A. Congressional Mandate
This report is the third volume in ILAB's
international child labor series. It focuses on the use of child labor in
the production of apparel for the U.S. market, and reviews the extent to
which U.S. apparel importers have established and are implementing codes of
conduct or other business guidelines prohibiting the use of child labor in
the production of the clothing they sell. The report was mandated by the
Omnibus Consolidated Rescissions and Appropriations Act of 1996, P.L.
A recent development, corporate codes of conduct and
other business guide lines prohibiting the use of child labor are becoming
more common, as consumers as well as religious, labor and human rights
groups are increasingly calling upon companies to take responsibility for
the conditions under which the goods they sell are being manufactured. Many
U.S. companies that import apparel have adopted codes of conduct that
prohibit the use of child labor and promote other labor standards. For
purposes of this report, the term "codes of conduct" is used generically to
refer to various types of corporate policies and standards on child labor
and other working conditions. These instruments take different forms codes
of conduct, statements of company policy in the form of letters to
suppliers, provisions in purchase orders or letters of credit, and/or
1. Child Labor in the Apparel Sector
The term "child labor" generally refers to any economic activity
performed by a person under the age of 15. Not all work performed by
children is detrimental or exploitative. Child labor does not usually refer
to "light work" after school or legitimate apprenticeship opportunities for
young people. Nor does it refer to young people helping out in the family
business or on the family farm. Rather, the "child labor" of concern is
generally employment that prevents effective school attendance, and which is
often performed under conditions hazardous to the physical and mental
health of the child.
There are no reliable statistics on the rate of child employment in any
particular economic activity, including the apparel sector. Most
information on child labor in the garment industry comes from eyewitness
accounts, studies by non -governmental organizations (NGOs) and
academicians, reports by journalists, and studies by the International Labor
Anecdotal information gathered during the preparation of this report indicates that in some of the countries examined, fewer children may currently
be working on garment exports for the U.S. market than two years ago. A
dramatic example involves Bangladesh, where large numbers of children worked
in garment factories as recently as 1994. International media attention and
threats of boycotts and can celled work orders led to the dismissal of
thousands of child workers from the garment sector unfortunately with no
safety net in place for them. Thus, it is possible that in the absence of
government programs to assist the children, the precipitous dismissal of
child workers can endanger, rather than protect them. More research is
needed so that governments, industry, international organizations, and
others concerned with the welfare of children are better equipped to design
appropriate programs. It is clear, however, that local and national
commitments to universal and free education for children are immediate and
positive steps which can and should be taken.
One reason for any potential downward trend in the use of children in the
garment industry may be the widespread adoption in the last several years of
U.S. company codes of conduct prohibiting child labor. This potential
downward trend may also be the result of (1) greater public awareness about
child labor and its use in export industries; (2) changes in the garment
industries of exporting countries tending to eliminate subcontractors where
the use of child labor is most likely to occur coupled with policies to the
same effect by U.S. importers; and (3) concerns that importing countries
could enact legislation banning the importation of products made by
children. Most likely all of these factors have worked in a
mutually-reinforcing way to reduce the use of child labor in the export
sector. On the other hand, there remains continuing evidence of child labor
in the apparel industry of some countries, including the use of child labor
in homework. To be any more definitive, further information is needed.
2. Codes of Conduct
Voluntary codes of conduct have become increasingly common among U.S.
corporations in recent years, particularly in the apparel sector. They have
their roots in ethical guidelines for multinational corporations developed
in the 1970s and voluntary codes of conduct developed by private groups
during the 1980s. The first apparel company code of conduct was adopted in
1991. Most other codes have been developed in the last two or three years.
United States corporations have adopted corporate codes of conduct for a
variety of reasons, ranging from a sense of "social responsibility" to
pressure from competitors, labor unions, the media, consumer groups,
shareholders, and worker -rights advocates. The U.S. Government has also
encouraged U.S. corporations to adopt model business principles for their
3. The Apparel Industry
The U.S. is the world's largest importer of garments. Imports of garments
have been increasing steadily since the 1970s. Between 1985 and 1995, U.S.
imports of apparel grew in current dollars by 171 percent, reaching nearly
$34.7 billion. In that year, the U.S. imported apparel products from 168
The U.S. apparel industry is made up of a complex chain of actors whose
functions often overlap. The industry includes the following entities:
Apparel manufacturers are primarily engaged in the design,
cutting, and sewing of garments from fabric. Some manufacturers are
contractors or sub contractors, which generally manufacture apparel from
materials owned by other firms. Larger manufacturers often contract
production to many such contractors and subcontractors in the U.S. and
abroad. Some manufacturers are vertically integrated, producing the
textiles from which they make garments, or even operating retail outlets.
