Why Stopping Child Labour Matters to Your Company

Child labour is work that deprives children of their childhood, their potential, and their dignity, and that is harmful to physical and mental development [1]. This includes all work done by a child who is under the minimum age of admission to employment for the type of work concerned; work that prevents children from attending compulsory education; hazardous work; and other “worst forms of child labour” [2]. While child labour may sound like a distant problem to many companies – and consumers – this issue is often sustained and enabled by global purchasing/ sourcing practices. Compared to other human rights risks, companies tend to overlook their impact on child labour and other pertinent children rights, notably the right to education. However, this article will illustrate why companies should be focused on stopping child labour, especially in the context of the European Union Omnibus legislation. 

How Big of an Issue is Child Labour?  

Today, more than 160 million children remain subjected to child labour [3]. According to the recent Save the Children Report [4], child labour is close to endemic across global industries, especially in the manufacturing, mining and agricultural industries. Moreover, the report highlights that child labour is not a siloed issue – instead, low incomes/wages and high education costs are key drivers of child labour, as well as the lack of accessible childcare services. This highlights the systemic nature of the issue. As such, child labour should be addressed through both direct and indirect policies that tackle not only the employment of children, but also the contextual factors which drive children into these situations. For example, a study by Fairtrade found that the price of cocoa paid to farmers dropped from 50% of the chocolate bar in 1970 to 6% today [5]. This, in turn, has an impact on farmers and their children: their inability to earn a living wage/income means children are pressured to work to support their family and, as a result, are unable to attend school. Not only is child labour a fundamental violation of a child’s dignity, it also further obstructs their right to education, which is likely to have long-term effects on their socio-economic opportunities. Such examples highlight the broad repercussion of companies’ purchasing and sourcing practices, and their role in enabling human rights violations.

Why Should Companies Prioritise Addressing Child Labour?

The ongoing publication of legislation aimed at regulating and addressing human rights violation points to the increasing need for companies to set in place strong due diligence frameworks. Some of the key legislation includes: 

1. 2015 Modern Slavery Act, UK:

• Companies must publish an Annual Slavery Statement 
• Companies should disclose whether they have clear policies and due diligence processes to prevent, identify and address modern slavery, forced labour and child labour in their business operations and supply chain
• The Secretary of State can hold companies accountable by enforcing injunctions for non-compliance

2. The Ordinance on Due Diligence and Transparency in relation to Minerals and Metals from Conflict-Affected Areas and Child Labour (the Ordinance), Switzerland:

• Companies must adopt a child labour supply chain policy
• Companies must implement a supply chain traceability system in relation to child labour
• Companies must implement a grievance mechanism and report publicly on compliance with the due diligence obligations
• Establish processes to identify and mitigate child labour risk in the supply chain

3. The Supply Chain Act, Canada:

• Companies must adopt policies and a clear due diligence process to identify and assess the risks of forced and child labour in their supply chains
• Companies must report and publicly disclose information related to efforts in combatting forced and child labour in supply chains
• Businesses should implement a grievance mechanism to help them detect and manage risks in the supply chain

4. EU Forced Labour Regulation, taking effect in 2027  

• Prohibits the sale of products in the EU which were made with forced labour, including the use of child labour
• Regulates all economic operators importing, exporting or selling products into or from the EU
• Member state or the European Commission are allowed to investigate suspected instances of forced labour 
• This is a binding regulation, with non-compliance resulting in a fine and the prohibition of sales of the product made with forced labour 

More broadly, the expected introduction of the Omnibus in Europe will also require companies to actively prevent instances of child labour in their supply chain. Outside the EU, countries like Thailand are currently starting the process of implementing human rights due diligence legislation. There has also been an increase in soft law, such as the United Nations Guiding Principles on Business and Human Rights (UNGP) [6], which invites companies to go beyond legally binding obligations and to build stronger due diligence processes. In the context of growing legislation and soft law regarding business and human rights, addressing key human rights violations should be viewed by companies as a strategic decision [7], which will enable companies to attract more investors and distinguish themselves on the global market. 

What Can Companies Do to Stop Child Labour?

The Stop Child Labour Report highlights three key actions that companies should do in order to help address child labour [8]. First, companies should acknowledge that child labour constitutes a risk, which should be addressed in cooperation with their supply chain partners. Second, companies should assess their sources and purchasing practices and evaluate to what extent they may be enabling the use of child labour, either directly by purchasing from suppliers which use child labour, or indirectly such as through “aggressive pricing structures, unrealistic turnover time, and unpredictable order volumes”. [9]  Following this, companies should establish clearly defined sourcing strategies to prevent such risks and to ensure high-level human rights standards are applied. Third, companies should set in place specific remediation measures that directly engage with the issue of child labour. This is a necessary step, especially considering the lack of awareness and transparency on child labour issues in lower tiers of the supply chain. 

These steps are key to protect the rights of children and to sever cycles of poverty and injustice. Moreover, the process of preventing child labour will be necessary under the EU Forced Labour Regulation by 2027. Crucially, training is essential to ensure the proper application of risk mitigation and equitable sourcing practices. Companies often do not have the capacity to sufficiently explore and unpack all the necessary requirements or recommended best practises. Considering this, it is necessary to ensure executive-level members of the company have access to training that can succinctly convey the relevant information and provide information on how to the necessary steps to stop child labour. 

Ardea’s ‘STOP Child Labour’ Programme: 

• Provides the tools to identify, assess and mitigate risks, ensuring compliance with human rights due diligence legislation.
• Is designed to not only enhance participants’ understanding of child labour, but also to empower them to guide their organisations in effectively addressing the risk of child labour in their global supply chains.
• Goes beyond theory and provides practical guidance for businesses.
• Operates through weekly online classrooms, which complement the reading materials, and are facilitated by a team of Ardea’ experienced consultants