child labour case study example

• IKEA Case: One Company’s Fight to End Child Labor
• Markkula Center for Applied Ethics
• Focus Areas
• Business Ethics
• Business Ethics Resources

IKEA Case: One Company’s Fight to End Child Labor

A business ethics case study.

In this business ethics case study, Swedish multinational company IKEA faced accusations relating to child labor abuses in the rug industry in Pakistan which posed a serious challenge for the company and its supply chain management goals.

Empty garage with a highlighted walking path in front of an IKEA.

Photo credit: mastrminda/Pixabay

Yuvraj Rao '23 , a 2022-23 Hackworth Fellow at the Markkula Center for Applied Ethics graduated with a marketing major and entrepreneurship minor from Santa Clara University.

Introduction

IKEA is a Swedish multinational company that was founded in 1943 by Ingvar Kamprad. [1] The company mainly provides simple, affordable home furniture and furnishings, and it pioneered DIY, or do it yourself, furniture. Kamprad originally sold binders, fountain pens, and cigarette lighters, but eventually expanded to furniture in 1948. According to the Journal of International Management, in 1953, Kamprad offered products that came as “a self assembled furniture” for the lowest price, which ultimately became a key part of IKEA’s value proposition going forward. In 1961, IKEA started to contact furniture factories in Poland to order chairs from a factory in Radomsko. [2] Outsourcing to Poland was mainly due to other Swedish furniture stores pressuring Swedish manufacturers to stop selling to IKEA. In the mid 1960’s, IKEA continued its supplier expansion into Norway, largely because IKEA didn’t want to “own their own line of production,” [3] and Germany due to its ideal location (downtown, suburban area) to place an IKEA store. Given IKEA’s suppliers were now not just in Sweden, it led to an increased importance on developing strong relationships with its suppliers.

In the following decades, IKEA continued its expansion and solidified its identity as a major retail outlet with parts being manufactured around the world. By the mid 90’s, IKEA was the “world’s largest specialized furniture retailer with their GDP reaching $4.5 billion in August of 1994.” [4] It also worked with 2,300 suppliers in 70 different countries, who supplied 11,200 products and had 24 “trading offices in nineteen countries that monitored production, tested product ideas, negotiated products, and checked quality.” [5] IKEA’s dependence on its suppliers ultimately led to problems in the mid 1990’s. At this time, IKEA was the largest furniture retailer in the world, and had nearly “100 stores in 17 countries.” [6] Also during this time, a Swedish documentary was released that highlighted the use of child labor in the rug industry in Pakistan, which impacted IKEA given it had production there. The rug industry in particular is extremely labor intensive and is one of the largest “export earners for India, Pakistan, Nepal and Morocco.” Here, children are forced to work long hours for very little pay (if there is any pay at all). In some cases, their wages are only enough to pay for food and lodging. In cases where children are not paid, the wages are used by the loom owner to pay the parents and agents who brought the children to the factories. Additionally, the work the children must do comes with a lot of risk. More specifically, children face risks of diminishing eyesight and damaged lungs from “the dust and fluff from the wool used in the carpets.” [7] As a result of these working conditions, many of these children are very sick when they grow up. Despite these terrible conditions, it isn’t that simple for families not to send children to work at these factories. A lot of the parents can’t afford food, water, education, or healthcare, so they are often left with no choice but to send their children to work for an additional source of income. [8]

 IKEA and Child Labor Accusations

The accusations of child labor in the rug industry in Pakistan posed a serious challenge for IKEA and its supply chain management goals. It would need to address the serious issues of alleged injustice for the sake of its reputation and brand image. Additionally, as IKEA also had suppliers in India, it would need to be in compliance with India’s “landmark legislation act against child labor, the Child Labor (Prohibition and Regulation) Act of 1986.” [9]

As a result of these accusations, IKEA ultimately ended its contracts with Pakistani rug manufacturers, but the problem of child labor in its supply chain still persisted in other countries that were supplying IKEA. Marianne Barner, the business area manager for rugs for IKEA at the time, stated that the film was a “real eye-opener…I myself had spent a couple of months in India for some supply chain training, but child labor was never mentioned.” [10] She also added that a key issue was that IKEA’s “buyers met suppliers at offices in the cities and rarely visited the actual production sites.” [11] The lack of visits to the actual production sites made it difficult for IKEA to identify the issue of child labor in these countries.

To make matters worse, in 1995, a German film “showed pictures of children working at an Indian rug supplier... ‘There was no doubt that they were rugs for IKEA,’ says business area manager for textiles at the time, Göran Ydstrand.” [12] In response to these accusations, Barner and her team went to talk to suppliers in Nepal, Bangladesh, and India. They also conducted surprise raids on rug factories and confirmed that there was child labor in these factories. The issue of child labor, along with the accusations of having formaldehyde (a harmful chemical) in IKEA’s best selling BILLY bookcases and the discovery of unsafe working conditions for adults (such as dipping hands in petrol without gloves), led to increased costs and a significantly damaged reputation for the company.

It was later discovered that the German film released in 1995 was fake, and the renowned German journalist who was responsible for this film was involved in “several fake reports about different subjects and companies.” [13] IKEA was now left with three options. First, some members of IKEA management wanted to permanently shut down production of their rugs in South Asia. Another option was to do nothing and proceed with its existing practices now that it was announced that the film was fake. The third option was that the company could attempt to tackle the issue of child labor that was clearly evident in its supply chain, regardless of whether the film was fake or not. IKEA ultimately decided to opt for the third option, and its recent discoveries would eventually help guide the policies the company implemented to address these issues, particularly child labor in India.

Steps Taken to Address Child Labor in the Supply Chain

IKEA took multiple steps to deal with its damaged reputation and issues of child labor in its supply chain. One way in which it did this was through institutional partnerships. One such partnership was with Save the Children, which began in 1994. According to Save the Children’s website, one of the main goals of their partnership is to realize children's “rights to a healthy and secure childhood, which includes a quality education. By listening to and learning from children, we develop long-term projects that empower communities to create a better everyday life for children.” [14] Furthermore, the partnership is intended to “drive sustainable business operations across the entire value chain.” [15] Together, IKEA and Save the Children are focused on addressing the main causes of child labor in India’s cotton-growing areas. [16] Save the Children also advised IKEA to bring in an independent consultant to ensure that suppliers were in compliance with their agreements, which further improved IKEA’s practices in its supply chain. IKEA also partnered with UNICEF to combat child labor in its supply chain. According to the IKEA Foundation, in 2014, IKEA provided UNICEF with six new grants totaling €24.9 million with a focus “on reaching the most marginalized and disadvantaged children living in poor communities and in strengthening UNICEF’s response in emergency and conflict situations.” Additionally, five of the six grants were given to help programs in “Afghanistan, China, India, Pakistan, and Rwanda,” with a “focus on early childhood development, child protection, education, and helping adolescents to improve their lives and strengthen their communities.” [17]

Next, IKEA and Save the Children worked together to develop IWAY, which was launched in 2000. [18] IWAY is the IKEA code of conduct for suppliers. According to the IKEA website, “IWAY is the IKEA way of responsibly sourcing products, services, materials and components. It sets clear expectations and ways of working for environmental, social and working conditions, as well as animal welfare, and is mandatory for all suppliers and service providers that work with IKEA.” [19] In addition, IWAY is meant to have an impact in the following four areas: “promoting positive impacts on the environment,” “securing decent and meaningful work for workers,” “respecting children’s rights”, and “improving the welfare of animals in the IKEA value chain.” [20] IWAY is used as a foundation to collaborate with IKEA’s suppliers and sub-contractors to ensure supply chain transparency.

As mentioned previously, one of the main goals of IKEA’s partnership with Save the Children was to address child labor in India’s cotton-growing areas. To do this, IKEA and Save the Children developed a program that would ultimately help more than 1,800 villages between 2009 and 2014. More specifically, the program moved nearly 150,000 children out of child labor and into classrooms. Also, as a result of this program, more than 10,000 migrant children “moved back into their home communities.” [21] Last but not least, the program trained almost 2,000 teachers and 1,866 Anganwadi workers (whose duties include teaching students and educating villagers on healthcare [22] ) in order to provide each village with a community leader. This was to ensure that the community had a skilled leader to assist in educating the villagers. In 2012, the IKEA Foundation and Save the Children announced that they would expand with new programs in Punjab, Haryana, and Rajasthan. This joint program illustrates IKEA’s commitment to improving communities in addition to helping children go to school.

Conclusion & Looking Ahead

IKEA has taken numerous steps to ensure that suppliers abide by the IWAY Code of Conduct. Companies around the world can learn from the policies IKEA has put in place to ensure that each company has control and complete oversight over their supply chains, which can lead to a more transparent and ethical supply chain. According to The IKEA WAY on Purchasing Products, Materials and Services, one way in which IKEA does this is by requiring all suppliers to share the content of the code to all co-workers and sub-suppliers, thus leading to more accountability among the company's suppliers. IKEA also believes in the importance of long term relationships with its suppliers. Therefore, if for some reason, a supplier is not meeting the standards set forth by the code, IKEA will continue to work with the supplier if the supplier shows a willingness to improve its practices with actionable steps to complete before a specified period of time. [23]

Additionally, during the IWAY implementation process, IKEA monitors its suppliers and service providers. To do this, IKEA has a team of auditors who conduct audits (both announced and unannounced) at supplier facilities. The auditors are also in charge of following up on action plans if suppliers are failing to meet the agreed upon standards specified by IWAY. Along with this, “IKEA…has the Compliance and Monitoring Group, an internal independent group that is responsible for independent verification of implementation and compliance activities related to IWAY and Sustainability.” [24] IKEA also has independent third party teams who conduct inspections on behalf of IKEA. [25] By conducting audits and putting together teams to ensure cooperation from suppliers throughout the supply chain, companies can be better equipped to prevent unethical practices in the production of goods and services. In Ximeng Han’s Analysis and Reflection of IKEA’s Supply Chain Management, Han highlights IWAY’s importance in maintaining links with IKEA’s suppliers. [26] Therefore, IWAY plays a crucial role in ensuring supply chain transparency and in building a more ethical and sustainable supply chain.

In addition to all of the policies IKEA has put in place to address issues in its supply chain, the company has also donated a lot of money to combat child labor in India. More specifically, according to an IKEA Foundation article written in 2013, “Since 2000, the IKEA Foundation has committed €60 million to help fight child labour in India and Pakistan, aiming to prevent children from working in the cotton, metalware and carpet industries.” [27] Furthermore, in 2009, the company announced that it would donate $48 million to UNICEF to “help poor children in India.” [28]

IKEA’s goal to completely eliminate child labor from its supply chain is an ongoing battle, and it is still committed to ensuring that this is ultimately the case. More specifically, it is extremely difficult to completely eliminate child labor from a company’s supply chain because of the various aspects involved. According to a report published in 2018 by the International Labour Organization, these aspects include a legal commitment, building and “extending” social protection systems (including helping people find jobs), “expanding access to free, quality public education,” addressing supply chain issues, and providing more protection for children in general. [29] Furthermore, Han points out the potential downsides that could arise as a result of having a global supply chain like IKEA does. Given IKEA is an international retailer, the company “has to spend a lot of time, money and manpower to enter new markets due to the different cultures, laws and competitive markets in different regions, and there is also a significant risk of zero return.” [30] Han also argues that the COVID-19 pandemic showed IKEA’s and many other companies’ inability to respond to “fluctuations in supply and demand,” primarily due to inflexible supply chains. [31] This information points out the various aspects that need to align in order to completely end the issue of child labor throughout the world, as well as the difficulties of having a global supply chain, which is why child labor is so difficult to completely eliminate.

Specific to IKEA’s actions, in 2021, IKEA announced three key focus areas for its action pledge: “Further integrating children’s rights into the existing IKEA due diligence system (by reviewing IWAY from a child rights’ perspective in order to strengthen the code),” “accelerating the work to promote decent work for young workers,” and partnering “up to increase and scale efforts.” [32] IKEA’s fight to end child labor in India highlights the importance of supply chain transparency and putting policies in place that ensures cooperation from suppliers and all parties involved. Additionally, in a Forbes article written in 2021, “According to the data from the OpenText survey…When asked whether purchasing ethically sourced and/or produced products matters, 81 percent of respondents said yes.” [33] Steve Banker, who covers logistics and supply chain management, also adds, “What is interesting is that nearly 20 percent of these survey respondents said that it has only mattered to them within the last year, which indicates that the Covid pandemic, and some of the product shortages we have faced, has made consumers re-evaluate their stance on ethical sourcing.” [34] These results confirm that customers are now considering how a product was sourced in their purchasing decisions, which makes it even more important for IKEA to be transparent about its efforts to eliminate child labor from its supply chain. Furthermore, the company’s open commitment to eliminating child labor and helping communities in India is beneficial in maintaining a positive relationship with its stakeholders.

The increase in globalization has made it even more essential for companies to monitor their supply chains and have complete oversight over business practices. IKEA is one of the companies leading the way in building a more ethical and sustainable supply chain, but more companies need to follow suit and implement policies similar to IWAY that holds all parties in the supply chain accountable for their actions. Through supply chain transparency and accountability, companies will likely be better equipped to handle issues that arise throughout their respective supply chains. Furthermore, by implementing new policies, conducting audits, and maintaining close communication with suppliers, companies can work to eliminate child labor in their supply chains and put children where they belong: in school.

