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Ethical Sourcing

Child Labor in the Modern Supply Chain

Keeping Child Labor Out of the Supply Chain is a Moral Imperative

Many of us believe child labor was confined to the early days of the industrial revolution – sadly, this isn’t the case. Despite the best efforts of concerned citizens, businesses, and governments, child labor continues to proliferate in many parts of the world.

The International Labour Organization (ILO) estimates that child labor affects 152 million children between the ages of 5 and 17, with most victims under 14 years old. While the global supply chain has lowered costs and increased efficiencies, it has also helped mask child labor violations in a number of industries.

Businesses have a responsibility to build ethical supply chains that respect human rights. Globally, the ILO’s Minimum Age Convention sets 15 years of age as the minimum threshold for regular employment. Nations have banded together to hold one another accountable for the observance of child labor laws. Some signatories have even instituted stricter standards, such as in the United States, where most work is off limits to kids under the age of 16.

Causes of Child Labor

Experts at the ILO have identified multiple factors that often accompany the use of child labor, including:

  • Severe financial stress: Families may struggle to get by without the extra income gained from sending a child to work.
  • Weak enforcement of child labor laws: Governments that don’t prosecute labor violations encourage abuse.
  • Lack of educational opportunities: Without access to schools, children end up working instead of pursuing an education.

Child Labor by Industry

According to the United States Department of Labor, children contribute to the production of 139 goods from 75 countries.

The Labor Department has identified industries where child labor is most common, including:

  • Agriculture: Growing cotton, sugarcane, coffee, and tobacco
  • Manufacturing: Making bricks, garments, and textiles
  • Mining/quarrying: Extracting gold, coal, and diamonds

It’s important to note that concerns about child labor aren’t limited to farms, factories, and mines. Businesses that source components or products from disreputable vendors can unknowingly introduce child labor into their supply chains. Procurement professionals use risk management tools and processes to identify and avoid such companies.

Child Labor by Region

Child labor violations occur around the world – even in modern industrial economies. The list below is based upon ILO data, with regions ranked from the greatest to least number of youth involved in child labor:

  1. Africa
  2. Asia and the Pacific
  3. The Americas
  4. Europe and Central Asia
  5. The Arab States

International efforts are underway to make child labor a thing of the past. The ILO helps nations develop National Action Plans (NAP) suited to their specific challenges.

The common denominator behind all child labor operations is profit. Businesses can contribute to the fight against child labor by adopting responsible sourcing strategies.

How to Manage the Risk of Child Labor in Your Supply Chain

Companies that use child labor go to great lengths to cover it up. Many businesses hire compliance auditors to visit farms and factories to ensure suppliers are following the law. However, auditors can only review the worksites they’re aware of. It’s quite common for child labor operations to work as subcontractors in order to stay hidden from authorities or customers.

While auditors visit worksites to confirm compliance, the addition of an analytics programs designed to identify trends and correlations that may not be apparent to a human being are a crucial supplemental strategy. Advanced algorithms sort through information on violations by region or product, bringing potential risks to the attention of compliance professionals.

Dun & Bradstreet’s Human Trafficking Risk Index combines data from the US government with our own global business information on more than 300 million companies. Users can submit information on supplier locations and products in order to understand their own exposure to labor risks, including the employment of children.

Keeping child labor out of your supply chain hurts criminals where it counts – their profits. Removing the financial incentive to employ cheap child labor can go a long way towards eliminating modern slavery and the exploitation of children.

Learn more about how Dun & Bradstreet's supply chain management product can reduce risk for your company.

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