European Social Dialogue in Commerce
Uni Commerce Child Labour Pages

3 January 2000

In March 1996, Euro-FIET and EuroCommerce adopted a joint statement on combating child labour. As a follow-up to the joint statement, the social partners were keen to have an exchange of information on initiatives taken in this area. The aims was to draw up a guide, which would assist commerce companies keen to become active or to develop their actions in this area with practical advice and examples from companies which have already engaged with the problem of child labour for some time.

1.0 INTRODUCTION

Ethics and social accountability have become increasingly significant issues for the management of commerce (and other) companies in recent years. This has all too often been the result of adverse media coverage when breaches of minimum labour standards are exposed. As consumers have become more sensitised to these issues, positive management responses to bad publicity have become more important. A business approach which merely responds to such crises is not only financial costly and damaging to the public image of a brand name, but also leads to a situation where companies are forced to review and improve their standards in the glare of public attention.

Many companies in the US and increasingly in Europe have begun to respond pro-actively by:

· taking action to understand and actively intervene in their supply chains;

· appoint specialist staff to set up and monitor codes of conduct, deploy existing staff to take on this role, or commission external organisations to carry out a monitoring and verification role;

· engaging with Non-Governmental-Organisations (NGOs) and other organisations to address the issues and initiate remedial action.

The aim of "ethical sourcing" or "ethical trading" is to ensure that good and services offered by a company, a supplier, a sub-contractor or under a brand name, are produced under a minimum set of internationally acceptable conditions of employment, in areas such as:

· the employment of children;

· the use of forced and bonded labour;

· health and safety;

· discrimination;

· freedom of association and the right to collective bargaining;

· pay.

Child labour is by far the biggest single issue in the field of ethical sourcing. The term child labour generally refers to any economic activity performed by children under the age of 15. However, according to a definition by the US Department of Labor, which recognises the economic necessity, in many countries, for children to contribute to the family income, not all work performed by children detrimental or exploitative. According to this definition, child labour does not usually refer to performing "light work" after school or legitimate apprenticeship opportunities. Nor does it refer to young people helping out in the family business or on the family farm. Rather, the "child labour" of concern is generally "employment that prevents effective school attendance, and which is performed under conditions which are hazardous to the physical and mental health of the child" (US Department of Labor, Bureau of International Affairs, The Apparel Industry and Codes of Conduct, Washington, 1996, p.2).

It is estimated that the total number of full-time working children in the world aged 5-14 is at least 120 million, with a further 120-140 million working as a secondary activity (ILO, Targeting the intolerable, 1998). Although child labour is a world-wide problem, over 95% of working children live in developing countries. Child labour has many forms, but the majority of children work within one of the following areas:

· agriculture

· domestic service

· forced and bonded labour

· the industrial sector

· commercial sexual exploitation and

· the informal sector

Despite the attention focused on the issue of children working to produce goods destined for markets in the industrialised countries, it is estimated that fewer than 5% of all working children produce items for export. Efforts to eliminate child labour in export businesses can therefore only have a marginal impact on the problem as a whole. However, any supported initiatives, which are designed to help children out of work and into school may have demonstration effects and contribute towards establishing greater awareness, procedures, partnership and infrastructure.

The causes of child labour are complex. Key factors which contribute to the problem include the exploitation of poverty, the absence of relevant or affordable education and restrictions of culture or traditions. Children are also often used as a flexible and low cost reserve army of labour in sectors faced with extreme fluctuations in demand for their products.