Reflection Questions:

• What does this case teach you about supply chain ethics?
• What are some of the ways in which management/leaders can ensure compliance of the standards set forth by a company in terms of supplier behavior and ethical sourcing?
• Who is primarily responsible for ensuring ethical behavior throughout the supply chain? Is it the company? The suppliers? Both?
• How can companies utilize the various platforms and technologies that exist today to better understand and oversee their supply chains? 
• IKEA has taken numerous steps to address child labor in its supply chain. Do you think every business working in a context that may involve child labor has a duty to act in a similar way? Why or why not?

Works Cited 

“ About Ikea – Our Heritage .” IKEA.

“Anganwadi Workers.” Journals Of India , 16 June 2020. 

Banker, Steve. “ Do Consumers Care about Ethical Sourcing? ” Forbes , 9 Nov. 2022.

Bharadwaj , Prashant, et al. Perverse Consequences of Well-Intentioned Regulation ... - World Bank Group .

“ Child Labor in the Carpet Industry Rugmark: Carpets: Rugs: Pakistan .” Child Labor in the Carpet Industry RugMark |Carpets | Rugs | Pakistan .

“ Creating a Sustainable IKEA Value Chain with Iway. ” Sustainability Is Key in Our Supplier Code of Conduct .

“ Ending Child Labour by 2025 - International Labour Organization .” International Labour Organization .

“ Film on Child Labour Is Eye-Opener for IKEA .” IKEA Museum , 31 Mar. 2022.

Foundation , ECLT. “ Why Does Child Labour Happen? Here Are Some of the Root Causes. ” ECLT Foundation , 17 May 2023.

Han, Ximeng. “ Analysis and Reflection of IKEA’s Supply Chain Management. ” Analysis and Reflection of IKEA’s Supply Chain Management | Atlantis Press , 27 Dec. 2022.

“ Human Rights and Global Sourcing: IKEA in India. ” Journal of International Management , 13 May 2011.

“ IKEA and IKEA Foundation .” Save the Children International .

“ IKEA Foundation Contributes €24.9 Million to UNICEF to Help Advance Children’s Rights. ” IKEA Foundation , 26 May 2020.

“ IKEA Foundation Helps Fight the Roots Causes of Child Labour in Pakistan .” IKEA Foundation , 18 Feb. 2013.

“ Ikea Gives $48 Million to Fight India Child Labor .” NBC News , 23 Feb. 2009.

“ IKEA Supports 2021 as the UN International Year for the Elimination of Child Labour. ” About IKEA.

The Ikea Way on Purchasing Products , Materials and Services .

Jasińska, Joanna, et al. “ Flat-Pack Success: IKEA Turns to Poland for Its Furniture. ” – The First News .

Thomas , Susan. “ IKEA Foundation Tackles Child Labor in India’s Cotton Communities .” Boston College Center for Corporate Citizenship , 15 July 2014.

[1] “About Ikea – Our Heritage.” IKEA .

[2] Jasińska, Joanna, et al. “Flat-Pack Success: IKEA Turns to Poland for Its Furniture.” – The First News .

[3] “Human Rights and Global Sourcing: IKEA in India.” Journal of International Management , 13 May 2011.

[4] “Human Rights and Global Sourcing: IKEA in India.” Journal of International Management , 13 May 2011.

[5] “Human Rights and Global Sourcing: IKEA in India.” Journal of International Management , 13 May 2011.

[6] “Film on Child Labour Is Eye-Opener for IKEA.” IKEA Museum , 31 Mar. 2022.

[7] “Child Labor in the Carpet Industry Rugmark: Carpets: Rugs: Pakistan.” Child Labor in the Carpet Industry RugMark |Carpets | Rugs | Pakistan .

[8] Foundation , ECLT. “Why Does Child Labour Happen? Here Are Some of the Root Causes.” ECLT Foundation , 17 May 2023.

[9] Bharadwaj , Prashant, et al. Perverse Consequences of Well-Intentioned Regulation ... - World Bank Group .

[10] “Film on Child Labour Is Eye-Opener for IKEA.” IKEA Museum , 31 Mar. 2022.

[11] “Film on Child Labour Is Eye-Opener for IKEA.” IKEA Museum , 31 Mar. 2022.

[12] “Film on Child Labour Is Eye-Opener for IKEA.” IKEA Museum , 31 Mar. 2022.

[13] “Film on Child Labour Is Eye-Opener for IKEA.” IKEA Museum , 31 Mar. 2022.

[14] “IKEA and IKEA Foundation.” Save the Children International .

[15] “IKEA and IKEA Foundation.” Save the Children International .

[16] “IKEA and IKEA Foundation.” Save the Children International .

[17] “IKEA Foundation Contributes €24.9 Million to UNICEF to Help Advance Children’s Rights.” IKEA Foundation , 26 May 2020.

[18] “IKEA and IKEA Foundation.” Save the Children International .

[19] “Creating a Sustainable IKEA Value Chain with Iway.” Sustainability Is Key in Our Supplier Code of Conduct .

[20] “Creating a Sustainable IKEA Value Chain with Iway.” Sustainability Is Key in Our Supplier Code of Conduct .

[21] Thomas, Susan. “IKEA Foundation Tackles Child Labor in India’s Cotton Communities.” Boston College Center for Corporate Citizenship , 15 July 2014.

[22] “Anganwadi Workers.” Journals Of India , 16 June 2020.

[23] The Ikea Way on Purchasing Products, Materials and Services .

[24] The Ikea Way on Purchasing Products, Materials and Services .

[25] The Ikea Way on Purchasing Products, Materials and Services .

[26] Han, Ximeng. “Analysis and Reflection of IKEA’s Supply Chain Management.” Analysis and Reflection of IKEA’s Supply Chain Management | Atlantis Press , 27 Dec. 2022.

[27] “IKEA Foundation Helps Fight the Roots Causes of Child Labour in Pakistan.” IKEA Foundation , 18 Feb. 2013.

[28] “Ikea Gives $48 Million to Fight India Child Labor.” NBC News , 23 Feb. 2009.

[29] “Ending Child Labour by 2025 - International Labour Organization.” International Labour Organization .

[30] Han, Ximeng. “Analysis and Reflection of IKEA’s Supply Chain Management.” Analysis and Reflection of IKEA’s Supply Chain Management | Atlantis Press , 27 Dec. 2022.

[31] Han, Ximeng. “Analysis and Reflection of IKEA’s Supply Chain Management.” Analysis and Reflection of IKEA’s Supply Chain Management | Atlantis Press , 27 Dec. 2022.

[32] “IKEA Supports 2021 as the UN International Year for the Elimination of Child Labour.” About IKEA .

[33] Banker, Steve. “Do Consumers Care about Ethical Sourcing?” Forbes , 9 Nov. 2022.

[34] Banker, Steve. “Do Consumers Care about Ethical Sourcing?” Forbes , 9 Nov. 2022.

Child Labor 101: Meaning, Examples, Learning Opportunities

Around the world, children as young as 5 years old are working in mines, fields, and factories. They’re exposed to brutal working conditions like long hours, toxic materials, sexual exploitation, pollution, and dangerous equipment. While child labor has decreased over the decades, there are still millions of kids facing exploitation. In this article, we’ll define child labor, provide eight examples of the most common forms, and explain where you can find more learning opportunities about child labor.

Child labor disrupts a child’s education, damages their health, and exposes them to violence, sexual abuse, and exploitation. The most common types include debt bondage, sex trafficking, armed conflict, forced criminal activities, agriculture, mining, factory work, and domestic work.

What’s the meaning of child labor?

The International Labour Organization (ILO) defines “child labor” as work that takes a young person’s childhood away from them. The work is “mentally, physically, socially, or morally dangerous and harmful” to kids and interferes with their education. As an example, putting a 15-year-old to work in a salt mine for 12 hours a day is child labor, while hiring a 15-year-old to wash dishes after school is most likely not. Laws vary from country to country. The United States has regulations regarding what hours 14 and 15-year-olds can work, while certain occupations (like power-driven bakery machines and power-driven forklifts) are completely prohibited for all minors .

The Convention on the Rights of the Child (CRC), which was adopted in 1989, states that all ratifying parties must recognize a child’s right to be protected from economic exploitation and performing hazardous work. It also requires State Parties to take legislative, administrative, social, and educational measures to enforce this right. The CRC is the most widely ratified human rights treaty, although the United States and Somalia have not ratified it. In 2020, the ILO announced that all ILO party countries had ratified Convention No. 182 on the Worst Forms of Child Labor, which provides for the elimination and prohibition of child labor like slavery, trafficking , armed conflict, pornography, and illegal activities. Convention No. 182, which was adopted in 1999, is the fastest ratified agreement in UN history.

How long has child labor existed?

Child labor has a long history, and for centuries, it wasn’t considered exploitative. From a very young age, children were expected to contribute to their families and communities. Why? The concept of childhood wasn’t as accepted as it is today. As the philosophy around children and childhood changed, so did society’s view of child labor. Child labor laws were passed and rates of child labor fell around the world. It’s still prevalent in areas affected by poverty. In 2016, global estimates found that ⅕ of kids in Africa are involved in child labor.

What are examples of child labor?

Child labor refers to any exploitative and harmful labor performed by a child. Here are eight examples:

#1. Debt bondage

When people go into debt and can’t pay with money or goods, the person owed the money may suggest that family members – including children – work for very little or for nothing to pay off the debt. This is often a trick as the debt-holder has no intention of lifting the debt or ending the forced labor. Because the debt can never be paid, debt bondage can keep multiple generations enslaved. This form of exploitation was one of the most prevalent types of forced labor in 2016 .

#2. Child sex trafficking

Child sex trafficking is the buying, selling, and moving of children for sexual exploitation. Precise numbers are hard to calculate, but a 2016 UNODC Global Report found that women and girls are trafficked more often for sexual slavery and marriage . Armed groups are a common perpetrator, although experts say trafficked children are very likely to know or even be related to their exploiters.

#3. Armed conflict

According to UNICEF, more than 105,000 children were exploited in armed conflict between 2005 and 2022 . Because of how difficult it is to track child labor statistics, the number is likely higher. Children in armed conflict are used as soldiers, scouts, cooks, guards, messengers, and more. Some are abducted or threatened into work, while others are trying to earn money for their families. Regardless of the specifics, using children for any reason in armed conflict is a major violation of human rights law.

#4. Forced criminal activities

Children are exploited for a variety of criminal activities, such as theft, producing and trafficking drugs, burglarizing homes, and more. According to a post on The Conversation, organized crime gangs can groom and exploit kids as young as 12 years old. Kids may be initially paid with drugs and alcohol, which can trigger addiction and make it even harder to break free. In Ecuador, police found stuffed animals at one cartel hideout, leading them to believe that the gang was using toys to lure children . In that same area, most of the 230 people arrested between January and April 2022 were just 17 or 18 years old.

#5. Agriculture

According to the International Labour Organization, child labor is concentrated in agriculture . 60% of the child laborers aged 5-17 years old are in work like farming, fishing, livestock, forestry, and aquaculture. Poverty is the main driver of child labor in agriculture. Child labor may also be more widely accepted in agriculture because of its long-standing history. Children can participate in agricultural activities on family farms without being child laborers, but any work that interferes with schooling, harms a child’s health and development, or exceeds what’s age appropriate for the child is exploitation.

Mining is a dangerous activity even for adults, but around the world, thousands of kids labor in mines for materials like cobalt, salt, gold, and mica. In the Democratic Republic of the Congo, children as young as seven mine for cobalt, which is used for lithium-ion batteries. In 2014, around 40,000 kids were working in cobalt mines . Conditions can be brutal and deadly. Many miners work long hours without protective equipment for pay as low as 1-2 dollars a day.

#7. Factory work

Factories make a huge amount of products like clothing, toys, and meat. They’re also rife with poor ventilation, toxic materials, and hazardous machinery. When kids are exploited in factories, they face long-term health and development consequences. In 2023, the United States Department of Labor discovered more than 100 kids – some just 3 years old – employed in factories across eight states. Their jobs included cleaning dangerous equipment like bone cutters and skull splitters in meatpacking plants.

#8. Domestic work

Domestic work includes a variety of tasks and services, some of which don’t constitute exploitative child labor. Exploitation occurs when kids are employed in the domestic work sector at ages younger than is legal and are exposed to hazardous conditions. Any domestic work that interferes with a child’s education is also child labor. In many places, domestic work exploitation is “hidden” as kids – especially girls – are expected to contribute to the household and prepare for a life as an adult. According to the International Labour Organization, kids face heightened risks when they live in the household where they’re employed. Without consistent contact from the child’s parents or friends, it’s much easier for employers to exploit a child.

Where can you learn more about child labor?

Child labor is one of the most troubling human rights violations . Here’s a short list f of classes, books, and documentaries that shine a light on this urgent issue:

The ILO’s e-learning tools

The International Labour Organization offers a handful of courses to help students understand child labor and what role ILO stakeholders play. Using interactive tests and exercises, these free courses are self-paced. Examples include the reporting on child labor for media course, which is 8 hours long and available in English, and the eliminating child labor course, which is a 2-hour course for labor inspectors and child labor monitors. It’s available in French, Spanish, Vietnamese, English, and Mongolian.

