Child Labor and Big Corporations

The term “child labor” is defined as work that is mentally, physically, socially or morally dangerous and harmful to children; and/or interferes with their schooling.   Although classification is not homogeneous and varies from country to country, UNICEF’s standard indicator includes the following:

• Age 5 to 11 years: At least 1 hour of economic work or 21 hours of unpaid household services per week.
• Age 12 to 14 years: At least 14 hours of economic work or 21 hours of unpaid household services per week.
• Age 15 to 17 years: At least 43 hours of economic work per week.

Among the United Nations’ Sustainable Development Goals (SDG) is a call for the end of child labor by 2025 followed by an end to all forms of forced labor and human trafficking by 2030.  SDG 8.7 advocates to, “Take immediate and effective measures to eradicate forced labor, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labor, including recruitment and use of child soldiers, and by 2025 end child labor in all its forms.”  Despite this general agreement, the global goal of abolishing child labor appears unlikely to be achieved in the set time frame. 

In 2020, some 160 million children (almost 1 of every 10) were in child labor.  Breaking down this figure gives us a better idea of the scope of the problem:

• 69 million children work in hazardous conditions threatening their health, safety, or moral
• 67 million are girls (7.8% of all girls) while 93 million were boys (11.2% of all boys)
• 7 million of these working children are in rural areas (13.9% of rural children compared to 4.7% of urban children).
• 1 in every 4 children 5-11 in child labor, do not attend school.
• UNICEF estimates that 25% of kids in the poorest countries work in duties that are “detrimental to their health and development.”
• Since 2016, there has been no progress in the percentage of child labor worldwide, which means that from 2016 to 2020, 8 million more children entered the workforce. This increase mostly included 5-11 years olds.
• Although there have been improvements in Latin America and the Caribbean as well as in Asia and the Pacific, child labor in sub-Saharan Africa has grown, and now this region has more children working than the rest of the world combined.

Despite wide varieties from region to region, it is estimated that up to 26% of exports from Eastern and South Eastern Asia involve children.

Numerous multi-national corporations are turning a blind eye to this issue. The Bureau of International Labor Affairs lists over 400 goods produced by child labor or forced labor including garments, agricultural products, building materials and  precious metals. This includes many major tech corporations that utilize cobalt extracted in mines that violate their workers’ human rights, including the use of child labor. And despite agreeing over 10 years ago to address their supply chain child labor, the major chocolate companies have failed to eliminate this practice.

The nature of child labor and the fact that it is more frequent in upstream production activities, has previously made it difficult to trace and audit. The advent of blockchain and other methodologies have now made it easier and cost effective to monitor supply chains to track goods and services, inventory levels, raw materials, supply and demand trends, production schedules and delivery timelines. These methodologies can also monitor supply chain labor practices.

The world’s major corporations have the power to reverse this trend and eventually end this form of child exploitation. And it makes good business sense. ESG rankings and rating providers include SDGs in their assessment metrics. Companies risk low ESG scores by continuing to permit child labor within their supply chains. The adverse negative financial impacts of low ESG scores on revenue, stock price and the costs of doing business greatly outweigh the short-term costs of eliminating supply chain child labor. 

Companies have the obligation to their shareholders, and to society at large, to eradicate child labor. By paying extra attention to those products in their supply chain that come from certain regions of the world and/or certain industries, this issue can be aggressively addressed. Stakeholders worldwide can also help by advocating for effective legislation; promoting support systems to alleviate multi-dimensional poverty (schooling, childcare, informality, discrimination); adopting measures for responsible business conduct to ensure due diligence in tracing child labor in the supply chain.