The complex causation of child labour has raised problems for companies attempting to eliminate child labour from their supply chain, as removing children from the workplace may deprive children of a key breadwinner and simply put children into a more vulnerable situations. One response has been to drawn in NGOs to set up work-to-school programmes or to work with internationally sponsored initiatives such as the ILO’s IPEC programme The International Programme on the Elimination of Child Labour(IPEC) was launched by the ILO in 1992 with the assistence of a substantial grant from the German Government. It is currently the largest technical cooperation programme on child labour. The programme is operational in over 50 countries and to date comprises of more than 1000 individual projects. The Programme’s central aim is to assist member states strengthen their national capacities to address the problem of child labour. This involves a number of actions including:

· motivating a broad alliance of partners to develop concrete actions towards the elimination of child labour;

· carrying out situational analysis to assess the nature and extent of the child labour problem;

· assisting with the development and implementation of national policies;

· strengthening existing organisations and setting up institutional mechanisms;

· creating awareness on the problem nationwide, in communities and workplaces;

· promoting the development and application of protective legislation;

· supporting direct action with ( potential ) child workers for demonstration purposes;

· replicating and expanding successful projects into the programmes of partners, and Mainstreaming child labour issues into socio - economic policies, programmes and budgets.

. However, not all companies have been able to do this and some have responded abruptly with the dismissal of children or the cessation of contracts: good practice suggests that developing a programme over a reasonable time scale is vital if more difficulties are to be avoided.

A number of Conventions are in place at international level, aimed at prohibiting the use of child labour:

· Article 32 of the UN Convention on the Rights of the Child guarantees the "right of the child to be protected from economic exploitation and from performing and work that is likely to be hazardous or to interfere with the child’s education or to be harmful to the child’s health or physical, mental, spiritual, moral or social development". The UN Convention became international law in 1990 and obliges ratifying countries to protect children from exploitative or hazardous labour.

· The ILO Minimum Age Convention (138) deals with the minimum age for child workers. The Convention specifies a minimum age of 15, but developing nations may specify 14 years as the minimum. The Convention allows children as young as 12 to work in developing countries if the work is considered light.

· On 17th June 1999, at its International Labour Conference, the ILO adopted a new Convention (Convention 182) on the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour. The new Convention is to protect children under 18 from:

- all forms of slavery, the sale and trafficking in children, forced or - compulsory labour, debt bondage and serfdom,

- the use, procuring and offering of a child for child prostitution and pornography,

- the use, procuring or offering of a child for illegal activities, including the production and trafficking of drugs;

- any other work which by its nature or the circumstances in which it is carried out could jeopardise the health, safety and morals of children.

Whether or not they have ratified the relevant ILO Conventions or not, most countries have statutory provisions on the employment of children, requirements for medical examinations, and formal mechanisms for enforcement, with, in some cases, severe penalties for breaches. The problem lies with the practical enforcement of these provisions because of the excessive workload on labour inspectorates, the complexity of national laws, and the fact that many children are employed in the informal sector and are out of reach of official enforcement agencies.

International trade agreements have also sought to assist in guaranteeing minimum labour standards. The European Union has operated its Generalised System of Preferences since 1971. The scheme offers preferential access via duty reductions to a list of products from developing countries. A major reform of the system was carried out in 1994/95. The new text includes provisions for granting preferential treatment to countries which observe certain labour standards and withdrawal of GSP privileges from those that do not.

Corporate codes of conduct, aimed at regulating the behaviour, practices and standards of participants in supply chains have assumed increasing prominence, as they allow companies to respond to consumer concerns quickly. They have the advantage - for companies - of being under corporate control and subject to internal compliance procedures. Where other parties such as trade unions or NGOs are involved via consultation, this control may be diluted, but the code may acquire a higher degree of acceptance and legitimacy.

The modern phase of codes of conduct directed at employment standards dates back to the 1960s, when the ICFTU issued a call for the regulation of multi-national companies. In 1976, the OECD adopted its non-binding declaration on International Investment and Mutlinational Enterprises. In 1977, the Tripartite Declaration on Multinational Enterprises was agreed within the framework of the ILO. Both texts are voluntary and have had little practical impact.

Many of the attempts to develop codes in the 1970s and early 1980s were responses to the growing internationalisation of business, but their main focus was not to regulate labour standards in detail. Codes expressly aimed at regulating labour standards only began to emerge more frequently in the early 1990s, particularly in the US apparel industry. The 1990s also saw the development of a number of industry codes and initiatives. In recent years, more emphasis is being accorded to the implementation and verification of standards set down in codes of conduct and it is with these initiatives that this guide is primarily concerned.

