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4 ILLUSTRATIVE BUSINESS PRACTICES Introduction Dealing with child or forced labor is an imperative for businesses for a variety of reasons. The International Organization of Employers (IOE) notes the obvious ethical or moral considerations and argues that businesses have a responsibility to mitigate child or forced labor. Where a company becomes engaged in the issue of child labour, its priority should be to work towards the complete and unconditional elimination of the WFCL [worst forms of child labor]. This should also include measures to address the needs of the affected childrenâs families. Once the WFCL have been completely addressed in a particular context, business can, where it is within its means and power to do so, explore efforts to promote beneficial conditions in the context of the other forms of child labour as a next step. Again, these measures should address the needs of the childrenâs families.1 There are also economic reasons for business to address the worst forms of child labor because such labor may have a negative impact on companiesâ bottom lines. Child laborers have fewer opportunities to go to school to become more skilled adult workers and child labor can undermine economic growth and depress the consumer market. Such labor may also affect the publicâs perception of the company. Businesses are in a unique position to become involved and can have a direct impact on child labor.2 The degree of responsibility businesses should take and the scope of remedies are a matter of opinion. In this section we present examples of business practices and practices followed by NGOs with some degree of business engagement, gleaned from presentations at the workshop. (Additional examples of business practices can be found in Appendix F.) The Cocoa Sector Three presentationsâby Jeff Morgan of Mars Inc., Bill Guyton of the World Cocoa Foundation, and Meg Roggensack of Free the Slavesâfocused on cocoa as an example of a sector in which child labor is known to occur and where industry has taken steps alone and in various partnerships. Bill Guyton began his presentation by noting that there are 1.5 to 2 million small- scale family farms in West and Central Africa, stretching from Cote dâIvoire to Cameroon. About 10 million people live on cocoa farms and the cocoa supplies about 50 percent of the household income, particularly in Côte dâIvoire. While referred to as 1 International Organization of Employers. Challenges in Addressing Child Labour: IOE, May 2005. 2 Ibid. 31
32 REDUCING THE USE OF FORCED AND CHILD LABOR cocoa farms, generally these family farms grow multiple crops. Mr. Guyton noted that the World Cocoa Foundation3 has many member organizations including large branded companies who participate in the programs, processors, traders, port authorities, and many smaller chocolate companies from such areas as North America, Europe, and Southeast Asia. He also noted that the World Cocoa Foundation partnered with many more organizations: ⢠Farmers and farmer organizations ⢠Governments in cocoa producing countries ⢠Government and development agencies o CGIAR Centers (IITA and ICRAF) o GTZ (Germany) o Danida (Denmark) o U.S. Agency For International Development (USAID) o U.S. Department of Agriculture (USDA) ⢠NGOs (Winrock, ACDI/VOCA, IFESH, Technoserve, Socodevi, Making Cents) ⢠Researchers and universities Mr. Morgan began his presentation by offering background on child labor issues in West African cocoa production. He noted that the industry began to be pressed on this issue in September of 2000 and more so in the spring of 2001 when there were public reports of children in very dire straights in the cocoa sector. He highlighted such information as the September 2000 documentary on Channel 4 in the United Kingdom and the spring 2001 series of articles in the Philadelphia Inquirer that featured children who had been trafficked and were forced to work in absolutely unacceptable conditions. Mr. Morgan commented that in his view âpart of the concern that we in industry had was that although these were anecdotal accounts, which we all have to deal with, I think some of the comments on their prevalence, we felt were exaggerated.â Ms. Roggensack further framed the challenge in the cocoa sector. Research and surveys show that the predominant phenomenon is the engagement of children of families in hazardous work activities on family-owned cocoa farms: carrying heavy loads, spraying hazardous chemicals, and using machetes to open cocoa pods. She noted that this is exacerbated by poverty in this area, and a lack of awareness. âWe are talking about a head of household, a parentâs lack of awareness that they are putting their child at risk of harm but over the longer term that they are harming their welfare, their ability to grow and develop.â She added the factor of tradition, the fact that many of the individuals, practically all of them, grew up in the same cultural milieu. This is how it has always been done and there is the notion that there is some value in learning how to do this because this is the childâs future. What the studies do find, she suggested, is that simply removing children from cocoa farming activities is not necessarily the entire answer. It may lead to displacement, to other activities such as domestic work, or other forms of work that could be equally damaging if not as hazardous to welfare. If not twinned with a quality educational alternative, removing the children is not going to result in the change that you want. 3 See âAbout the World Cocoa Foundationâ at http://www.worldcocoafoundation.org/about/default.asp.
ILLUSTRATIVE BUSINESS PRACTICES 33 Mr. Morgan noted that the industry did react.4 The U.S. industry collaborated with the offices of Senator Harkin, Representative Engel, and Senator Kohl during July 2001 to address the issue. Comparing the response in the United Kingdom to that in the United States, Mr. Morgan remarked that in the UK it was more of a consumer and consumer agency issue, whereas in the United States, it became a legislative issue led by members of Congress who were starting to call for a labeling provision. The industryâs view in Mr. Morganâs perspective was that such action would have been damaging to both the industry and the cocoa farms. Industry signed on to the Harkin-Engel Protocol.5 Since that time, the cocoa industry has been pursuing a consolidated effort to address child and adult labor issues in the cocoa sectors of Ghana and Côte dâIvoire. According to Mr. Morgan, the only remaining step is the implementation of standards of public certification in the cocoa sector. Mr. Morgan said that the Protocol required that âindustry in partnership with other major stakeholders will develop and implement credible ⦠standards of public certification ⦠that cocoa beans and their derivative products are grown â¦without any of the worst forms of child labor.â This was to be accomplished by July 1, 2005, but industry did not meet this deadline. New milestones were proposed and agreed to. The industry was to implement a certification system covering 50 percent of the cocoa- growing areas of Ghana and Côte dâIvoire by July 2008, with industry dedicating more than $5 million annually to this effort. The milestone for 2010 is independent verification of sector-wide reports from Côte dâIvoire and Ghana (see Figure 4-1). 4 There are currently a number of actors involved in this issue: Cadbury, Ferrero, The Hershey Company, Kraft Foods, Mars Incorporated, Nestlé, ADM Cocoa, Barry Callebaut, Cargill, Association of the Chocolate, Biscuit, and Confectionery Industries of the EU (CAOBISCO), Confectionery Manufacturers of Australasia (CMA), Confectionery Manufacturers Association of Canada (CMAC), European Cocoa Association (ECA), Federation of Cocoa Commerce (FCC), National Confectioners Association of the US (NCA), and the World Cocoa Foundation (WCF). There have been a few critiques of industryâs response to child labor and cocoa. See for instance: the ILRF, âThe Cocoa Protocol: Success or Failure? June 30, 2008, available at http://www.laborrights.org/sites/default/files/publications-and- resources/Cocoa%20Protocol%20Success%20or%20Failure%20June%202008.pdf. 5 For the text of the protocol, see: http://www.cocoainitiative.org/images/stories/pdf/harkin%20engel%20protocol.pdf. See also âJoint Statement from U.S. Senator Tom Harkin, Representative Eliot Engel and the Chocolate/Cocoa Industry on Efforts to Address the Worst Forms of Child Labor in Cocoa Growing Protocol Work Continues.â July 1, 2005. Available at: http://harkin.senate.gov/pr/p.cfm?i=240245.