FAO e-learning academy

The Food and Agricultural Organization of the United Nations offers a 2.5-hour course on child labor in agriculture. It gives an overview of child labor in agriculture, foundational knowledge on what is and isn’t child labor, its causes and consequences, and more. It’s available in English, Spanish, French, Turkish, and Russian. It’s also available in Portuguese as a downloadable offline package.

Harvard University’s Child Protection: Children’s Rights Theory in Theory and Practice

This 16-week course teaches students about the causes and consequences of child protection failures. Topics include the strategies, international laws, standards, and resources that protect all children, as well as how students can apply strategies to their careers. It’s a self-paced course, but it takes 16 weeks with 2-5 hours of work per week. Students can audit the course for free or pay a fee for a certificate.

Agents of Reform: Child Labor and the Origins of the Welfare State (2021)

Elisabeth Anderson

This book explores the late 19th-century labor movement, groundbreaking child labor laws, and the regulatory welfare state. Through seven in-depth case studies from Germany, France, Belgium, Massachusetts, and Illinois, Anderson explores individual reformers and challenges existing explanations of welfare state development.

Blood and Earth: Modern Slavery, Ecocide, and the Secret to Saving the World (2016)

Kevin Bales

Expert Kevin Bales, who has traveled around the world documenting human trafficking, describes the link between slavery and environmental destruction. In addition to being a human rights violation, human trafficking is destroying the earth. Backed by seven years of research and travel, Bales reports from places where this link is most concentrated. While it doesn’t focus exclusively on child labor, child labor is a huge part of human trafficking.

“The Chocolate War” (2022)

Director: Miki Mistrati

The cocoa and chocolate industry is rife with child slavery. In 2001, eight large companies, the World Cocoa Foundation, and the Chocolate Manufacturers Association signed a pledge to end child labor and slavery in Ghana and the Ivory Coast, but the deadline has been postponed to 2025. Why won’t the industry change? “The Chocolate War” follows Terry Collingsworth, a human rights lawyer, for five years as he takes on the multi-billion-dollar chocolate industry. The film was nominated for a Cinema for Peace Award and Best Documentary at the Warsaw International Film Festival.

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About the author, emmaline soken-huberty.

Emmaline Soken-Huberty is a freelance writer based in Portland, Oregon. She started to become interested in human rights while attending college, eventually getting a concentration in human rights and humanitarianism. LGBTQ+ rights, women’s rights, and climate change are of special concern to her. In her spare time, she can be found reading or enjoying Oregon’s natural beauty with her husband and dog.

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What is Child Labour?

Child labour is work that harms children’s well-being and hinders their education, development and future livelihood, according to the International Labour Organization ( ILO ). Not all child labour is harmful; for example, if it is light work and does not interfere with a child’s education or right to leisure, such as, children helping their parents on a farm with non-harmful activities or in a shop outside of school hours. Moreover, youth employment and student work are considered legal and may contribute positively to the development of children and young people.

What is the Dilemma?

The dilemma for responsible business is how to address child labour responsibly given the complex social and economic context in which it occurs. While a business may seek to respect the principles contained in international labour standards and national laws on minimum age, removing children (or having children removed) from their operations or supply chains without considering the implications for them could potentially worsen their situation. For example, removing children from the workplace without providing safer and suitable alternatives may leave them vulnerable to more exploitative work elsewhere (e.g. in subcontractor companies), as well as potentially lead to negative health and well-being implications due to increased poverty within their family.

Prevalence of Child Labour

The  ILO  and  UNICEF  estimate that 160 million children — 63 million girls and 97 million boys — were in child labour globally at the beginning of 2020, accounting for almost 1 in 10 of all children worldwide. [2]  79 million children (nearly 50% of all children in child labour) were involved in hazardous work such as agriculture or mining, operating dangerous machinery or working at height. However, this number is an approximation — child labour is difficult to quantify as it is often hidden due to its illegal nature. The identification of children in the workplace can be further impeded by a lack of reliable documents such as birth certificates and the fact that it often occurs in rural settings or in areas of cities where authorities have little visibility.

Key trends include:

• Global progress against child labour has  stagnated  since 2016 despite global efforts to eradicate child labour by 2025, as per  target 8.7 [1]  of the Sustainable Development Goals (SDGs).
• The COVID-19 crisis threatened to  further erode  global progress against child labour. ILO estimates suggested that a  further 8.9 million children  would be in child labour by the end of 2022 due to rising poverty and parental deaths driven by the pandemic.
• Since the start of the pandemic, child labour risks increased in more than 83 countries. Africa remains the highest risk region, with 6 of the 10 highest risk countries ( Verisk Maplecroft ). According to an  ILO report published in June 2021, there are more children in child labour in sub-Saharan Africa than in the rest of the world combined.
• The year 2021 was designated as the  International Year for the Elimination of Child Labour by UN Member States to further increase global efforts in eliminating child labour.

Impacts on Businesses

Businesses can be impacted by child labour risks in their operations and supply chains in multiple ways:

• Reputational and brand risk : Campaigns by NGOs, trade unions, consumers, media and other stakeholders can result in reduced sales and/or brand erosion.
• Financial risk : Divestment and/or avoidance by investors and finance providers (many of which are increasingly applying environmental, social and governance (ESG) criteria to their decision-making) can result in reduced or more expensive access to capital and reduced shareholder value.
• Legal risk : Legal charges can be brought against the company, up to and including criminal charges, which can result in imprisonment in some countries and usually involve significant fines and/or surrendering of goods produced by child labour (see section ‘ Definition and Legal Instruments ’). Former child workers may also be able to sue their exploitative employers, potentially including companies further up in the supply chain.
• Operational risk : Changes to a company’s supply chains made in response to the discovery of child labour may result in disruption. For example, companies may feel the need to terminate supplier contracts (resulting in potentially higher costs and/or disruption) and direct sourcing activities to lower-risk locations.

Impacts on Children’s Rights

Child labour has the potential to impact a range of children’s rights, [3]  including but not limited to:

• Right to health and to an adequate standard of living  ( CRC , Articles 6.2 and 27.1): Children’s  health and personal development  may be negatively impacted through engagement in work activities, which are not age-appropriate.
• Right to education  ( CRC , Article 28): Working hours may preclude children from attending school. Likewise, working children may be too tired to benefit fully from their studies. Children’s ability to learn and join the formal labour market at a later date may also be compromised by child labour.
• Right to rest and leisure and to cultural life  ( CRC , Article 31.1): Children involved in child labour often do not have sufficient time to develop socially and culturally through play and interaction with other children.
• Right to protection from economic exploitation  ( CRC , Article 32): Children have the right to be protected from economic exploitation. This includes the right to be protected from work that is hazardous or likely to interfere with the child’s health or physical, mental, spiritual, moral or social development.

For further information on children’s rights, please refer to UNICEF’s  helpful summary  of children’s rights listed in the UN Convention on the Rights of the Child.

The following  SDG targets  relate to  child labour :

• Goal 8  ( “Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all” ), Target 8.7 : Take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms
• Goal 16  ( “Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels” ), Target 16.2 : End abuse, exploitation, trafficking and all forms of violence and torture against children

Progress on these targets and Global Goals will also help advance other goals, for example  Goal 3  ( “Ensure healthy lives and promote well-being for all at all ages” ) and  Goal 4  ( “Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all” ).

Key Resources

The following resources provide further information on how businesses can address child labour responsibly in their operations and supply chains:

• ILO and UNICEF,  Child Labour: Global Estimates 2020, Trends and the Road Forward : The most up-to-date  global estimates  of child labour from the ILO and UNICEF, including an overview of the impact on child labour from COVID-19.
• ILO and International Organisation of Employers (IOE),  Child Labour Guidance Tool for Business : This  tool  helps companies meet the due diligence requirements laid out in the  UN Guiding Principles , as they pertain to child labour.
• Ethical Trading Initiative,  Base Code Guidance: Child Labour : A step-by-step  guide  for businesses on eliminating child labour in global supply chains.

Definition & Legal Instruments

According to the  ILO , the term “child labour” is work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development. It refers to work that:

• Is mentally, physically, socially, or morally dangerous and harmful to children; and/or
• Interferes with their schooling by depriving them of the opportunity to attend school; obliging them to leave school prematurely; or requiring them to attempt to combine school attendance with excessively long and heavy work.

It is important to distinguish between minimum age violations and the worst forms of child labour. The minimum age for work is defined as follows:

• The minimum age for work should not be less than the age for completing compulsory schooling, and in general, not less than 15 years. However, States whose economy and educational facilities are insufficiently developed may initially specify a minimum age of 14 years as a transitional measure ( Minimum Age Convention No. 138 ).
• Children can engage in light work from 13 years of age (or 12 as a transitional measure), provided that it does not interfere with their education or vocational training and that it does not have a negative impact on their health ( Minimum Age Convention No. 138 ).

The worst forms of child labour include ( Worst Forms of Child Labour Convention No. 182 ):

• The sale and trafficking of children, debt bondage and serfdom and forced or compulsory labour, including forced or compulsory recruitment of children for use in armed conflict;
• The use, procuring or offering of a child for prostitution or pornographic performances;
• The use, procuring or offering of a child for illicit activities (e.g. production and trafficking of drugs).

Child labour also includes hazardous work performed by young workers over the legal minimum age for work but under 18 years. According to the  ILO , hazardous work is defined as work which, by its nature or the circumstances in which it is carried out, is likely to harm the health, safety or morals of children.

Examples of hazardous child labour include:

• Work that exposes children to physical, psychological or sexual abuse;
• Work underground, underwater, at dangerous heights or in confined spaces;
• Work with dangerous machinery, equipment and tools, or which involves the manual handling or transport of heavy loads;
• Work in an unhealthy environment which may, for example, expose children to hazardous substances, agents or processes, or to temperatures, noise levels, or vibrations damaging to their health;
• Work under particularly difficult conditions such as work for long hours or during the night or work where the child is unreasonably confined to the premises of the employer.

The  ILO  provides further  guidance  on types of hazardous work, while national legislation often includes lists of prohibited hazardous activities for children. It is important to note that the list of prohibited hazardous activities will vary between states, depending on a variety of contextual factors; it is, therefore, often better to follow best practice and work to prevent children working in hazardous jobs.

Legal Instruments

Ilo and un conventions.

Two ILO Conventions and the  UN Convention on the Rights of the Child  provide the framework for national law to define a clear line between what is acceptable and what is not in terms of child employment. The effective abolition of child labour is one of the five fundamental rights and principles at work by the ILO which Member States must promote, irrespective of whether or not they have ratified the respective conventions listed below

• ILO Minimum Age Convention, No. 138  (1973) sets a general minimum age of 15 for employment with some exceptions for developing countries.
• ILO Worst Forms of Child Labour Convention, No. 182  (1999) prohibits worst forms of child labour, including hazardous work by young workers under 18.
• The  UN Convention on the Rights of the Child  prohibits child labour and requires signatories to regulate minimum age and conditions of work for children.

The ILO Convention No. 182 has been  ratified  by all 187 ILO Member States (the only ILO Convention that has achieved  universal ratification ). The UN Convention on the Right of the Child has also been  ratified  by all countries except the United States (although the United States signed the Convention). Furthermore, most States have  ratified  ILO Convention No. 138. This means that in most countries relevant national legislation should be in place to implement the terms of these international legal instruments. In due diligence, it is important to check the ratification status for particular countries as an indicator of potentially more limited state protections against child labour. However, ratification does not guarantee that these countries are free from child labour, as the existence and enforcement of national laws to address child labour varies.

The fight against child labour is included as one of the  Ten Principles  of the UN Global Compact:  “ Principle 5 : Businesses should uphold the effective abolition of child labour” . The four labour principles of the UN Global Compact are derived from the  ILO Declaration on Fundamental Principles and Rights at Work .

These fundamental principles and rights at work have been affirmed and developed in the form of specific rights and obligations in International Labour Conventions and Recommendations and cover issues related to child labour, discrimination at work, forced labour and freedom of association and the right to collective bargaining.

Member States of the ILO have an obligation to promote the effective abolition of child labour, even if they have not ratified the Conventions in question.

Other Legal Instruments

The UN Guiding Principles on Business and Human Rights ( UNGPs ) set the global standard regarding the responsibility of businesses to respect human rights in their operations and across their value chains. The Guiding Principles call upon States to consider a smart mix of measures — national and international, mandatory and voluntary — to foster business respect for human rights. Businesses should consider the UNGPs in their operational and supply chain decisions, and when following national legislation.

Children’s Rights and Business Principles ( CRBPs ) were first proposed in 2010 and are based on existing standards, initiatives and best practices related to business and children. These Principles seek to define the scope of corporate responsibility towards children. Covering a wide range of critical issues – from child labour to marketing and advertising practices to the role of business in aiding children affected by emergencies – the Principles call on companies everywhere to respect children’s rights through their core business actions, but also through policy commitments, due diligence and remediation measures.