The experience outlined in this guide suggests that different sectors and different types of businesses may need different approaches to addressing the problem of child labour. This depends on the resources available, internal expertise, the character of supply chains. There are currently two ends to this extreme:

· incrementalism in good faith approach by some companies sceptical of external standards and initiatives;

· the stringent demand of an externally monitored standard such as SA8000.

A middle way is emerging with initiatives such as the UK Ethical Trading Initiative, which requires a priori commitment to a number of basic principles embodied in its Base Code, but allows some latitude in meeting them while a developmental Action Plan in put in train.

2.0 THE STATUS OF THE CHILD LABOUR DEBATE IN EUROPEAN COMMERCE COMPANIES

For the purposes of gathering primary information for the study, we carried out series of interviews with representatives from the management and trade union side of a number of European commerce companies, ILO officials, representatives of NGOs working in the area of child labour and researchers in the field (see Annex). From these discussions, a number of key findings emerged in relation to the current status of the debate on child labour in European commerce companies:

· A significant number of companies in the commerce sector have drawn up codes of conduct or are currently in the process of establishing them. These codes of conduct differ from company to company, but most enshrine a prohibition of child labour. However, most of these codes say little or nothing about their implementation or enforcement. There are only few exceptions of companies which have taken a step further towards implementation and even fewer which are seeking to get more actively involved not only in the removal of children from the supply chain but also in the rehabilitation of child labourers.

· The main obstacles facing companies and trade unions seeking to address the issue of child labour, even where codes of conduct have been developed, include the following: a lack of awareness of the problem; a lack of knowledge of precise locations of production or incomplete addresses of production units; a denial of the problem of child labour on the part of certain producing countries and resulting difficulties in relation to enforcement; a lack of an established support network which could help with enforcement and rehabilitation actions; a lack of awareness of codes or conduct on the part of suppliers; a failure by supplier to communicate information on code of conduct.

· Many of the trade unions we contacted were primarily involved in campaigns and actions seeking to address child labour at the national level within the European Union. The feeling was often expressed that this was a which was seen to be "closer to home" and therefore ought to be addressed first. There was a perception that national sectoral trade unions are limited in what they can achieve in relation to child labour in developing countries, although a number were actively involved, or initiators of information campaigns calling for the elimination of child labour and the granting of basic workers’ rights. A number of trade union representatives have more immediate exposure to the issue through their involvement with works councils in commerce companies which are more actively engaged in seeking to eliminate child labour from their supply chain. However, in such cases, resistance was sometimes detected on the part of the works council to take this issue on board as it may harm the interests of the respective company and therefore its employees.

· A number of companies are emerging as front runners in relation to the drafting and implementation of codes of conduct seeking to eliminate child labour from the supply. Their respective approaches to addressing this issue often differ significantly depending on the nature of their supplier framework and their internal traditions and practices. Nevertheless, some important lessons can be learnt from these examples. These lessons are outlined below under the following headings:

- identifying the problem

- raising awareness

- mapping the supply chain

- measures taken to address the problem of child labour

- training buyers and suppliers

- monitoring and ensuring compliance/verification

- costs and benefits of measures aimed at eliminating child labour

- obstacles to successful implementation and how to overcome them

- the evolution of policies

- measures going beyond the removal of child labourers towards rehabilitation

- sharing information/dissemination

- conclusions

- useful contacts

As the level of competition rises, production becomes more globalised and supply chains take on more complex forms, the risk of child labour being used in the production process increases.

A considerable number of companies which are today actively engaging in the elimination of child labour from their supply chain, initially came into contact with the problem as a result of adverse publicity. It was therefore the experience or fear of a consumer backlash against their products or brand which forced many companies into becoming more actively aware of the need for "ethical sourcing" and the exercise of greater control over their supply chain.