34 REDUCING THE USE OF FORCED AND CHILD LABOR Figure 4-1 Cocoa sector country certification model implemented in conjunction with national government programs. Source: Jeffrey Morgan, Mars, Inc. Workshop Presentation, May 11, 2009. The Cocoa Industry Certification Program Jeff Morgan of Mars Inc. noted that the cocoa industry certification program is a complex model that industry was trying to implement across the cocoa- producing sectors of two countries: Ghana and Côte dâIvoire. The program comprises data collection, public reporting, remediation and response, and an independent third- party verification. Industry has sought credible data on child and adult labor practices in the regions. Concerning remediation, both data collection and remediation require significant financing. Noting that there were likely over 1 million independent farms in Ghana and Côte dâIvoire, Mr. Morgan suggested that one could spend enormous amounts of money trying to evaluate what is happening on each farm and then have little left over for remediation. We should try to balance the findings and the data that are needed and put the majority of the resources in remediation. Concerning verification, Mr. Morgan noted that stakeholders are skeptical that information brought forward by the industry and the governments in this area is untainted. He said that industry, under the Harkin-Engel Protocol, has been working on implementing an independent third-party verification process. Mr. Morgan commented on the impact of the practices to date: ⢠There have been a series of surveys completed both in Ghana and Côte dâIvoire. In May 2009, he noted, members of stakeholders would meet in Accra, Ghana, to determine the best step way forward regarding the quality of data and how much
ILLUSTRATIVE BUSINESS PRACTICES 35 data collection is really needed as the industry goes forward. ⢠Reports detailing the incidence of child labor and adult labor have been posted on Web sites with the support of the governments of Ghana and Côte dâIvoire. Mr. Morgan commented: âI think this is a real breakthrough. When we began the process, many in the governments were hesitant to agree that there was a child labor issue and now we have reports on their Web sites that detail the extent of the issue.â ⢠A portfolio of activities is being undertaken by industry vis-à -vis remediation to address this issue. ⢠There was a third-party verification in December 2008. There have been other meetings, and dissemination of those findings in West Africa and the European Union and in the United States. Tulane University conducted an oversight evaluation. According to Mr. Morgan: âTo the best of our understanding of their results, they have had two sets of results publicized and they are finding very similar results to the surveys that have been published by the countries.â Mr. Guyton spoke about the World Cocoa Foundationâs programs. He began by addressing some of the most important characteristics of those programs over the last several years: ⢠Effective public-private-partnerships; ⢠Empowerment of smallholder farmers; ⢠Host country engagement and capacity development; ⢠Economic, social and environmental components; ⢠Continuity of approach and resources; ⢠Tangible results orientation; ⢠Scalability; and ⢠Pooling of resources and expertise. The Sustainable Tree Crops Program Mr. Guyton identified several goals for the WCFâs programs, including the one most relevant to this workshop: National and international labor standards are implemented with no worst forms of child labor. He detailed two major programs that the World Cocoa Foundation has in West Africa: (1) the Sustainable Tree Crops Program that covers five West African countries (Cote dâIvoire, Ghana, Cameroon, Nigeria, and Liberia) and (2) a public-private partnership called ECHOES that is specifically looking at youth empowerment, youth livelihood and education in the countries of Ghana and Côte dâIvoire. Details on this program were presented by Vicki Walker of Winrock, and are summarized later in this chapter. The Sustainable Tree Crops program intends to improve farm incomes by up to 50 percent, encourage safe farming practices, increase awareness and understanding of child labor issues, and ensure that labor standards are incorporated in all WCF programs. The program components include: farmer field schools, the primary method of reaching out to farmer groups; farmer organizational support through which WCF is helping to
36 REDUCING THE USE OF FORCED AND CHILD LABOR develop farmer co-ops to strengthen them in all five countries; and approaches to improved marketing practices as well as policy and research. Farmer field schools are conducted in the farmer fields and they look at how to improve the productivity of the farms, farm safety, child labor awareness, HIV/AIDS and malaria prevention, marketing skills, gender-specific training and diversification. With respect to metrics of success, Mr. Guyton noted that the programâs goal is to reach 150,000 farmers. To date, the WCF has reached about 76,000 in the 5 countries. The WCF has seen through surveys that incomes of farmers who graduate from the farmer field schools increase 22 to 55 percent, depending upon the country. The WCF has seen (by surveys in Ghana) that for every 1,000 farmers trained, 210 children have been removed from hazardous work conditions. Mr. Guyton included a photograph from a farmer field school in Cameroon. The farmers actually put together a cropping calendar of what they do at different months of the year and then they looked at who in the family actually carries out certain activities, whether it is the father, the mother, or the children. This is the first step in understanding child labor, and which sorts of activities are appropriate and not appropriate for children to be undertaking. This is matched with the school year to explain how important it is for the children to be in school rather than helping their parents in the fields during certain times of the year. The International Cocoa Initiative Ms. Roggensack described the experiences of the International Cocoa Initiative (ICI), which is one of the outcomes of the Harkin-Engel Protocol.6 ICI is funded by industry and core funding is guaranteed. It is an independent, nongovernmental organization headquartered in Geneva, Switzerland. ICI is a multistakeholder activity that engages all parts of the production chain, the processors, the brands, and national governments. It is focused on the cocoa sector and in particular on the worst forms of child labor and forced labor. The most important aspect of it is the role of community engagement. The first thing that ICI did was to go into communities on a pilot basis and talk to a wide range of individuals, including local leaders, women, and children, to listen to their perspectives and to sensitize them to the fact that what they were doing with regard to child labor was not appropriate. From that understanding ICI began a communication about the steps communities would like to take, what would be appropriate to their circumstances, and how their needs might be best met. ICI replicated this experience, widening it out to a larger category of communities, to create community action plans that include implementation and monitoring components as well. In virtually every community action plan one of the first things is the request for quality educational alternatives: teachers, rehabilitation, schools, and vocational training, something that Ms. Roggensack felt was an integral part of this model. Ms. Roggensack noted that national legal norms and company practices were important to the work of ICI. When the ICI started its work, the relevant countries had ratified the pertinent ILO Conventions, but they were in denial about the challenge they were facing and at virtually every level ignorant about the pertinent standards and laws. 6 See International Cocoa Initiative, âHomeâ available at http://www.cocoainitiative.org/.
