ILAB - Introduction

Introduction

A. Overview

This report is the fourth in the international child labor series of the Department of Labor's Bureau of International Labor Affairs (ILAB).¹ ILAB's first two reports documented the use of child labor in the production of U. S. imports, as well as situations of forced and bonded child labor. The third report focused on the use of child labor in the production of apparel for the U. S. market and reviewed the extent to which U. S. apparel importers had established and were implementing codes of conduct or other business guidelines prohibiting the use of child labor in the production of the clothes they sold. The present report analyzes voluntary labeling initiatives to inform consumers that measures are being taken to prevent the use of child labor.

Frequent and often unsettling media reports have made consumers in the United States and other industrialized countries aware that the goods they purchase could have been produced by a child under exploitative conditions. One way for a manufacturer or retailer to convey to consumers that a product is made under humane working conditions is through a label.² Recent surveys have shown that consumers are interested in product labels indicating fair working conditions and are ³ willing to pay a slight premium to purchase such products.⁴

In response to increased attention paid to the child labor issue, several non- governmental organizations (NGOs) and corporations are communicating child labor policies to consumers. Oftentimes, this takes the form of a descriptive label or logo ⁵ that states or implies that: 1) a product was not made by children; 2) the program/ company aspires to a no child labor policy; and/or 3) the program/ com- pany supports rehabilitation and education programs for child workers. Although the labels themselves differ in the degree to which they actually offer a "child labor free" guarantee, consumers may receive a similar message: "buying this product will not contribute to the exploitation of child labor."

For some companies, the use of a label might enhance their market share by enticing the consumer to purchase their "no child labor" product instead of that of an unlabeled competitor. For NGOs, a labeling program may be a way to create additional disincentives for the use of child labor in certain industries and countries. For the consumer, choosing to purchase a product with a label provides a sense of assurance of not being complicit in exploitative labor practices.

This report focuses on consumer labeling — a relatively new, creative, and increasingly popular method of informing the buying public that a particular product is made without child labor. However, consumer labels are just one of many tools that can eliminate the exploitation of children in the workplace. Clearly, the elimination of child labor will still require a larger, more comprehensive set of programs and government policies including effective law enforcement, adequate primary and secondary education programs, and other poverty alleviation programs for child workers and their families. Used in this larger context, labeling programs can be an important tool in the fight against child labor.

This report reviews the development and use of consumer labeling programs in the hand- knotted carpet, leather footwear, soccer ball and tea industries. Chapters II through V first present an overview of each industry and U. S. imports. They then discuss the extent of child labor in that industry, based in part on information gathered by Department of Labor officials who visited eight countries in the preparation of this report. The chapters next identify, describe and assess the labeling programs and some other mechanisms aimed at addressing the child labor problem.

B. International Child Labor

The International Labor Organization (ILO) establishes and supervises the application of international labor standards — including child labor standards.

Under ILO Convention 138 on the Minimum Age for Employment, adopted in 1973, the term "child labor" generally refers to any economic activity performed by a person under the age of 15. Of course, not all work performed by children is detrimental or exploitative. Child labor does not usually refer to performing light work after school or legitimate apprenticeship opportunities. Nor does it refer to young people helping out in a family business or on a family farm. ⁶ Rather, the "child labor" of concern is generally employment that prevents effective school attendance, and which is often performed under conditions hazardous to the physical and mental health of the child.

ILO Convention 138 also sets a standard which permits countries whose economy and educational facilities are insufficiently developed to initially specify a minimum age of 14 years (rather than 15 years), and reduce from 13 years to 12 years the minimum age for light work. ⁷ Convention 138 defines "light work" as work that is not likely to harm children's health or development, or prejudice their attendance at school. Convention 138 also prohibits any child under the age of 18 from undertaking hazardous work — that is, work that is likely to jeopardize his or her health, safety or morals.

Partly due to the recent focus on exploitative child labor, there have been discussions about more clearly defining what constitutes intolerable child labor that clearly violates the human rights of a child and for which a strong international consensus exists for immediate abolition. ⁸ The ILO has begun work to draft a new standard on the abolition of intolerable child labor for adoption by 1999.