These issues have gained increasing prominence as consumers are becoming more sensitised to human rights and environmental issues. The rise of Internet and electronic communications, which provide direct access to large audiences at fairly low costs has spawned an increasing number of consumer campaigns seeking to raise awareness of breaches of basic human or labour rights by large companies. Such campaigns have recently provided an additional impetus for companies to address ethical sourcing issues.

Adverse publicity has a particularly significant impact on companies which have long professed a strong commitment to the provision of humane working conditions or an overwhelming paternalistic concern. It has therefore been many of these companies which, following adverse publicity, have taken innovative actions in an attempt to eliminate child labour from their supply chain.

It is frequently argued that few companies today have a full grasp of their supply chain down to the last tier at the level of the company headquarters. Much of the level of control a company has over its sourcing decisions depends on its organisational structure in relation to production units and buyers in the developing world. Some companies have set up an extensive network of subsidiaries in different key sourcing countries, others work with a network of buyers, who are not always solely operating for one single client company. Divergences can therefore occur in the way management decisions are translated at the level of the sourcing countries.

Once the existence of the problem of child labour in the supply chain has been identified, it is not enough that this awareness exists at the level of management, which subsequently formulates a commitment to addressing the problem and seeks to identify solutions. It is, at this stage, crucial to raise awareness of the issue the the company’s intention to address the problem across the supply chain with suppliers, buyers and production units.

Significantly, awareness of the problem and its implications also have to be addressed in all departments throughout company. This is particularly important in terms of co-ordinating the approaches of the company’s financial operations and strategic corporate planning to prevent the emergence of conflicting policies. Trade unions and NGOs working in the field identify a common tension between the desire to reduce costs and to turn around production more quickly and at shorter notice and the aim to eliminate the use of child labour.

An internal information exchange strategy can also assist in encouraging the flow of information between departments and different tiers of the supply chain. It can help to identify possible solutions with the knowledge and expertise in particular of those individuals with an in-depth knowledge of the situation in the sourcing countries. It is important to understand the economic and social realities of the producing countries, their cultural traditions and any local partners the company may be able to co-operate if the problem of child labour is to be actively address, rather than merely externalised.

Additional expertise on the situation in the producing countries and strategies to address the child labour issue can also be sought externally from NGOs, local trade unions or labour inspectorates.

Global sourcing has drawn many manufacturing and commerce companies into contact with suppliers operating at standards and in regulatory environments which are very different from those of their home markets. In addition, in an economy where sale, distribution and production units are becoming more and more geographically remote and where supplier relationships are taking on increasingly complex forms, it is often difficult for company management to establish where exactly each of its products is sourced. Some companies have their own sourcing outlets and production sites in developing countries, others operate a more complex, independent sourcing network. Sourcing decisions are thus often left to buyers based on the developing countries themselves, who are given varying degrees of autonomy in their actions. These buyers generally need to respond to the financial guidelines and time constraints given by the parent company or national subsidiaries. These often lead buyers into more complex networks of sourcing arrangements where they are often no longer aware of where the final production is taking place.

In order for any monitorable code of conduct to be effective, it is essential that the supply chain can be fully mapped to ensure that practices in each production unit can be checked. This information should be sought from national production and distribution units and be placed on a database to ease the exchange of information.

The introduction of ethical considerations into supply decisions has been one factor in attempts by many companies to rationalise their supply chains and work with fewer, higher quality suppliers on a more long-term basis.

There has been an increasing proliferation in Codes of Conduct among companies keen to engage with the issue of child labour. The style and format of codes of conduct varies considerably: some codes are very general in character and intend to convey the company’s values externally - this may be supported by more detailed material which is made available to suppliers. Other codes are highly elaborated. The main components of codes of conduct generally are:

· prohibitions on child labour, either in terms of international conventions, national law, or their own definition;

· prohibitions on forced or bonded labour;

· prohibitions on discrimination based on race, religion or ethnic origin;

· prohibitions on certain types of disciplinary practice;

· provisions on health and safety;

· provisions on pay;

· provisions on working hours and time off;

· provisions on collective employment rights.