ILLUSTRATIVE BUSINESS PRACTICES 37 There were no national plans. There was no hazard list and there was no active engagement by the authorities in Ghana or Côte dâIvoire. One of the first things that the ICI accomplished was awareness raising aimed at the governments, business, and communities. The ICI then worked to provide training and technical support to the governments, for example, by assisting in the development of national plans or, with the ILO and foreign donors, for a list of hazardous work. Ms. Roggensack noted that while companies involved in cocoa production tended to have codes of conduct that included some focus on child or forced labor, there were barriers to transmitting the codes all the way down the supply chain. The result was less coordination. The ICI provided a platform for businesses to come together, use their collective bargaining power and political power to make these labor issues a priority at the government level, allocate resources, and engage the cocoa boards and the licensed buying cooperatives. A second challenge noted by Ms. Roggensack concerned collection of data on child labor. When the ICI began, the governments were not collecting quality data and a lot of misinformation was in the media. While businesses had undertaken internal audits, these efforts were criticized as neither independent nor particularly credible given some of the heated concerns around this issue. The ICI again played an important role in providing a platform for conducting initial pilot surveys that could be replicated. These surveys were valuable in developing a better sense of how these communities work. A third area of focus for the ICI is remediation. Within the cocoa communities there was low enrollment in schools, few teachers, and little government contribution to teacherâs salaries. Companies responded with such efforts as farmer field school training, but these efforts were not necessarily intended to be a coordinated response to a challenge. What ICI did through its engagement with the communities was to articulate a priority for education and in the process start to give voice to the members of the community. Additionally, the ICI helped the governments implement education policy changes. A variety of reports have been released and disseminated on the Internet: the ICIâs original pilot work, quarterly and annual reports, the certification survey results that the governments have published, the verification boardâs work, and the Tulane oversight studies.7 Businesses have also published their own reports on what they are doing and in some cases what their foundations are doing; they also have their own individual outreach to their stakeholders. Target The case of the Target Corporation, a large-volume importer of thousands of items, contrasts with the case of cocoa, which is focused on a deep supply chain for a specific commodity. Toni Dembski, senior counsel with Target, presented Targetâs social responsibility program, âGlobal Compliance,â part of which covers vendors and is connected to Targetâs sourcing and quality function. Target operates 1,600 stores in the United States and will sell annually over 250,000 different items. Target is the number-two importer in the United States by 7 Payson Center for International Development, Tulane University. Available at: http://www.childlabor- payson.org/default.html.
38 REDUCING THE USE OF FORCED AND CHILD LABOR volume, importing $10 billion worth of merchandise across 70 of the 100 chapters in the U.S. tariff book. At any given time in Targetâs stores there are 60,000 to 80,000 items. Many of those items are trend items and will only be in the store for six weeks or so. According to Ms. Dembski, Target has a world-class social responsibility program, called âGlobal Compliance,â which is 10 years old.8 Targetâs goal in developing its program was to be proactive in defining the program and its objectives. The program is sensitive to legal and labor issues as well as the social responsibility expectations of its customers. Global Compliance covers more than child labor or forced labor though those were two of the initial problems. Given Targetâs breadth, its global compliance program reach extended significantly beyond those two issues, to include such areas as a safe and healthy workplace, nondiscriminatory practices, fair pay and wages, and compliance with several other laws of the United States. Ms. Dembski noted that it is difficult for companies like Target that deal with thousands of vendors to probe far into the supply chain. Targetâs approach is to raise awareness both internally and with its vendors. Ms. Dembski believes that Targetâs position can give it leverage over its vendors: âIf you want to work with Target, the number-two importer in the United States, you better understand what you are doing. You better understand our standards and actually apply those standards in the way you conduct your own business.â Awareness raising is done through education and information is disseminated in a variety of formats, such as through Web sites, program materials, and training both online and in person. Target trains internal teams to work with foreign vendors and conducts audits of factories all over the world. Whenever a vendor wants to do business with Target, it has to give Target access to all of its owned and nonowned facilities anywhere goods will be produced for Target. Those facilities initially answer questions about the working conditions and then they are measured on a series of different kinds of audits. For example, lawyers might visit the facility and look at particular issues, while other auditors might focus on social responsibility. Audits involve questionnaires and interviews with employees and managers. She noted that because of the large number of factories involved, Target randomly selects factories to be visited each year. Over a five- year period all factories are visited. If a vendor disregards Targetâs standards repeatedly, it will be eliminated from their pool of vendors.9 Levi Strauss And Company Anna Walker, manager of government affairs and public policy, presented business practices at Levi Strauss. Leviâs was founded in 1853 by Bavarian immigrant Levi Strauss who had a dry goods store and was servicing the â49âersâ mining gold in the Sierra Nevada and brought us the iconic jean. The company has grown to 11,000 8 For a broader description of the program, please see Target Corporate Social Responsibility Report 2008 available at: http://www.socialfunds.com/shared/reports/1229103541_Target_CR_Report_2008.pdf . 9 One participant from an NGO who had worked with Target noted that Target had strong incentives in place. Over time factories that were not in compliance were dropped from working with Target. Another participant asked about prison labor and Ms. Dembski noted that in the past Target had found that it was working with prison factories and had eliminated them from its factory base.
ILLUSTRATIVE BUSINESS PRACTICES 39 employees around the world, 1,500 of whom are at its headquarters in San Francisco. The company had revenues in 2008 of about $4.4 billion and its brands are the Levi Strauss brands, the Dockers brand, and Signature by Levi Strauss and Company, which are sold in Target and Walmart. The company is privately held by the descendents of Levi Strauss and remains a values-based company drawing on the values of its founder, which are empathy, originality, integrity, and courage. Levi Strauss started the tradition of corporate responsibility within the company when he founded it 156 years ago. As an immigrant in San Francisco as it was growing and developing, he was already giving grants, providing philanthropy in the community as a small, new businessman. Building on that example, the company continued a tradition of philanthropy and engaging with the local community. When the 1906 San Francisco earthquake hit, the companyâs headquarters were destroyed, but there was a commitment to keep the employees on, and the company continued to pay all the employees and put them to work refurbishing the floor in the local facility just to keep them busy and occupied and on the payroll as the company rebuilt its headquarters. In the 1940s, Levi Straussâs racially integrated its sewing facilities in the United States. In the 1980s the company was the first multinational company to address HIV/AIDS in the workplace. The company has made a commitment to provide prevention, care, and treatment to all employees globally. Levi Strauss is the worldâs largest brand-name apparel maker with sales in more than 110 countries around the world.10 Combining direct factories with its licensed factories, there are about 800 factories in 50 countries. Levi Strauss was the first multinational company to start a code of conduct, in 1991.11 The code was actually motivated internally by the companyâs employees. Levi Straussâs publishes its factory list in an effort to be transparent, 12 and has been an advocate since 2000 for the linkage of trade and labor in U.S. trade agreements. 10 More information on the company, http://www.levistrauss.com/Company/. 11 âLevi Strauss & Co. Global Sourcing and Operating Guidelines,â http://www.levistrauss.com/Downloads/CitizenshipCodeOfConduct.pdf. 12 http://www.levistrauss.com/Downloads/FactoryList.pdf.
40 REDUCING THE USE OF FORCED AND CHILD LABOR Box 4-1 Levi Strauss & Co. Global Sourcing and Operating Guidelines Child Labor Use of child labor is not permissible. Workers can be no less than 15 years of age and not younger than the compulsory age to be in school. We will not utilize partners who use child labor in any of their facilities. We support the development of legitimate workplace apprenticeship programs for the educational benefit of younger people. Prison Labor/Forced Labor We will not utilize prison or forced labor in contracting relationships in the manufacture and finishing of our products. We will not utilize or purchase materials from a business partner utilizing prison or forced labor.
