This report has described efforts initiated by companies, NGOs, and other groups to eliminate the use of child labor in the hand-knotted carpet, leather footwear, soccer ball, and tea industries. While such efforts include codes of conduct and other child labor policies, the focus of the report has been the emerging child labor consumer labels.

The labeling of products to convey information to consumers on working conditions has a long history in the United States. Early efforts originated in the nineteenth century and were meant to indicate that certain products were manufactured in a union environment or under decent working conditions, including without child labor. In recent years, a growing number of consumers in the U. S. and other industrialized countries have become concerned about the possibility of purchasing imported goods made by children and have sought assurances from importers and retailers. Various organizations have reacted by instituting labeling programs. These labeling efforts directly convey to the consumer, through the use of a visible label, that the manufacturers or importers of a good adhere to a code of conduct or "child friendly" policy.

These labels vary in meaning and scope. Some are meant to provide an assurance to consumers that the goods they purchase have not been made by children. In other cases, a label may solely signify that the producers, exporters, or importers of the goods have contributed to social programs to improve conditions for workers and their families.

Consumer labels with a child labor component exist in the hand- knotted carpet, leather footwear, soccer ball, and tea industries. A few of these programs were initiated by the U. S. private sector, but most were developed by foreign producers, governments, or organizations. U. S. importers and retailers have not generally instituted labeling initiatives, and products with child labor labels are not widely available in the United States at this time. Labeling is more common in Europe, perhaps because of the precedent of fair trade labeling, in which some of the largest European importers and retailers are participating.

Because the child labor labeling programs are 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. Instead, the report has described the programs and views on their implementation, using information gathered from companies or organizations that administer the programs, a small, non-random voluntary survey of U. S. importers and retailers, and site visits to producing countries.

The Department of Labor believes that labeling programs can be an effective, market-based response to consumers who do not want to support the exploitation of children in the production of goods for export. Labeling initiatives can help create useful partnerships among industry groups, NGOs, international organizations, and governments to combat child labor. Furthermore, they may have an impact on reducing child labor in targeted industries. The more comprehensive labeling programs — including monitoring and social components — are likely to have a more significant impact in reducing and preventing child labor.

A. Child Labor in the Production of Hand- Knotted Carpets, Leather Footwear, Soccer Balls, and Tea

There have been numerous allegations of child labor in the four industries examined in this report, many of which were documented in previous volumes of By the Sweat and Toil of Children. The research conducted for the current report has found that the great majority of children who work in the carpet, leather footwear, soccer ball, and tea industries are found in subcontracting or smallholder operations, including homework, rather than in factories and well organized workshops or agricultural estates. Children tend to perform the labor-intensive operations associated with the production of these goods. While poverty remains a common explanation given for the persistence of child labor, lack of access to quality education and inadequate law enforcement perpetuate a cycle of child labor and poverty in many countries.

Due to a lack of adequate, affordable schools, many children are left in the care of their mothers all day. This sometimes creates a barrier for women to work outside the home or obliges them to bring their children to work. Some parents combine farming and manufacturing homework. Because there are very few controls on such subcontracting arrangements, the potential for violation of child labor, wage and hour, as well as health and safety laws is multiplied in home settings.

Hand- knotted carpets: Child labor continues to be a problem in the hand- knotted carpet industries of India, Nepal, and Pakistan. The actual extent of exploitative child labor in the carpet industry remains unknown. Estimates on the number of working children range widely. Bonded child labor, in which children are forced to work off their parents' debts, continues to exist in the carpet industries of India and Pakistan.

Children are involved in almost every aspect of carpet production, including dyeing, spinning, and unraveling yarn and weaving, knotting, cutting, and washing carpets. In Nepal, where the hand- knotted carpet industry is concentrated in the Kathmandu Valley, children tend to work in factories. In India and Pakistan, how- ever, children can be found working in small centers, loomsheds, and homes in rural villages or urban areas. Working conditions are often dangerous and unhealthy. During the various phases of carpet production, children are exposed to chemical dyes and sharp tools. Many develop respiratory illness and suffer spine deformities and retarded growth from long hours of work crouched in poorly ventilated, dust-filled rooms.