The precise standards set down vary significantly, but most make some reference to the core ILO Conventions.

In some cases codes of conduct were drawn up in consultation with representatives of international organisations or non-governmental organisation. Some companies actively engage in learning from the experience of other initiatives prior to drawing up their measures. In the UK, the newly established Ethical Trading Initiative has drawn up a "Base Code" and is actively engaging companies signed up to the initiatives in projects and training events.

A key weakness of the majority of Codes currently in existence is that they do not directly address the issue of implementation and monitoring. Similarly few codes and company practices go beyond the commitment to eliminate child labour from the supply chain. A small minority of companies have gone beyond the removal of children from the supply chain towards assisting in rehabilitation programmes.

Codes have been classified as follows:

· "strong codes" - but weak implementation and monitoring: this may be aspirational in character and may reflect the fact that the company has only recently finalised its code and has begun to consider its practical implementation issues;

· a "weaker" or more general code - but with strong mechanisms to enforce it, and monitor compliance;

· a more general code or statement of intent - but a genuine and verifiable commitment to making tangible step-by-step improvements;

· a strong and precisely specified code, with developed mechanisms for implementation and monitoring.

The following characteristics have been identified as designating successful codes:

· leadership and commitment and rank and file buy-in

· clear statement of objectives, expectations, obligations and ground rules - with sufficient flexibility to allow code to evolve to meet new circumstances;

· open, transparent development and implementation - combined with a regular flow of information on how the code is working;

· an effective transparent dispute resolution system - with the added criteria that it should be "inexpensive, fair, open, accessible and consistent".

The UK Ethical Trading Initiative is a strategic alliance of companies, NGO’s and trade unions which is supported by the UK government, particularly the Department for International Development (DFID). The ETI has two explicit aims, firstly to encourage companies to implement codes of conduct embodying internationally agreed labour standards and human rights in the workplace, this is done through conducting research and facilitating workshops and conferences. Secondly, to develop and encourage the use of best practice monitoring and independent verification methods.

Once a code of conduct has been established, it is crucial that all buyers, suppliers and production units, as well as subsidiaries are informed of its existence and the standards contained in it. Information should be given on how the standard is to be monitored and verified and what their role will be in this process. All partners need to be informed of any sanctions which may be applied in case of a breach of the standards set down in the code of conduct and whether any assistance can be made available to help suppliers reach the required standard.

In order to achieve this, training should be made available to management staff, key suppliers/buyers. The nub of being able to effectively implement a code of conduct is the development of capacities within the company to do so. This can be broken down into a number of components:

· establishing commitment at the top - and then from the top down. This may also entail developing some new objectives, assigning them to individuals or corporate functions and possibly developing internal incentives to promote them;

· the mainstreaming of quality and human and labour rights issues throughout the organisation;

· identifying and developing the personnel competencies and resources to implement the code - both at the corporate centre and in the field.

Success in developing internal capacity is entirely linked to the degree of company commitment and in particular to the active engagement of the senior management team and the quality of the training provided to key managers, buyers, factory managers, quality control and other key staff.

Companies are becoming increasingly aware that they can rarely implement ethical sourcing policies independently of other organisations or interests. In order to avoid some of the pitfalls described above, ensure a maximum amount of buy-in from all actors and to ensure external support, a number of key organisations should be engaged in the undertaking: NGOs, trade unions, governments, labour inspectors and consumers need to be involved to ensure the measures’ success and recognition as a success.

When Promodès made the commitment to implement the SA 8000 standard, it also commited itself to embark on a training programme on the standard and their role in its implementation to key staff. This training is being provided in association with the Council for Economic Priorities.