Meanwhile, the ILO's International Programme on the Elimination of Child Labor (IPEC), established in 1992 to assist countries in the phased elimination of child labor, already categorizes certain forms of child labor as intolerable: children working under forced labor conditions and in bondage; children in hazardous working conditions and occupations; and very young working children (under 12 years of age). ⁹

Whether child labor is defined by age or work conditions, no reliable infor- mation exists on the actual number of children working throughout the world. Most available data only cover economic activity of children between the ages of 10 and 14. Nevertheless, the ILO estimates that there are at least 250 million workers between the ages of 5 and 14 in developing countries; at least 120 million are working full- time.¹⁰ The number of child workers under 10 is thought to be significant — in the millions.¹¹ According to the ILO, the number of child workers worldwide may be in the "hundreds of millions."¹²C. Labels and Labor Conditions

The purpose of any product label or marketing logo is to convey information to the consumer. Labeling may also serve as: 1) an independent evaluation and endorsement of a product; 2) a consumer protection tool; and 3) a method of achieving specific economic or social policy goals.¹³ A product's brand name, care instructions, weight, content, nutritional value, and/ or associated health risks may all ap- pear on its label.¹⁴

Labeling for labor conditions, including child labor, has the potential to allow the consumer to purchase a product without the uncertainty that it may have been produced under unacceptable conditions. Placing a label describing labor conditions on a product allows consumers to penalize or reward the practices of various companies.¹⁵ Firms that publicly promote their adherence to fair labor practices can gain a larger share of the market if they can convince consumers to buy their product and shun their competitors'.

The success of a label rests on a number of factors, such as the level of consumer demand and the ability to conduct widespread consumer education campaigns that link the label with a certain message. Success also hinges on the integrity of the label, or the degree to which the consumer believes the promises implied or stated by the label are credible. A labels's integrity may be enhanced if it is certified by an entity independent of the producer. ( See Box I-1 for further discussion.)

1. A Short History of Labor Conditions and Labeling

The labeling of products made under satisfactory working conditions — including no child labor — is not without precedent, and actually has its origins in the nineteenth century United States. This section provides a short history of such labeling initiatives.

a. Trade Union Labels

The trade union label appears to be wholly of American origin.¹⁶ The first use of a trade union label has been traced back to 1869 by the Carpenter's Eight- hour League of San Francisco. The League furnished a stamp to all lumber mills that ran on an eight-hour schedule so that their work could be differentiated from those mills operating on a ten-hour schedule.¹⁷

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A less admirable example was the Cigar Makers' Association of the Pacific Coast, which in 1874 placed a white label on cigar boxes to inform consumers they were patronizing white labor.¹⁸ This was done in response to the growing use of low-wage, Chinese immigrant labor.

In 1875, a cigar makers' union in St. Louis tried to encourage consumers to buy union-made cigars by using a red label.¹⁹ During this period, the cigar makers' unions were not only facing competition from low-wage, Chinese immigrant labor, but also from cigars made in prisons and tenement houses. More systematic use of the label was encouraged to strengthen the union's cause against such competition.²⁰ At that time, tenement houses, which combined living and work areas, were prevalent in many of the larger U. S. cities (especially in New York City) where rents were extremely high. The tenement houses were known for their lack of cleanliness and use of immigrant and child workers. In addition to cigar making, tenement house production, which often involved the entire family, included garments, feather and fur goods, artificial flowers, and bakery goods. As a result of the success of local union labels adopted by cigar makers in San Francisco and St. Louis, in 1880 the Cigar Makers' International Union adopted a standard blue label for the use of all its members.

Labels were also adopted by other associations and trade unions, such as the United Hatters of North America (1885), Knights of Labor ²¹ (1884), and United Garment Workers of America (1891). Before the turn of the century, the union label had been taken up by printers, bakers, wood workers, harness makers, iron molders, broom makers, coopers, photographers, shoemakers, custom tailors, mattress makers, horseshoers, brewers, egg inspectors, barbers, and coal distributors.

In general, the union label was used to promote better working standards and to guard against the use of tenement-house, sweatshop, ²² and prison labor. Some early labels also attempted to convey guarantees about the workmanship, quality, or healthfulness of the product. But primarily, the union label stood for better pay and improved work conditions, though, depending upon the strength of the union, these objectives were not always realized.

b. National Consumers League

Founded in 1899, the National Consumers League (NCL) is the oldest national consumer organization in the United States. ²³ The NCL's objectives are to improve industrial life by eliminating child labor, reducing excessive hours of work, and increasing wages and improving other working conditions. To realize these objectives, the NCL seeks to increase public awareness of the need to raise industrial standards.