Apparel merchandisers generally design and market clothing, but
contract the actual production to manufacturers.
Buying agents locate, qualify and inspect foreign
suppliers/producers of garments, negotiate with suppliers/producers, and
often monitor production for quality control and compliance with other
standards. They may be used by U.S. companies that do not have a large
presence abroad, or in addition to a U.S. company's buying staff.
Retailers are primarily engaged in the distribution,
merchandising, and sale of garments to consumers. Apparel retailers
include department stores, mass merchandisers, specialty stores, national
chains, discount and off-price stores, outlets, and mail-order companies.
A relatively new development is the rise of electronic forms of retailing
such as interactive TV and on-line shopping services. Some retailers who
sell their own private labels go beyond their traditional role as
distributors and become directly involved in the design and sourcing of
garments from manufacturers and contractors.
C. Codes of Conduct in the U.S. Apparel Industry
In order to gather information on the extent and implementation of U.S.
garment importers' codes of conduct containing child labor provisions, the
Department of Labor conducted a voluntary survey of the largest U.S.
retailers and apparel manufacturers, based on their level of sales in 1995
as reported in publicly available documents.
- A questionnaire on import sourcing and child labor policies was sent
to 48 companies, representing U.S. apparel manufacturers, department
stores, mass retailers, specialty stores, and non-store direct marketers
(mail order and electronic home shopping).
- Forty-five companies responded to the questionnaire, three of whom
said that they regard all information provided as confidential. The
remaining 42 companies all indicated that they acquire foreign-produced
apparel, the majority as direct importers (i.e., purchasing apparel
directly from abroad for their own account), others as indirect importers
(i.e., purchasing apparel domestically from U.S. companies that have
imported the goods), or in both forms. Follow-up telephone interviews were
conducted with respondents to obtain additional information.
1. Existence and
Scope of Codes of Conduct
Thirty-six of the 42 companies indicated that they have adopted a policy
specifically prohibiting the use of child labor in the manufacture of goods
they import from abroad. These policies take different forms:
- special documents (typically referred to as "codes of conduct")
outlining their values and guidelines in a variety of areas, including
child labor. These documents are a means for companies to clearly and
publicly state the way in which they intend to do business to their
suppliers, customers, consumers and shareholders;
- letters stating their policies on child labor circulated to all
suppliers, contractors and/or buying agents;
- compliance certificates, which typically require suppliers, buying
agents, or contractors to certify in writing that they abide by the
company's stated standards prohibiting the employment of children;
- clauses in formal documents such as purchase orders or letters of
credit, which make compliance with the policy a contractual obligation for
- a combination of the above.
Corporate codes of conduct that address labor standards vary from company
to company with regard to the specific labor standards included. Some or all
of the following elements are found in various codes: (1) prohibitions on
child labor; (2) prohibitions on forced labor; (3) prohibitions on
discrimination based on race, religion, or ethnic origin; (4) requirements
to ensure the health and safety of the work place; (5) provisions on wages,
usually based on local laws regarding minimum wage or prevailing wage levels
in the local industry; (6) provisions regarding limits on working hours,
including forced overtime, in accordance with local laws; and (7) support
for freedom of association and the right to organize and bargain
U.S. corporate codes of conduct in the garment industry also differ with
respect to how the labor standards are defined. The standards used to define
child labor vary significantly from company to company. For example, a
company's policy statement may:
- state a minimum age for all workers who make their products
- refer to the national laws of the host country regarding the minimum
age of employment or compulsory schooling;
- refer to international standards (e.g., ILO Convention 138); or
- use some combination of the three.
In some cases, companies' policies prohibiting child labor in the
production of their goods do not contain any definition of child labor.
An important issue regarding implementation of corporate codes is their
transparency, or the extent to which foreign contractors and subcontractors,
workers, the public, NGOs and governments are aware of their existence and
meaning. Transparency reinforces the message of codes and leads to more
credible implementation. When transparency is lacking, interested parties
cannot benefit fully from a code of conduct.
- Most of the respondents with child-labor policies indicated that they
had distributed copies of their policies to all suppliers, but few stated
that they had communicated their existence to a wider audience or engaged
in educational efforts. Many respondents stated that they did not know
whether workers were aware of the existence of their codes.
- A small group of companies indicated that they have tried to ensure
that production workers in overseas facilities know about their code or
policy by specifically requiring that copies of such a statement be posted
in the foreign factories from which they purchase.
- Only a few respondents solicited input from international
organizations, labor unions, NGOs, or government agencies in developing
or implementing their codes of conduct.