ILLUSTRATIVE BUSINESS PRACTICES 41 Ms. Walker noted that the code of conduct outlines the labor and environmental conditions Leviâs expects to see in its contract facilities around the world. It is based on the universal declaration of human rights and ILO labor conventions. The code is a living document, which has evolved over time. Leviâs has a staff of 45 employees that are dedicated to the monitoring, remediation, and capacity building associated with the code and an additional group of third-party monitors supporting that team. The child labor component within the code is consistent with the ILOâs minimum age convention and convention on the worst forms of child labor. It is considered to be a zero- tolerance issue. If Leviâs finds in its initial assessment of a facility that there is child labor, Levi Strauss cannot enter that facility until the situation is remediated. If Leviâs has already been active in that facility and child labor is found, there is a policy of immediate remediation and attention. Levi Strauss tries to avoid withdrawing from a facility, and works with the facility to address the situation. Ms. Walker spoke of the Levi Strauss experiences in Bangladesh, one of the poorest countries in the world, with 45 percent of the population living below the poverty line.13 Apparel constitutes 75 percent of the countryâs exports and provides both direct employment and employment through businesses associated with the apparel industry. Levi Strauss was already sourcing from Bangladesh when the code was put in place and was just rolling it out to its supply chain. When Leviâs first started to implement its policies, the company found two facilities in Bangladesh that had workers under the minimum age, which is a clear violation of Levi Straussâs terms of engagement. The company set to work to remediate the situation, taking the context into account. Ms. Walker noted that Bangladesh has had child labor problems stemming from its poverty for years and it is common for children there to be working and supporting the entire family on their wages. It is common to not know someoneâs legitimate age. Birth certificates are not always issued and malnutrition makes individuals look younger or seem smaller than their actual age. Levi Strauss began to work with the facilities in question on how to address this issue. The company obtained agreement from the two factories to continue to pay the underage workers their salaries and benefits while they attended school and offered them full-time jobs when they reached legal working age. Levi Strauss agreed to pay for their tuition and books and where schools or school facilities were not sufficient to support the workers moving from the factory into schools. Levi Strauss supported the opening or renting of space and hiring of teachers to move them in. In addition, Leviâs changed its policy with these facilities such that all personnel they hire must present a school certificate stating that the applicantâs age is 15 years or older and where this could not be acquired or there was some doubt of age, a dental examination was required as an alternative. Levi Strauss was aided, in a sense, by an employersâ association, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), which took ownership of the situation so that the issue began to be applied to more facilities in Bangladesh. The association set up a grant of approximately $1 million to provide education to girls in the factories or who had previously worked in the factories where there were underage girls 13 âCase Study: Child Labor in Bangladeshâ available at: http://www.levistrauss.com/Downloads/CaseStudyBangladesh.pdf.
42 REDUCING THE USE OF FORCED AND CHILD LABOR found (75,000 underage girls overall). Ms. Walker noted that the remediation occurred because Leviâs was looking to see if there was a problem and Leviâs stepped in with an immediate practice. Ms. Walker also spoke of multi-stakeholder initiatives in which Levi Strauss has participated. One was the Better Cotton Initiative (BCI).14 Included in the initiativeâs global principles, criteria, and enabling mechanisms is the statement that the BCI promotes decent work. With reference to child labor, the BCI notes: ⢠There is no child labor, in accordance with ILO Convention 138. ⢠Exceptionally, in the case of family smallholdings, children may work on their familyâs farm provided that this work is not liable to damage their health, safety, well-being, education, or development, and that they are supervised by adults and given appropriate training. ⢠For hazardous work, the minimum age is 18 years of age And considering forced labor: ⢠Employment is freely chosen: no forced or compulsory labor, including bonded or trafficked labour.15 Ms. Walker said that âchild labor in the first tier of our supply chain is not endemic. I think it is more sloppiness. The factory is not paying attention or looking the other way, but itâs not an endemic problem. Thatâs not to say we donât have child labor elsewhere in our supply chain. Leviâs has been looking very carefully at cotton, the source of our product. Ninety-five percent of what our product consists of is cotton and the child labor is certainly there. But as far as our direct supply chain goes, that is not the key issue.â Understanding the local context and identifying local stakeholders were important elements in Leviâs efforts. For sustainability to occur, Ms. Walker argued, some level of local ownership is required. Concerning Levi Straussâs ability to replicate its practices, she noted that the agricultural setting (i.e., cotton) was different from manufacturing and practices differed in these different sectors. She also noted that replicability depends on local context, which is unique to location. Levi Strauss is interested in the ability to scale up practices. As the company focuses more on cotton, one of its steps has been to disclose its supplier list in order to find other partners in the industry to work with. Levi Strauss realizes that there is a lot of duplication in monitoring and in education and training with these facilities. Working with partners in industry might allow Leviâs to coordinate responses or better use resources. Efforts to scale up practices would likely be facilitated by taking multistakeholder approaches. Government engagement is very important; if governments were doing their job (i.e., if they were applying the law, if they had the appropriate law in place, and were engaging with their private sector in their countries to avoid these situations), the need for businesses to act would be reduced. 14 http://www.bettercotton.org/. 15 BCI, Global principles, criteria, & enabling mechanisms, Version 1.0, July 2008. p. 9. Available at: http://www.bettercotton.org/pics/BCI_GlobalPrinciples&CriteriaEnablersv1.0_EN%20_7july08.pdf.
ILLUSTRATIVE BUSINESS PRACTICES 43 Fair Labor Association Jorge Perez-Lopez, executive director of the Fair Labor Association (FLA), described the FLA and its work in various sectors.16 FLA has worked primarily in apparel and footwear through factory audits (independent external monitoring). Mr. Perez-Lopez discussed the case in which FLA worked with Syngenta, a multinational company that had been stung by a report about child labor in their cottonseed farms in India and wanted the FLA to help them in dealing with the issue.17 The FLA worked with Syngenta in part to see whether the model that the FLA had developed mostly for apparel and footwear factories could, with some changes, be applied to a cultural setting as well. However, in 2005 in the midst of the project, Syngenta sold its cottonseed business. Rather than stop the project FLA switched the agricultural sector focus for Syngenta from cottonseed to vegetable seeds.18 The FLA has been working on okra, pepper and tomato seeds, for example, in three Indian states: Karnataka, Maharashtra, and Gujarat. Mr. Perez-Lopez noted that child labor is a large concern in India. Estimates vary, but from 14 million to 60 million children from ages 7 to 14, many of them girls, are working. A lot of them are employed in vegetable seed farms. Syngenta alone contracts with over 6,000 small commercial farms, between a quarter of an acre and an acre. The farmers that Syngenta uses are actually contractually bound to Syngenta. They are producing seed crops, they are provided starter seed, and they have a contract that says their product will be bought by Syngenta. The FLA initiated a project in this seed crop sector involving multiple stakeholders in order to be able to understand better the context and the situation in the field. The FLA then adapted existing benchmarks to the agricultural field. They met with the multistakeholder group on remediation and on identifying the key variables on which the FLA should concentrate. From this, the FLA developed a tool kit with audit instruments and other mechanisms, based on the FLAâs approach to factories, but now applied to the agricultural sector. When Syngenta partnered with the FLA, they agreed they would implement 16 âIncorporated in 1999, the Fair Labor Association (FLA) is a collaborative effort of socially responsible companies, colleges and universities, and civil society organizations to improve working conditions in factories around the world. The FLA has developed a Workplace Code of Conduct, based on ILO standards, and created a practical monitoring, remediation and verification process to achieve those standards. The FLA is a brand accountability system that places the onus on companies to voluntarily achieve the FLAâs labor standards in the factories manufacturing their products. Universities affiliated with the FLA ensure that the licensees supplying their licensed products manufacture or source those products from factories in which workersâ rights are protected.â Fair Labor Association, âAbout Us.â Available at: http://www.fairlabor.org/aboutus.html. The FLA Code of Conduct states in part: âForced Labor. There shall not be any use of forced labor, whether in the form of prison labor, indentured labor, bonded labor or otherwise. Child Labor. No person shall be employed at an age younger than 15 (or 14 where the law of the country of manufacture allows*) or younger than the age for completing compulsory education in the country of manufacture where such age is higher than 15.â 17 See Davuluri Venkateswarlu, âChild Labour and Trans-National Seed Companies in Hybrid Cotton Seed Production in Andhra Pradesh.â 2003. Available at: http://www.indianet.nl/cotseed.html. 18 For details on what the FLA did with Syngenta, see Fair Labor Association, âSyngenta Seedsâ available at: http://www.fairlabor.org/what_we_do_special_projects_d2.html. See also Syngenta, âTackling labor conditions on seed farms,â available at: http://www.syngenta.com/en/corporate_responsibility/tackling_labor.html.