The New York City League, a forerunner of the NCL, had its beginnings in 1889-90 when Alice Woodbridge, secretary of the Working Women's Society, reported on the results of her survey of working conditions in New York City department stores. Her report found people working excessive hours for low wages under unsanitary conditions. She also reported finding, "numbers of children under-age employed excessive hours, and at work far beyond their strength." ²⁴ As a result of the attention received by the report, a committee was formed to help the Society make a list that would inform shoppers about the working conditions in retail stores.

Subsequently, the New York City League prepared a "White List" of retail establishments that met basic working standards. The List was intended to appeal to women and influence their buying habits as a way to improve the working conditions of store employees, most of whom were also women. The standards were based upon "Standards for a Fair House" drafted by the Working Women's Society and modified by the League after consulting with firms with a reputation for treating their employees fairly. The standards stated, in part:

A fair house is one in which humane and considerate behaviour toward employees is the rule; In which fidelity and length of service meet the consideration which is their due; In which no children under fourteen years of age are employed. ²⁵

As part of the League's public education campaign, the White List was published in local newspapers. ²⁶ Following publication of the White List, the New York City Consumers League, in 1898, developed a White Label, adopted by the NCL the following year, for women's underwear not made under sweatshop conditions, and without workers under 16 years of age.²⁷ In this way, the shopping public could distinguish these labeled goods from those made under conditions which could not be endorsed by the League. It was found that seventeen out of twenty-two manufacturers interviewed were willing to use a Consumers' League label, if a demand for it were created. ²⁸

After the first year of the label's use, manufacturers of corsets, sheets and pillow cases, curtains, shirt and stocking supporters, shirt waists, and children's wash dresses asked the League to be permitted to sign contracts with them to use the label. After a positive inspection by the League, the White Label was issued upon the signing of a formal agreement between the National Consumers League and the manufacturer. The agreement stated the League's purpose of "promoting intelligent and effective cooperation among the purchasers in demanding goods made under the right conditions in preference to the Sweat Shop product" and specified the form and content of the label, reproduced below:

The agreement contained conditions the manufacturer agreed to abide by (e. g., "That no girl under the age of sixteen years shall be employed, or permitted or suffered to work on such premises.") and stipulated conditions on the label's use, application, duplication, and withdrawal from use (e. g., if revoked by the League for not complying with the conditions of the contract, the collection of liquidation damages to enjoin the further use of the label by the manufacturer).

Eventually a variety of garments bore the label. Factories using the label were located in Maine, Massachusetts, Michigan, New York, Pennsylvania, and Rhode Island. National Consumers League representatives visited the facilities each year to ascertain that they maintained the required standards. The rapid positive response to the White Label matched that of the White List. By 1914, the League's list of firms using the White Label had grown to 68.

In 1918, the League decided to discontinue the White Label since by then legislation in many states had secured standards even higher than the label requirements. The League then focused attention on national legislative reforms to improve working conditions, including a ban on child labor.

D. Elements of a Child Labor Labeling Program

Used in the early 1900's to promote humane working conditions or to fight child labor, labels have once again, at the end of the century, been reintroduced. Research underlying this report has identified consumer labeling programs addressing child labor in the hand-knotted carpet, leather footwear, soccer ball and tea industries. Nine of those programs are described in detail in this report. To the extent that information is available about other labels, it is noted in the individual industry chapters.

Conceptually, all of the current consumer labeling programs have certain common elements. They include: (1) a physical label; (2) claims behind the label; (3) the administration of a labeling program; (4) transparency to the public; (5) monitoring; and (6) enforcement.

While the labeling programs have certain common elements, they also have differences. First, some of the programs are established and implemented solely by the producers of the items. Other programs are operated by entities independent of industry. Still others are managed by partnerships of industry and non-industry actors. In a few cases, programs are managed by a quasi-governmental body, such as an export promotion council, established jointly by government and industry representatives.

Second, the use of the label or logo differs from product to product and program to program. The labels described in this report may be found on a product, on a store window or in a store display, on company letterhead, or as part of a company advertising campaign. Although the placement of the label differs, a common feature of the programs is an attempt to inform the consumer about child labor.

Third, the labels themselves convey differing information about the program. Some labels are representative (such as a logo or symbol) and say nothing directly about child labor. Others include some text regarding children or child welfare. Only some labels state "child labor- free" while others indirectly convey that message through pictures of smiling children.

