a case study on child labour

• 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.

• Casestudies

Child labour

“ how does a company address the presence of child labour in its supply chain, particularly in locations where child labour is relatively common and where there is evidence that removing income-generating opportunities will push children into deeper poverty or other forms of exploitation ”, dilemmas and case studies.

• Access to water
• Community relocation
• Conflict minerals
• Cumulative impacts
• Doing business in conflict-affected countries
• Forced labour
• Freedom of association
• Freedom of religion
• Freedom of speech
• Gender equality
• Health and safety
• Human trafficking
• Indigenous peoples’ rights
• Living wage
• Migrant workers
• Non-discrimination and minorities
• Product misuse
• Security forces
• Stabilisation clauses
• Working hours
• Working with SOEs
• Case studies

This page presents all relevant good practice case studies that showcase how business have addressed the Child 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) IKEA: Child education issues and UN partnership *

IN-DEPTH (Print seperately) Starbucks: Child education issues - Guatemala *

IN-DEPTH (Print seperately) Singer: Child labour issues - Bangladesh *

IN-DEPTH (Print seperately) Monsanto and Bayer: Child labour issues - India *

IN-DEPTH (Print seperately) ILO, UNICEF et al.: Combating child labour in football production – Pakistan

Established in 2003, the Social Forum for the Banana Production Sector was created after reports by Human Rights Watch on child labour and obstacles to freedom of association in Ecuador. A tri-partite initiative, the Forum promotes social dialogue. In May 2004, the Forum produced a Banana Sector Plan on the elimination of child labour. In 2002, the Flower Forum was created in Ecuador to foster social dialogue with leaders from the government, companies and trade unions. The Flower Forum seeks to get children out of hazardous work, such as applying pesticides, and into non-hazardous aspects of flower production.

http://www.ioe-emp.org

Supported by the ILO, the Elimination of Child Labour in Tobacco Foundation (ECLT) brings together tobacco companies, the International Union of Food and agricultural workers, trade unions and the International Tobacco Growers Association. The Foundation produces independent research, funds local community-based projects and shares best practice. The members of the ECLT include companies, such as Altria, British American Tobacco, Imperial Tobacco, Japan Tobacco and Philip Morris. This is a multi-stakeholder initiative which also includes the International Tobacco Growers Association and the International Union of Food, Agricultural, Hotel, Restaurants, Caterers and Tobacco Workers Federation.

http://www.eclt.org

A Brazilian Foundation, Abrinq works to promote the rights of children and adolescents up to the age of 18. In 1995, Abrinq created a child-friendly label to be put on products denoting that a company is promoting the rights of children. Abrinq has been active in combating child labour in several supply chains, including orange juice, coal, sugar and tobacco. The Foundation has facilitated the establishment of social pacts between key players in the industry which ban the use of child labour.

http://www.fundabrinq.org.br

RugMark is an international NGO which works to end child labour in the carpet industry in India and Nepal. RugMark has developed a label known as “Good Weave” which is affixed to rugs made without child labour. RugMark works to rehabilitate children found in the carpet industry. Thus far, it has freed 3,000 children working in the carpet industry and provided them with access to education facilities, including literacy programmes, schooling, day care and vocational training.

http://www.rugmark.net

The Fair Wear Foundation (FWF) works to promote good labour conditions in the supply chain for sewn textiles. The FWF has developed a Code of Labour Practices which includes a prohibition on the use of child labour. The Code references ILO Conventions 138 and 182. FWF provides a mechanism for verification for European companies. Each year, the FWF reviews the workplan of its members to ensure that they are implementing the FWF Code of Labour Practices. The FWF has also developed a complaints mechanism to address workplace grievances.

http://en.fairwear.nl

The International Finance Corporation (IFC), the private sector arm of the World Bank Group, issued a policy statement on forced labour and harmful child labour in 1998. Under this policy, the “IFC will not support projects that use Forced or Harmful Child Labour as defined by the ILO Convention No. 29, article 2. The IFC will incorporate the necessary provisions in its contractual documents to implement this policy.” The policy was issued in March 1998. Interim guidance on implementation issues for addressing harmful child labour was made available in July 1999.

http://www.ifc.org

The BSCI is the broadest business-driven initiative for increasing social compliance in the supply chain. A membership organisation, BSCI has developed the BSCI Code which addresses a wide range of supply chain issues, including a prohibition on child labour. 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. It relies on external monitoring to ensure conformance to the BSCI Code. As of October 2009, there are 381 brands and retailers participating in the BSCI.