Regional and Domestic Legislation

Companies are increasingly subject to non-financial reporting requirements and due diligence obligations in the jurisdictions in which they operate, which often include disclosures on their performance. There are several high-profile examples of national legislation that specifically mandate human rights-related reporting and other positive legal duties, such as due diligence, including the  United Kingdom Modern Slavery Act 2015 ,  Australian Modern Slavery Act 2018 , the  California Transparency in Supply Chains Act 2010 , the  French Corporate Duty of Vigilance Law 2017 , the  German Act on Corporate Due Diligence Obligations in Supply Chains 2023 and the Norwegian Transparency Act 2022 .

Also, in 2021 the Netherlands submitted a Bill for Responsible and Sustainable International Business Conduct, and the European Commission announced its  Corporate Sustainability Due Diligence Directive (CSDDD). This Directive is likely to come into force between 2025 and 2027 and will make human rights and environmental due diligence mandatory for larger companies.

These mandatory due diligence and disclosure laws require companies to publicly communicate their efforts to address actual and potential human rights impacts, including the worst forms of child labour. Failure to comply with these obligations leads to real legal risk for companies.

Contextual Risk Factors

The prevention of child labour requires an understanding of its  underlying causes  and the consideration of a wide range of issues which may increase the risk of child labour, that often interfere and reinforce one another, such as inadequate family income and poor or non-existent educational facilities.

Key risk factors include:

• High rates of poverty and unemployment , especially where there is a lack of state support (e.g. unemployment benefits). In regions where adult unemployment is high, children may be required to work to assist the family.
• Low wages  can exacerbate the prevalence of poverty and drive the need for children to work alongside their parents to supplement household income (see  Living Wage  issue).
• Lack of educational opportunities for children  due to a lack of school facilities or where school tuition costs and educational materials are considered too expensive. Where educational facilities or other forms of childcare are missing, children tend to accompany (and often help) their parents at work.
• Lack of safe alternative pathways to employment  results in adolescents finding themselves moving from one form of hazardous work to another. The alternative is for adolescents to have access to safe work that could lead to long-term employment.
• Poorly enforced domestic labour laws  due to a lack of government resources, capacity or commitment to fully implement state duty to protect citizens against human rights violations. This can result in a lack of or inadequate training of labour inspectors, as well as improper payments made by employers to (sometimes poorly compensated) inspectors to overlook child labour violations.
• Informal economies  are associated with higher child labour risks. Informality often leads to lower and less regular incomes, inadequate and unsafe working conditions, extreme job precarity and exclusion from social security schemes, among other factors. All of these can spur families to turn to child labour in the face of financial distress.
• Rural areas  are also associated with a  higher prevalence  of child labour. There are 122.7 million rural children (13.9%) in child labour compared to 37.3 million urban children (4.7%). Job opportunities are often scarce in rural areas, leaving children to find work to assist their families, with government oversight of these areas much lower.
• Intersectionality , or the interaction between gender, race, ethnicity, age and other categories of difference, leads to increased child labour risks. For example, girls from an ethnic minority living in poor rural areas may be more exposed to the risks of child labour exploitation.

Industry-specific Risk Factors

Whilst child labour is present in many industries, the following present particularly significant levels of risk. To identify potential child labour risks for other industries, companies can access the  CSR Risk Check .

Agriculture

According to ILO 2020  estimates , around 70% of child labourers around the world — 112 million children — work in agriculture, including fishing, aquaculture and livestock rearing. Although certain work on family farms is acceptable for children — provided that it is not hazardous and does not prevent them from receiving an education — many forms of child work in  agricultural  supply chains are not legal. The US Department of Labor’s 2022   report suggests that the most common items produced by child labour in agriculture include bananas, cattle and dairy products, cocoa, coffee, cotton, fish, rice, sugar and tobacco.

Agriculture-specific risk factors include the following:

• Piece rate: Many  agricultural  jobs are paid by the amount of produce picked, which encourages parents to bring their children along with them to help collect greater volumes.
• Seasonal migrant labour: The agricultural sector traditionally relies heavily on migrant labour due to seasonality. This can mean the children of migrant labourers are often not in  one place long enough  to attend school, so work with their parents in the field instead.
• Families: Family-based child labour is hard for companies to identify, as family farms usually feed into larger co-operatives or wholesalers and are relatively invisible within the supply chain. Furthermore, family-based child labour can be easily hidden on inspection.
• OECD-FAO,  Guidance for Responsible Agricultural Supply Chains : This  guidance provides a common framework to help agro-businesses and investors support sustainable development and identify and prevent child labour.
• FAO,  Framework on Ending Child Labour in Agriculture : This  framework  guides the FAO and its personnel on the integration of measures addressing child labour within FAO’s typical work, programmes and initiatives.
• FAO,  Regulating Labour and Safety Standards in the Agriculture, Forestry and Fisheries Sectors : This  resource  provides information on international labour standards that apply in agriculture, including those on child labour.
• FAO,  e-Learning Academy: Business Strategies and Public-Private Partnerships to End Child Labour in Agriculture : This  course  presents several business-oriented strategies to reduce child labour in agricultural supply chains.
• ILO,  Child Labour in the Primary Production of Sugarcane : This  report  provides an overview of the sugarcane industry, including key challenges and opportunities in addressing child labour.
• Fair Labor Association,  ENABLE Training Toolkit on Addressing Child Labor and Forced Labor in Agricultural Supply Chains : This  toolkit  guides companies on supply chain mapping and the abolition of child labour in supply chains. It contains six training modules, a facilitator’s guide, presentation slides and a participant manual.
• Principles for Responsible Investment (PRI),  From Farm to Table: Ensuring Fair Labour Practices in Agricultural Supply Chains : This  resource  provides guidelines on what investors should be looking for from companies to eliminate labour abuses in their agricultural supply chains.
• Sustainable Agriculture Initiative (SAI) Platform : The SAI Platform  guidance document  on child labour facilitates the development of their members’ policies on child labour.
• Rainforest Alliance,  Child Labor Guide : This  guide  has been developed to support the efforts of farm management to address the risks of child labour on their farms with a focus on coffee, cocoa, hazelnut and tea; however, it can be used for other crops as well.
• German Initiative on Sustainable Cocoa : This  multi-stakeholder initiative  aims to improve the livelihood of cocoa farmers and their families, as well as to increase the proportion of certified cocoa according to sustainability standards. The Initiative’s  background paper  provides helpful information on child labor in the West African cocoa sector and possible solutions to address it.
• Fairtrade International, Guide for Smallholder Farmer Organisations – Implementing Human Rights and Environmental Due Diligence (HREDD) : This guidance was developed to provide advice and tools on HREDD for farmer organisations to implement.
• UNICEF, Mapping Child Labour Risks in Global Supply Chains: This paper provides a detailed analysis of the Apparel, Electronics and Agricultural Sectors. It was written as a background report for the Alliance 8.7 report on “Ending child labour, forced labour and human trafficking in global supply chains”.

Fashion and Apparel

The fashion and  apparel  industry may be linked to significant child labour risks. Fashion and apparel-specific risk factors include the following:

• Subcontracting: This industry features a lot of subcontracting and outsourcing, making tracing where a product was made and by whom difficult. In-depth due diligence checks on this part of a supply chain are, therefore, often overlooked.
• Homeworking: Homeworking is particularly hard to monitor, as the location of  homeworking  is often unknown to companies and there is no way to control working hours or who is doing the work. Research from the  University of California, Berkeley , shows that the activities often outsourced to homeworkers are usually finishing tasks, such as beading, embroidery or adding tassels — activities that require delicate handiwork as opposed to being produced by machinery in a factory. Children’s smaller hands can be considered useful for this delicate handiwork.
• Gender: There is a significant gender aspect in this regard, with  studies  showing most homeworkers in the apparel industry are women and girls (see  Gender Equality  issue).
• OECD,  Due Diligence Guidance for Responsible Supply Chains in the Garment & Footwear Sector : The  guidance aims to help fashion and apparel businesses implement the due diligence recommendations contained in the  OECD Guidelines for Multinational Enterprises  in order to avoid and address the potential negative impacts of their activities and supply chains on a range of human rights, including child labour.
• Fair Wear Foundation,  The Face of Child Labour: Stories from Asia’s Garment Sector : This  report seeks to promote a greater understanding of the realities of child labour by presenting interviews with children who were found working in Asia’s garment sector.
• Fair Labor Association,  Child Labor in Cotton Supply Chains: Collaborative Project on Human Rights in Turkey : The  report explores cotton and garment supply chains in Turkey and provides recommendations for companies and other stakeholders on eliminating child labour from cotton supply chains.
• Fair Labor Association,  Children’s Lives at Stake: Working Together to End Child Labour in Agra Footwear Production : The  report demonstrates a high prevalence of child labour in shoe production in Agra, India, and provides recommendations for brands, including on enhancing their subcontracting policies.
• SOMO,  Branded Childhood: How Garment Brands Contribute to Low Wages, Long Working Hours, School Dropout and Child Labour in Bangladesh : This  report illustrates a link between child labour and low wages for adult workers and provides a series of concrete recommendations for brands and retailers sourcing from Bangladesh on combatting child labour.
• Save the Children,  In the Interest of the Child? Child Rights and Homeworkers in Textile and Handicraft Supply Chains in Asia : This  study provides data on both the positive and negative impact of home-based work and work in small workshops on child rights and identifies best practices to improve child rights in such settings.
• UNPRI,  An Investor Briefing on the Apparel Industry : Moving the Needle on Labour Practices : The  resource guides institutional investors on how to identify negative human rights impacts in the apparel industry, including those pertaining to child labour.
• The Partnership for Sustainable Textiles,  Bündnisziele: Sozialstandards  (German) : The Partnership for Sustainable Textiles — a multi-stakeholder initiative with about 135 members from business, Government, civil society, unions, and standards organizations — has formulated  social goals , including on child labour, that all members recognize by joining the Partnership.
• Green Button :  Certification label for sustainable textiles run by the German Government with ban on forced and child labour as one of the certification criteria.

Mining and the Extractive Industry

Child labour takes place in parts of the informal artisanal and small-scale  mining  (ASM) industry and has been associated with the mining of “ conflict minerals ” — tantalum, tin, tungsten and gold — among other minerals such as cobalt. ASM work can be dangerous and personal protective equipment (PPE) is rarely provided. The  US Department of Labor’s 2022 report  suggests that gold, coal, granite, gravel, diamonds and mica are all associated with child labour.

Mining-specific risk factors include the following:

• Small and slight: Children  are often involved in digging as they can get into tighter spaces to mine, or in carrying  mined  products like gems or metals between extraction sites and refining/washing/filtering sites.
• Global supply chains: Minerals mined by children can end up in global supply chains, including those of automobiles, construction, cosmetics, electronics, and jewellery. For example, the increased production of electric vehicle (EV) batteries has led to the growing demand for cobalt — an essential battery input. Approximately  70% of cobalt  (as of January 2023) comes from the Democratic Republic of the Congo (DRC), one of the poorest and most unstable countries in the world where ASM activity is common, thus increasing  child labour risks .
• OECD,  Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas : The  OECD guidance identifies the worst forms of child labour as a serious human rights abuse associated with the extraction, transport or trade of minerals. The guidance has  practical actions  for companies to identify and address the worst forms of child labour in mineral supply chains and conduct related due diligence.
• OECD, Practical actions for companies to identify and address the worst forms of child labour in mineral supply chains : This report has been designed for companies to help them identify, mitigate and account for the risks of child labour in their mineral supply chains.
• ILO,  Child Labour in Mining and Global Supply Chains : This  brief report outlines the scope of child labour in ASM, risks to children’s health and welfare, and recommendations for businesses on addressing this issue.
• ILO,  Mapping Interventions Addressing Child Labour and Working Conditions in Artisanal Mineral Supply Chains : This  report provides a high-level review of projects and initiatives that aim to address child labour in the ASM sector across different minerals.
• UNICEF,  Child Rights and Mining Toolkit: Best Practices for Addressing Children’s Issues in Large-Scale Mining : This  toolkit is designed to help industrial miners design and implement social and environmental strategies (from impact assessment to social investment) that respect and advance children’s rights, including the elimination of child labour.
• SOMO,  Global Mica Mining and the Impact on Children’s Rights : This  report outlines mica production globally and identifies direct or indirect links to child labour.
• SOMO,  Beauty and a Beast: Child Labour in India for Sparkling Cars and Cosmetics : This  report focuses on illegal mica mining in India. It outlines the due diligence actions of several multinational companies and provides further recommendations for mica mining, processing and/or using companies.
• Responsible Jewellery Council (RJC),  Responsible Jewellery Council Standards Guidance : This  guidance provides a suggested approach for RJC members to implement the mandatory requirements of the RJC Code of Practice (COP), including the elimination of child labour in mining operations.
• Responsible Minerals Initiative,  Material Change: A Study of Risks and Opportunities for Collective Action in the Materials Supply Chains of the Automotive and Electronics Industries : This  report examines responsible sourcing of materials in the automotive and electronics industries, including association with child labour. Responsible Minerals Initiative also has other helpful resources for mining companies on various steps of human rights due diligence.
• UNICEF, Extractive Pilot – Children’s Rights in the Mining Sector : This report seeks to understand the the impacts of the mining industry on children’s rights and facilitate the integration of children’s rights into companies’ human rights due diligence processes.

Electronics Manufacturing

The  electronics manufacturing  industry poses child labour risks, as well as risks for young workers.