Leather footwear: Reports of child labor in the leather footwear industries document children cutting, hammering, folding, gluing, marking, hand- sewing, and sanding the soles of shoes. The enterprises where children work tend to be home-based, sometimes operating as subcontractors to producers of shoe parts or shoes. Children often work in unhealthy environments and are exposed to hazardous chemicals and fumes. They work long hours and earn little.

The incidence and attitudes towards child labor in the footwear industry differ among countries. In Mexico, for instance, child labor in household production of footwear seems to be widely acknowledged. In India and Pakistan, where the footwear industry has experienced some growth in recent years, there are reports that the use of child labor may be increasing. In these countries, there are no footwear labeling programs, and the use of codes of conduct is rare.

The structure of the Brazilian footwear industry, with its many tiers of producers and suppliers, facilitates the employment of children, as does also the educational system, which holds classes either in the morning or in the afternoon. The consensus of Brazilian business leaders, NGOs, union leaders, and government offi- cials interviewed by the Department of Labor is that there has been a reduction in the number of children working in the footwear industry centered in Franca, dubbed a few years ago as Brazil's "capital of child labor." This reduction may be due, at least in part, to the national emphasis on the eradication of child labor and two labeling programs addressing child labor in the Brazilian footwear industry.

Soccer balls: The use of child labor in the production of hand-stitched soccer balls has been documented primarily in Pakistan and India. The stitching of soccer balls in Pakistan is decentralized in homes and small village workshops, mainly in the area of Sialkot. Traditionally, subcontractors distribute synthetic leather panels to families and village workshops to be stitched together into soccer balls. Adults and children commonly work side by side in stitching the balls. Working arrangements in India are very similar.

Tea: It is impossible to accurately estimate the number of children employed in the tea industry worldwide. Existing surveys of child labor in the tea industry usually cover large- scale operations, failing to document potential child labor on smallholder estates. Recent reports and information gathered during site visits by Department of Labor officials to Brazil, India, Kenya, Nepal, and Tanzania indicate that child labor is no longer common on large commercial estates in these countries.

Child labor appears to be more pervasive in the smallholder sector in these and other countries. More research is needed to determine whether these children work as hired laborers or on their own families' farms, which is legal under international conventions, and if they attend school. In some cases, smallholder harvests are sold to nearby larger estates through outsourcing arrangements. Most allegations of child labor in the tea industry involve plucking, weeding, hoeing, and nursery work. Some argue that children make good pluckers because of their "nimble fingers;" others argue that plucking is too arduous a task for children to perform.

B. Consumer Labeling Programs

Research underlying this report has identified numerous labeling programs addressing child labor in the hand-knotted carpet, leather footwear, soccer ball, and tea industries. Nine of these programs are described in considerable detail in this report. These programs, and their product coverage, are (in alphabetical order): The Abrinq Foundation for Children's Rights (leather footwear); Baden Sports (soccer balls); Care and Fair (hand- knotted carpets); Fair Trade Labeling (tea); Kaleen (hand-knotted carpets); Pro- Child Institute (leather footwear); Reebok (soccer balls); RUGMARK® (hand- knotted carpets); and the STEP Foundation (hand- knotted carpets).

The first modern labeling program addressing child labor identified in the research for this report is RUGMARK®, established in India in 1994. Several other programs described in the report started soon thereafter. Some labeling programs, however, were barely getting started at the time U. S. Department of Labor officials made visits to Brazil, China, India, Kenya, Mexico, Nepal, Pakistan, and Tanzania in the summer of 1997. Since most of the labeling programs have been in operation for less than two years, there is limited information on their operation. Moreover, imple- mentation procedures are still being worked out.

While some of the labeled products are available in the U. S. market, many can only be found in other countries. The U. S. market is the focal point of the two soccer ball labeling programs, which were developed and are administered by indi- vidual U. S. corporations. Soccer balls labeled by these programs are currently available for sale to U. S. consumers.

The remaining labeling programs were developed and are administered by foreign entities, and the labeled products are sold in different geographic markets, which may include the United States.