http://www.bsci-eu.org

Headquartered in Amsterdam, Made-By is a shadow label used by a wide range of fashion companies in Europe to promote garments made in socially responsible factories and with organic raw materials. Made-By companies receive technical support to implement sustainable practices in the supply chain. Factories in China, Peru, Benin, Zambia and Senegal are benefiting from the programme. The Made-By Initiative benefits from the expertise of Solidaridad, a Dutch development organisation striving for poverty alleviation, which developed the initiative. Participating companies receive a score card, which shows the percentage of a collection that was produced by certified suppliers and the amount of organic cotton used in the collection.

http://www.made-by.org

A leading Indian manufacturer and exporter of rugs, Obeetee launched an awareness campaign to raise awareness about child labour in 1986. Obeetee does not buy products made by children. Obeetee established 21 depots to centralise production and to avoid weaving in the home where child labour often takes place. When announcing the no child labour policy, the company took the unusual step of paying suppliers more, so as to allow them to train adults to do the work. Suppliers who use child labour are blacklisted. Carpets made without child labour are labelled through the Kaleen label, a programme run through the Carpet Export Promotion Council of India.

http://www.obeetee.com

A Kenyan exporter of tea, Muramati collaborates with the Child Welfare Society of Kenya (CWSK) to raise awareness about harmful child labour. The CWSK receives support from the ILO and IPEC to combat child labour by providing education to children. Muramati works with the CWSK by financing student loans and by finding jobs for workers once they have been through the training programme run by the CWSK.

Founded in 2002, the International Cocoa Initiative (ICI) is a partnership of NGOs, trade unions, brands, and cocoa processors who work to address child labour through a range of programmes, including: working at the national level to build the capacity of ministries, working at the regional level, supporting social programmes and promoting radio and other media programmes that raise awareness about the consequences of child labour.

http://www.cocoainitiative.org

In partnership with the UN Development Programme, local governments, farmers, and communities, Cadbury, a large British multinational in the confectionary sector, has established a partnership to enhance the sustainability of one million cocoa farmers in Ghana, India, Indonesia and the Caribbean. In this 10 year programme, £45 million will be invested to improve the income levels of farmers and build partnerships. The partnership is active in 100 communities in Ghana, where the initiative is constructing new school buildings and forming youth clubs.

http://www.cadbury.com

In addition to having KPMG conduct unannounced site visits of all suppliers and subcontractors in South Asia, IKEA, a large retailer, has hired a Children’s Ombudsmen to oversee all aspects of its work with children. IKEA holds workshops for suppliers on a wide range of issues, including child labour. According to its code of conduct, ‘The IKEA Way of Preventing Child Labour’, IKEA requires all suppliers to maintain a registry of all workers and to include their date of birth. IKEA is also partnering with UNICEF to combat child labour in the carpet-producing area of India, Uttar Pradesh. The IKEA-UNICEF partnership seeks to address the root causes of child labour, including poverty and indebtedness. IKEA has helped to establish 1,600 women’s self help groups, reaching 22,000 women. In these groups, women learn about the rights of children, health and nutrition, saving money and starting up small businesses in order to eliminate debts. As a result of the project, more than 80,000 children have enrolled in schools in 500 villages.

http://www.ikea.com

H&M, a large clothing retailer, and UNICEF have launched a five-year initiative to focus on the rights of children in cotton-producing regions of Southern India. H&M has donated US$45 million to rehabilitate child workers by providing them with educational opportunities and access to better health care and nutrition. H&M will also sell bags and then provide a share of the profits to the programme.

http://www.hm.com

Under its pillar on ‘fair partner’, M&S has committed to a number of ethical trade and labour standard commitments, which assists in the elimination of child labour within its supply chain. By the 2009/10, the company (1) extended its use of Fairtrade certified products and purchased approximately a third of the world’s Fairtrade cotton, (2) increased Fairtrade food sales by 55% from 2006/7 and sold 7.9 million Fairtrade cotton garments and (3) assisted its suppliers to develop six ethical model factories to identify and share best practice. Factories will be extended in 2012.

http://plana.marksandspencer.com

The Global Social Compliance Programme (GSCP) was formed because “ the proliferation of codes, audit duplication and divergence of approach is causing inefficiency and slowing improvement within the supply chain ”. It provides a global, cross ? sector platform to facilitate the exchange of knowledge and best practice to “ build comparability and transparency between existing social compliance and environmental compliance systems .” The GSCP is based on three key pillars:

