initial authorization and on an annual basis (or as otherwise specified by Disney) for existing authorized facilities. Check with Disney or the facility first — an existing qualified report on file may avoid a duplicate audit. Disney generally takes up to 30 days to evaluate a submitted report.

Step 5: Remediate Any MCS Violations

If an audit shows MCS violations, Disney issues an Audit Review Result. You will generally have 120 days to work with the facility to remediate the violations and submit a new qualified ILS Audit Report showing the violations are corrected and no additional MCS violations exist. Disney may specify a shorter period for egregious violations.

Step 6: Maintain Ongoing Compliance and Periodic Audits

Once authorized, you are responsible for working with the facility on continuous improvement of all working conditions and for providing periodic ILS Audits as required. The MCS is the floor — full Code compliance is the goal.

Step 7: Report Facility Changes Within 30 Days

You must notify Disney promptly — but no later than 30 days — when you stop using a facility (with no intent to use it within 12 months) or have not used a facility for 12 months with no pending order.

Qualified ILS Audits: Requirements and Accepted Programs

To be “qualified,” an ILS Audit and its report must meet these conditions:

• Timing: The audit must have been conducted no more than six months before the report is submitted to Disney, and the report must be dated after any earlier reports on file.
• Who conducts it: An approved Social Compliance Monitoring Organization (SCMO) under Disney’s ILS Audit standards; an authorized SCMO under a recognized multi-stakeholder program; or, where approved by Disney, a recognized brand/retailer/licensee/vendor program.
• Content: The report must cover the Disney Code elements (human rights, child labor, forced labor, harassment and abuse, discrimination, freedom of association, health and safety, wages and benefits, working hours, worker communications, environment, and supply chain management), show the facility’s full name/address/phone, the audit date, and the SCMO name, and be submitted in English electronically.

Disney will not accept the following in lieu of a complete ILS Audit Report: seals of compliance, facility certifications, self-assessments or self-audits, virtual audits, partial reports, ratings, or preliminary reports (including CAPAR).

Disney accepts a variety of qualified audit programs, preferring multi-stakeholder or industry initiatives such as:

• amfori BSCI (Business Social Compliance Initiative)
• Better Work Program
• Fair Labor Association (FLA)
• Fashion Jewelry and Accessories Trade Association (FJATA)
• ICTI Ethical Supply Chain Program
• Responsible Business Alliance (RBA)
• Sedex Members Ethical Trade Audit (SMETA)
• Social Accountability International SA8000
• Worldwide Responsible Accredited Production (WRAP)

Disney also reserves the right to conduct scheduled ILS Audits (with a Code of Conduct Assessment Notification, or COCAN) or unscheduled ILS Audits at any facility, anywhere in the world, and may invoice you for the cost of ILS Audits per your agreement.

Remediation, Loss of Authorization, and Reinstatement

A Facility Loss of Production Authorization (FLOPA) may occur when MCS violations are not remediated within the required time, additional MCS violations are found after an initial audit, an audit involved fraud or bribery, the facility denied auditor access, a follow-up audit could not be completed, the facility breached PSC conditions, or Disney intellectual property was used for an unauthorized purpose.

When Disney withdraws authorization, all licensees and vendors using the facility must promptly cease production and remove all Disney-branded products — including in-process goods, molds, and materials — within 30 days of Disney’s written notice. A facility that loses authorization may be considered for reinstatement typically after 12 months, at Disney’s discretion.

Better Work and Country-Specific Requirements

Disney supports the Better Work Program, a partnership between the International Labour Organization (ILO) and the International Finance Corporation (IFC). Better Work currently operates in: Bangladesh, Cambodia, Egypt, Ethiopia, Haiti, Indonesia, Jordan, Nicaragua, Pakistan, Uzbekistan, and Vietnam. Participation may lead to reduced monitoring, and in certain PSC Disney may require facilities to participate. Country-specific submission requirements vary, so consult Disney’s Country Specific Submission Requirements Supplement.

FAQ: Disney Audit Frequently Asked Questions

Conclusion

Passing the Disney audit is not a one-time event — it is an ongoing commitment to the ILS Program and the Supply Chain Code of Conduct. Secure facilities in Permitted Sourcing Countries, declare them with a FAMA Application, obtain your FAMA before production, submit qualified ILS Audit Reports on time, and remediate any MCS violations within 120 days. Treat the MCS as the floor and pursue continuous improvement toward full Code compliance.

Need help preparing for a Disney ILS audit? Our team supports licensees and vendors with gap assessments, audit readiness, corrective action plans, and accepted-program audit coordination. Contact us for expert guidance.

References

1. The Walt Disney Company. International Labor Standards Program Manual (Revised January 2024).
2. The Walt Disney Company. Supply Chain Code of Conduct (adopted 1996, updated 2022). Available at impact.disney.com.
3. The Walt Disney Company. ILS Program Manual — Appendix 3: Examples of MCS Violations; Appendix 4: The Better Work Program.