For countries and industries who land on government watch lists detailing alleged use of child and forced labor, the consequences are as much about public perceptions as they are about the economic fallout.
This summer, the Indian apparel industry expressed concerns about being named by the U.S. Labor Department on one of its watch lists for child labor. Indian manufacturers were particularly concerned their presence on the list would impact the image the world had and would ultimately damage operations. There are no specific punitive actions or trade remedies associated with being named on the list.
“I think it’s going to make a big difference to business,” said Sandeep Jain, owner of Chandan Garments in Indore, India.
While Jain said he does not employ children in his factory, he acknowledged that “child labor is a problem, especially in small towns, and this is likely to reduce sales until people understand that children are not [regularly] employed in India.”
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Under Indian law, children under the age of 14 are prohibited from working in “hazardous” industries and in homes, hotels and restaurants. But the law is rarely enforced and convictions have been few. The Indian government estimates that more than 12 million children under the age of 14 are employed, while nongovernmental organizations estimate there are twice that many.
Premal Udani, chairman of India’s Apparel Export Promotion Council, said his organization is concerned that what he calls isolated instances were used to malign the entire Indian apparel sector. Udani met with Labor Department officials in Washington last month about the Indian industry’s concerns. For now, he said his organization is focused on “clearing up misconceptions” and will introduce its own code of compliance for members.
Global labor rights organizations disagree with the Indian industry’s characterization and said the Labor Department has identified a real problem.
“Child labor is very common in the textiles industry, mostly at the small unit level,” said Shireen Miller, head of policy and advocacy for Save the Children India.
There is “no question” that bonded labor and bonded child labor are used in the apparel industry in India, Bama Athreya, executive director of the International Labor Rights Forum, told WWD days after returning from a three-week trip to India to speak with local organizations.
“Nothing leads us to believe that the industry as a whole has responded adequately enough to eradicate the problem,” Athreya said. “It is hard to tell how widespread or what specific brand responses [to the problem] have been.”
The Labor Department releases two lists of goods produced by child or forced labor. The methodology for the lists is almost identical, but the focus and the authority are different. One list, the “List of Goods Produced by Child Labor or Forced Labor,” is required by the Trafficking Victims Protection Reauthorization Acts of 2005 and 2008, and is intended to provide a public awareness tool that identifies products made by child or forced labor. It was released for the first time in September 2009.
The other list, released most recently in July, is mandated by executive order and focuses specifically on child labor in the government procurement supply chain. The list is used to ensure that government contractors and federal agencies are not sourcing from countries found to be using child labor in specific industries.
The TVPRA list cited Argentina, China, India, Jordan, Malaysia and Thailand for labor practices in the apparel industry. The executive order list, released in July, cited India, Argentina and Thailand for allegedly using child labor in the industry. India was also listed for embroidered textiles.
In compiling both of the lists, the Labor Department’s International Labor Affairs Bureau utilizes a diverse source base, including international and local NGOs, government sources, statistical surveys, academic reports and in some cases investigative reporting from credible media sources. The Labor Department also funds some data collection efforts, often in conjunction with the International Labor Organization’s International Program on the Elimination of Child Labor.
“Since the development of the lists, we have had numerous conversations with some of the countries included, as well as some industries,” said Marcia Eugenio, director of the Office of Child Labor, Forced Labor and Human Trafficking at the ILO division. “In a lot of these countries, child labor is endemic. It is a really big problem happening in all sectors of the economy.”
Apparel companies said the lists are helpful in strengthening efforts to operate responsibly. Before placing production in a particular country, Levi Strauss & Co. conducts “Country Assessments,” which evaluate social and environmental conditions, said Michael Kobori, vice president for social and environmental sustainability.
“We have been pleased that the Department of Labor child-labor reports include the apparel and cotton industries, and we believe this is important third-party research and validation that we value,” Kobori said. “We regularly share watch-list updates and information with our sourcing leadership team.”
Levi’s prohibited the use of Uzbek cotton in its products when child labor was identified in the cotton industry in Uzbekistan by third-party sources, Kobori said. The Labor Department’s citation of Uzbekistan over the issue was an important tool that aided Levi’s efforts to ask other countries to join it in the action, he said.
The use of child labor was widespread, systematic and government-directed in Uzbekistan for many years without showing signs of abating, Athreya said, and the problem lead to an industry boycott.
Thea Lee, deputy chief of staff at the AFL-CIO, said despite a lack of specific consequences attached to the Labor Department’s reports, landing on one has the potential to impact decisions about government loans, aid or trade access.
Retailers monitor the lists closely for potential policy ramifications more than internal business decisions, said Erik Autor, vice president and international trade council for the National Retail Federation.
“Retailers view [the Labor Department lists] in terms of some concern about whether they will translate into actual policy, whether it might be the basis of legislation to restrict imports from a specific country or action by the Labor Department or the administration,” Autor said.
Labor rights groups and activists cite watch lists as important tools that give them leverage.
“There is value [in them] because what they’ve done is take a look at this in terms of global commodities, not just countries,” Athreya said. “It not only puts governments in a place where they feel compelled to respond, but it puts entire industries in a place where they feel compelled to respond.”