·          Development of a set of reference tools to describe existing best practice – and to “ provide a common interpretation of fair labour and environmental requirements and their implementation ”. This is with the aim of enabling mutual recognition between existing programmes using these tools as a ‘benchmark’ through the GSCP equivalence process

·         The building of comparability between different systems – and the facilitation of data sharing between different databases

·          Collaborative approaches towards capacity building

The GSCP currently has 39 members, including Adidas Group, Chiquita, Gap Inc., S.C. Johnson, Hasbro, Timberland and Walmart. In addition, the GSCP’s advisory board includes representatives from UNI ? Commerce, FGTA ? FO, the International Federation for Human Rights, ICCR (SRI), the Global Partnerships Forum and Harvard’s Kennedy School of Government.

http://www.gscpnet.com

The IKEA Foundation works in partnership with Save the Children and UNICEF to prevent child labour – donating €8 million up until the start of 2013 and pledging a further €9 million. Its efforts are focused on cotton-growing areas in Pakistan – including root causes behind child labour – and include projects focused on:

• Providing access to education
• Engaging families, farmers and communities around attitudes towards child labour
• Facilitating efforts by families to find other sources of income

The Foundation estimates that by 2017, partnership projects should benefit more than 4 million children. The Foundation cites the example of one child who has already benefited; a 13 year old girl called Palwasha, whose family used to beg for a living in Pakistan. Save the Children used funding from the Foundation to establish community groups and children’s clubs in her local village – and these helped convince Palwasha’s parents that sending her to school was in her best interest.

Kraft Foods institutes a three-step process towards supplier management. This is based on: (1) Supplier selection and analysis (including an assessment of their code of conducts and reputation – as well as their ability to deliver); (2) Corporate responsibility in supplier contracts (including the development of contracts that incorporate corporate responsibility provisions – including those relating to forced and child labour, for example; and (3) Assessing corporate responsibility through AIM-PROGESS, Program for Responsible Sourcing (an industry initiative that allows a supplier to provide common information relating to corporate responsibility to its customers – allowing such customers to make independent business decisions on the basis of that information). At the time of writing, Kraft Foods was rolling out AIM-PROGRESS to its suppliers and business partners – a process that is likely to take several years.

Kraft Foods imposes a number of conditions on suppliers, including those relating to child labour. Suppliers are required to not use (directly or indirectly through subcontractors) anyone under the age of 18 unless legal, necessary and the following criteria are met:

·          Suppliers comply with national law or ILO Convention 138 – whichever imposes the higher minimum age. Convention 138 cites minimum employment age as the local mandatory schooling age – but not less than 15 years of age (14 in some developing countries) – subject to mandated exceptions

·          Employees working on the manufacture or packaging of Kraft’s products, serving as temporary Kraft employees or working in Kraft facilities must be at least 15

·          Suppliers demonstrate that the employment of such individuals “ does not expose them to undue physical risks that can harm physical, mental, or emotional development .”

http://www.kraftfoodsgroup.com

In 2012, Apple marked the third year of operation of its Prevention of Underage Labor training programme – aimed at helping its suppliers identify and prevent underage labour. During 2012, it provided training to 84 suppliers in China that were located in provinces that represent a high risk of child labour. The training addresses effective age verification methods, as well as the steps to be taken if underage employees are identified during auditing. It also introduced a guidebook to assist with the verification of legal identification documents and the assessment of the recruitment practices of third-party labour agents. Following training, the selected suppliers assess their internal and external child labour risks – and create action plans to address any concerns. These are then reviewed by Apple. Where necessary, suppliers are assisted in the implementation of their action plans by industry consultants. In addition, higher risk suppliers are given the names of labour agents that have been associated with child labour – as well as guidance as to how to work with labour agents, including advice around:

• Ensuring the labour agents have all necessary licences and permits
• Conducting regular audits of labour agents’ recruitment practices
• Reporting violations, both to Apple and to the local authorities

http://images.apple.com

In its Supplier Responsibility 2013 Progress Report, Apple notes that during 2012, it found no cases of underage labour at any of its final assembly suppliers. Nonetheless, it notes that “ dishonest third-party labor agents conspire to corrupt the system ”. In an example of transparent reporting, it cites the example of an audit of supplier Guangdong Real Faith Pingzhou Electronics Co., Ltd. (PZ) in January 2012, during which it identified 74 cases of workers under the age of 16 – in violation of Apple’s Code of Conduct. The contract was terminated.