• The bulk of hand- knotted carpets bearing the RUGMARK®, Kaleen, STEP and Care & Fair labels are found in Europe, although some RUGMARK® and Kaleen carpets are also available in the United States. 
   
• The Abrinq Foundation and Pro- Child Institute labels are only found in Brazil and other South American countries. 
   
• Tea bearing one of the fair trade labels can be found in Austria, Denmark, Germany, Japan, Luxembourg, Switzerland and the United Kingdom. Labeled tea is scheduled to be available in the United States by the end of 1997.

C. The Physical Label

Six of the labeling programs issue product labels, while three issue company labels. Product labels are affixed to the actual good, while company labels are used to certify that a company as a whole has met certain child labor criteria.

• Product labels include RUGMARK® and Kaleen for hand- knotted carpets; the Pro-Child Institute label for leather footwear produced in Brazil; the Reebok and Baden labels for soccer balls; and the fair trade labels for tea.
• Company labels include STEP and Care & Fair for hand-knotted carpets, and
• The Abrinq Foundation for leather footwear produced in Brazil.

D. Claims Behind the Label

The labeling programs reviewed in this report make different claims about child labor. Some of the programs inform consumers that products have not been manufactured by children. Others claim that, in addition to creating a child labor-free production environment, they provide or fund alternatives for child laborers such as schools and/or promote employment for their parents. Still others do not make any claims regarding child labor, but contribute funds to social programs.

Most of the labels, with the exception of those on soccer balls, include a logo but little text. In these cases, the label alone does not convey its meaning to consumers, and the claims behind the label must be sought out from other sources.

The four major carpet labeling programs make very different claims, while at the same time communicating similar visual messages to the consumer:

 

• The RUGMARK® program claims that carpets are produced in a child labor-free production environment subject to a monitoring and tracking system. The exact wording of the claim currently differs in the literature of the various national foundations. RUGMARK® also claims that children removed from the carpet industry are placed in rehabilitation programs, funded by ;icensees fees and other sources. RUGMARK® also requires its licensees to pay at least the official minimum wage to weavers.
   
• The Kaleen program claims that carpets are produced by companies who have stated they do not employ child labor. It also contributes to child welfare programs funded by exporter fees.  The STEP Foundation claims that licensed importers and retailers have agreed to actively fight abusive child labor, promote improved working and environmental conditions, and provide financial support for development and rehabilitation programs.
   
• The Care & Fair Foundation claims its members have obligated their carpet suppliers to produce without the use of child labor and contribute to health and education programs for carpet workers and their families.

The labeling programs of the Abrinq Foundation and of the Pro-Child Insti- tute claim that no child labor is used in the manufacture of leather footwear by participating companies.

• The Abrinq Foundation makes the additional claim that participating companies either operate and/or contribute to projects that benefit children, such as education and training.
   
• The Pro- Child Institute also claims that child labor has not been used in any part of the leather footwear "chain of production."

The labeling programs of Reebok and Baden claim that soccer balls are pro- duced in a child labor- free environment. 

• Reebok claims that "all work in soccer balls imported ... is performed at the factory by workers aged 15 or older" and that independent human rights monitors periodically verify that this is the case. Reebok also says that it supports educational and vocational training for children in the Pakistani soccer ball manufacturing industry.
   
• Baden claims that no child labor or slave labor has been used in the production of its soccer balls.

The fair trade labels claim that tea is grown and harvested on plantations certified as not employing children under 14. Unlike most other labeling programs discussed in this report, child labor is not the primary focus of fair trade labeling. Rather, fair trade labeling aims to improve overall conditions for workers through the payment of a fair trade premium.

The existence of competing child labor labels conveying similar messages may raise some confusion among consumers. Conceivably, a product could have more than one child labor-free label if it complied with the requirements of more than one program. Since most labels only contain logos or short statements, consumers may not have sufficient information to choose one labeled product over another.

E. Administration of Labeling Programs

The labeling programs are administered by different entities, including individual companies, groups of companies, governmental entities, NGOs, or a combination of the above.