Industry-specific risk factors include the following:

• Work experience: In several Asian and South-East Asian countries, there are government programmes with major businesses for  students  and young workers to get work experience. However, there are reports of these programmes being abused, with student and young workers having  their IDs faked  so they can work longer and more hazardous hours.
• Materials: Electronics companies may be linked to child labour via their mineral supply chains given that some of the minerals and metals used to manufacture electronic components can be associated with significant child labour risks (i.e. during the mining process), such as gold — see the section on mining.
• Responsible Business Alliance (RBA), Student Workers Management Toolkit : This  toolkit  helps human resources and other managers support responsible recruitment and management of student workers in electronics manufacturing.
• Responsible Minerals Initiative,  Material Change: A Study of Risks and Opportunities for Collective Action in the Materials Supply Chains of the Automotive and Electronics Industries : This  report examines responsible sourcing of materials in the automotive and electronics industries, including association with child labour.
• SOMO,  Gold from Children’s Hands: Use of Child-Mined Gold by the Electronics Sector : This  report outlines the magnitude and seriousness of child labour in the artisanal gold mining sector and provides insight into the supply chain linkages with the electronics industry.

Travel and Tourism

Businesses in the travel and tourism industry (e.g. hotels, restaurants and tour companies) may be linked to the risks of child labour and has significant risks of facilitating child trafficking, particularly in the aviation industry.

Travel and tourism-specific risk factors include the following:

• Developing countries: Children in developing countries are often put to work selling tourist gifts or supporting family businesses like restaurants. Although this type of work is acceptable for children — provided that it is not hazardous and does not prevent them from receiving an education — it may also constitute child labour if it does preclude children’s school attendance.
• Child sexual exploitation: Child sex tourism does exist, and the trafficking or use of children for sexual activities for tourists occurs around the world.

Businesses in other sectors that use travel and tourism services as part of their business activities or in their supply chains may also be linked to child exploitation.

• ILO,  Guidelines on Decent Work and Socially Responsible Tourism : These  guidelines provide practical information for developing and implementing policies and programmes to promote sustainable tourism and strengthen labour protection, including the protection of children from exploitation.
• ChildSafe Movement and G Adventures Inc,  Child Welfare and the Travel Industry: Global Good Practice Guidelines : These  guidelines provide information on child welfare issues throughout the travel industry, as well as guidance for businesses on preventing all forms of exploitation and abuse of children that could be related to the tourism industry.
• International Tourism Partnership,  The Know How Guide: Human Rights and the Hotel Industry : This  guide provides an overview of human rights (including child labour) within hospitality, with guidance on developing a human rights policy, performing due diligence and addressing any adverse human rights impacts.

Due Diligence Considerations

This section outlines due diligence steps that companies can take to eliminate child labour in their operations and supply chains. The described due diligence steps are aligned with the UN Guiding Principles on Business and Human Rights ( UNGPs ). Further information on UNGPs is provided in the ‘Key Human Rights Due Diligence Frameworks’ section below or in the  Introduction .

While the below steps provide guidance on eliminating child labour in particular, it is generally more resource-efficient for companies to ‘streamline’ their human rights due diligence processes by also identifying and addressing other relevant human rights issues (e.g.  forced labour ,  discrimination ,  freedom of association ) at the same time.

Several human rights frameworks describe the due diligence steps that businesses should ideally implement to address human rights issues, including forced labour. The primary framework is the  UN Guiding Principles on Business and Human Rights  ( UNGPs ) . Launched in 2011, the UNGPs offer guidance on how to implement the United Nations “Protect, Respect and Remedy” Framework, which establishes the respective responsibilities of Governments and businesses — and where they intersect.

The UNGPs set out how companies, in meeting their responsibility to respect human rights, should put in place due diligence and other related policies and process, which include:

• A publicly available policy setting out the company’s commitment to respect human rights;
• Assessment of any actual or potential adverse human rights impacts with which the company may be involved across its entire value chain;
• Integration of the findings from their impact assessments into relevant internal functions/processes — and the taking of effective action to manage the same;
• Tracking of the effectiveness of the company’s management actions;
• Reporting on how the company is addressing its actual or potential adverse impacts; and
• Remediation of adverse impacts that the company has caused or contributed to.

The steps outlined below follow the UNGPs framework and can be considered a process which a business looking to start implementing human rights due diligence processes can follow.

Additionally, the Children’s Rights and Business Principles (CRBPs) were based on the UNGPs as the first comprehensive set of principles to guide companies on the due diligence steps they can take to respect children’s rights in the workplace, marketplace and community.

The  OECD Guidelines on Multinational Enterprises  further define the elements of responsible business conduct, including human and labour rights.

Another important reference document is the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy ( MNE Declaration ), which contains the most detailed guidance on due diligence as it pertains to labour rights. These instruments, articulating principles of responsible business conduct, draw on international standards enjoying widespread consensus.

Companies can seek specific guidance on this and other issues relating to international labour standards from the  ILO Helpdesk for Business . The ILO Helpdesk assists company managers and workers who want to align their policies and practices with principles of international labour standards and build good industrial relations. It has a specific section on  forced labour .

Additionally, the  SME Compass  offers guidance on the overall human rights due diligence process by taking businesses through five key due diligence phases. The SME Compass has been developed in particular to address the needs of SMEs but is freely available and can be used by other companies as well. The tool, available in English and  German , is a joint project by the German Government’s  Helpdesk on Business & Human Rights  and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

1. Develop a Policy Commitment to Help Eliminate Child Labour

As per the  UNGPs , a human rights policy should be:

• “Approved at the most senior level” of the company;
• “Informed by relevant internal and/or external expertise”;
• Specific about company’s “human rights expectations of personnel, business partners and other parties directly linked to its operations, products or services”;
• “Publicly available and communicated internally and externally to all personnel, business partners and other relevant parties”; and
• “Reflected in operational policies and procedures necessary to embed it throughout the business”.

Research of 2,500 companies across nine industries conducted by the Global Child Forum suggests that 57% of companies have some form of stand-alone policy against child labour. Examples of companies with stand-alone child labour policies include ALDI South, H&M and ASOS. These tend to be companies that have identified child labour as a highly salient issue.

Another option is to integrate child labour commitments into companies’ wider human rights policy, an option that has been taken by Unilever, Marks and Spencer and Freeport-McMoRan. Where companies do not have a human rights policy, child labour is often addressed in other policy documents, such as a business code of conduct or ethics and/or a supplier code of conduct. Starbucks, BHP and HP offer examples of multinational companies that integrate child labour requirements into their codes of conduct. Small and medium enterprises (SMEs), such as Haas & Co. Magnettechnik GmbH, also often include child labour in their business code of conduct or supplier code of conduct.

Businesses may want to check the ILO Helpdesk for Business, which provides answers to the most common questions that businesses may encounter while developing their child labour policies — or integrating child labour commitments into other policy documents. Examples include:

• I am trying to figure out why the basic minimum age is set at 15 or 14. What would be the consequences of setting a global policy with a basic minimum age at 16?
• A company is committed to not recruiting people below 18 years old, but the company operates in States where people below 18 have the right to work. Can it be considered as a breach of ILO Conventions related to discrimination?
• What are the general recommendations concerning apprenticeships to use when clarifying our child labour requirements to our suppliers?

Businesses may also consider aligning their policies with relevant industry-wide or cross-industry policy commitments, for example:

• Responsible Business Alliance (RBA) Code of Conduct
• Ethical Trading Initiative (ETI) Base Code
• amfori BSCI Code of Conduct
• Fair Labor Association (FLA) Code of Conduct
• The Code of Conduct for the Protection of Children from Sexual Exploitation in Travel and Tourism initiated by ECPAT, the United Nations World Tourism Organization (UNWTO) and several tour operators
• ILO,  Helpdesk for Business on International Labour Standards : The  ILO Helpdesk for Business is a resource for company managers and workers on how to better align business operations with international labour standards, including child labour.
• ILO-IOE,  Child Labour Guidance Tool for Businesses : This  guidance includes several diagnostic questions that businesses could ask to evaluate their child labour policy.
• ILO,  Child Labour Platform: Good Practice Notes :  Guidance on developing children’s rights and labour policies with examples from business.
• UNICEF and Save the Children,  Children’s Rights in Policies and Codes of Conduct : This  tool recommends ways for businesses to incorporate children’s rights into their policies and codes of conduct, based on the Children’s Rights and Business Principles.
• Global Child Forum,  Child Labour Policy: A Child-Centred Approach : This report gives  guidance on developing child labour policies and integrating child labour approaches into existing policies.
• United Nations Global Compact-OHCHR,  A Guide for Business: How to Develop a Human Rights Policy : This  guidance provides recommendations on how to develop a human rights policy and includes extracts from companies’ policies referencing child labour.
• SME Compass : Provides  advice on how to develop a human rights strategy and formulate a policy statement.
• SME Compass, Policy statement : Companies can use this practical guide to learn to develop a policy statement step-by-step. Several use cases illustrate how to implement the requirements.
• UN Global Compact Labour Principles, Advancing decent work in business Learning Plan : This learning plan , developed by the UN Global Compact and the International Labour Organization, helps companies understand each Labour Principle and its related concepts and best practices as well as practical steps to help companies understand and take action across a variety of issues.

2. Assess Actual and Potential Child Labour Impacts

The  UNGPs  note that impact assessments:

• Will vary in complexity depending on “the size of the business enterprise, the risk of severe human rights impacts, and the nature and context of its operations”;
• Should cover impacts that the company may “cause or contribute to through its own activities, or which may be directly linked to its operations, products or services by its business relationships”;
• Should involve “meaningful consultation with potentially affected groups and other relevant stakeholders” in addition to other sources of information such as audits; and
• Should be ongoing.

Impact assessments should look at both actual and potential impacts, i.e. impacts that have already manifested or  could  manifest. This contrasts to a risk assessment that would only look at potential impacts and may not satisfy all of the above criteria.

Child labour impact assessments are most often integrated into broader human rights impact assessments (for example  Freeport-McMoRan ). The  ILO-IOE Child Labour Guidance Tool for Businesses  includes suggestions on how to identify and assess actual and potential child labour impacts; how to prioritize operations and parts of a supply chain to conduct more detailed assessments; and how to conduct stakeholder engagement. If impact assessments  involve children through interviews  or other data gathering mechanisms, strict safeguarding measures should be put in place to protect the children from any potential harm, such as employer retaliation or unplanned termination of employment.

• ILO and IOE,  Child Labour Guidance Tool for Business : Helpful  guidance on how businesses can systematically identify and assess actual or potential child labour impacts.
• UNICEF and the Danish Institute for Human Rights,  Children’s Rights in Impact Assessments: A Guide for Integrating Children’s Rights into Impact Assessments and Taking Action for Children : This  guide gives specific advice on how to conduct a child-sensitive impact assessment.
• Rainforest Alliance, Child Labor Toolkit Module 3: Risk Assessment : This  toolkit  provides step-by-step guidance on how to conduct a basic and in-depth risk assessment on child labour.
• UNICEF and the Global Child Forum,  Children’s Rights and Business Atlas : The  Atlas provides quantitative scores on risks of child labour for businesses in 198 countries.
• Ethical Trading Initiative,  Base Code Guidance: Child Labour : A detailed  guide for businesses on assessing the actual and potential risk of child labour in global supply chains.
• US Department of Labor,  List of Goods Produced by Child Labour or Forced Labor details child labour risks in various goods and commodities, which can be used as  qualitative data  in risk and impact assessments.
• Human Rights Watch  has a range of  resources on child labour, which could also be used as qualitative data in risk and impact assessments.
• CSR Risk Check : A  tool allowing companies to check which international CSR risks (including related to child labour) businesses are exposed to and what can be done to manage them. The tool provides tailor-made information on the local human rights situation as well as environmental, social and governance issues. It allows users to filter by product/raw material and country of origin. The tool was developed by MVO Netherland; the  German  version is funded and implemented by the German Government’s  Helpdesk on Business & Human Rights  and  UPJ .

3. Integrate and Take Action to Address Child Labour Impacts

As per the  UNGPs , effective integration requires that:

• “Responsibility for addressing [human rights] impacts is assigned to the appropriate level and function within the business enterprise” (e.g. senior leadership, executive and board level);
• “Internal decision-making, budget allocations and oversight processes enable effective responses to such impacts”.

The actions and systems that a company will need to apply will vary depending on the outcomes of its impact assessment. Any actions should take into account (and try to address) risk factors and root causes of child labour, i.e. what caused or might cause a human rights violation.

One of the most common actions undertaken by companies is  training  of company employees and suppliers, which may cover child labour laws, company policies, procedures to  ascertaining the age of workers  and detect falsified documentation, and safety and health procedures for young workers (which often differ from those required for adults). Training can be delivered in a range of formats, such as online videos, e-learnings, in-person sessions or supplier round tables.  Coca-Cola , for example, conducts training on human rights (including child labour) for employees, bottlers, suppliers and auditors. Another example is  PepsiCo  that conducts training for suppliers on PepsiCo’s  Supplier Code of Conduct , which includes the prohibition of child labour. Businesses, however, should be mindful that training alone will not solve the problem, for example, if parents have no other option than to bring their children to work (be it for economic reasons or for lack of access to education etc.). Hence, the need to address root causes of child labour.