44 REDUCING THE USE OF FORCED AND CHILD LABOR internal monitoring, and visit each of their farms. Syngenta adopted the FLA code of conduct in principle which goes beyond child labor to include other labor standards. Syngenta monitors about one-third of its 6,000 farms each year and has found small numbers of children working, as noted in their reports.19 Child labor is fairly well accepted culturally in the areas where Syngentaâs seed farms are locatedâthe more remote the area, the more child labor. To combat this, much awareness raising is needed to inform families of the value of education for their children. Syngenta has been using an incentive system to combat child labor, incorporating both incentives and disincentives. The incentive is that farms that do not use child labor receive a bonus for being able to supply the product, which has worked quite well. There is also a disincentive system. If, after so many times, a farmer continues to have child labor, then that farmer will be dropped. The FLA conducts independent audits, using monitors in India to check-up on Syngentaâs the internal audits. The FLA performed visits on a pilot basis at the end of 2008. Using a cluster method and random sampling, the FLA examined 60 farms and found that most of the violations were related to safety and health; however there were some findings in the area of child labor. Most of these involved the lack of age certification systems rather than children working. Mr. Perez-Lopez pointed out that the FLA is concerned about remediation. âWe think that is part of the FLA process that if a problem is found, there is an obligation to remediate the problem.â Syngenta, he noted, has taken responsibility for any child labor problems that are found. One practice is child labor awareness campaigns, which are occurring in the villages. The FLA is engaged with the communities and with the farms in terms of improving the age certification system, which is challenging in India. The FLA has also encouraged Syngenta to continue to use and refine the incentive systems, which seem to work fairly well so far. The FLA is also working on problems to rehabilitate child workers, but Mr. Perez-Lopez noted that is difficult for a single company or one individual to try to fix a problem like not having schools. The FLA expects to continue working with local stakeholders and will seek to strengthen programs and address child labor. The FLA may also work with other companies in the agricultural area. Winrock International Vicki Walker, program officer for Empowerment and Civic Engagement, presented the work of Winrock, a global agricultural, natural resource organization. Winrock works in such areas as empowerment and civic engagement, trafficking 19 Recently, Syngenta along with Monsanto, DuPont, Bayer CropScience, BASF, and Dow AgroSciences have put forth a plan to eliminate child labor in contracted seed growing operations and other supply chain activities around the world. See CropLife International, âLeading Seed Producers Announce Plan against the Use of Child Labor in Agriculture.â June 12, 2009. Available at: http://www.croplife.org/library/attachments/0e67e2de-9b8f-4420-a2f3- 1f38611e14a8/3/20090612%20World%20Day%20against%20Child%20Labor.pdf. CropLife International, âCropLife Position on Child Labor in the Seed Supply Chain.â June 12, 2009. Available at: http://www.croplife.org/library/attachments/db61f617-8500-46d5-828b- 73a42275d3ab/3/CropLife%20Position%20Paper%20on%20Child%20Labor%20in%20the%20Seed%20S upply%20Chain%20.pdf.
ILLUSTRATIVE BUSINESS PRACTICES 45 prevention, womenâs rights, education, and child labor prevention.20 Ms. Walker, drawing on language from the ILO, noted a principle that provides a platform for Winrockâs work: the number of child laborers in a countryâs child population is a key indicator of economic and social development.21 Winrock views the education of children as key to development. She indicated how important it is to work within, and strengthen existing government structures. Agriculture is the mainstay of developing countries, with over 70 percent of the economies dependent on agriculture, which occurs mostly in subsistence smallholder farms. Over 50 percent of child labor is hidden in the non-formal sector. For example, one larger category in which much of child labor is hidden is domestic work. When children work in a household or on family farms, this adds significant complexity to the situation. Children cannot be removed from family farms in the same way that they can be removed from plantations, for example. Ms. Walker spoke of the Community-based Innovations to Reduce Child Labor through Education (CIRCLE) project, established in 2002. The projectâs objective is to promote and document the best practices of innovative, community-based projects that address the reduction of child labor through formal and non-formal education. Funded by the U.S. Department of Labor, CIRCLE is an outreach program consisting of 101 subprojects affecting 24,000 children and reaching 84 local NGOs in many different sectors.22 Ms. Walker offered two criteria for reducing child labor in small scale agriculture: ⢠The criteria need to correspond to and improve local realities as well as to reflect local realities. There may not be absolutes. ⢠There should be a framework for continuous improvement with benchmarks over time to meet standards and criteria. Ms. Walker then gave three case studies that meet these criteria: (1) the Child Labor Alternatives through Sustainable Systems in Education (CLASSE) program, (2) the Empowering Cocoa Households through Opportunities in Education Systems (ECHOES) program, and (3) the Tanzanian Education Alternatives for Children (TEACH) program. The CLASSE program is a program that reflects the first criterion and focuses in part on the notion of where children came from to end up in child labor. The ECHOES program focuses on relevant education and remediation. Both programs focus on the cocoa sector. The TEACH program focused on monitoring and targeting of leaders and community activists. The key criterion common to all three is the engagement of the government, the community, and alternative relevant education. Features common to all three programs include a focus on child labor in small-scale agriculture, basic education and teaching relevant agriculture, and moving from child labor to a new generation of rural entrepreneurs. The CLASSE program focuses on Mali and Cote dâIvoire. Children regularly 20 See: http://www.winrock.org/index.asp. 21 ILO, A future without child labour. Global Report under the Follow-up to the ILO Declaration on Fundamental Principles and Rights at Work 2002, International Labour Conference 90th Session 2002 Report I (B) 22 See: Winrock International, âCIRCLE,â available at: http://circle.winrock.org/.
