Ethical Issues: Child Labor and Sweatshops

It’s been almost two weeks of classes. I’ve learned so much this past week. I’ve enjoyed my readings and knowledge gained, though I would say we are barely surviving with the amount of readings, case studies and homework.

I have updated my personal blog on a few of the readings and cases covered in class, and would like to share in this blog, the hot topic we discussed in our Business Ethics class on sweatshops and child labor.

The big question for decision makers in companies is: in conflicts of stakeholder interest – whose interest should be prioritized? And for businesses, that would usually mean – the shareholder’s interest, in the form of increased profits.

Coming from South East Asia myself, and wanting to start my own clothing business, I found the video from Panorama on Nike and Gap shared in the first Business Ethics class extremely relevant. The question I asked myself was; how do I ensure that when outsourcing, the company carries the same values and will implement the same rules that I asked them to?

Both Nike and Gap, have explicit guidelines on labor practices. Furthermore, they are even members of a UN pledge outlawing child labor.

This is the summary of the factories/ manpower policies posted for Nike/GAP:

·      1 day off in 7 days

·      Zero tolerance of underage workers

·      No forced overtime

·      Workers must be told beforehand if they need to do overtime.

·      GAP – 14 or legal age. 16/17 Nike.

An interviewed spokesperson in UK, when asked whether they have child labor, confidently said, “Absolutely, absolutely, we’re very confident” that they did not have any breaches to the rules they outlined above.

The camera then moves to … Cambodia.

The reality, as expressed by the workers:

·      Refusal to work overtime or on weekends– more than 3 times, fired.

·      Living in small wooden homes shared with 3-4 other employees with no running water and frequent power cuts.

·      “If we’re paid even for the price of 2 shirts we would be happy. “

·      “I think we’ve been working like hell. “

Note: The workers are scared. I am questioning the media on why they took clear photos and pictures of the workers in Cambodia. The workers can be prosecuted. Perhaps this is another example of business revenue vs. ethics, or in terms of the media, sensational news story vs. people’s privacy and rights.

When confronted, both companies mentioned that they did not know this was going on. How could they not know when they had periodical quality audits on going? Perhaps they were only looking at the quality of the products and put a blind eye towards the quality of their employees.

If the company talked or asked the workers during any of these audits, they would have found out. This speaks volumes about the level of engagement in these factories.

If you can check quality everyday, then why can’t you check on the working conditions?

So is it a real intention to outlaw child and forced labor, or just a marketing whim? Only the owners and decision makers of a company can answer that question.

And, who is to blame? Should we blame the branded company, Gap and Nike? What happened to trust? Can we no longer trust a company that we outsource to?

The living conditions in certain places sometimes also dictate the ‘necessity’ for child labor. Children lie about their age to get jobs because their parents say that they cannot afford to take care of them anymore.

One of the girls in the video, a 12 year old, was told by her parents, that she would have to travel to the city and work in the factory because her parents didn’t have enough money to care for her and her siblings. She left her family home with a broker, and has been at the factory for more than 6 months, and hasn’t been back to see her family. Her parents’ are a day’s drive away.

She cried.

I didn’t want to come here. But we’re very poor and I had to come. My parents felt sorry for me, but there was no other way. After rent and food, there’s nothing else.

We would say, adults should work, children should study and play. But it’s almost impossible to guarantee childfree labor in conditions like this where there’s not enough money for the family. Should you help the family by employing the girl, or ask her to go back, risk the anger of her parents, and end up with malnutrition/ diseases.. or going into worse careers like prostitution or going into the black market?

Some NGOs ask that the company’s pay for the child’s education and food until they reach the minimum age for working. Is it realistic? Is it the company’s responsibility?

– Nur Zahira M Sukran, FT MBA 2012/13