In addition, Apple notes that one of the region’s largest labour agencies – Shenzhen Quanshun Human Resources Co., Ltd. (Quanshun) – knowingly provided children to PZ. This reportedly included collusion with families to forge relevant identification documents to give the impression children were older than they were. Apple informed the provincial government of these practices – and Quanshun was subsequently fined and had its licence suspended.

Meanwhile, Apple cites two further outcomes from the episode:

• The affected children were returned to their families – and Quanshun “ was required to pay expenses to facilitate their successful return ”
• The company that subcontracted its work to PZ was prompted by Apple’s findings to audit its other subcontractors for underage labour – widening the positive impact of the discovery

Electronics manufacturer Hewlett Packard (HP) has begun imposing limits on the number of students and temporary workers that may be employed in its Chinese factories. Its company policy now states that during peak production periods, students and temporary workers should not comprise more than 20% of the workforce. According to HP, this will eventually be reduced to 10%. However, no official timeframe for this reduction has been released. Students and temporary workers are frequently hired during periods of high productivity, when factories need to fulfil rush orders. They are often subjected to long working hours and low wages. HP’s new supplier code stipulates that all work must be voluntary, and that students and temporary workers must be given access to grievance mechanisms. An HP Spokesperson stated that training sessions for suppliers and workshops for government officials, NGOs and academics, would be held in March 2013.

Hewlett Packard

In December 2012, Vodafone and GAVI initiated a partnership project to improve the supply of vaccinations to children in Africa through the use of mobile technology. Vodafone and GAVI both invested US$1.5 million to assess the situation and to prepare an action plan for improvement of the provision of healthcare, in particular the access to vaccines and immunisation for children in Africa. One of the goals of the partnership is to improve communication between health workers, vaccination providers and patients through the use of mobile phones. The first stage of the programme will be tested in Mozambique. The work in Mozambique will be based on the experiences of implementing a similar programme in Tanzania, where 5,000 hospitals used Vodafone’s mobile management system to record and track the provision of health care, such as supply of vaccines and to organise deliveries. In addition, Vodafone has secured a further US$55 million in investment to support GAVI’s goal to immunise 250 million children and prevent four million deaths in areas of poor governance by 2015.

Supply Management News

Vodafone to cover Africa

In December 2015, UNICEF collaborated with the Punjab Labour & Human Resource Department in Pakistan by giving Rs50 million (US$ 481.9 million) in funding towards the Provincial Child Labour Survey. The previous child labour survey was conducted in 1996, since which there has been a huge increase in the number of industrial and commercial businesses operating. As a result of the outdated child labour survey and an increase in industry, the Punjab government initiated the provincial level survey in order to obtain accurate facts and figures about child labour occurring in the province. UNICEF will provide financial and technical assistance to the project which will help to curb child labour in the region.

http://pakobserver.net

In December 2016,  Swedwatch  published the results of an  investigation  into child labour in diamond mining in the Democratic Republic of Congo (DRC) and weakness of the Kimberley Process. The report examines how children in the DRC, which is the world’s third-largest diamond producer, are affected by conditions in small-scale mine sites. The report finds that diamond supply chains are tainted with child labour, including child sexual exploitation.

The report also addresses company corporate responsibility in relation to children’s rights in the diamond supply chain. Swedwatch’s survey of Swedish diamond importers and jewellery companies indicates that implementation of voluntary human rights due diligence standards is low.

Swedwatch concludes that the Kimberley Process Certification Scheme (KPCS), the only diamond certification certification scheme, is no longer effective and requires restructuring or replacement. Swedwatch argue that the definition of ‘unethical’ diamonds used by the KPCS, which focuses on the relationship between diamonds and conflict, no longer reflects the reality of human rights abuse occurring in most diamond-producing countries.

Swedwatch encourages companies associated with diamond supply chains to:

·           Make public commitments to respect human rights and children’s rights, and to establish adequate systems to identify, prevent and address abuses

·           Actively urge the Kimberley Process and the World Diamond Council to adopt the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and the UN Guiding Principles on Business and Human Rights

·           Work not just with direct suppliers but also with other actors in the diamond supply chain (such as other companies in the same industry or other important stakeholders in the value chain)

* Taken from: UN Global Compact et al, Human Rights Translated: A Business Reference Guide

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M.C. Mehta v. State of Tamil Nadu and Others, 1996 – The Child Labour Case – Case Summary

Background  

Child labour is a practice of employing children in economic activities on a part time or full time basis. Children employed in such economic activities are deprived of their childhood and it is harmful for their physical and mental health. Child Labour is a major problem in our country. In the present case, Sivakasi was taken as one of the worst offenders for violating fundamental rights of children.