• Five of the nine labeling programs were developed, and are administered by, business associations or individual businesses engaged in production, export or retail sales. These are: Care & Fair (hand- knotted carpets); The Abrinq Foundation and Pro- Child Institute (leather footwear); and Baden and Reebok (soccer balls).
   
• Kaleen (hand- knotted carpets) was developed and is administered by the  Indian Carpet Export Promotion Council (CEPC), a quasi-governmental body financed by private members of the CEPC and the Indian Ministry of Textiles.
   
• Two of the labeling programs — the STEP Foundation (hand- knotted carpets) and fair trade labeling organizations (tea) — were created and are administered by NGOs that focus on social development issues.
   
• RUGMARK® and the Abrinq Foundation are hybrids, made up of groups from various sectors. RUGMARK® was founded by NGOs, the Indo- German Export Promotion Program, UNICEF, and representatives of the carpet industry. The Abrinq Foundation was founded by members of the Brazilian Toy Manufacturers Association and includes a wide range of business representatives on its board of directors.

The nine labeling programs rely on different financing mechanisms. Most often, retailers and importers finance the programs, but in some cases, manufacturers and/or exporters in producing countries provide funds.

• In carpets, RUGMARK® and Care & Fair activities are financed through both importer and exporter fees. Kaleen relies on exporter fees; STEP on importer fees.
   
• In leather footwear, the labeling activities of the Abrinq Foundation are financed through a grant received from a private company. Participating companies do not pay fees or dues. The Pro- Child Institute program is financed through contributions of participating footwear manufacturers.
   
• The Reebok and Baden soccer ball labeling programs are self-financed by each company.
   
• In tea labeling, importers and retailers pay a licensing fee for the use of the fair trade label.

There is little available information on the additional costs associated with the labeling programs, and who bears the burden of such costs. The significance of the costs of labeling programs in relation to other production and marketing costs depends on the approach used.

• An integral part of Reebok's labeling program for soccer balls in Sialkot, Pakistan, was the construction of a new factory that would locate all stitchers under one roof. The decision to centralize stitching in a factory setting required additional expenses to transport stitchers from homes to the factory and fund health insurance and pension plans. Reebok has stated that it does not intend to pass on the costs of operating its Sialkot program to soccer ball consumers.
   
• Several of the programs have well defined schedules of costs borne by importers, exporters, or producers. Little information is available at this time on whether these costs are passed on to consumers.
   
• Two programs — Care & Fair and fair trade labeling — specifically intend or consumers to pay a premium for purchasing the related products.

F. Transparency

Most labels discussed in this report do not convey all aspects of the labeling program to consumers. Most are pictorial representations (logos) containing little or no text. Some consumers might be under the impression that any label indicating opposition to child labor translates into a "child labor- free" guarantee, but as explained above, this may not be the case. On the other hand, many consumers might be satisfied to know that some effort is being made by the industry or company from which it is buying a product to eliminate child labor or support children's development, and not seek out a guarantee of no child labor. While consumers do not necessarily want to read detailed information on how a particular labeling program works, it is important that this information be readily available for those who seek further explanation.

Since the viability of labeling initiatives depends on the volume of sales they generate, their success will ultimately depend on the degree to which they succeed in consumer outreach. With a few exceptions, the research underlying this study found that the labeling programs have not engaged in extensive consumer education programs. This may be due to the programs' recent implementation and the high costs associated with consumer outreach and advertising campaigns.

G. Monitoring

No labeling program is entirely foolproof. Yet credibility in the eyes of the consumer is an issue of paramount importance. Some importers, producers or organizations may find it profitable to label items as being child labor-free without actually instituting an adequate monitoring program. This strategy can backfire if exploitative child labor is found in the facilities where the products are made. Loss of credibility in labeling programs can be difficult, if not impossible, to restore.

One of the ways credibility can be maintained is through monitoring of pro- duction facilities, including subcontracting arrangements. Research underlying this report has found that child labor in hand- knotted carpets, leather footwear, soccer balls and tea is most often associated with production by households, small workshops and smallholder plantations. Unless there is a monitoring program that addresses production by these units, child labor- free claims cannot be guaranteed.