Whereas between the 1960 and late 1980s, most emphasis was placed on the development of codes of conduct, the ethical sourcing debate has recently moved on to look more seriously at questions of monitoring and verfication. In doing so, companies are seeking to increase the legitimacy of their code and prevent the expose of working conditions in their production sites which do not comply with the principles laid down in their code of conduct.

It is therefore increasingly considered important that codes of conduct include provision on how compliance will be ensured.

There is much debate over the question of the value of internal monitoring over external monitoring. A number of companies currently only carry out internal monitoring, but may in future move towards an externalisation of the monitoring function. External monitoring has the benefit of greater legitimacy in the eyes of outside observers.

Monitoring should be carried out (or monitors should be assisted) by partners with a knowledge of the local situation. Monitoring visits should be unannounced and take place at regular intervals, particularly if there is a suspicion that standards are being breached or problems have been identified which need to be remedied.

Monitoring should not be viewed as the policing of suppliers, but as a means of educating and encouraging suppliers to take ownership of standards and enforcement. Defaulting production units should be assisted with an Action Plan to improve their practices. Progress should be monitored regularly and sanctions should only come into force if a site persistently fails to meet the required standards.

Organisations with significant experience in monitoring emphasise the importance of prioritising and systematising to keep monitoring efforts managable. An attempt to monitor compliance of too many standards at the same time can led to failure. A number of initiatives have shown that collaboration within sectors can drive monitoring costs down.

According to evidence gathered at a recent ETI seminar, effective monitoring requires:

· a reliable identification of the supply chain

· the setting down of clear guidelines and standards

· effective communicating with - not to - suppliers emphasise improvement over time, rather than comply or die;

· a clearly defined monitoring process;

· provision of a monitor toolkit;

· provision of a supplier toolkit;

· development of a responsive monitoring plan;

· facilities for the preparation of remedial action plan;

· outreach to involve external parties;

· transparency;

· the development of a database of suppliers recording problems and successes.

Promodès has adopted the SA 8000 standard, which is monitored through regular audits.

C&A has an internal auditing unit (SOCAM - short for Service Organisation for Compliance Audit Management). This unit has an annual budget of $3 million and carries out 1000 unannounced inspections per annum. SOCAM was set up in response to the greater globalisation of the supply chain network at C&A. Whereas buyers had previously been able to visit all production sites, the removal of many production functions to the Far East, India and Africa meant that buyers were no longer able to fulfill this role. SOCAM was established in 1996 to carry out a social auditing function separate from the companies sourcing operation. The unit’s purpose is to oversee and monitor responsible business standards in merchandise buying on behalf of the C&A retail companies which operate in Europe. SOCAM is particularly concerned with the detection and prevention of exploitation - especially child labour - and with ensuring that suppliers conform to the Code of Conduct. SOCAM is therefore structured to be totally independent from the buying function. Because a significant proportion of goods are sourced in the Far East, SOCAM also has a subsidiary company in Singapore.

· permanent termination of business

· termination of business for a period of time

· cancellation of orders produced under infringing conditions

· cancellation of all outstanding orders

· suspension of business

A decision to re-start business at a later stage is dependent on the supplier presenting a convincing corrective plan. By March 1998, C&A had suspendended contracts with 80 suppliers, of which 30 were re-instated after agreeing a corrective plan. A further 50 suppliers received very strong warnings Source: IDS, Corporate Codes of Conduct and Labour Standards in Global Sourcing (1998)

When deciding whether or not to take action in respect of ethical sourcing, companies may be motivated by their own ethical considerations, either because of humanitarian concerns or in order to place their brand, or they could ask themselves a number of purely financial questions:

· can they count on non-detection

· is ethical campaigning a passing phenomenon

· are consumers really swayed by ethical campaigning

· how are company share prices affected by negative publicity and campaigns

However, this purely reactive approach is increasingly being considered fallacious for a number of reasons:

· planning is considered to be better than crisis management

· the more widespread belief that there are gains in efficiency and quality through the close attention to the supply chain resulting from and ethical or risk review

· many managers and employees want to work in companies which are not rooted on abuses of minimum standards - this can create greater company loyalty and attract a higher calibre of staff.

