Countries falling short on commitments to wipe out practice

Child Labour Index

What do Denmark and the DR Congo have in common on the issue of child labour? From a legal perspective, they’ve signed the same international treaties and their domestic legislation offers a similar level of protection against child labour. But based on their respective scores in our Child Labour Index, they could hardly be more different; Denmark is the lowest risk country in the world with a score of 9.83/10.00, while DR Congo is the fifth riskiest with a score of 1.76/10.00.

Do laws matter?

It can be very easy for countries to pay lip service to the protection and advancement of human rights by wielding a pen, but businesses need to look far beyond a country’s laws and international commitments to understand their exposure to human rights violations.

By separately assessing the domestic and international legal framework, the efforts made by the state in upholding a right, and the extent of child labour violations in 198 countries, the Child Labour Index reveals just how weak the relationship between laws and the prevalence of violations can be.

We identify 70 countries as having near-perfect histories of treaty ratification and robust domestic anti-child labour legislation, and these are represented in the chart below. The grey band at the top of the chart shows their strong performance in relation to the provision of legal protections, with scores close to 10.00 for this element of the index. However, as the variation in the height of the columns that represent each country shows, reported violations range from being widespread – as in Colombia, Kenya and Thailand – to non-existent. If laws did make a difference, we would not expect to see such a large gap between many of the columns and the grey shaded area. In other words, companies that look only at a state’s legal commitments leave themselves open to the exploitation of children in their supply chains.

The gap between laws and outcomes for 70 countries_2017 Child Labour Index

If not, then what does?

So, if it’s not enough to look at what laws and treaties a country has signed, what should businesses look at when trying to assess whether a state is doing enough to fight child labour? The answer: enforcement.

It generally follows that in countries where enforcement is inadequate there are widespread reports of children working. Vietnam is an example of where a state’s enforcement efforts should raise alarm bells; according to the International Labour Organization’s most recent estimate, one in ten Vietnamese children, about 1.75 million in total, were working. The labour inspectorate is both chronically underfunded and understaffed; and when it does uncover child labour violations, the penalties imposed amount to no more than a slap on the wrist.

In contrast, Canada, the Netherlands and Norway make impressive efforts to stamp out the use of children in the workforce. Understandably, businesses may be tempted to assume such efforts shield them from the risk of child labour being used in their supply chains, but they could well be wrong. There are still reports, although rare, of children working in all three of these countries.

Violations matter most

The main concern for business is the record of violations in countries in which they operate; the past is an excellent guide to the future. Children are reportedly working in almost every one of the 198 countries that our Child Labour Index assesses. The frequency and severity of violations, and the number of sectors affected, are factors that we score separately, so we can see the actual on-the-ground situation.

Companies’ exposure to the risk of child labour in their supply chains is greatest in sectors where workers take on low-skilled/low-paid jobs. The chart above shows how agriculture fits this bill, with children reportedly working in the agricultural sectors of 139 countries, while parts of the services and construction sectors of 80 countries use children for basic but often dangerous work.

How child labour varies by sector and region_2017 Child Labour Index

The chart above shows that the agricultural sector is vulnerable to child labour the world over, including in some EU countries, such as Greece and Spain, both of which have large agricultural sectors. Child labour is reported in the manufacturing and services sectors in over half of Asian countries, and is present in sectors like fishing and mining across many countries in Africa and the Americas.

The UN Guiding Principles on Business and Human Rights give the state the responsibility to protect human rights. Companies need to be able to differentiate between the states taking appropriate action to stop child labour and those that are just paying lip service. If they don’t, they are likely to find themselves exposed to the reputational, financial and even legal costs of child labour violations in their supply chains.

To discuss this topic with an analyst or to request a Country Risk Report contact

Sam Haynes

Head of Risk Analytics