Article 24 imposes a duty on the state to provide every child below the age of 14 with free and compulsory education. After the Unni Krishnan Case, this duty has acquired the status of a fundamental right. In this case, the Supreme Court discussed various provisions prohibiting employment of children in India. The Supreme Court ordered to send a copy of this judgment to Chief Secretaries of all the State Governments and Union Territories and to the Secretary of Ministry of Labour, Government of India for their information and doing the needful.

Final judgment  

Our constitutional makers were wise enough to keep into consideration the future of the children in India. The situation of children born in India was not pleasant at the time of independence. Therefore, the makers of our constitution prohibited employment of children below the age of 14 in factories under Article 24 and imposed a duty on the state to provide fee and compulsory education of children under Article 45 of the Constitution. After the decision of Unni Krishnan [1] , Article 45 has acquired the status of a fundamental right. The Court acknowledged that despite the presence of such provisions in our constitution, children are still exploited and forced into child labour even after 50 years of independence of our country. 

Sivakasi was considered as one of the worst regions that violated these provisions by employing young children in its match factories. The court noted that the manufacturing process of matches and fireworks is hazardous to the health of children and may give rise to fatal accidents.The court noted that the process of manufacturing matches and fireworks is hazardous and may give rise to accidents. By relying on Article 39(f) and Article 45 of the Constitution, the court gave certain directions to improve the quality of life of children employed in the factories. The Court also felt the need of constituting a committee to oversee the directions passed. The committee was to consist of (1) Shri R.K. Jain, a senior advocate; (2) Ms. Indira Jaisingh, another senior advocate; and (3) Shri K.C. Dua, Advocate.

The committee has done a commendable job. It submitted its report on 11 th September, 1991 containing the following recommendations –

(a) State of Tamil Nadu should ensure that children are not employed in fire work factories.

(b) The children employed in the match factories for packing purposes should work in separate premises.

(c) Employers should let children work for more than 6 hours a day.

(d) Proper transport facilities should be provided by the employers and State Governmentto the children.

(e) Facilities for recreation, socialization and education should be provided either in the factory or close to the factory.

(f) Employers should make arrangements for providing basic diets for the children and in case they fail to do so, the Government should provide for basic diet to the children.

(g) Daily wages should be abolished and payment should be made on monthly basis. Wages should be commensurate to the work done by the children.

(h) All the workers working in the industry, whether in registered factories or in unregistered factories, whether in cottage industry or on contract basis, should be brought under the Insurance Scheme.

(i) Welfare Fund – For Sivakasi area, instead of present committee, a committee should be headed by a retired High Court Judge or a person of equal status with two social workers, who should be answerable either to this Hon’ble Court or to the High Court as may be directed by this Hon’ble Court. Employers should be directed to deposit Rs.2/- per month per worker towards welfare fund and the State should be directed to give the matching contribution. The employers of all the industries, whether it is registered or unregistered, whether it is cottage industry or on contract basis, to deposit Rs.2/- per month per worker.

(j) A National Commission for children’s welfare should be set up to prepare a scheme for child labour abolition in a phased manner. Such a Commission should be answerable to this Hon’ble Court directly and should report to this Hon’ble Court at periodical intervals about the progress.

President of the All India Chamber of Match Industries, Sivakasi in his affidavit rejected the recommendations of the committee. However, the court didn’t consider the affidavit of the President.

As per the 1971 census, 4.66 per cent of the child population in India consisted of working children which meant that around 10.7 million children were working at that time.  According to 1981 census the figure went up to 11.16 million working children. None of the above figure includes children working in the unorganized sector. The court stated that the actual number of working children in India is between 44 million to 100 million. (As per 1991 census). This indicates that Child labour is widely practiced in India. The Court stated that without the efforts of the Central and State Government this problem will never be solved.

Constitutional Framework

The Court dealt with this issue with a wider perspective by taking into account the situation of Child Labour in other parts of the country and discussed how the constitution mandates health, development and education of children through its provisions.

