Child Labor Supply Chain Risks in the BRICs

Jul 5th, 2010 | By | Category: Sustainability

The risks to business relating to child labor in the BRIC countries of Brazil, Russia, India and China are increasing according to a new report released by Maplecroft. The report analyzes the most recent events, reports and published raw data to offer a detailed overview of the child labor situation in the BRICs. It will enable business and investors to identify potential supply chain risks and investment risks arising from child labor in the world’s fastest growing economies.

Child Labor in India

Of the four countries, India has the most challenging environment for business relating to child labor, as it is ranked number 1 of 196 countries in Maplecroft’s Child Labor Index. The country has the highest number of child workers in the world. Estimates from national and international NGOs place the figures of child workers in India between 60 and 115 million. Latest official government figures estimate 16.4 million child laborers between the ages of 5 and 14. Of those, approximately two million are thought to work in “hazardous industries,” including mining, ship breaking and manufacturing or are trafficked and exploited in the sex industry.

Child Labor in China 

China is rated “extreme risk” in all of Maplecroft’s labor rights and protection indices with the risks for child labor, trafficking and discrimination increasing. Key findings of the report point towards the highest prevalence of child labor violations in the agricultural and manufacturing sectors of China. Human rights abuses associated with suppliers within the textile and electronic sectors are of particular concern following a recent cluster of suicides that occurred in a Foxconn factory based in the country. 

“Child labor in the manufacturing sector is hard to identify. It often occurs down the supply chain when production is outsourced to home-workers,” said Professor Alyson Warhurst, CEO of Maplecroft. “This means that companies need to be especially diligent when it comes to auditing their supply chains. But they also need to be cognizant of the implications for children of taking them out of work where schooling is inadequate and families live in poverty.”

Child Labor in Brazil

According to the report, child labor in Brazil is prevalent in the informal, agricultural and manufacturing sectors. In 2008, the ILO estimated that 58.7% of child workers between 5-14 years old worked in agriculture. Children working in this sector are particularly vulnerable to accidents, often involving agricultural chemicals and machinery. The latest available statistics from the Brazilian government reported that in 2006 there were 273,000 accidents involving child laborers. Maplecroft’s labor protection risk indices show that working conditions are worsening in Brazil.

Child Labor in Russia

Business in Russia is not immune from the risks associated with child labor, as the country is ranked number 75 of 196 countries and “high risk” in Maplecroft’s Child labor Index. While an overall estimated figure on children working is unavailable, the Federal Labor and Employment Service (FLES) found over 10,000 child labor law violations in 2008. These children often received little pay and were discovered in dangerous working conditions in the industrial and agricultural sectors. The report also states that risks associated with working conditions in Russia are growing.

The Maplecroft Report

Detailed analysis about child labor in each of the BRIC countries is available within the report, which provides companies with an understanding of where child labor risk exposures may lie within their supply chains. The report includes country scores from Maplecroft’s labor protection indices, analysis of the issues and sector insight, details of labor laws and ratification of ILO and other UN Conventions. Sub-national maps reveal hotspots and pinpoint incidents, particularly around economic zones. There are also stakeholder viewpoints and a chronology of key recent child labor reports.

About the Author

Maplecroft is a leading source of global risks analysis. They research, index and map over 500 risks and issues to identify exposures and opportunities in both countries and companies. Maplecroft’s products and services are a vital resource for businesses and investors requiring analysis and insight into complex political, economic, social and environmental risks. To purchase a copy of the report visit the Maplecroft Store.

Photograph: Web Buttons by Billy Alexander, Charlotte, North Carolina, U.S.A.

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