Addressing Root Causes
- Understand the root causes of child labor and forced labor.
- Learn ways in which companies are addressing these root causes.
Livelihood Programs—Livelihoods programs are efforts to help individuals obtain new skills and assets to be able to sustain themselves in the face of various shocks and stresses, including changes in national or local economies, severe weather and illness.
When planning or enhancing a social compliance system, it is important to understand the root causes of child labor and forced labor, as well as strategies for addressing such labor abuses. The links below can assist.
- What are the Root Causes of Child Labor and Forced Labor?
Based on 2005 estimates from the World Bank, 1.4 billion people in the developing world live in extreme poverty, surviving on less than $1.25 a day. During the global economic crisis, lack of adult employment with decent wages further exacerbated global poverty. Poverty carries vulnerabilities beyond low income. Individuals who are poor lack mechanisms to cope with economic shocks, and suffer disproportionately from poor health, hunger and inadequate access to education and services. As such, they may be more willing to assume risk to avail themselves of economic opportunities, making them more vulnerable to labor exploitation. This is particularly true for migrant workers, who may be at the mercy of recruiters and receiving employers.
- Ineffective or inadequate government resources
Many governments have not enacted strong laws against labor abuse; others may have adequate laws but do not enforce them effectively, or may struggle with inadequate revenues to address social problems. In some countries, government corruption, sometimes with corporate complicity, and weak rule of law allow abusive practices to occur in worksites and go unpunished. Many governments lack effective social protections for their citizens, leaving workers who may be abused without alternative livelihoods or support services.
- Lack of access to quality education
In many countries, citizens continue to face barriers to adequate education. Lack of access may be driven by many factors, including the absence of free public education; requirements to pay for books, uniforms and other necessities that prevent poor children from enrolling; an inadequate education infrastructure; or poor quality instruction. Children who have limited or nonexistent educational opportunities are more likely to enter the workforce. Individuals who are denied educational opportunities in childhood face more restricted employment opportunities as adults and are, therefore, more vulnerable to exploitation.
- Weak or nonexistent trade unions and other civil society groups
In many countries, trade unions, as well as human rights and other civil society groups, are suppressed by the government, sometimes with the support of employers. In some cases, unions exist but have direct links to the government. An absence of effective, independent trade unions hampers collective bargaining and thus workers’ ability to effectively advocate for their rights, including fair compensation and safe working conditions.
- Gender inequality
In many countries, women face additional risks of labor exploitation, including child labor and forced labor. For example, women are often less educated than men of the same socio-economic and cultural background, and social factors may restrict their capacity to communicate with authority figures. These types of inequalities can make women less capable of speaking up to defend their rights as workers.
According to World Bank statistics, more than 1.5 billion people live in countries affected by violent conflict. Countries plagued by cycles of violence also experience 20 percent higher poverty rates. Conflict is a push factor for migration, as workers are often forced to leave home to seek opportunity due to physical and economic devastation, as well as insecurity.
- Natural disaster and extreme weather
Natural disasters and extreme weather, including drought and flooding, are also push factors for migration. The Internal Displacement Monitoring Center estimates that in 2010 alone, approximately 42 million people worldwide were displaced by natural disaster, with several parts of Asia especially affected by high numbers of displaced persons.
- Lack of awareness about human rights
In many countries, workers may not have access to information enabling them to understand what constitutes child labor, forced labor or other labor abuses. Lack of awareness about good labor practices and workers’ rights can be compounded by language barriers, particularly where multiple languages are spoken by workers within a facility. This heightens individuals’ vulnerability to exploitative labor and hinders their capacity to organize and advocate for themselves.
- Global competition
Even companies with the best intentions face constraints in administering an effective social compliance program. For example, tight margins may tempt suppliers to evade social compliance requirements. Managing a social compliance program effectively requires continuous examination of your own actions and a system for regularly communicating messages to your supply chain.
- Precarious work and lack of access to social protection
In today’s economy, employment relationships are increasingly fragmented, with more distant relationships between companies and the hiring, management and firing decisions made in their supply chains. As more workers shift from the formal to the informal economy and from permanent to temporary and contract work, not only do they receive fewer employer-provided benefits such as healthcare and pensions, and fewer government supports, such as unemployment insurance and social security, but they are likely to be more vulnerable to abuse.