The  ILO-IOE Child Labour Guidance Tool for Businesses  includes further suggestions of practical approaches by companies to prevent or mitigate child labour in their operations and supply chains, including:

• Proactively communicating their short and medium-term needs to suppliers and other business partners so that they can plan ahead appropriately;
• Enhancing alignment and collaboration between the purchasing team and sustainability or responsible sourcing experts inside the buying company;
• Moving to integrate the two functions, making purchasing managers directly responsible for social compliance in relation to the suppliers they buy from;
• Participating in multi-stakeholder initiatives (MSIs) whose code requires members to evaluate the role that purchasing practices can play in incentivizing negative impacts by suppliers.

Ferrero and Olam International  are examples of companies taking action on child labour in cocoa supply chains through their membership in the  International Cocoa Initiative (ICI) .  Hilton  and  TUI Group  work on protecting children from commercial sexual exploitation — one of the worst forms of child labour — through their membership in  The Code  initiative.

• ILO and IOE,  Child Labour Guidance Tool for Business : Helpful  guidance on integrating and taking action on child labour.
• ILO,  Supplier Guidance on Preventing, Identifying and Addressing Child Labour : A  practical guidance for factories and other production sites on effective age verification and measures to protect young workers.
• ILO,  Child Labour Platform: Good Practice Notes : Provides  guidance on embedding child-centred practices and management systems within a business.
• Ethical Trading Initiative,  Base Code Guidance: Child Labour : A detailed  guide on actions that businesses can take to eliminate child labour in global supply chains.
• Global Child Forum,  Child Labour Policy: A Child-Centred Approach :  Guidance on embedding child labour policies in practice.
• SME Compass : Provides  advice on how to take action on human rights by embedding them in your company, creating and implementing an action plan, and conducting a supplier review and capacity building.
• SME Compass, Identifying stakeholders and cooperation partners : This practical guide is intended to help companies identify and classify relevant stakeholders and cooperation partners
• SME Compass, Standards Compass : This online tool offers guidance on what to pay attention to when selecting sustainability standards or when participating in multi-stakeholder initiatives. It allows comparing standards and initiatives with respect to their contribution to human rights due diligence and their potential limitations.
• UNICEF, Engaging Stakeholder’s on Children’s Rights: This tool offers guidance to companies on how to engage stakeholders on children’s rights to help enhance their standards and practices at both the corporate and site levels.

4. Track Performance on Eliminating Child Labour

As per the  UNGPs , tracking should:

• “Be based on appropriate qualitative and quantitative indicators”;
• “Draw on feedback from both internal and external sources, including affected stakeholders” (e.g. through grievance mechanisms).

Businesses should regularly review their approach to eliminating child labour to see if it is effective and is having the desired impact. The  ILO-IOE Child Labour Guidance Tool for Businesses  includes suggestions on systems for tracking performance.

Audits and social monitoring are common ways to check performance. Such monitoring or audits can be undertaken internally by the company or a third party contracted by the company. A common approach or first step taken by companies is to issue self-assessment questionnaires (SAQs) to suppliers, requesting information and evidence on their child labour procedures, such as how they verify the age of their workers or their own approach to managing child labour. Repeated SAQs can give insight into improvements in supplier management systems and let suppliers self-report on actual or potential child labour impacts.

Where SAQ results warrant it, companies can carry out on-the-ground (or in the context of the COVID-19 pandemic) remote suppliers audits. Common supplier audit frameworks that span most industries and include child labour indicators include  SMETA  audits and  SA8000 accredited audits .  General Mills , for example, conducts SMETA audits of its suppliers and co-packers.

If shortcomings are identified, Corrective Action Plans (CAPs) should be developed jointly with the supplier, setting out clear targets and milestones for improvement. Progress should then be tracked regularly to ensure CAP completion.

Setting SMART targets helps objectively track performance. SMART targets are those that are: specific, measurable, attainable, resourced and time-bound. Examples of indicators to be recorded and monitored include:

• Child labour grievances recorded (number and nature)
• Audit findings on child labour
• Progress on Corrective Action Plans
• Media reports on instances of child labour
• Official inspection outcomes

Responsibility for data collection should be clearly allocated to relevant roles within the company and reported with a set frequency (for instance once a month).

Although both SAQs and audits are commonly used by companies in various industries, both tools have  limitations  in their ability to uncover hidden violations, including child labour. Unannounced audits somewhat mitigate this problem but even these are not always effective at identifying violations given that an auditor tends to spend only limited time on-site. Furthermore, human rights violations, including child labour, often happen further up supply chains, whereas audits often only cover ‘Tier 1’ suppliers.

New tools such as technology-enabled worker surveys/‘ worker voice ’ tools allow real-time monitoring and partly remedy the problems of traditional audits. An increasing number of companies complement traditional audits with ‘worker voice’ surveys (e.g.  Unilever  and  VF Corporation ), which can be easily adapted to different languages to accommodate workers’ needs.

Some companies go further and adopt ‘ beyond audit ’ approaches, which are built on proactive collaboration with suppliers rather than on supplier monitoring (‘carrots’ rather than ‘sticks’). Collaborating with other stakeholders, including workers’ organizations, law enforcement authorities, labour inspectorates and non-governmental organizations to proactively identify and remediate child labour can also prove to be effective. Progress reports from MSIs, such as the  Responsible Mica Initiative , may also be helpful to track improvements in areas that are highly relevant to the occurrence of child labour.

• ILO and IOE,  Child Labour Guidance Tool for Business : This tool includes helpful  guidance on monitoring and performance tracking.
• Global Child Forum,  Child Labour Policy: A Child-Centred Approach : Outlines  different approaches to tracking performance on child labour, particularly Approach 6.
• Ethical Trading Initiative,  Base Code Guidance: Child Labour : A step-by-step  guide for businesses on eliminating child labour in global supply chains, including Step 4 ‘Monitoring implementation and impact’.
• SME Compass : Provides  advice on how to measure human rights performance.
• SME Compass: Key performance indicators for due diligence : Companies can use this overview of selected quantitative key performance indicators to measure implementation, manage it internally and/or report it externally.
• SME Compass:   Measuring and reporting on progress: This resource provides an overview of how to measure and report on the progress of the actions taken to address human rights impacts.

5. Communicate Performance on Eliminating Child Labour

As per the  UNGPs , regular communications of performance should:

• “Be of a form and frequency that reflect an enterprise’s human rights impacts and that are accessible to its intended audiences”;
• “Provide information that is sufficient to evaluate the adequacy of an enterprise’s response to the particular human rights impact involved”; and
• “Not pose risks to affected stakeholders, personnel or to legitimate requirements of commercial confidentiality”.

Companies are expected to communicate their performance on eliminating child labour in a formal public report, which can take a form of a standalone child labour report (e.g.  Nestlé’s Tackling Child Labour reports ). More commonly, however, an update on progress with eliminating child labour is included in a broader sustainability or human rights report (e.g.  Unilever’s Human Rights reports ), or in an annual  Communication on Progress  (CoP) in implementing the Ten Principles of the UN Global Compact. Additionally, other forms of communication may include in-person meetings, online dialogues and consultation with affected stakeholders.

The  ILO-IOE Child Labour Guidance Tool for Businesses  includes detailed recommendations on the form and frequency of a company’s communications on child labour, the nature of provided information and the risks of communication to children and their families.

• ILO and IOE,  Child Labour Guidance Tool for Business : This tool has helpful  guidance  on how to report child labour approaches and results.
• Global Reporting Initiative (GRI),  GRI408: Child Labor 2016 : GRI sets out the  reporting requirements  on child labour for companies to achieve standard 408.
• UNICEF,  Children Are Everyone’s Business: Workbook 2.0 : This workbook includes  guidance  on integrating children’s rights into sustainability reporting.
• UNICEF,  Children’s Rights in Sustainability Reporting: A Guide for Incorporating Children’s Rights into GRI-based Reporting : A  practical tool  to help companies with reporting and communicating on how they are respecting and supporting children’s rights.
• UNGP Reporting Framework : A short series of  smart questions  (‘Reporting Framework’), implementation guidance for reporting companies, and assurance guidance for internal auditors and external assurance providers.
• United Nations Global Compact,  Communication on Progress (CoP) : The  CoP  ensures further strengthening of corporate transparency and accountability, allowing companies to better track progress, inspire leadership, foster goal-setting and provide learning opportunities across the Ten Principles and SDGs.
• The Sustainability Code : A framework for reporting on non-financial performance that includes 20  criteria , including on  human rights  and  employee rights .

6. Remedy and Grievance Mechanisms

As per the  UNGPs , remedy and grievance mechanisms should include the following considerations:

• “Where business enterprises identify that they have caused or contributed to adverse impacts, they should provide for or cooperate in their remediation through legitimate processes”.
• “Operational-level grievance mechanisms for those potentially impacted by the business enterprise’s activities can be one effective means of enabling remediation when they meet certain core criteria.”

To ensure their effectiveness, grievance mechanisms should be:

• Legitimate : “enabling trust from the stakeholder groups for whose use they are intended, and being accountable for the fair conduct of grievance processes”
• Accessible : “being known to all stakeholder groups for whose use they are intended, and providing adequate assistance for those who may face particular barriers to access”
• Predictable : “providing a clear and known procedure with an indicative time frame for each stage, and clarity on the types of process and outcome available and means of monitoring implementation”
• Equitable : “seeking to ensure that aggrieved parties have reasonable access to sources of information, advice and expertise necessary to engage in a grievance process on fair, informed and respectful terms”
• Transparent : “keeping parties to a grievance informed about its progress, and providing sufficient information about the mechanism’s performance to build confidence in its effectiveness and meet any public interest at stake”
• Rights-compatible : “ensuring that outcomes and remedies accord with internationally recognized human rights”
• A source of continuous learning : “drawing on relevant measures to identify lessons for improving the mechanism and preventing future grievances and harms”
• Based on engagement and dialogue : “consulting the stakeholder groups for whose use they are intended on their design and performance, and focusing on dialogue as the means to address and resolve grievances”

Grievance mechanisms can play an important role in helping to remediate child labour issues in operations and supply chains. Grievance mechanisms should be:

• Created with input from the affected groups they are intended to help;
• Available in multiple formats and languages to accommodate workers’ needs. For instance, a high prevalence of migrant labour means a mechanism will need to be available in different languages, or illiteracy may require the mechanism to be explained to workers in a format other than writing (for example a video or presentation).

If instances of child labour are identified, corrective actions should be taken to protect the child from child labour and ensure that the child is not left in a worse situation due to loss of income. Ensuring viable alternatives is key. Child-focused actions can include:

• Providing education alongside work if the child is above the minimum age, but if the child is below minimum age the child should be progressively withdrawn from child labour;
• Removing the child but paying the wages they would have earned until they reach working age;
• Assisting the child in finding education opportunities once removed from work; and
• Assisting the child in finding employment opportunities upon reaching the legal working age.

Businesses may also want to consider cooperation with third parties to remediate child labour, including education officials, NGOs, public health officials and other companies using the same supply chain. In cases concerning the worst forms of child labour, this may even be a legal requirement. MSIs are also helpful in designing child labour remediation programmes, i.e. exchanging thoughts and ideas, and combining remediation efforts. Examples of companies with child labour remediation programmes include  Nestlé  and  ASOS .

• ILO and IEO,  Child Labour Guidance Tool for Business : This tool includes helpful  guidance  on remediation actions and grievance mechanisms for businesses.
• ILO,  Child Labour Platform: Good Practice Notes  (particularly sections 4 and 5) :  Guidance  on approaches for businesses to establish and implement remedial systems and actions.
• ILO,  Supplier Guidance on Preventing, Identifying and Addressing Child Labour : A practical  guidance  for factories and other production sites on remediating child labour.
• Ethical Trading Initiative,  Base Code Guidance: Child Labour : A step-by-step  guide  for businesses on eliminating child labour in global supply chains, including Step 3 ‘Mitigation of risk and remediation for child workers’.
• Ethical Trading Initiative,  Access to Remedy: Practical Guidance for Companies :  This  guidance  explains key components of the mechanisms that allow workers to submit complaints and enable businesses to provide remedy.
• Global Compact Network Germany,  Worth Listening: Understanding and Implementing Human Rights Grievance Management : A business  guide  intended to assist companies in designing effective human rights grievance mechanisms, including practical advice and case studies. Also available in  German .
• SME Compass: Provides advice on how to establish grievance mechanisms and manage complaints.

Case Studies

This section includes examples of company actions to address child labour in their operations and supply chains.

