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A Toolkit for Responsible Businesses
Boy working in match-making industry

Special Topic: Informal Subcontracting and "Homework"

In many countries, particularly developing countries, the informal economy accounts for a significant portion of the overall economy.  A large proportion of agricultural work is informal, and in the manufacturing sector, portions of production are frequently subcontracted to informal workshops or homes. For example, in the Indian garment sector, much of the work has shifted from factories to informal production units and homes over the past decade.  Over 90 percent of child workers in one study on the Indian garment industry worked at home.  Another study found that over half of people engaged in home-based work in Pakistan were below the minimum age for work.

Child labor and forced labor typically thrive in the informal economy – in unregistered workplaces outside the purview of labor unions and law enforcement.  Using child labor in the home increases a family unit’s productivity and wages with little risk of interference from regulatory bodies.  In addition, the increased focus by many governments and corporations on eradicating child labor may have caused more of it to be driven underground into informal work.  The informal economy often involves the most dangerous and hidden forms of work, and children are extremely vulnerable to the negative impacts of the work associated with informal labor situations.

Companies and multi-stakeholder groups have been grappling with the challenges of informal work and homework for years.  In 2011, the Ethical Trading Initiative released ETI Homeworker Guidelines: Recommendations for Working with Homeworkers.  These guidelines include tools such as a model policy for retailers and suppliers on homework, research guides for identifying homework in supply chains, mapping tools, and guidance on setting appropriate piece rates, since homeworkers are usually paid on a piece rate basis.

A CLMS is a time-intensive and resource-intensive approach to monitoring that requires extensive engagement at the community level.  A key advantage is that it is a participatory approach that involves all appropriate stakeholders from the outset and ensures that all interactions with children—from identification to remediation—are carried out in a culturally appropriate manner.

Example In Action

Brazil’s Footwear Industry:  Public-Private Collaboration to Monitor Child Labor in Homes

Since the mid-1990s, Brazil’s footwear industry association, Abicalçados, has collaborated with government agencies and community groups to combat child labor in shoe manufacturing, from large-scale factories to home-based producers.  Abicalçados and its affiliates have partnered with NGOs such as the Abrinq Foundation to carry out awareness campaigns and develop a footwear sector code of ethics that requires companies to monitor and eliminate the use of child labor in their production and in that of subcontracted suppliers.  Footwear companies also formed an innovative partnership with the NGO Pro-Criança, which provides companies with a child labor-free certification if it passes Pro-Criança’s production chain audits, which include auditing of subcontractors and private home-based producers.

Through a grant to the ILO, the U.S. Department of Labor played a role in creating inter-sector collaboration to eliminate child labor in shoe production in the Vale dos Sinos Region of southern Brazil.  Through this project, the Association for the Well-Being of Minors in Novo Hamburgo (ASBEM) was able to generate extensive community buy-in for business and government efforts to keep children in school and out of shoe production.   Local government and private enterprises also provided direct funding to NGO initiatives for at-risk children.

Source:  ILO-IPEC, Ex-Post Evaluation: Combating Child Labour in the Footwear Industry of the Vale dos Sinos, Brazil, April 2002.