- Migration systems
As discussed throughout this toolkit, migrant workers are likely to be more vulnerable to abuse; frequently, they are denied freedom of association and the right to collectively bargain, and do not have whistleblower protections.
- Addressing the Root Causes of Child Labor and Forced Labor
- Wages and benefits
Through investment and job creation, you are already contributing to economic growth and better livelihoods for workers in the countries where you source. You are also paying workers at least the minimum wage of the country and complying with all applicable laws in relation to worker compensation. However, in some cases, the minimum wage may not be enough to provide a decent livelihood for workers.
In-work benefits to supplement salaries can help enhance workers’ welfare without a raise in the minimum wage. Some in-work benefits for low-income workers are provided by governments in the form of tax credits and reduced social security obligations. Private companies can also provide benefits through reimbursement of health care costs and provision of transportation and child care. Productivity incentive-based bonuses can also be a benefit—as long as they can actually be met on a regular basis and inability to meet them does not result in hours of work that are unpaid or paid below minimum wage.
- Business processes
Sometimes simple changes in processes can make a big difference in workers’ day-to-day lives. For instance, how and when workers are paid is critical for low-income individuals. Reliable, consistent payment relieves a large strain on workers who may have little or no savings to rely upon and are put at risk when paid late or unpredictably. Similarly, workers who are paid on a piece rate basis should fully understand the terms of their compensation. Continuous job training is also an important way for companies to keep workers invested in their positions while advancing business capacity and productivity.
- Building government capacity
Although the responsibility for addressing root causes is that of governments, many lack the resources to improve the situation. In countries where governments are willing to reform and change, but simply lack adequate resources, you can have an impact—particularly if you work together with other companies to negotiate agreements with governments to invest in certain areas in exchange for social services or other community benefits. Examples may include supporting expert technical assistance for government agencies to improve laws, enforcement, policies and programs, or agreeing to fund a certain initiative—such as building a school in a particular community—in exchange for government provision of related services in the community.
- Collaboration with other companies
Acting together, companies can make a significant dent in the complex root causes that underlie child and forced labor. Sharing expertise and solutions makes obvious sense to expand scope and impact and maximize the use of available resources.
- Supporting labor unions
Your code of conduct should include the rights to freedom of association and collective bargaining, but in any given workplace there may or may not be a union present. In workplaces where there is no independent union, it is especially important for auditors to look for signs that worker association may be suppressed. If this is then identified, it should be dealt with in corrective action plans. When a union is present, it is incumbent to include union representatives in your communication and outreach efforts. Ultimately, effective worker organization and engagement are critical elements of any effort to identify and deal with child labor, forced labor and other labor abuses.
- Educational programs. If your workers are predominantly women, providing a daycare or early childhood education facility can make a positive difference for workers and their families. In communities where children do not have reliable access to education, you can finance a school or educational facility. In communities with schools but where education quality is low, you can finance training for teachers or funding for better teacher salaries. In communities where quality education is available, you can finance a scholarship program. Vocational training is another avenue to provide adolescents with skills to obtain better jobs.
- Livelihood programs. Livelihood programs seek to help the poor attain the necessary competencies and tangible and intangible assets to be able to sustain themselves and their families in the face of various shocks and stresses. Your company can support these programs for workers and their families, contributing to their ability to weather often unpredictable economic environments. Elevating livelihoods of the communities in which you operate can contribute to their growth and stability and, by extension, the growth and stability of your business.
- Youth Employment initiatives. In many developing countries, young adults are disproportionately impacted by unemployment. Providing job training and apprenticeship programs that target youth are critical to expanding a country’s human capital and thus future growth potential. By sponsoring these types of programs, your company can prepare young people with the necessary skills to be effective employees, while contributing to broader development objectives.
- Women’s empowerment programs. If your company employs a large female workforce or operates in an environment where substantial gender inequalities exist, sponsoring programs that target the specific needs of women can have a positive impact on female workers’ lives as well as business operations. Women’s empowerment programs can take many forms, including skills training, health sensitization, savings groups and education.