Further Guidance

Examples of further guidance on child labour include:

• United Nations Global Compact,  The Ten Principles of the UN Global Compact : The  Ten Principles  of the UN Global Compact provide universal guidance for sustainable business in the areas of human rights, labour, the environment and anti-corruption.  Principle 5  calls on businesses to uphold the elimination of child labour.
• United Nations Global Compact,  Business: It’s Time to Act: Decent Work, Modern Slavery & Child Labour : This  brief guide  offers an overview of the steps businesses can take to help eliminate child labour while highlighting key resources, initiatives and engagement opportunities to support business action.
• ILO,  COVID-19 and Child Labour: A Time of Crisis, a Time to Act : This  report  outlines the impact of the global COVID-19 pandemic on child labour trends.
• ILO,  Understanding the Health Impact of Children’s Work : This  study  brings together information from a wide variety of nationally representative household surveys in an attempt to shed additional light on the health effects of children’s work within and across less-industrialized countries and on which types of children’s work pose the greatest risk of ill-health.
• ILO,  Towards the Urgent Elimination of Hazardous Child Labour : This  report  brings together and assesses new research on hazardous child labour and provides recommendations on prevention and protection.
• ILO,  Improving the Safety and Health of Young Workers : This  report  provides a definition of young workers and outlines factors threatening their safety and health.
• ILO, Ending Child Labour, Forced Labour And Human Trafficking In Global Supply Chains : This report aims to help businesses develop policies and practices to prevent child labour in global supply chains.
• ILO, OECD, IOM and UNICEF,  Multi-Stakeholder Initiative on Ending Child Labour, Forced Labour and Human Trafficking in Global Supply Chains : This  resource  provides recommendations on responsible business conduct on labour and human rights, including developing due diligence on child labour.
• ILO Helpdesk for Business, Country Information Hub : This resource can be used to inform human rights due diligence, providing specific country information on different labour rights.
• UNICEF, UN Global Compact and Save the Children,  Children’s Rights and Business Principles : The  Principles  (particularly 2, 3 and 4) guide companies on actions they can take to prevent child labour.
• UNICEF and UN Global Compact,  Children in Humanitarian Crises : What Business Can Do : A  report  on how business can help uphold children’s rights — including freedom from child labour — and support and promote their well-being during humanitarian crises.
• UNICEF,  Tool for Investors on Integrating Children’s Rights into ESG Assessment : This  tool  has been designed to guide investors on integrating children’s rights into the evaluation of ESG opportunities and performance of investee companies.
• UNICEF, UN Global Compact and Save the Children, Children Introduce the Children’s Rights and Business Principles: This video features children from Panama teaching businesses about the Children’s Rights and Business Principles.
• UNICEF, Child Rights and Security Handbook : This tool provides details on how to implement the Child Rights and Security Checklist – a checklist for companies to improve the protection of children’s rights within security programs.
• Alliance 8.7,  Delta 8.7 Knowledge Platform : A global  knowledge platform  providing resources on eradicating forced labour, modern slavery, human trafficking and child labour.
• Stop Child Labour,  Handbook: 5×5 Stepping Stones for Creating Child Labour Free Zones : The stepping stones presented in this  handbook  are based on the stories and strategies of NGOs, unions and child labour free zone members worldwide. The handbook shows that — in spite of poverty — it is possible to get children out of work and into school.
• SME Compass, Due Diligence Compass : This online tool offers guidance on the overall human rights due diligence process by taking businesses through five key due diligence phases.
• SME Compass , Standards Compass : This online tool offers guidance on what to pay attention to when selecting sustainability standards or when participating in multi-stakeholder initiatives. It allows comparing standards and initiatives with respect to their contribution to human rights due diligence and their potential limitations.
• SME Compass, Measuring and reporting on  progress : This resource provides an overview of how to measure and report on the progress of the actions taken to address human rights impacts.
• SME Compass, Downloads : Practical guides and checklists are available for download on the SME compass website to embed due diligence processes, improve supply chain management and make mechanisms more effective.

Nike and child labour – how it went from laggard to leader

29 February 2016

For well over a decade, Nike became defined by the term ‘sweatshop labour’. It was simply one of the principal things for which it became famous. Consequently, a good many people saw it as the epitome of uncaring capitalism. It was one of the demons of the anti-capitalist campaigners.

In reality, there was no truth to the idea that the company was wicked or uncaring. It was simply one of the first that had pioneered a new business model, and it was learning the hard way that it’s hugely successful formula had unintended consequences that would have to be dealt with.

Nike was originally founded in 1964 as Blue Ribbon Sports, changing to Nike in 1971. One of the two founders, Phil Knight, came up with the idea while he was at Stanford Business School. At the time, the vast majority of US footwear was manufactured in America. Nike was able to grow quickly using the model of outsourcing production to a network of suppliers in parts of the world where costs were lower.

Nike didn’t own the factories. In a very real sense, Nike has never manufactured a single shoe in its entire history. And because it didn’t own the factories, the assumption was that running them was business of the owners, not Nike. In its early decades of existence, there was apparently no evidence of any problem that challenged that assumption.

But by the 1990s, the world was changing. Economic deregulation was leading to a huge increase in the globalisation of the economy, and as the scale of global corporate activity was ramping up, the negative consequences were becoming highly visible. Consequently, the US and European home markets began to hear more about working conditions in foreign factories. Nike was neither better nor worse than any of its peers at this point. The whole outsourced industry was based on the premise of “ignorance is bliss”. But ignorance was proving more and more difficult to maintain.

The company began to make changes. It revised its factory code of conduct, and hired auditing firms to carry out safety checks. But by and large, it was still left to the factory owners to sort themselves out while Nike negotiated for the lowest possible prices.

Everything changed in 1996. Life magazine published a story that included a photograph of a child stitching footballs that carried the Nike logo. There is some evidence that the photo was staged, since it showed inflated footballs while in reality the balls were shipped uninflated. It didn’t matter. The picture was a powerful visual for a situation that was shown to genuinely exist. The company’s reputation suffered and the first of many protests began to take place.

By 1998, the company accepted it needed to take responsibility. Phil Knight admitted “the Nike product has become synonymous with slave wages, forced overtime and arbitrary abuse.” It was going to be a longer journey than they might have imagined. Nike and child labour had become indelibly linked in the public consciousness.

Nike began to take the first steps. It released the names and locations of its factories. It changed elements of its shoe manufacture to reduce hazards to the workers who make them. It began producing reports to talk about its progress. And it put more focus on audits of factories to identify problems.

Still, the popular view of the company as a villain refused to go away. In 2001, one particular incident summed up the problem. The company had offered customers the ability to have a word of their choice stitched onto their new Nike trainers. One enterprising critic requested that the word ‘sweatshop’ should be used for his shoes. The company’s refusal was one of the first examples of a viral internet phenomenon as the email exchange got shared widely across the world.

Organisations such as ‘NikeWatch’ and the Clean Clothes Campaign expressed skepticism about Nike’s efforts, taking a cynical view of its seriousness and sincerity.

But by 2005, the company’s steady progress began to gain grudging respect from some of the campaign groups, and it seemed like the mood music might begin to change. Then just at that point, there came a crisis that threatened to take it right back to the beginning.

In the run-up to the 2006 World Cup, photos were presented to the company of pictures of Pakistani children stitching Nike footballs – a direct repeat of what had happened ten years earlier. It turned out that the supplier, Saga Sports, having become overwhelmed with orders linked to the approaching World Cup, had gone against the rules by sending balls out to be made at local homes.

There was a significant cost to dealing with this problem. To recall the balls would cost $100m short term, and it would delay future production considerably. The company decided to pull the product anyway and to cancel its contract with Saga, moving instead to Silver Star where all work would be done on factory premises.

It was a short-term financial blow, but it sent a strong signal to the company’s suppliers and its customers at the same time, that it was serious about tackling the problem.

The impact on former supplier Saga was enormous, essentially driving it to bankruptcy. Other suppliers based in Sialkot, Pakistan took careful note.

Nike has shown itself to be willing to take other tough decisions, for instance pulling support from a major low cost supplier in Bangladesh because it was impossible to provide working conditions that met decent standards. This was a move that gave it a competitive disadvantage when others were exploiting Bangladesh as the lowest possible cost base. But it left the company less exposed when the Rana Plaza building disaster took place and hard questions began to be asked about who was doing what.

Now, Nike finds itself more often at the top of lists for sustainable companies, particularly within its sector. It appears in the top ten of the Fortune Most Admired Companies list. Its commitment to improving its environmental impact, providing transparency about its processes, and ensuring decent working conditions in its supply chain, have turned the tide of public perception.

Now the company is more often to be found on the front foot when it comes to matters of integrity. For instance, when boxer Manny Pacquiao recently made anti-gay comments during a media interview, Nike dissolved its partnership with him the very next day, labelling his comments “abhorrent.”

The company’s turnaround has become one of the success stories of corporate integrity in the last two decades.

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• Case studies

This page presents all relevant good practice case studies that showcase how business have addressed the Forced labour dilemma. Case studies have been developed in close collaboration with a range of multi-national companies and relevant government, inter-governmental and civil society stakeholders. We also draw on public domain sources, including the UN Global Compact's own published Communications on Progress through which signatories are required to report on their performance against the Ten Principles.

The case studies explore the specific dilemmas and challenges faced by each organisation, good practice actions they have taken to resolve them and the results of such action. We reference challenges as well as achievements and invite you to submit commentary and suggestions through the Forum.

IN-DEPTH (Print seperately) Responsible Cotton Network: Combating forced child labour during the cotton harvest - Uzbekistan

IN-DEPTH (Print seperately) ICC: Combating slave labour in the Brazilian charcoal and steel sector - Brazil

Verite, a US-based NGO, conducts research on forced labour and human trafficking around the world, with a particular focus on exploitive labour broker practices. Some of Verite’s projects include:

·          The use of forced labour in the electronics sector in Malaysia

·          Unscrupulous labour practices in the Guatemalan palm oil sector

·          Human rights abuses perpetuated throughout global supply chains of artisanal and small-scale mining (ASM), with a focus on ASM gold in Peru

  Verite aims to engage with companies in implementing strategies to identify and eliminate exploitive labour broker practices from their supply chains in order to minimise the risk of forced labour. Verite also provides courses that provide participants the competencies to perform audits of labour practices within companies, with a focus on auditing compensation, business ethics and working hours. These audits are run by Verite’s partnership organisation, the Electronic Industry Citizenship Coalition (EICC). 

http://www.verite.org

Established in 2002, the International Cocoa Initiative (ICI) is a partnership between NGOs, trade unions, cocoa processors and companies focused on tackling exploitative child labour. Member companies include: Cargill, Hershey’s, Kraft Foods, Mars, Nestle, Twinings and Toms International, amongst others. The ICI works at both the national- and the community-level to foster programmes to combat and prevent forced child labour. The ICI has implemented programmes in Cote d’Ivoire and Ghana.

http://www.cocoainitiative.org

Business Social Compliance Initiative (BSCI) was launched in 2003 by the Foreign Trade Association, a Brussels-based trade association that represents the trade interests of European companies. BSCI acts as an umbrella group for around 1,300 retail companies focused on improving working conditions in their supply chains.

The organisation has developed the BSCI code which addresses a wide range of supply chain issues, including a prohibition on forced labour as well as disciplinary measures for suppliers failing to comply with the code. Members adopt the BSCI Code internally and require their suppliers to come into compliance. BSCI provides capacity building in the form of training and technical assistance. BSCI also relies on external monitoring to ensure conformance to the code. BSCI is a member of the UN Global Compact.

http://www.bsci-eu.org

Founded in 2004, FFC is a New York-based membership organisation of companies seeking to improve working conditions in factories that make consumer goods. FFC shares compliance data between companies in order to improve the availability and standardisation of standards and audits on social, environmental and security standards. Amongst its members are Wal-Mart, Reebok, and Levi Strauss & Co. The FFC receives funding from the US Department of State. Its founders include Reebok, the National Retail Federation and the Retail Council of Canada.

http://www.fairfactories.org

The International Council on Metals and Mining (ICMM) is a CEO-led initiative founded in 2011 which focuses on promoting good practice in the mining and metals sector. Composed of 18 of the world’s largest mining companies and 30 associations, its corporate members include Anglo-American, BHP Billiton, Rio Tinto, Vale, Newmont and Mitsubishi Materials. Members commit to implementing ICMM’s Sustainable Development Framework. The framework comprises a set of 10 principles focused on integrating ethnical business practices across the mining sector, supported by public reporting and independent third-party assurance. The principles were adopted in May 2003. Principle 3 prohibits the use of forced, compulsory and child labour.

Global paper manufacturer Glatfleter implements a policy focused on combating forced labour in its supply chain, based on ILO conventions and national law. The company’s ‘Child and Forced Labor Policy’, which “recognises regional and cultural differences”, explicitly prohibits exploitative working conditions and the use of any forced labour. In order to address the problem, Glatfelter engages with suppliers, industry organisations, civil society representatives and governments.

In its policy document, Glatfelter acknowledges that the risks are particularly elevated for companies sourcing raw agricultural products, due to supply chains which are often long, complex and at risk of perpetuating forced labour use. The company strongly encourages its suppliers, subcontractors and business partners to adhere to its principles on the issue.

http://www.glatfelter.com

As part of its ‘No Child or Forced Labour’ policy, Indian multi-business conglomerate ITC Limited prohibits the use of forced or compulsory labour at all of its units, and maintains that no employee be made to work against their will or be subject to corporal punishment or coercion. The policy is made available to all employees through accessible induction programmes, policy manuals and intranet portals. Trade unions also engage with workers at each ITC unit to ensure they are aware of their rights. All units provide an annual report on any incidents of child or forced labour to divisional heads, and are subject to Corporate Internal Audits and Environment, Health and Safety assessments.

http://www.itcportal.com

Under the California Transparency in Supply Chains Act of 2010 (SB 657), which applies to retail sellers and manufacturers “doing business in the state”, multinational automaker Ford has disclosed its four key principles for the prevention of forced labour use in its supply chains:

·          Firstly, the company engages in risk assessment of its supply base, taking into account the geographic context, commodity type, level of labour required for production, supplier ownership structure and quality performance and the nature of the transaction.