Labeling programs examined in this report have different objectives, and thus different mechanisms to back up their child labor claims. These range from rigorous monitoring and inspection by external entities, to no monitoring at all. RUGMARK® and the soccer ball labeling program of Reebok appear to follow the model of rigorous monitoring. At the other extreme, the Care & Fair Foundation expressly rejects monitoring because of the difficulty of the task. However, rigorous, credible monitoring is essential to the integrity of a label explicitly claiming "no child labor."

It is becoming increasingly common for individual companies to affix their own child labor-free label to a product, particularly hand-knotted carpets and soccer balls, without instituting a monitoring system to back up the claim. Several brands of soccer balls currently being sold in the United States carry labels stating that the product has been made without child labor. Importers and retailers selling such products do not have a mechanism in place to confirm the veracity of the claims made by the producers and instead rely heavily on membership of their Pakistani manufacturers in the Partners' Agreement. Since the internal and external monitor- ing programs of the Partners' Agreement are not yet fully operational, it is premature for balls being produced in Pakistan to be labeled as child labor- free solely on the basis of this Agreement.
 

H. Recommendations

Based on the information gathered for this report through public hearings, a voluntary survey of U. S. importers and retailers, and visits to producing countries, the Department of Labor found that labeling programs can be an effective response to consumers who do not want to support the exploitation of children in the production of goods for export.

Labeling programs can have several positive effects. In addition to satisfying consumer interest for labeled products, labeling programs can encourage a consensus among industry groups, NGOs, international organizations, and governments to combat child labor. Second, many labeling programs raise funds for education and rehabilitation programs for former child workers and/or families in the affected in- dustries. Finally, labeling programs can have an impact on reducing child labor in targeted industries, especially when these programs contain effective and transpar- ent monitoring and enforcement procedures.

To increase the effectiveness of voluntary labeling programs to eliminate child labor, the U. S. Department of Labor recommends that U. S. companies consider whether some additional voluntary steps might be appropriate:

1. U. S. importers and retailers should consider further support for labeling efforts that inform consumers that a product is made without the use of child labor.

Labels can convey valuable information to consumers seeking child labor- free products. U. S. importers and retailers who have not implemented a labeling initiative should consider the benefits that labels may offer not only to consumers but to their own corporate image. By implementing a labeling initiative, U. S. importers and retailers may also benefit from an increase in consumer confidence.

2. U. S. importers, retailers, and administrators of labeling programs should con- sider working to increase the availability of labeled products in U. S. retail outlets.

Products labeled as child labor- free are not widely available in the United States. U. S. importers and retailers should consider taking steps to increase the number and variety of labeled products that are available so that consumers can exercise the option of purchasing labeled goods. Program administrators should consider increasing efforts to inform importers, retailers, and consumers about their labels.

3. Administrators of labeling programs should consider how to ensure that the claims they make about child labor are backed up with appropriate monitoring.

The integrity of a child labor- free label is best maintained through effective monitoring procedures. Some importers, particularly of hand- knotted carpets and soccer balls, appear to be placing their own child labor- free labels on products without first ensuring that adequate monitoring systems are in place to substantiate such a claim. If exploitative child labor is discovered in the facilities where such products are made, the use of such labels could result in a loss of credibility and consumer confidence.

4. Administrators of labeling programs should consider further steps to ensure that monitoring procedures cover subcontracting arrangements.

Child labor is most often found in subcontracting or outsourcing arrange- ments, including production by households, small workshops and smallholder plantations. If monitoring procedures do not cover these units, child labor-free claims may be misleading.

5. All parties should consider whether there would be additional benefits in adopting more standardized child labor labels.

Many existing child labor labels consist of a logo with little if any text ex- plaining their significance. This makes it difficult for consumers to discern whether a labeled product is child labor-free. Furthermore, the existence of several labels for the same product, each potentially making different claims, may add to consumer confusion. It may be worthwhile for interested parties to consider the creation of a mechanism to standardize labels for similar products. Such a mechanism could support the development of generally accepted labeling and monitoring standards.

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.

Acknowledgements