Due diligence in practice: how companies in the Netherlands can combat child labour in their supply chains


Posted
September 2017

Is child labour still a problem?

First the good news: child labour decreased since the beginning of this century by more than 30%. One hundred and sixty-eight million children are still working as child labourers according to the International Labour Organisation (ILO). The less good news is that fifty percent of these children are performing hazardous work. And a hundred and twenty million child labourers are below the age of fourteen. Children are the future. They are entitled to good education. Child labour hampers a sound development and without good education children will not be able to escape the poverty trap. It’s hardly surprising that the prohibition of the worst forms of child labour and ending child labour in all its forms is one of the priorities under the Sustainable Development Goals for 2030 (SDG 8).

How are Dutch companies involved in child labour and why is combatting child labour so hard?

Child labour still occurs, including in the global supply chains of Dutch companies. For example, one million children are currently working in gold mines. This gold can be incorporated into our jewellery but also into electronic chips in our electronic devices. In West Africa, an estimated 2.1 million children work in the cocoa industry; cocoa that is used to make our chocolate bars. Amnesty recently showed how children as young as eight years old are working on palm oil plantations; palm oil in our shampoos, cookies or make-up. Many Dutch companies claim they do not tolerate child labour in their supply chains and some have programmes to check on their suppliers. However, child labour is not easy to detect or to combat. Often, suppliers know perfectly well that child labour is not appreciated by their clients and know how to ensure that auditors do not find any. It requires careful investigation with the support of local experts, and consultation with involved stakeholders. It is important the company identifies the measures it can take to prevent child labour and that it accounts for how this is done. Dutch companies have the possibility to influence their suppliers. Child labour does not disappear by prohibiting it in a code of conduct nor by changing supplier when it is detected. It is important that underlying root causes such as parents’ low income, inadequate access to education, traditions and customs, and inequality between girls and boys are all addressed as well. Only then can a child be prevented from exchanging for example work in the cocoa fields for tobacco plantations or, even worse, from the cotton fields to prostitution.

The question is: what can companies based in the Netherlands do about these problems?

The Combatting Child Labour Fund (FBK)

In 2016, an initiative of the Dutch labour party (PvdA) led to an additional five million euros being allocated to the State budget to start a fund for companies and stakeholders to combat child labour. This led to the Combatting Child Labour Fund implemented by the Netherlands Enterprise Agency (RVO). We were involved as external experts in the development and implementation of the Fund. This included:

  • The phase in which companies are supported in implementing child labour due diligence.
  • The phase in which companies with a consortium of partners apply for a subsidy for a multi-stakeholder approach to combat child labour.
  • The phase in which a consortium of companies and NGOs work on a multi-stakeholder approach for responsible public procurement of, for example, natural stone.

Why does the Dutch government support companies?

The Dutch government supports companies in their exporting, importing or innovating activities. They are supported by embassies, with trade missions and local contacts. So why shouldn’t they be able to support combat child labour? In accordance with the OECD guidelines, all companies are obliged to carry out human rights due diligence to identify, prevent, mitigate and account for how they address their adverse human rights impact. This includes their impact on any child labour that they may cause or contribute to through their own activities, or which may be directly linked to its operations, products or services by its business relationships. As this is not yet standard practice, companies need to be actively supported and encouraged. This is what the Fund does.

However, the FBK has only received five applications for child labour due diligence. Possible causes of this low interest were found to be, the sensitivity of the topic and the fact that once child labour is identified, companies were no longer eligible to apply for a multi-stakeholder application to combat child labour because the Fund was no longer open. It was uncertain whether the Fund would be continued. Could it be that they feared that the problem was so large that the company would not have sufficient funds itself to combat child labour? In some projects, it was uncertain which part of the supply chain the due diligence would be directed at. This shows that some companies are not aware of the risks in their supply chains. All the more reason to investigate this as part of due diligence. We believe that new funding for the Fund is necessary. The experience with the Fund shows that supporting companies to carry out due diligence requires a systematic approach, not a one-off incentive. In our view, we need a long-term effort to support better due diligence and reduce child labour.

Important topics discussed with companies

Many questions that we raised had to do with the business model. As part of the project, would companies look at how low prices for farmers can lead to low (no living) wages and necessity for child labour? Other questions discussed were how to influence suppliers to participate and how to prevent cleaning their own supply chain leading to children moving to another sector? How can companies prevent child labour and does this influence their business? What is the level of ambition, how to create a level playing field, and how can they increase their leverage?

The cooperation with NGOs is often new and exciting, and it has led to new insights, for companies as well as for NGOs. The companies taking this approach to the Fund are to be admired, as they are taking real steps to eradicate child labour and leaving themselves potentially vulnerable. Who will follow their lead?

How to continue?

Applications for the 2017 Fund came from enterprises in the following sectors (amongst others): natural stone in India, sportswear in Pakistan, cocoa in the Ivory Coast, maize and grain in Hungary and Poland, garments in Bangladesh and India, seeds from India, sexual exploitation of children in Mexico and Thailand, gold from Uganda, spices and metals. Natural stone, gold and garments were applications from consortia working together in the Dutch International Agreements for Responsible Conduct. The projects have been approved and have been initiated. As experts in the field, we have been involved in advising and assessing the projects and we will continue to support the participants with follow-ups and an exchange of experiences in the form of network sessions in the coming years. We hope we can present an overview of all the valuable experiences gained by these frontrunners in different consortia in the Netherlands and in the global supply chain. These are frontrunners who have chosen system solutions to eradicate child labour in their supply chains and beyond

What is needed?

We expect many lessons to be learned in these projects, because these are unique cooperative partnerships, and companies will have to look at the relationship with their own core business. The FBK offers companies an opportunity to fulfil their duty of care and to have Dutch businesses develop as worldwide frontrunners in combatting child labour. This also prepares companies for the new Due Diligence of Child Labour Law, which may soon be approved and which obliges all companies to carry out due diligence of child labour.

Liesbeth Unger (Human Rights at Work), Annelien van Meer (Enact) and Machteld Ooijens (Partnering for Social Impact) are experts in the area of human rights and sustainability with companies. They have advised the Combatting Child Labour Fund of the Netherlands Enterprise Agency and the applicant companies.