- Health programs. Your company can play an important role in providing health programs for workers that simultaneously improve quality of life and enhance workplace productivity. Health programs may take the form of educational initiatives or direct health service provision for workers and their families. These efforts help improve health among workers and their families, which will mitigate their need to be away from work to care for themselves or other ill family members.
- Victim shelters, counseling, legal and other services. Your company can help victims of child labor, forced labor and human trafficking by engaging in measures beyond monitoring and remediation of your supply chain. You can cooperate with law enforcement to help ensure that perpetrators are held accountable. You can also assist victims in accessing critical services, including victim shelters, legal and mental health counseling, and medical care. This may mean supporting existing programs and facilities or working with local partners and governments to initiate new efforts.
- Financial literacy training. Low-income workers may have little education with regard to handling their finances. Providing training about basic financial competencies can help workers improve their financial sustainability. This may include training workers on basic savings techniques or helping them understand and access appropriate financial products.
It also makes sense to choose philanthropic initiatives that have synergies with the products you sell and the expertise of your company. For example, Hugo Boss, a clothing retailer, markets a special scarf and donates $10 from the sale of each to a Save the Children project in India’s textile industry.
- Developing markets. Many companies sourcing products from the developing world have also begun marketing and selling products in emerging markets. Economic growth in some countries has created large new markets for consumer products. Recent research has made the case for company investment in education, health and livelihoods programs for the poorest segment of these societies, the so-called “bottom of the pyramid,” in order to encourage the growth of a sustainable consumer base.
- Further Resources
- Business & Human Rights Resource Centre, Business, Conflict & Peace Portal. Available from http://www.business-humanrights.org/ConflictPeacePortal/Home.
- Chen, Shaohua, and Martin Ravillion. The developing world is poorer than we thought, but no less successful in the fight against poverty. World Bank, Washington, DC , August 26, 2008; available from http://siteresources.worldbank.org/JAPANINJAPANESEEXT/Resources/515497-1201490097949/080827_The_Developing_World_is_Poorer_than_we_Thought.pdf.
- Gap, Inc. Handwork Protections Project Summary. Available from http://www.gapinc.com/content/csr/html/Goals/supplychain/our_program_in_action/handwork_protections1.html.
- International Labor Organization. Corporate Social Responsibility (CSR) [webpage], available from http://www.ilo.org/ipec/Action/CSR/lang--en/index.htm.
- International Labor Organization. Global Wage Report 2010/11: Wage policies in times of crisis. Geneva, December 15, 2010; available from http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_145265.pdf.
- Manpower Group. Corporate Social Responsibility Update: Teaching a Man Not to Fish is Humanly Possible. Milwaukee, WI, 2011; available from http://files.shareholder.com/downloads/MAN/1590349430x0x530225/87BCD97B-F49D-411A-87A6-7B2CBF921F8C/2011CSR_lo.pdf.
- Manpower Group. Social Responsibility. Available from http://www.manpowergroup.com/social/social.cfm.
- World Bank. 2010 World Development Indicators. Washington, DC, April 2010; available from http://data.worldbank.org/sites/default/files/wdi-final.pdf.
- World Bank Institute. Business and Poverty: Opening Markets to the Poor. Washington, DC, June 2008; available from http://siteresources.worldbank.org/CGCSRLP/Resources/DevelopmentOutreachBusinessandPovertyBrochure.pdf.
A significant number of countries from which manufactured products are increasingly sourced—or where major agricultural commodities are grown—have deeply entrenched social, economic and societal challenges that perpetuate child labor and forced labor.
The achievement of broad, shared goals—to prepare workers for good jobs, ensure fair compensation and achieve supply chains free of labor abuse—will continue to be hindered if efforts are not made to address the root causes of child labor and forced labor.
The responsibility for protecting human rights rests with governments, both individually and working collectively in the international system. The Group of 20 (G-20) Labor and Employment Ministers have recognized decent work as a cornerstone for strong, sustainable and balanced growth and have encouraged governments to focus on strengthening social protection systems and improving active employment policies, particularly for youth and vulnerable groups.