·          Secondly, Ford operates purchase orders which require suppliers to certify compliance with standard terms and conditions on the prohibition of forced labour.

·          Thirdly, along with the other members of the Automotive Industry Action Group (AIAG), Ford conducts training and capacity building for global purchasing staff and suppliers in high-risk markets.

·          Finally, the company carries out regular audits of at-risk ‘Tier 1’ supplier factories, resulting, if necessary, in the completion of corrective action plans to then be reassessed six to 12 months after the original audit.

http://www.ford.com

On 6 May 2013, global sportswear brand Adidas announced that it was gradually launching a new whistle-blowing helpline at all of its Asia-based operations – to enable factory employees to voice potential grievances about labour violations. Workers employed in factories supplying Adidas will be able to send anonymous text messages – limited to 160 characters – to the  SMS Worker Hotline . While managers at the factories will be the main recipients of these text messages, Adidas will also be able to access them. This will allow the company to take direct action – particularly in cases where serious violations such as forced, bonded or child labour are identified.

Adidas acknowledges that workers sometimes do not feel comfortable in bringing issues to the attention of factory management in person. The move by the Germany multinational follows a spate of deadly incidents in Bangladeshi garment factories during 2013, one of the most important source countries for the global clothing industry. In this context, the establishment of worker hotlines can enable factory employees to raise practical issues related to health and safety, as well as labour violations.

Ford implements a supplier training programme to promote responsible working conditions in its supply chain. The programme is focused on “high-priority” countries including those in:

• The Americas (Argentina, Brazil, Colombia, Dominican Republic, Honduras, Mexico, Nicaragua and Venezuela)
• Asia (China, India, Malaysia, the Philippines, South Korea, Taiwan, Thailand and Vietnam)
• Europe, the Middle East and Africa (Morocco, Romania, Russia, South Africa and Turkey)

Training was originally based on Ford’s own Code of Basic Working Conditions and was implemented by Ford at supplier factories. The programme is based on one-day interactive workshops involving multiple suppliers, and is targeted at human resources, health and safety, and legal managers within supplier companies. Each participant is expected to ‘cascade’ relevant training materials to personnel within their own companies – and to their own direct suppliers. Indeed, Ford requires confirmation from participant suppliers that training information has been disseminated to these target groups within four months of each workshop.

The programme has since evolved into a joint initiative with other car manufacturers – in order to reach a larger number of suppliers (many of whom provide parts to multiple brands) more efficiently. This resulted in the formation of the Automotive Industry Action Group (‘AIAG’) through which car manufacturers from North America, Europe and Asia have developed common guidance statements on working conditions – as well as an online training programme for suppliers to the sector. These cover a range of issues including child labour, forced labour, freedom of association, discrimination, health and safety, wages and working hours.

Ford estimates that its training activity (carried out both unilaterally and in conjunction with the AIAG) has reached 2,900 supplier representatives – and been ‘cascaded’ to around 25,000 supplier managers, 485,000 workers and 100,000 sub-tier supplier companies.

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IKEA: Indian Rugs and Child Labour, Case Study Example

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Executive Summary

IKEA was founded by Ingvar Kamprad in the early 9150’s and was the C.E.O until 1986. In the 1990’s, the company had become the world’s largest retailer in specialized furniture. Kamprad brought to an end the traditional furniture maker and invested outside the Swedish Furniture cartel. He managed to establish relationships with outside suppliers and created a unique business structure that featured exhibition retail displays. It highlighted a wide range of functional and affordable uniquely designed home furnishings that customers could purchase to take home and assemble themselves. Kamprad established a mission for IKEA “ to create a better everyday life for the many people ”. He executed his mission through a strategy of selling affordable and high quality furniture to consumers in mass markets (Christopher, Vincent, & Anders, 2006).

Introduction

In 1994, a Swedish television documentary revealed IKEA’s connections to a carpet supplier of Pakistan who used child labour. At the time, child labour was just emerging as an issue of public concern. Although the problem caught IKEA unaware, it was quick to respond by seeking for advice from organizations involved in children’s rights. This was followed by an adoption of anti-child labour policy that was instituted through a section in all supply indentures. The clause stated that IKEA would discontinue any contracts with any supplier who was involved in child labour. IKEA collaborated with a third party agency in order to monitor the progress of child labour practices at suppliers in India and Pakistan, (Bill 2008).

For one year, the Swedish documentary focusing on child labour was aired, Marianne Barner, IKEA ’s business manager in charge of carpets discovered that a German T.V station was planning to air an investigative article naming one of IKEA ’s Indian Rug suppliers as a key employer of children. The supplier in this case had already signed a contract agreement with IKEA not to use child labour. The story was revealed at a time when the issue of child labour was gaining momentum in reporting in the media.

Furthermore, Germany was IKEA’s largest international market. The TV station for German seemed to be less disposed towards IKEA than the Swedish T.V show had been in its 1994 documentary. There was increased media play as the child labour issue was getting the attention of global organizations and NGOs including manufacturers, importers, and retailers as well as Indian organizations who were in support of use and certified their products as free of child labour, (Christopher, Vincent, & Anders 2006).

Barner was under pressure of deciding how to handle the problem with the impending documentary by German TV and the negligence by IKEA’s Indian rug supplier. More importantly, deciding on the best way of addressing over the long-term deeply imbedded issue of child labour in the supply chain of IKEA.

How should Marianne Barner respond to the invitation for IKEA to have a representative appear on the upcoming broadcast of the German video program?

The producers of the German T.V documentary presented their invitation to IKEA, asking them to send a representative who was to participate in a live debate when broadcasting the program. By accepting the invitation, IKEA would benefit by being given an opportunity to educate the producers as well as the public at large on their current efforts directed towards fighting child labour. However, it is evident that the producers will not allow IKEA to have a preview of the video and that the program planned to have a confrontational approach aimed at undressing IKEA. This raises the possibility that IKEA’s message would not be properly portrayed. Therefore, Barner should not accept the invitation and only give a response to the accusations in the video once they have been allowed to preview and verify the evidence, (Christopher, Vincent, & Anders 2006).

What actions should she take regarding the IKEA supply contract with Rangan Exports?

If the available evidence on child labour at Rangan Exports is accurate, this means that the supplier has directly violated KIEA’s clause of no child labour. There are two alternatives for Barner in handling the situation. First, she can immediately bring the contract with the supplier to an end based on breach of their breach of the child labour provision. According to IKEA’s policies, this option is legal. The only disadvantage with this option is that it may deprive IKEA of a lucrative supplier relationship. IKEA’s bottom line might be affected adversely due to the cutting off access to Indian rug resources (Rosabeth 2009).

Another option for Barner is to maintain its relations but issue a warning to the supplier. They should demand that the supplier stop employing child labourers. The advantage of this option is that IKEA would maintain a potential, lucrative supplier relationship. It would also be a ground for IKEA to educate suppliers on the hazards of child labour. On the other side, this alternative would be a direct contradiction of IKEA’s own established policies. It may send a message to suppliers that IKEA might in secretly tolerate child labour while openly condemning it. Another possible effect would be the level of negative publicity that would be generated and the likely damage it would cause to the reputation of IKEA (Rosabeth 2009).

IKEA should embrace the first alternative and terminate relations with the violating supplier. In case they fail to do so, they might send the wrong message to other suppliers who then might increase their bargaining power resulting in violation of IKEA’s policies. Moreover, it leaves IKEA as open to allegations of unethical behaviour. IKEA should publicly terminate its relations with Rangani Exports with immediate effect. The company should issue a press release with clear reasons to justify the decision and summarize IKEA’s policy on suppliers using child labour (Bill 2008).

What long-term strategy would you suggest she take regarding IKEA’s continued operation in India? Should the company stay or should it exit? Describe the impact of such a decision and how would you manage it?

There is a wide range of options, which IKEA could be use to address long-term strategy in India. The first alternative is to withdraw from India. This option has a key advantage in that it would solve the problem by withdrawing IKEA from the situation – at least as it has a relation with Indian rugs. Losses are likely to be minimal as rugs represent only a small percentage of IKEA’s business. However, some disadvantages including the likelihood of IKEA to lose potential businesses to customers looking for such imported rugs (Jiangyng, Tao, Yu & Grace 2009).

Another disadvantage is that the decision by IKEA not to carry any Asian rugs. This may encourage the purchase of extra rugs produced by employed children because customers go to competitors lacking competitive policies on child labour. This may also result to an impression that IKEA is hiding from the issue and not attempting to contribute to its solution. Lastly, this option does not prevent IKEA from being involved in another scandal of child labour in yet another home furnishing industry. Therefore, I would recommend that IKEA continues with its operation in India and work hand in hand with suppliers to curb child labour, (Rosabeth 2009).

As globalization continues to make the globe small, organizations are facing new ethical challenges. An international company must find effective ways of bridging the cultural gap in order to ensure the observation of consistent standards in all sectors of business and all levels of the supply chain. There is a direct link between behaving ethically and developing long-term shareholder value. It would be costly for suppliers failing to maintain high ethical standards. This has been evident in the public relations fallout from IKEA’s child labour allegations. Placing values as first priority can easily lead to profit and values creation for consumers, shareholders as well as communities (Bill (2008).

This case study has demonstrated the interdependence of all nations in the entire global economy. Just like the Tsunami in Japan would affect the economy of the US, the actions and values of US businesses would affect the rest of the world. Businesses across the world are with no doubt linked in one global economy. This link should be checked to create a positive change all over the world. Businesses that recognize labour rights pay their workers well helping them to educate their children. It is not easy to effect change because issues are complex. However, the knowledge on the strength of business decisions and its effects on the entire world is an essential step (Viederman 2011).

Bill G. (2008) “ Ethics must be Global, Not Local .” Bloomberg Business week.

Christopher A., Vincent D., & Anders S. (2006) IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labour (B). Boston: Harvard Business Publishing

Christopher, A., Vincent D., & Anders S. (2006). IKEA’s Global Sourcing Challenge: Indian Rugs and Child Labour (A) . Boston: Harvard Business Publishing

Jiangyng, L., Tao Z., Yu L. & Grace L. (2009). “ Mattel’s Strategy after its Recall of Products Made in China. Harvard: Harvard Business Review.

Rosabeth, K. (2009). Inside Procter & Gamble’s New Values-Based Strategy . Bloomberg Business Week

Viederman, D. (2011). “Overseas Sweatshops are a U.S. Responsibility.” Bloomberg Business Week

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Child Labour In India: A Story Of Three Kids Who Became Adults Too Soon

Curated By : Ayushi Gupta

Last Updated: September 23, 2021, 10:32 IST

a son of a vegetable seller, Ankit Gupta has topped commerce stream in the whole of Bihar (Representative image)

A survey done by International Labor Organization (ILO) reveals that over 4.5 million Indian children are engaged in child labor. This figure comes after the census report of 2011.

Among the many crises that the Covid-19 pandemic gave rise to, child labour is a pernicious one. The loss of sources of income and the closure of schools pushed children into a vicious cycle of exploitation and poverty.

Anil is 13. He migrated from Uttar Pradesh to Haryana around twelve years ago. Because they migrated from one state to another, his handicapped mother can neither avail of the subsidies provided by the local governments, nor can receive her widow and disabled-person pensions. Anil sells vegetables on cart and he is a sole earner for his family of six – four younger siblings and his mother. His father passed away recently. Anil wants to study but cannot due to family responsibilities.

15-year-old girl Deepika had to discontinue her studies due to financial crisis. After that she lost her mother, she was saddled with the responsibility of looking after her younger sisters and father.

Another 15-year-old from Panipat, Noorani, does sundry tailoring work and takes care of a family of six members. She dropped out of school after the death of her mother eight years back. Her father is an alcoholic who does not work.

The only silver lining in these children’s lives is that a few NGOs have come to their aid. NGO, Humana India helped Anil in enrolling his brothers and sisters in school but Anil has to manage his family’s financial crisis for now. This NGO came in touch with Deepika and her family. They convinced her father to enroll the girls back in school.

NGO also informed News18 that during Covid-19 lockdown, child labour has boomed as closure of schools gave parents an opportunity to take their kids to work along with them. “It is rampant in small contract companies to which large industries outsource their work. These companies are not registered and are hence not audited.”

A survey done by International Labor Organization (ILO) reveals that over 4.5 million Indian children are engaged in child labor. This figure comes after the census report of 2011. Ironically, India considers its youth as an asset and believes that we as a country have abundance of opportunities and human resources. A serious fact check might change this perspective.

Vishnu and Rohan are two kids who wander from place to place in a group of small families. They perform on the streets for local entertainment shows. Sudha Jha, who works for an NGO based in Panipat told News18 about such kids. They travel from place to place with their families and fall under the category of fixed child labour. Such kids are sharp and have good general knowledge about the locals  compared to children who work in particular areas. They travel and work in order to keep their family tradition alive.

Sudha mostly engages with rural sections and creates awareness about child labour and other social issues. She suggests that such children should be given proper education and skills training. But sadly, their parents want their kids to pass on the ‘Nat ka khel’ family tradition after them. So staying at one place for studies and skills training is not even an option for such kids. They work hard whole day by performing roadshows for a meagre income.

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