This report uses the following elements to assess each of the labeling programs. More detailed descriptions and discussion of these elements, as well as the operation of each of the child labor labels applicable to hand-knotted carpets, leather footwear, soccer balls and tea, are discussed in Chapters II through V.

1. Physical Label

The programs discussed in this report all have some type of label that is either affixed to a product, or used as a logo in store or company advertisements. Some labels explicitly describe that the product is child labor-free. In other cases, the label may not make specific claims about child labor. The prohibition on child labor may be one of a set of standards implied by the label or logo. Still others are logos that convey information about child labor or child welfare without the use of any text. Depending on the program, labels may be affixed to the product (e. g., carpets), incorporated onto the product (e. g., soccer balls), or printed on the box or packing container (e. g., shoes). In some instances, labels may take the form of posters or signs that are placed conspicuously in retail spaces.

2. Claims Behind the Label

Labels give child labor information to consumers. Many of the labels claim that the product has been manufactured or produced without the use of child labor. Others claim that the manufacturer or producer discourages the use of child labor. Yet others may claim that the manufacturer/producer supports rehabilitation programs for children or makes contributions to social programs that assist children — either in addition to or in lieu of the no child labor claim.

3. Administration of a Labeling Program

Labeling programs may be administered by different entities: individual pro- ducers (companies), groups of producers (an entire industry or a trade association representing producers — sometimes in conjunction with the government), NGOs, or a combination of the above.

An important function of a labeling program is to inform consumers about the label and why it is desirable to purchase goods that carry it. Typically this is done through advertising or public awareness campaigns.

Developing a labeling program, informing consumers about it, and monitor- ing and enforcing the claims behind it are costly propositions. Thus, financing is one of the key issues behind the administration of a labeling program. In some instances, a labeling program may be financed by grants from governments or NGOs, while in others a fee or levy is imposed on producers or importers seeking to use the label.

4. Transparency

The term transparency refers to the extent to which workers, managers, con- tractors and subcontractors, NGOs and the public can understand and verify the claims made by a label. It also relates to public accountability of the entity administering the labeling program, including public information about the operation of the program and monitoring and enforcement.

5. Monitoring

Monitoring gives labeling programs credibility in the eyes of the consumer, the media, NGOs and potential critics. Monitoring often begins with pre-screening of manufacturers or producers. Use of a label may depend on monitoring to ensure that the producer complies with claims associated with its use. Monitoring may be conducted by entities independent from the company or industry manufacturing or producing the labeled product, or by entities associated with them.

6. Enforcement

Just as labeling programs have a process to certify manufacturers and pro- ducers as eligible to use the label, many also have procedures to require remedial action or order discontinuation of the use of labels where a failure to comply with the terms of the label is found.

E. Other Private Sector Efforts

As market pressure for child labor- free goods has grown, so too has the variety of private sector responses. ²⁹ This report focuses primarily on the emerging child labor consumer labels. It also mentions other efforts initiated by businesses to develop and implement policies prohibiting child labor.

In most of the industries surveyed for this report, associations of manufacturers, importers, and sometimes retailers have developed or are now developing codes of conduct. ³⁰ International industry associations are actively debating guidelines for labor conditions. Some companies are changing their production processes to prevent child labor and monitor adherence to their labor practices policies. Finally, the recent trend toward codes of conduct has led concurrently to the rise in the number of NGOs and accounting firms offering consulting, auditing, monitoring and certification services to companies wishing to implement a code of conduct or label. Many of these organizations are new; and many firms are entering the field of monitoring for the first time. The effectiveness of many of these efforts is as yet undetermined.

Finally, a major new initiative promoting fair working conditions in the domestic and international apparel and footwear industries has emerged in the United States. The Apparel Industry Partnership, a coalition of U. S. apparel and footwear companies and religious, human rights, consumer, and trade union groups, ³¹ was formed in August 1996 after meeting with President Clinton and Vice-President Gore to discuss solutions to sweatshop conditions including child labor.

In April 1997, the Partnership announced its agreement to a comprehensive workplace code of conduct and independent monitoring system to ensure that apparel and footwear are produced under decent and humane working conditions. The Partnership is in the process of creating an association to oversee implementation and monitoring of the code. At the time the code of conduct was announced in April, the Partnership indicated it would develop a mechanism or "seal of approval" to inform consumers of companies that abide by the code and monitoring system.