Though governments must take the lead, business, civil society, labor unions and international organizations all have important roles in promoting and supporting such action. Corporations have a critical part to play in this effort, including in the following areas:
Public-Private Alliance for Responsible Minerals Trade
The Public-Private Alliance for Responsible Minerals Trade (PPA) is an initiative launched in 2012 by the U.S. Department of State, the U.S. Agency for International Development and a coalition of companies, civil society, and other organizations, to support supply chain solutions to conflict minerals challenges in Democratic Republic of the Congo and neighboring countries in the Great Lakes Region of Central Africa.
Microsoft: The “Human Trafficking and Business” Online Training
Teaming with UN.GIFT and the End Human Trafficking Now! Campaign, Microsoft designed an online training module for businesses, “Human Trafficking and Business.” The course provides an overview of the issue of human trafficking, a discussion of why human trafficking is an important issue for business, and a module on actions businesses can take to combat human trafficking.
Leber Jeweler: The Jewelers’ Burma Relief Project
Many gemstones—including 90 percent of the world’s rubies—are mined in Burma, a country long ruled by a dictatorship widely known to perpetrate human rights abuses against its people, and still facing enormous governance and human rights challenges. Leber Jeweler Inc., a family-owned company based in Chicago, does not purchase any Burmese gemstones. In 2004, the company founded the Jewelers’ Burma Relief Project, which brings together like-minded companies with non-governmental organizations (NGOs), such as the Foundation for the People of Burma and Planet Care, to provide humanitarian aid to Burmese people of all ethnic backgrounds and religions. The project was also part of a lobbying effort that resulted in the U.S. Congress passing the Tom Lantos Block Burmese JADE Act of 2008, which bans the importation of all Burmese rubies and jade into the U.S.
“Where labor standards are rigorously adhered to, workers are well unionized and labor laws are monitored and enforced for all workers, indigenous or migrant—the demand for trafficked people and services is likely to be low.”
Source: International Labor Organization.
It may make sense to target philanthropic contributions toward communities in your direct supply chains, particularly those at highest risk for child labor, forced labor and other labor abuses. While such contributions do not substitute for a robust social compliance system, they can assist in helping your company achieve the goals of a social compliance program.
Levi Strauss: “A Broader Vision of Social, Economic and Environmental Sustainability”
In 2011, Levi Strauss & Co. announced a change to its Terms of Engagement with suppliers. As a result of this change, the company requires suppliers to support community-based initiatives that advance the United Nations Millennium Development Goals of:
-Eradicating extreme poverty and hunger
-Improving maternal and child health
-Combating HIV/AIDS, and other diseases
-Promoting gender equality and empowering women
-Ensuring environmental sustainability
The company also initiated a consultation process with other companies and civil society organizations on implementation of this initiative.
Philanthropic initiatives that help to combat child and forced labor include:
Denimatrix Educational Benefits
Denimatrix is a subsidiary of the Plains Cotton Cooperative Association (PCCA), which produces about one-third of all the cotton grown in Texas, Oklahoma and Kansas. In January 2009, PCCA was approached with the idea of creating a vertically integrated supply chain from cotton field to store shelves. PCCA opened an apparel factory in Guatemala and created Denimatrix. Workers at the factory receive many benefits for themselves and their families, including medical and dental care, access to basic necessities, and educational opportunities. Denimatrix offers employees after-work programs to help them finish their primary and secondary schooling and supports technical training for homeless Guatemalans through a partnership with a local organization.
Gap Inc.’s Mewat Program
One hallmark of clothing produced in India is beautiful handwork—beading, embroidery and other embellishments. Apparel producers subcontract much of this handwork to India’s “embroidery belt,” where the work is done in informal workshops or homes. Handwork is an important source of income in this region, particularly for women. Over the years, companies sourcing apparel from India have had difficulty tracking handwork subcontracting arrangements. To get a handle on this area of its supply chain, Gap Inc. formed a multi-stakeholder group with the Government of India, suppliers, a local training institute and a local NGO. The group designed a program involving 20,000 women who do handwork in their homes or at community centers. The women who work at home bring finished products to the community centers for pick-up, which increases efficiency for suppliers. The local NGO coordinates monitoring of working conditions as well as payment to the workers. Workers are also provided free training to upgrade their handwork skills.
