This feature is based on discussions and insights gleaned from a panel at the Global Child Forum at the Royal Palace in Stockholm, earlier this year. The hard questions were asked about the root causes of child labour – which differ vastly from region to region, industry to industry. But what doesn’t differ is a deep commitment to tackling these causes. Read what steps are being taken in some companies with insights from Leslie Johnston, Executive Director at C&A Foundation; Paul Schoenmakers, Head of Impact at Tony’s Chocolonely and Georg Kell, Chairman, Arabesque Partners.
Making child labour visible
The corporate foundation C&A aims to “transform the fashion industry,” and eradication of child labour is one of its focus areas. Due to the nature of the global fashion industry – decentralized, globalized and opaque – it is possible to find, even today, many cases of child labour, bonded labour and slavery. “If we want to make fashion a force for good,” says Leslie Johnston, Executive Director at C&A, “we have to root that out.”
C&A Foundation therefore works to make the causes of child labour in the fashion industry visible. A major issue is purchasing practices. For example, how a brand buys from a factory can inadvertently lead to poor working conditions and child labour. If a factory receives an order that exceeds its capacity, they outsource it, usually to invisible, unregulated mom-and-pop operations.
To shine a light on the lack of transparency in such practices, C&A developed what Johnston referred to as a sort of TripAdvisor for purchasing practices. It allows factories to rate brands and how they buy. Johnston noted, “One can then see those that aren’t buying well at the bottom, while at the same time there is the name-and-fame approach so those with good practices rise to the top, creating peer pressure and raising the bar.”
Zero tolerance is not an option
Tony’s Chocolonely is a Dutch company whose mission is to make 100% slave free the norm in chocolate. According to Paul Schoenmakers, Head of Impact at Tony’s Chocolonely, the chocolate industry is dominated by a few multinationals profiting from keeping the cocoa purchase price low – meaning farmers live in poverty and resort to child labour and slavery.
The company deliberately sources cocoa beans from areas where child labour occurs. “We know that 2.3 million children work in Ghana and Ivory Coast, which produce two-thirds of worldwide cocoa. Ninety percent of these children work under hazardous and illegal conditions.” Tony’s aims to identify occurrences of child labour and determine how many children are at risk, because only then can they take action.
Tony’s Chocolonely teams up with the International Cocoa Initiative, partner cooperatives and the communities involved to address child labour. A community representative is in regular dialogue with children, parents and the community to explain their rights, the local laws that prohibit child labour, and to investigate what kind of work children do. “With information,” Schoenmakers notes, “you can build solutions. It’s part of business to understand your supply chain, to embrace problems in your supply chain, and to start solving them.”
“It’s part of business to understand your supply chain, embrace problems and start solving them.”
Paul Schoenmakers, Head of Impact, Tony’s Chocolonely
Smaller world, more complex supply chains
Though globalization has made the world smaller, supply chains are longer. In the chocolate business, Schoenmakers explains, “All cocoa beans end up in a giant pile worldwide, which we call the commodity trade, and no one knows who produced the cocoa beans they’re using in their chocolate bars.” Tony’s determined that, if they wanted to end slavery and child labour in the cocoa business, they had to investigate their supply chain and establish the beans’ origin. The company eventually developed a transparent and traceable ‘bean-to-bar’ process through direct, long-term relationships with cocoa farmers. Tony’s pays better prices to farmers, trains them to increase productivity and quality, and commits to long-term investments to make farmers stronger, thus freeing them from the poverty trap that necessitates child labour.
Johnston pointed out that in one’s supply chain – whether cocoa or clothing – it can be difficult to get close to the producer. Most companies are far removed from the farmers that grow the cotton used in the clothes. Johnston believes that technology will serve as an enabler of transparency in this regard, an opinion shared by Georg Kell, Chairman at Arabesque Partners: “Because datafication is increasingly being fed to investors, they can understand when they are potentially facing a huge branding risk.”
There is a need for business to collaborate to combat child labour – with communities, NGOs, suppliers and governments. According to Kell, “We are in a world where the private sector has growing influence, and where public and private interests increasingly overlap.”
But the nature of the collaboration matters. Global Child Forum research shows that many programs initiated by companies to address children’s rights are not related to the core business. Collaborative programs are often add-ons, separate from core business operations. Schoenmakers offered an illustration of integrating children’s rights issues into core business practice. “We work with one of the two big processors of cocoa beans, Barry Callebaut, and after some serious negotiating, they changed their factory and processes to enable us to get traceable cocoa butter in our bars. This is a big step for such a giant to take.”
C&A Foundation partners with the NGO GoodWeave, which aims to get children out of the rug and apparel industries. “Ultimately, this does need to be in the core of the business, integrated in sourcing policies, but that’s not enough,” Johnston noted. For example, in the apparel industry, decades of self-regulation has created a huge auditing industry. Though the auditors have prospered, conditions in factories have not improved. Johnston’s suggestion: “Governments need to be stronger. They need carrots and sticks to be able to support and encourage business to play its role.”
According to Georg Kell, when businesses began going global in the late nineties, they had to come to grips with realities such as child labour, confronting questions like: How do we operate in a systemically corrupt environment? In an environment prone to conflict? Which precautionary measures should we take? There has been, says Kell, a gradual, incremental learning curve over time.
Kell believes that corporate leadership is increasingly challenged on moral and material grounds to take a stand. It’s encouraging to note that emerging evidence establishes a clear correlation between good ESG material performance and financial returns and valuation.
STEPS TOWARDS MAKING A DIFFERENCE