46 REDUCING THE USE OF FORCED AND CHILD LABOR travel from Mali to Cote dâIvoire to work on cocoa farms or for domestic labor. The objective of the program has been to reduce the supply and demand of the seasonal migration of children to cocoa farms by providing training and educational alternatives for children, youth, and families. The Mali program was one of prevention and focused on increased capacity of school management committees, mentoring programs, skills development of out-of-school youth, and retention in formal school. Two key areas were skills development and vocational education. During the three years that Winrock was in Mali and Cote dâIvoire, none of the children it had targeted left the towns or villages. They did not leave for seasonal agricultural work. They stayed at home, because they had another alternative and they saw that they had a means of livelihood in their own rural environments. The CLASSE program in Cote dâIvoire had similar results. Efforts included children and youth completing agricultural training, student scholarships, microloans to mothers, youth sensitization to HIV/AIDS and child labor, agriculture clubs, cocoa plots, school gardens, a tree nursery, and renovation of schools. The ECHOES program focuses on the next generation of cocoa farmers. Many of the objectives indirectly affect children; other activities directly target children. Ms. Walker noted that it was important that industry has galvanized and come together with other donors.23 The focus is on basic education, youth livelihoods, and innovative conditional scholarships. Conditional scholarships are a type of credit to mothers and sometimes to fathers, who start a private enterprise and are able to pay back the loan to the school and continue to educate their other children and develop their enterprise. It is a type of loan where there is an enterprise that develops from it. This has been a very popular, very successful program, again, a type of best practice that could be applied in more places. The livelihoods model looks at training and educational alternatives for children and youth, and is designed to improve livelihoods in the long term. The TEACH program, also funded by the U.S. Department of Labor, is applied in Tanzania It focuses on children who work in such areas as cotton, tobacco, and animal herding. Again, the program provides educational alternatives to children. The program focuses on children in rural areas where there were small farmholders. Activities include agriculture vocational programs and support for non-formal primary schools. Ms. Walker concluded her talk by noting different attributes that businesses bring to these endeavors, including: ⢠Investing in the local economy ⢠Offering microcredit, conditional loans, and technology ⢠Matching or leveraging other support ⢠Leading networks of partners ⢠Offering innovations and new ideas and ⢠Increasing the likelihood of sustainability Businesses should identify reliable NGOs on the ground to implement and monitor; leverage resources and attract partners; and engage governments and other stakeholders. 23 Across Cote dâIvoire and Ghana, partners in the project included Fazer Finland, ED&F Man, Starbucks Coffee Company, Mars Inc., Olam International, Hershey, Kraft Foods, the Norwegian Association of Chocolate Manufacturers, and the Ministries of Education, Labor, and Agriculture.
ILLUSTRATIVE BUSINESS PRACTICES 47 International Labor Rights Forum Bama Athreya, executive director of the International Labor Rights Forum (ILRF), shared a case study on a Japanese company, Firestone, a wholly-owned subsidiary of Bridgestone since 1988. The story begins in 1926 when Firestone bought approximately one million hectares of land in Liberia, which would become the worldâs largest rubber plantation. According to Ms. Athreya, back in the 1920s when the land was first acquired, Firestone compelled villagers at gunpoint to clear the land to plant the rubber trees. They were forced to clear the land and for the intervening decades have been forced to labor on the Firestone plantation. She noted that more recently, as evidenced by visits to Liberia, families were compelled to bring all of their children to work with them every day to tap the rubber trees to meet impossible quotas. For decades, then, the plantation had widespread child labor. There was a significant and dramatic change on this plantation in 2008, however, as a result of continued international pressure and the valiant efforts of workers on the plantation itself. The adult workers organized an independent union and, for the first time in the history of this plantation, negotiated successfully a collective bargaining agreement with Firestone. That collective bargaining agreement reduced the quotas for adult tappers, contained a clause prohibiting child labor, and raised the wages for adult laborers so they could afford to feed their kids and send them to school as opposed to bringing them to work every day. There is much to be done to ensure that the collective bargaining agreement is fairly implemented. However, this is a dramatic and sustainable step forward for conditions on the plantation for workers. It will not require a lengthy international campaign or a vast deployment of development resources to sustain this gain. Over the years the ILRF has been organizing letter writing campaigns and other actions against Firestone. The companyâs response to the ILRFâs most recent round of letter writing starts off with Firestone proudly declaring that they have recently negotiated a historic collective bargaining agreement with the Firestone Autonomous Independent Workersâ Union and that agreement, again, diminishes the quota and calls for an end to child labor. International Labor Organization Benjamin Smith from the International Programme on the Elimination of Child Labour (IPEC) at the ILO spoke about the importance of engaging multilateral stakeholders and ILO initiatives.24 He focused on two cases: the Banana and Flower Social Forums in Ecuador and Soccer Ball Production in Pakistan.25 24 âThe ILOâs International Programme on the Elimination of Child Labour (IPEC) was created in 1992 with the overall goal of the progressive elimination of child labour, which was to be achieved through strengthening the capacity of countries to deal with the problem and promoting a worldwide movement to combat child labour. IPEC currently has operations in 88 countries, with an annual expenditure on technical cooperation projects that reached over US$61 million in 2008. It is the largest programme of its kind globally and the biggest single operational programme of the ILO.â See ILO, âThe Programmeâ available at: http://www.ilo.org/ipec/programme/lang--en/index.htm. 25 He also mentioned a third tripartite initiative: the Eliminating Child Labor in Tobacco-growing Foundation (ECLT), which supports and funds local and community-based projects that combat child labor
48 REDUCING THE USE OF FORCED AND CHILD LABOR His first example focused on the Banana and Flower Social Forums in Ecuador. These were tripartite initiatives to eliminate child labor based on social dialogue with effective trade union participation. He noted that trade unions are uniquely qualified to continually monitor child labor, which is more advantageous than periodic audits or other tools that may be able to diagnose the problem but do little to solve the underlying factors. Trade unions also have a clear incentive both to preserve jobs for adults and to make sure that their own children and the children in their communities are not exposed to child labor. The Social Forum for the Banana Production Sector was established by the banana industry in 2003, in response to a Human Rights Watch report on child labor in Ecuadorâs banana plantations.26 The report resulted in international pressure for banana certification.27 In May 2004 the Banana Sector Plan for the elimination of child labor was launched, a key accomplishment of the banana forum. An ILO report in 2000 noted that child labor was also a problem in the flower industry.28 The Flower Social Forum is âan interagency working group made up of government agencies, industry associations, trade unions, nonprofit organizations, and international groups such as the ILO and UNICEF.â29 In January 2009, the Flower Social Forum was expanded to include other fundamental principles and rights at work. Mr. Smith observed, however, that the banana forum had lost some momentum compared with the flower forum. The social forums in Ecuador also contributed to greater demand for effective government response. Twenty-six child labor inspectors were hired as part of a national plan to eradicate child labor. In this example, the government has been stimulated or encouraged to do a better job about fulfilling its duty to protect children from child labor and companies and trade unions are playing their roles according to their competencies in what they should be doing in the system. The ILOâs participation in the Banana and Flower Social Forums has helped reduce tension among banana producers, exporters, and workers and to build consensus among the groups for the need to join forces to eliminate in tobacco-growing and encourages and funds independent research to produce an objective picture of the conditions and level of child labour in tobacco growing; as well as establishes and shares best practices. The nonprofit organization, established in 2002, is supported by the ILO. Anonymous, âInternational Business Forum on Engaging Business--Addressing Child Labor: Case Studies.â February 25, 2009. Available at: http://www.ioe- emp.org/fileadmin/user_upload/documents_pdf/international_level/child_labour/atlanta_casestudies.pdf. Mr. Smith noted that the role of trade unions were an invaluable asset to the ECLT initiative. The perspective and the credibility of having a trade union representative on the board of the ECLT really makes it stand out. 26 For the report, see Carol Pier, âTainted Harvest: Child Labor and Obstacles to Organizing on Ecuador's Banana Plantations.â New York: Human Rights Watch , April 2002. 27 Anonymous, âInternational Business Forum on Engaging Business--Addressing Child Labor: Case Studies.â February 25, 2009. Available at: http://www.ioe- emp.org/fileadmin/user_upload/documents_pdf/international_level/child_labour/atlanta_casestudies.pdf. 28 Cecilia Castelnuovo, Andrea Castelnuovo, Jorge Oviedo, and Ximena Santacruz. âEcuador: Child Labour in Flower Plantations: A Rapid Assessment.â Geneva, ILO: April 2000. See also: Fundation Salud Ambiente y Desarrollo, âExecutive Summary: Baseline for the prevention and gradual elimination of child labour in the flower industry in the districts of Cayambe and Pedro Moncayo, Ecuador.â Geneva, ILO: October 2002. 29 Barbara J. Fraser, âOff the flower plantations and into school: agencies team with industry in Ecuador to combat child labor.â National Catholic Reporter, May 25, 2007.