Article 24 – Prohibition of employment of children in factories, etc. – No child below the age of fourteen years shall be employed to work in any factory or mine or engaged in any other hazardous employment. 39(e). that the health and strength of workers, men and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength:

Article 39(f) -Children should be given opportunities and facilities to develop in a healthy manner, in conditions of freedom and dignity and childhood should be protected against exploitation and against moral and material abandonment.

Article 41 – Right to work, to education and to public assistance in certain cases.- The State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.

Article 45 – Provision for free and compulsory education for children.- The State shall endeavor to provide, within a period of ten years from the commencement of this Constitution, for free and compulsory education for all children until they complete the age of fourteen years.

Article 47 – Duty of the State to raise the level of nutrition and the standard of living and to improve public health. – The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavor to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health.

International commitments

Convention on Rights of the Child to which India is a party to , affirms that children’s right require special protection and it aims, not only to provide such protection, but also to ensure the continuous improvement in the situation of children all over the world, as well as their development and education in conditions of peace and security. Thus, the Convection not only protects the child’s civil and political right, but also extends protection to child’s economic, social, cultural and humanitarian rights.

International Labour Organization has laid down 5 main focus areas for the gradual elimination of Child Labour-

• Prohibition of children labour.
• Protecting child labour at work.
• Attacking the basic causes of child labour.
• Helping children to adapt to future work.
• Protecting the children of working parents.

A royal commission on Labour was also established in 1929 under the British Government to inquire into various matters relating to labour in India. The commission examined the conditions of Child Labour in India and found out that children are made to work for any number of hours every day. The recommendations of the committee were discussed in the Legislative assembly and The Children (pleading of labour) Act, 1933 was passed, which the first statutory enactment dealing with child labour. Today there are various legislations that prohibit the employment of child labours. Section 67 of the Factories Act, 1948, Section 109 of the Merchant Shipping Act, 1951, Section 45 of the Mines Act, 1952, Section 21 of the Motor Transport Workers Act, 1961, Section 3 of the Apprentices Act, 1961, Section 24 of the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 strongly prohibit child labour.

The court expressed its disappointment towards the state of children who were employed inspite of the presence of the aforesaid provisions and listed out the main causes of Child Labour in India.

(1) poverty; (2) low wages of the adult; (3) unemployment; (4) absence of schemes for family allowance; (5) migration to urban areas; (6) large families; (7) children being cheaply available; (8) non-existence of provisions for compulsory education; (9) illiteracy and ignorance of parents; and (10) traditional attitudes, were held to be the main causes of Child Labour in India.

Solution contemplated by the Supreme Court

The Court explored certain ways through which the problem of Child labour can be solved. It stated that the problem of Child labour can be solved by insisting on compulsory education. Poor citizens don’t send their children to schools due to lack of money. Therefore, unless a family is provided with a stable source of income the problem of child labour will not be solved. Since, it is not possible for such parents to educate their children, the state owes a duty to come forward and discharge its obligation in this regard.

Final Orders –

• The court ordered to conduct a survey of child laboursthat could be given an alternative source of income to help in their education.
• Those areas of employment should be identified which are hazardous on human health, especially children, and ranked. The most hazardous employment may rank first in priority, to be followed by comparatively less hazardous and so on.
• Employment must be given to the parents of the child. Such an employment can be given in the same industry where the child is employed.
• In those cases where alternative employment cannot be made available, the parent of the concerned child would be paid the income which would be earned on the corpus, which would be a sum of Rs.85, 000/- for each child, every month. The employment given or payment made would cease to be operative if the child would not be sent by the parent/guardian for education.
• On discontinuation of the employment of the child, his education would be assured in suitable institution with a view to make it a better citizen.
• The court pointed out that  Article 45 mandates compulsory education for all children until they complete the age of 14 years; it is also required to be free. It would be the duty of the Inspectors to see that this call of the Constitution is carried out.
• A district could be the unit of collection so that the executive head of the district keeps a watch on the work of the Inspectors. Further, in view of the magnitude of the task, a separate cell in the Labour Department of the appropriate Government would be created. Monitoring of the scheme would also be necessary and the Secretary of the Department could perhaps do this work. Overall monitoring by the Ministry of Labour, Government of India, would be beneficial and worthwhile.

The writ petition was accordingly disposed off.

[References]

[1] Unni Krishnan J.P. and others v. State of Andhra Pradesh [1993] 1 S.C.C. 645

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Inter-Agency Toolkit | Child Labour Case Studies

Find ALL 34 Case Studies  in the Inter-Agency Toolkit on Preventing and Responding to Child Protection in Humanitarian Action!