The impact of campaigns by ethical consumers groups and NGOs on companies has so far not been the subject of any detailed empirical research conducted over a sustained period of time - and its probably not amenable to precise quantification. Claims that share prices are affected by such campaigns are difficult to verify against the general turmoil of equity markets.

This does not mean, however, that campaigns have no impact on company performance. In particular, crisis management to respond to campaigns can be unsettling, costly and time consuming and unmanaged or mismanaged issues can led to more serious consumer actions such as boycotts and other forms of brand avoidance.

Surveys have shown an increasing bias towards ethical sourcing among consumers (not only individuals, but also corporate actors - an example is the corporate code for the Sydney Olympics) and have indicated a willingness to pay a premium for goods which meet these ethical requirements.

The main obstacles facing companies seeking to address the issue of child labour include the following:

· supplier fails to disclose all production units;

· supplier lists the address of his agent’s offices rather than disclosing production units;

· addresses of production units are incomplete;

· supplier fails to inform his production units of the possibility of auditing visits and production units therefore refuse entrance on the site;

· suppliers fail to explain the code of conduct, its enforcement and possible sanctions;

· denial of the existence of the problem of child labour on the part of certain producing countries and therefore difficulties in relation to enforcement;

· lack of an established support network which could help with enforcement and rehabilitation actions;

· price and time constraints imposed by companies force buyers into a labour market where child labour is rife.

These obstacles reveal the importance of a co-ordinated partnership approach and the need to build commitment from the top down through awareness raising and training. It is particularly crucial to generate commitment to the standards set out in the code of practice among national trading companies, buyers and suppliers.

The above enumeration also shows the importance of close co-operation with local level partners and the involvement of national, regional and local authorities, labour inspectorates, trade unions and NGOs in the producing countries, as these can assist with enforcement and rehabilitiation activities.

In most "good practice" companies, their approach and policies have developed significantly over the years and it is often remarked that the codes of conduct which are applied today would not have been possible, if it had not been for the evolution phase. This is generally because awareness needed to be raised first and systems put in place to allow for a monitorable code of conduct to be established. Some companies have expanded codes of conduct from some part of their business to others. There is also a tendency for monitoring to filter further down from first tier over second and third tier suppliers over time.

A significant number of companies have benefited from the expertise of external organisations when evolving their code of practice. The UK Ethical Trading Initiative is a prime example of an initiative which aims to reduce the costs of planning and implementing ethical sourcing by pooling resources and joint learning.

As codes develop, more effective partnerships are developed at management level, as well as in the producing countries and greater opportunities arise to move on from the effective removal and rehabilitation of child workers.

As outlined in the introduction, a strategy which only seeks to eliminate child labour from the supply chain of European commerce companies can prove to be counterproductive if it is not backed up with additional remedial action. As in many countries, the work of children is essential to the survival of the family unit, removal from production can drive them into worse forms of exploitation and more hazardous work. UNICEF has repeatedly stressed that removal should go hand in hand with rehabilitation and integration into the education and training process.

There is so far little evidence that companies are going beyond standards which seek to eliminate child labour from their supply chain. Some companies profess the realisation that in certain countries and localities child labour (among children above a certain age) is necessary to assist in the survival of the family unit. Instead of an outright prohibition of child labour, they therefore seek to ensure that children have work in humane conditions, receive adequate pay and have access to training.

A number of companies are seeking to work with international or local non-governmental organisations and charities through the donation of funds to rehabilitaiton projects. In order to develop a successful rehabilitation strategy, effective partnerships and funding must be in place.

There is a growing network being established of companies, which are seeking to share good practice. Exchanges of information tend to take place at European level or international events, either under the auspices of social partners organisations, the European Commission or the ILO. In the UK, the Ethical Trading Initiative has brought together many companies which already display good practice and those who are only beginning to engage themselves with the issue.