ILLUSTRATIVE BUSINESS PRACTICES 49 child labor. Some of the activities carried out by the forum to date include: ⢠Carrying out a series of awareness raising activities on child labor for trade unions, entrepreneurs, families, and children; ⢠Setting up child labor inspection and monitoring systems; and ⢠Playing an important role in getting banana companies to agree to labor inspections on their farms and plantations. Mr. Smith then offered four characteristics of the two forums: 1. Effective dialogue concerning child labor, producing consensus on thorny issues such as hours and conditions of work for adolescents above the minimum age; 2. Private sector initiatives to improve family and community living standards in banana and flower producing areas and an increased emphasis on social responsibility generally; 3. Holistic, integrated approach that addresses root causes and provides viable alternatives to child labor: education and other basic social services; and 4. Labeling programs referencing the elimination of child labor. Mr. Smith then discussed the case of soccer ball production in Pakistan.30 The trigger for action, he noted, was media exposure of child labor in major sporting goods companiesâ supply chains, which occurred in the mid-1990s.31 A result of this attention was that in 1997, the Atlanta Agreement was signed with the World Federation of Sporting Goods, ILO, UNICEF, and the Sialkot Chamber of Commerce and Industry.32 With U.S. Department of Labor and other donor support, IPEC began a project there that centralized production and set up a child labor monitoring system.33 There was a transition to an Independent Monitoring Association for Child Labor (IMAC) in 2003, as the ILO-IPEC project was in its final stages.34 According to Mr. Smith, one interesting element about this case was that changes to the business model (e.g., moving to centralized stitching centers) were necessary and effective in this case. Getting rid of household production, which is just inherently conducive to child labor, was important but so too was protecting womenâs access to 30 For background on this case, see: Anonymous, âInternational Business Forum on Engaging Business - Addressing Child Labor: Case Studies.â February 25, 2009. Available at: http://www.ioe- emp.org/fileadmin/user_upload/documents_pdf/international_level/child_labour/atlanta_casestudies.pdf. 31 The majority of all soccer balls are made in Pakistan in Sialkot. See: Barbara Crossette, âSoccer Balls Sustain Pakistan Town.â New York Times, October 8, 1990. U.S. Department of Labor, By the Sweat & Toil of Children (Volume IV) Consumer Labels and Child Labor. 1997. 32 For the text of the agreement, see ILO, âILO Partnership to eliminate child labor in the soccer ball industry in Pakistan,â available at: http://actrav.itcilo.org/actrav- english/telearn/global/ilo/guide/ilosoc.htm#Text%20of%20the%20agreement 33 For a description of the original project elements (Prevention and Monitoring Program and Social Protection Program), see: ILO, âILO Partnership to eliminate child labor in the soccer ball industry in Pakistan,â available at: http://actrav.itcilo.org/actrav- english/telearn/global/ilo/guide/ilosoc.htm#Text%20of%20the%20agreement. See also, ILO, âElimination of Child Labor in the Soccer Ball Industry in Sialkotâ available at: http://www.ilo.org/public/english/region/asro/newdelhi/ipec/responses/pakistan/p1.htm. 34 For the IMAC Web site, see: http://www.imacpak.org/.
50 REDUCING THE USE OF FORCED AND CHILD LABOR jobs. A solution was crafted by providing day care at the stitching centers so that women could continue to work and have safe alternatives for childcare. An emphasis on capacity building, as opposed to sanctions and the termination of contracts, was also employed. Overall, efforts were anchored in a broader social service platform with stakeholders contributing each according to their responsibility and competence. Once the transition was made from an ILO-supported project to a completely industry-supported initiative, Mr. Smith noted, it was a real test for the Sialkot model whether this was going to be sustainable, but it continues to this day. In order for the local manufacturers to be able to say they are part of IMAC, they have to devote financial resources to a monitoring system that is independently checked by IMAC. The huge majority of soccer ball producers in Sialkot participate in IMAC. The risk that they will be implicated in child labor is really reduced for all international buyers because all of the producers are involved even though international buyers only work with a select few. The soccer ball production project also brought about increased social services that were key to addressing the root causes of child labor. These have been maintained to some extent, according to Mr. Smith. âI think there has probably been some decline since the project left and the project stopped mobilizing local governments and the direct provision of education and social services, but it certainly has been improved and is a stronger social safety net in place.â Mr. Smith concluded by noting the issue of different actors: international brands and local suppliers. The international brands have monitoring systems and conduct social audits, which can diagnose the problem, but they do little to address root causes of child labor in Sialkot. The IMAC and the community-based monitoring system create a broader alliance geared to providing and ensuring real alternatives to child labor and providing education and health and the basic social services that can address the root causes. Thereâs a disconnect between the two and Mr. Smith thought certainly that it would be in a brandâs interest to be engaged with the IMAC process because of the good platform that it provides and its ability to mobilize the different actors, labor inspectors, local government, schools, and trade unions. IMAC probably would benefit from better engagement with the brands. Ms. Aurelie Hauchere from the ILOâs Special Action Program to Combat Forced Laborâa technical cooperation program that provides assistance to the ILOâs constituentsâthen spoke about the ILOâs work on forced labor. Ms. Hauchere began by defining forced labor based on ILO Convention No. 29. She emphasized that the definition focused on âall work or service that is exacted from any person under the menace of any penalty for which the said person has not offered himself voluntarily.â She noted that while the definition was the base for ILO activities and programs, it needed to be translated into operational terms in practice. Ms. Hauchere then spoke to ILO efforts with the private sector and business. She noted that the ILO has carried out a series of activities, including: ⢠awareness raising ⢠policy development (supporting the design of codes of conduct) ⢠identifaction of 10 principles for business leaders to combat slavery and trafficking ⢠training and capacity building; and
ILLUSTRATIVE BUSINESS PRACTICES 51 ⢠tools and guidelines, in particular, a handbook for employers that the ILO has produced and published, which is being translated into several languages and includes some useful case studies.35 Ms. Hauchere noted several general challenges facing the private sector. How far should a companyâs liability extend? She noted that supply chains are very complex. On the one hand, there is agreement that addressing just the first tier is not enough because as far as forced labor is concerned it mainly occurs in the informal economy as is the case with child labor. But on the other hand, it is not realistic and it is not feasible to ask a company to address the whole supply chain. The question, she suggested, is how do you detect forced labor in those tiers? Ms. Hauchere then discussed the example of Brazil as a very good practice of a multi-stakeholder initiative, which focused on rural forced laborâbonded laborâmostly in the larger Amazonian states. Forced labor is a problem in Brazil. The ILO describes the situation: âForced labor practices in Brazil occur in rural and urban areas mainly through debt bondage schemes. In rural areas workers are immobilized in estates until they can pay off debts often fraudulently incurred; their identity documents and work permits are frequently retained; they are often physically threatened and punished by armed guards and some have been killed while attempting to flee. Debt bondage involves abusive labor contracting schemes operated by contractors known locally as empreiteiros or gatos, often engaged in other types of seasonal labor contracts. The typical debt bondage cycle occurs as follows: given the seasonality of rural demand for labor, the gatos recruit workers from poverty stricken areas marked by seasonal unemployment or drought. They are ferried in trucks or buses to destination sites hundreds or thousands of kilometres away from their origin. Even before they start working they will have incurred debts in initial transport and food payment at prices beyond their control. Once working they will then incur additional debts in tools, housing and other services often through abusive charges.â36 In Brazil prior to 1995 the government denied the existence of forced labor. This situation changed that year, as the government officially recognized the problem at the United Nations. The first step was the creation of a Special Mobile Inspection Group, which is a labor inspection team consisting not only of labor inspectors but also labor prosecutors and federal police officers that go to investigate complaints on the estates to see whether there is forced labor. The teamsâ objective is to investigate complaints of slave labor, free workers, and to prosecute the owners of estates. If there is forced labor they have the capacity to release workers. More than 32,000 workers have been freed in Brazil between 1995 and 2008. Ms. Hauchere attributed the success of the activity to at least two factors. First, because teams have no local offices, there cannot be any corruption from local and state owners or local police officers, which is a very important point. Second, complaints of forced 35 ILO Special Action Programme to Combat Forced Labour, Combating Forced Labour: A Handbook for Employers & Business. Geneva: ILO, 2008. 36 ILO, âCombating Forced Labour in Brazilâ available at: http://www.ilo.org/sapfl/Projects/lang-- en/WCMS_090984/index.htm. See also Carlos Juliano Barros, âModern-Day Slavehouseâ Rolling Stone Brazil, February 2008 and the case study in ILO, Combating Forced Labour: A Handbook for Employers & Business, Vol. 7: Good Practice Case Studies. Geneva, ILO: 2008.
