By  on November 7, 2007

LISBON — The disclosure of alleged child labor abuses in a New Delhi apparel factory linked to a Gap Inc. contractor has put supply chain risks under renewed scrutiny and is expected to intensify efforts to stem exploitation, industry executives and labor leaders said.

"Gap Inc. is certainly not alone," said Simon Steyne, international officer with Britain's Trades Union Congress, who was among the officials attending an International Labor Organization conference here. "They have been up front with their response."

Steyne said buyers have to make it clear to suppliers that they only deal with subcontractors who have been certified, inspected and approved, and "only in those circumstances should subcontracting be allowed."

In addition, a stable supply chain, first-use suppliers and full transparency of the supply chain is paramount, he noted.

Responding to allegations in a British newspaper that a child labor plant in India was working on a product for GapKids, Gap Inc. said it launched an investigation and noted that "a very small portion of a particular order placed with one of its vendors was apparently subcontracted to an unauthorized subcontractor without the company's knowledge or approval."

Marka Hansen, president of Gap North America, said, "We strictly prohibit use of child labor. This is nonnegotiable for us and we are deeply concerned and upset by this allegation."

Last year, Gap Inc. stopped doing business with 23 factories because of code violations, Hansen said.

"Gap found themselves in the eye of the storm over child labor in their Indian supply chain,'' said Neil Kearney, general secretary of the International Textile, Garment & Leather Workers Federation. "But the name Gap could have been supplanted by hundreds of the other brands and retailers sourcing from suppliers who use subcontractors in more than two dozen countries."

All are vulnerable down the supply chain, Kearney said, and brands should source from suppliers directly whenever possible. Only in exceptional circumstances should subcontracting be permitted and then only after each specific subcontractor has been approved, he added.

Business leaders also are weighing the problem.

"All multinationals are very aware of the risks they have in their supply chains and will not be happy to find this sort of infringement occurring," said Brent Wilton, deputy secretary general of the International Organization of Employers. "I'm sure its going to require a number of companies to reinvestigate how vulnerable they might be in terms of the arrangement they have."

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