A number of companies have revolved their publicity campaigns around their ethical trading image, others have so far done little to disseminate their practice. This is sometimes driven by concerns over the adverse effects any negative publicity would have on such companies.

Ethical trading initiatives are distinct from labelling initiatives as charted in a recent Commission study, but can be linked.

Social and ethical accountability have become increasingly important issues for companies active in the global market place, as cosumers are less willing to accept products manufactured by children and/or under inhumane and dangerous conditions. Because of its multifacetted causation, there is no easy solution to the complex problem of child labour. Initiatives solely aimed at removing child workers can be counter-productive. International Organisations have therefore placed emphasis on removing children from the most intolerable and dangerous forms of labour and improving working conditions and access to training and education for children (above a certain minimum age) who currently have no alternative but to be involved in gainful employment.

It is still far too commonplace that companies only become active in the area of ethical sourcing if their company or brand name becomes the subject of negative publicity in relation to child labour. However, an increasing number of companies are beginning to identify the benefits of pro-active initiatives in this area.

Once the existence of a problem such as child labour in the supply chain has been identified it is crucial to raise awareness of the problem throughout the company structure and the supply chain. It is advisable to encourage an exchange of information to achieve a maximum amount of buy-in and draw up a feasibility action plan aimed at addressing the issue. The use of external partners and experts can be beneficial in order to ensure success.

It is of vital importance that companies can fully map their supply chain down to the final tier. This can assist not only in implementing and monitoring social accountability standards but can also lead to improvements in quality and productivity.

A Code of Conduct should focus on a number of key standards which are capable of being monitored and verified. Advice from internal and external experts can be vital in this process. To succeed, a Code of Conduct requires top-level commitment as well as rank and file buy-in. It should allow for improvements to be made over time, but needs to be specific in terms of final sanctions which can be used if a production unit repeatedly fails to meet the requirements.

Successful implementation requires investment in training and the development of internal capacity at key stages in the supply chain. Provision needs to be made for internal or external monitoring.

Working in partnership with other producers in the sector, national and local authorities in the producing countries, trade unions and NGOs can overcome many of the obstacles which can face companies in implementing a code of conduct and can lead towards more wide-ranging rehabilitation actions.

Finally, the dissemination of experience and good practice is vital to advance the process of ethical sourcing. National and international networks are increasingly emerging which serve this purpose.

Ethical sourcing is a developmental process which needs to be adapted to the requirements and means of each company and the countries it sources in.

EuroCommerce

122-133, rue Froissart

1040 Brussels

BELGIUM

Tel. +32 2 2305874

Fax +32 2 2300078

Euro-FIET Commerce / Uni Europa Commerce

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1219 Chatelaine

Switzerland

Tel: + 41 22 979 0311

Fax: + 41 22 796 5321

E-mail: Jan.Furstenborg@union-network.org

Brussels Office:

3, rue Joseph II

1000 Brussels

BELGIUM

Tel. +32 2 230 7455

Fax +32 2 2230 7566

E-mail: Marie.Simonsen@union-network.org

Ethical Trading Initiative

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London

EC1N 7RJ

Tel +44 1717 831 8677

Fax +44 171 405 5943

International Labour Office

4, route des Morillons

CH-1211 Geneva 22

Switzerland

Tel. +41 22 799 6661

ILO

IPEC (International Programme on the Elimination of Child Labour)

4, route des Morillons

CH-1211 Geneva 22

Switzerland

Tel. +41 22 799 8176

Fax +41 22 799 8771

Council on Economic Priorities Accreditation Agency (CEPAA)

30 Irving Place

New York

NY 10003

USA

Tel. +1 212 420 1133

Fax +1 212 420 0988

Our e-mail links:

Geneva:
jan.furstenborg@union-network.org
frieda.gazzini@union-network.org

Brussels:
marie.simonsen@union-network.org

Bonn/Sarajevo Project Offices
alexruedig@aol.com

Sarajevo Project Office
fietsa@bih.net.ba