52 REDUCING THE USE OF FORCED AND CHILD LABOR and child labor violations are confidential. Visits are not announced in advance. Even for the members of the team they know the destination only a couple of days in advance. The second step taken by the government was the creation in 2004 of the lista suja or the âdirty list,â a register of names of individuals or company employers who have been caught using forced labor during a labor inspection.37 The list was established by the Ministry of Labor and Employment (MTE) by a decree, and 199 employers have been on it.38 What makes this register so effective is that it is public and is accessible via the MTE Web site. Ms. Hauchere briefly explained how the list works. When an employer is registered on this list, it is monitored for two years and in any case will remain on the list for two years. After two years, the employerâs name can be removed from the list provided he has not repeated the offense (which happens), he has paid all fines, and he has paid all labor and social security compensation. If all these conditions are met the employerâs name is removed. What is interesting in this example is that in the decree there are no penalties for the employer except the fact of appearing on that list, but some penalties have been imposed by public and private financial institutions. For example, the Bank of Brazil, the Bank of Amazonia, the Brazilian Development Bank, and Northeast Bank39 decided to refuse credit and banking benefits to the employers appearing on the dirty list. These actions can provide real disincentives for using forced labor. In addition, the National Congress is currently considering amending legislation to create new penalties, such as the expropriation of land of farm owners using forced labor. What was the response from the business sector? According to Ms. Hauchere, one positive response involved signing a voluntary commitment: the National Pact for the Eradication of Slave Labor, which was launched in May 2005.40 Currently about 200 companies have signed on. Together these companies represent about 20 percent of the gross domestic product of Brazil. By signing this pact, companies commit not to use forced labor and not to work with companies using forced labor. Ms. Hauchere detailed the main commitments of the Pact: ⢠Commercial restrictions on enterprises and individuals identified as using slave labor ⢠Formalizing employment relations o Fulfillment of all labor and social security obligations o Preventive actions on safety and health ⢠Prevention o Provide information to workers vulnerable to enticement into slave labor o Publicity campaigns to prevent slavery 37 MTE Decree No. 540/2004. For text see: http://www.mte.gov.br/legislacao/portarias/2004/p_20041015_540.pdf. 38 MTE, âCadastro de Empregadores-Portaria 540 de 15 de Outubro de 2004 ATUALIZAÃÃO Semestral em 29 de Dezembrode de 2008.â Available at: http://www.mte.gov.br/trab_escravo/lista_2009_06_16.pdf. 39 According to the ILO: âIn December 2005 the Federation of Brazilian Banks (FEBRABAN) decided to suspend credits to companies included on the Government's "laundry list". See: ILO, âRegional Meeting for the Americas 2-5 May - Forced labour in Latin America: Fighting impunity.â May 2, 2006. Available at: http://www.ilo.org/global/About_the_ILO/Media_and_public_information/Press_releases/lang-- en/WCMS_069168/index.htm. 40 See Reporter Brasil, âBrazilian Pact to Eradicate Slave Labourâ available at: http://www.reporterbrasil.com.br/pacto/conteudo/view/9.
ILLUSTRATIVE BUSINESS PRACTICES 53 ⢠Rehabilitation of freed workers o Support social reintegration for workers o Training and professional qualification ⢠Support implementation of the National Plans to Eradicate Slave Labour ⢠Monitoring o Monitor the actions and publicize the results o Collate and share experience o Assess, after one year, the implementation results She noted that a commitment like this has to be monitored because the ILO saw that some companies did sign the pact and were found later to be using forced labor. There is a monitoring process and those companies have been excluded from the pact. According to Ms. Hauchere, business in Brazil has taken further steps in signing the pact. Some businesses have ceased trading with estates on the âdirty list.â They provide training to staff responsible for buying soya to inspect the labor practices of supplying estates. They consult the list before dealing with new suppliers. They maintain restrictions on enterprises once they have been removed from the list. On June 24, 2008, the Declaration on Social Responsibility of Companies and Human Rights was signed by 13 presidents of important national companies, Brazilian branches of multinational companies, and banks. The declaration stated that they will eradicate forced labor in their supply chains. Ms. Hauchere concluded her presentation by discussing the role of private-sector businesses involved in labor rights activities. In Brazil, Citizenâs Charcoal Institute (ICC), has worked to provide formal contracts with labor rights to freed workers-- workers that have been freed from forced labor. ICC is starting with small numbers: 46 freed workers received formal contracts with labor rights in 2006, and over 100 in 2007, but that is a start and that is very important. As Ms. Hauchere noted it is important to think about what happens to freed workers. Overall, Ms. Hauchere suggested that the Brazilian experience is a good practice because it is based on a clear definition of slave labor, has strong political commitment, is a multi-stakeholder initiative, uses both âcarrotsâ and âsticks,â includes activities by the government and businesses, has the active involvement of the labor inspectorate, and can provide contracts with labor rights. For the ILO, an effective practice would be a tripartite process. This is the ILO way of working, involving government, employers, and workers. This should be based on social dialogue. This should definitely involve labor administration and labor inspectors. There should be a strong legal framework around this with clear indicators on what is forced labor and what isnot forced labor and, of course, based on ILO core conventions.