F. Methodology

This report analyzes private-sector efforts that use labeling programs to communicate their child labor policy to consumers. Because the child labor labeling programs are relatively recent, and definitive data on costs and benefits as well as consumer demand are not available, this report has not attempted to make quantitative assessments of their effectiveness. The four industries selected — hand- knotted carpets, leather footwear, soccer balls and tea — were chosen because: (1) allegations of child labor in these industries were reported in ILAB's prior child labor reports; ³² and (2) private sector labeling programs exist in these industries.

To supplement the available published information, the Department of Labor held a public hearing, conducted a small, non-random voluntary survey of U. S. importers and retailers, and visited countries that produce hand-knotted carpets, leather footwear, soccer balls and tea. A company or program's inclusion in this report does not constitute endorsement by the U. S. Department of Labor of any product, service, company, or program. The rest of this section describes in general terms these sources of information.

1. Public Hearing

The Department of Labor held a public hearing to gather information for this report on April 18, 1997. Public notice of the hearing was given through the Federal Register. ³³ Letters of invitation were sent to a wide range of groups around the world, including human rights groups, international organizations, U. S. companies, trade unions, consumer groups, and foreign governments. The public was invited to present testimony, submit a statement for the record, or both. The record was kept open for written statements until April 28, 1997.

Eleven witnesses presented oral testimony, ten of whom also presented written statements for the record. In addition, 40 individuals, foreign governments or organizations submitted statements for the record. Copies of statements submitted for the record are available from the U. S. Department of Labor, Bureau of International Labor Affairs.

2. Survey of U. S. Importers and Retailers

In order to gather information on the extent to which labeling programs and other voluntary mechanisms are used by each industry under review, the Department conducted a small, non-random voluntary survey of U. S. importers and retailers. Although companies surveyed were chosen to represent a broad spectrum of the hand-knotted carpet, leather footwear, soccer ball and tea industries, the findings from the survey cannot be generalized to firms beyond the respondents. ( See Appendix A for a complete list of companies surveyed.)

A set of eight questions regarding labeling programs and codes of conduct was sent to 49 U. S. importers and retailers in the four industries. ³⁴ ( See Appendix B for a copy of the questionnaire.) The survey asked about methods used by the company to inform consumers that child labor was not used in the production of goods. Respondents also were asked about their codes of conduct. Finally, the survey asked for information on the use of child labor in any overseas facilities and approaches to reduce child labor abuses.

Thirty- six of the companies (73.5 percent) responded to the voluntary ques- tionnaire. ³⁵ The remaining thirteen companies (26.5 percent) did not return the questionnaire or informed the Department that they declined to participate. More detailed information on the survey for each of the industries is given in Chapters II through V.

3. Field Visits

During May and June 1997, Department of Labor officials traveled to eight countries — Brazil, China, India, Kenya, Mexico, Nepal, Pakistan and Tanzania — that produce hand-knotted carpets, leather footwear, soccer balls or tea for export to the U.S. market. The objective of the visits was to learn about the approaches used by producers and suppliers in these countries to implement labeling programs for child labor. The countries were selected based upon: 1) the existence of a child labor labeling program; 2) reports of child labor in the production of hand-knotted carpets, leather footwear, soccer balls or tea; 3) exports to the United States of hand- knotted carpets, leather footwear, soccer balls or tea; or 4) a combination of 1-3 above. In planning the field visits, Department officials met in Washington, D. C. with representatives of industry, trade associations and non-governmental organizations knowledgeable about the industries and the countries to be visited.

Interviews were held with as many relevant persons and organizations as possible in the foreign countries. These included government officials, manufacturers, managers of production facilities, buyers, trade associations, trade unions, workers, community activists, human rights groups, international organizations concerned with children's issues, and other NGOs. In some cases, U. S. Embassy personnel in each of the countries accompanied the Department of Labor officials. At the beginning of each interview, Department of Labor officials indicated that the purpose of the interview was to gather information for a public report, and any information collected would be used for that purpose.

Department representatives visited a sample of production facilities — facto- ries, workshops and plantations. These sites were selected on the basis of information provided by U. S. importers, exporters' associations, U. S. Embassy officials, administrators of labeling programs, trade union representatives, international organizations, and NGOs.

Appendix D lists all the production facilities and organizations interviewed by Department of Labor officials in each country.

This report was produced by the staff of the International Child Labor Program and is published by the U.S. Department of Labor, Bureau of International Labor Affairs.

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