Manpower: Jóvenes Visionarios
In Medellín, Colombia, ManpowerGroup, a global employment services firm, supports a program called Jóvenes Visionarios, which assists abandoned and at-risk youth through counseling, training and employment support. The program has served more than 250 youths since 2007. Through one sub-project, Manpower has partnered with the International Organization of Migration to target youths approaching 18 years of age, when they will no longer be supported by government assistance. The project provides access to training facilities, equipment, instructors, courses and materials, as well as vocational assessments and career guidance. In addition, youth receive psychological counseling to help them navigate the transition to independence.
Procter and Gamble: Focus on Girls’ Education
In the developing world, the majority of children who lack access to primary school are girls. To combat this gender inequality, Proctor and Gamble (P&G) partnered with the United Nations Educational, Social and Cultural Organization (UNESCO) to create a cause-related marketing campaign for a literacy program for girls in several regions of Senegal. A percentage of profits from sales of P&G’s feminine hygiene products in France and Romania provide funding for the program. P&G also contributed to the program with an up-front donation. The program focuses on educating girls and women because educating them can have numerous benefits on health, economic, and social conditions. In addition, P&G’s own Protecting Futures project uses the company’s expertise in basic sanitary protection to help girls in the developing world. The project provides puberty education, sanitary protection, and sanitary facilities to prevent girls from missing several days of school each month due to inadequate resources for managing their menstrual cycles.
Learn more about UNESCO’s Women and Girls’ Education Advocacy Program.
“Ultimately, we strongly believe that higher standards will drive better performance and results in our suppliers’ factories.
Five years ago, the Levi Strauss Foundation partnered with Business for Social Responsibility to launch HER-Project, a woman’s health education program in factories in Bangladesh, China, Egypt, and Pakistan. The program is touching more than 90,000 women in 65 facilities.
The focus is on women’s health outcomes, helping factory workers connect to existing health care services nearby.
A study found that for every dollar invested in building the capacity of factory health clinics, health education, and training, three dollars of return are realized in the form of increased productivity on the factory floor.
Let me repeat that – one dollar invested provides three dollars in return: Greater concentration on the shop floor. Less absenteeism. More production targets met. These are exactly the kinds of results socially responsible investors have told us we could achieve.
The workplaces of the 21st century will be stronger when workers have the tools to improve their lives. When they are given healthy and safe workplaces, they become more productive, dependable, and efficient.
We can demonstrate that investing in workers is what you do because, one: it’s the right thing; and two: it yields profitable returns.”
Source: “A New Terms of Engagement for Global Supply Chains,” John Anderson, Levi Strauss & Co. President and CEO, Ceres Annual Conference, May 11, 2011
Manpower: Serving Victims of Human Trafficking
Manpower Group has engaged in philanthropic efforts to combat child labor, forced labor and human trafficking in its supply chains, as well as in the broader communities in which it works. For example, in Mexico City, Manpower supports Casa de las Mercedes, a shelter for female victims of human trafficking. The halfway house provides recovery services as well as job training. Manpower Mexico staff members volunteer at the shelter to mentor residents, provide skills training and help with job searches.
Unilever: Project Shakti
Through its micro-enterprise initiative, Project Shakti, Unilever was able to create a network of female entrepreneurs in rural India. Women in the program engage in direct-to-consumer/door-to-door sales. Unilever recognized the strong linkage between its own company’s health and the economic health of the society in which it was operating. The effort has simultaneously enhanced Unilever’s business model and facilitated development for the rural communities in which it operates. Major accomplishments of the program include stimulating productivity and income generation among the rural poor; facilitating decent job creation through direct employment; and engaging local consumers in their business success.
Note: Any references to companies or other non-governmental entities within this guide are only for informational purposes and should not be interpreted as an official endorsement of those entities, their products or services by the U.S. Department of Labor.