Child Labor risks on your supply chain?

UNICEF's last published figures for child labor are from June 2023. I had the opportunity to review these figures, which were primarily concerned with African countries. The number of children working in Ethiopia, at the top of the list, goes from a whopping 45% to an average of 26% in most of Africa and 22% in other less-developed countries (Source: UNICEF). In 2020, the number of children in child labor has risen to 160 million worldwide – an increase of 8.4 million children since 2016 (Source: UNICEF). How is it possible that we do commerce with countries with such levels of child labor, and there is no progress in reducing these figures over time?

I know how difficult it is for Supply Chain and Operation teams to identify and remediate child labor. Don't say, "This doesn't happen here" too fast: On the list, we have countries from virtually all continents. There are still medium risks of child labor in a few countries in Europe; in some countries, this was still a common fact until the second half of the XX century. It's not so far away.

Sometimes, defining what child labor is or is not takes work. Is this child labor if you help your father in the family garden with a dozen trees after school?

UNICEF defines child labor as follows:

A child is considered to be involved in child labor under the following conditions:

(a) children 5–11 years old who, during the reference week, did at least one hour of economic activity and/or more than 21 hours of unpaid household services,

(b) children 12–14 years old who, during the reference week, did at least 14 hours of economic activity and/or more than 21 hours of unpaid household services,

(c) children 15–17 years old who, during the reference week, did at least 43 hours of economic activity.

Experiencing reality always makes any potential measure subjective; why is that one measure and not another? What about a child of 12 years working only 20 hours? Disappears from the statistic? Is that correct?

Aside from the ethical discussion here, which may be extended and heated, the primary fact for any company is that, being measured with whatever possible amount, any Supply Chain Manager or directive does not want to bear any of the risks regarding this topic. By any means. Why?

The potential impact on your company's reputation in the newspapers due to a child labor scandal (or forced labor, by the same token) is enough to give chills to anyone at the top of the company. The consequences are primarily unpredictable but indeed disastrous.

Starting by the ethical concerns of your employees and their trust in the Company, through your customers, investors, and public in general, an event like this may represent reduced sales, the cancellation of cooperation or contracts with partners, an eventual boycott, and negative campaigns from customers and end users and NGOs' adverse activity and focalization which will accelerate the above in a vicious cycle, which can spiral to a terrible situation. Consider that 25% of a company's market value is directly attributable to its reputation (Source: World Economic Forum)

Anyone will agree that third-party due diligence is an ethical priority in casual conversations. However, we see here that it is also a significant risk; therefore, avoiding it should be a business priority. What are you doing about it? Are you conscientiously and actively managing Child Labor risks in your supply chain? Or do you unquestioningly trust your first-tier suppliers, hoping that it will be their problem rather than yours?

Well, forget about that possibility. Current and upcoming laws in most developed countries are evolving towards extending companies' responsibility upstream to their whole supply chain up to the n-th level. This applies to two elements: the impact of your activities (and the activities of your suppliers) on the environment and the social impact of your activities on your employees, suppliers, and all the people working for them or impacted by their activities.

There is only one way to ensure you are doing right and to demonstrate your due diligence: evaluate and act upon your risks.

-????????? You should use all available benchmark information to objectively evaluate the risk of your operations and providers (by business, country or region, activity, etc.) and, based on this information, catalog and classify the inherent risk of all your operations and providers.

-????????? You should request and catalog who are the providers of your providers for your higher risks and include them in the Risk Assessment.

-????????? You should take appropriate measures, well-adjusted with the levels of each risk, to mitigate, avoid, or remove these risks.

-????????? You should do this at the necessary frequency to stay current on the evolution of your risks.

It looks pretty straightforward, but it's only possible if you do this not once but continuously and sustainably. The best-proven way to implement continuous risk assessment and risk management is by deploying a management system that focuses on the social topics of your operations. Why social risks? Because what is discussed above is valid not only for Child Labor but for any other critical social risks that companies cannot afford anymore, like Forced Labor or other Human Rights offenses. A Management System drives your company to assign the required resources, attention, and control to your social risks.

ISO Standards are a proven method for implementing Management Systems. The Standard PAS 24000:2022 from the British Standards Institution is the only ISO-like Standard covering Social Risks in an ISO way. FSSC 24000, from the FSSC Foundation, is the only audit Scheme supporting PAS 24000:2022. Want to know more? See here: https://www.fssc.com/schemes/fssc-24000/ ?

I am looking forward to an update from UNICEF for 2024.