Monitoring is critical to the success of a code of conduct; it also gives
the code credibility. Yet, most of the codes of the respondents do not
contain detailed provisions for monitoring and implementation, and many of
these companies do not have a reliable monitoring system in place.
Respondents indicated that they utilize a variety of means to monitor
that their codes of conduct or policies on child labor are respected by
- Some companies use a form of active monitoring, which involves site
visits and inspections, by company staff, buyer agents or other parties,
to verify that suppliers are actually implementing the importing company's
policy on child labor.
- Some use contractual monitoring, whereby they rely on the guarantees
made by suppliers, usually through contractual agreements or
certification, that they are respecting a company's policy and not using
any child labor in production. This may be seen as "self-certification" by
contractors or suppliers. Companies that use contractual monitoring in
some cases have no mechanism for ensuring compliance.
- Some respondents indicated that they use a combination of active and
Active monitoring may be done through regular checks, formal audits or
evaluations, or special visits by corporate staff. The frequency and
intensity of visits vary greatly from company to company. For example, some
companies may focus their site visits on their larger suppliers or suppliers
where there have been alleged problems, or may only monitor those facilities
from which they import directly or which manufacture their private-label
Contractual monitoring shifts at least part of the burden of
responsibility for ensuring compliance with codes of conduct onto the
foreign manufacturer, the supplier or the buying agent. Even when
monitoring is primarily contractual, there are instances in which the U.S.
corporation requires documentary proof of compliance or reserves the right
to carry out on-site inspections.
While technically not a monitoring activity, evaluation of prospective
con tractors with regard to labor standards is becoming an important aspect
of code implementation. Seventeen of the companies that responded to the
survey stated that they have a process in place to evaluate overseas
facilities before they establish a business relationship with them. Such
on-site evaluations or inspections have long been made primarily to verify
whether the facilities have the physical capacity to meet quality and
quantity specifications. Increasingly, the working conditions and employment
practices of prospective contractors are also being evaluated, screening out
companies that are violators or have the potential for being so in the
- Several of the companies that conduct such evaluations indicated that
compliance with their policies on working conditions is an important
factor in the decision to place a production program with a contractor.
These evaluations, according to many, enable them to screen out
contractors who do not com ply with applicable legal or company standards.
- A few respondents indicated that such pre-contract inspections had
enabled them to avoid doing business with a facility that appeared to
employ under -age children, but most reported that when facilities were
rejected, it is usually for other reasons.
Enforcement of codes of conduct refers to how U.S. companies respond to
violations of their codes of conduct. The vast majority of respondents
stated that they have never found any violation of the child labor
provisions of their codes; some companies attributed this to their efforts
to evaluate and carefully select suppliers before entering into contracts
with them, while others indicated that child labor violations of their codes
are less common than other types of violations, such as safety and health.
Most respondents stated that, faced with an allegation of violation of
their code of conduct, they would first investigate to confirm the use of
child labor and then impose enforcement measures. Enforcement policies range
from the more severe immediate termination of the business relationship to
more tempered responses, including demand for corrective action (e.g.,
dismissal of under-age workers), cancellation of specific orders, and
placement of the violating supplier on probation.
D. Implementation Experiences of Codes of Conduct in the U.S. Apparel
Department of Labor officials visited six countries where there is
extensive production of garments for the U.S. market the Dominican Republic,
El Salvador, Guatemala, Honduras, India, and the Philippines. The objective
of the visits was to learn about foreign suppliers' approaches to the
implementation of the established child labor policies of U.S. importers.
Interviews were held with as many relevant persons or organizations as
possible associated with the apparel industry, i.e., Labor Ministry
officials, manufacturers, plant managers, buyers, trade associations,
unions, workers, community activists, human rights groups, organizations
concerned with children's issues, and other NGOs. At the beginning of each
interview, Department of Labor officials indicated that the purpose of the
interview was to gather information for a public report, and any information
collected could be used for that purpose.
The central element of the field visits was the opportunity to discuss
matters related to the existence and implementation of codes of conduct with
managers and workers of plants producing apparel for the U.S. market.
Department of Labor officials visited 74 apparel-producing plants and 20
export processing zones and met with key representatives of the garment
industry and more specifically of the garment export industry in all six
countries. The results of interviews regarding the 70 plants determined to
be exporting to the U.S. market at the present time are reported in the
1. Child Labor in
the Apparel Industry
The consensus of government officials, industry representatives, unions
and NGOs interviewed by the Department of Labor in the Dominican Republic,
El Salvador, Guatemala, and Honduras is that child labor is not now
prevalent in their garment export industries. In the very few cases where
child labor was mentioned, the children were 14 or older. However, the use
of workers 15 to 17 is common and there may be extensive violations of local
laws limiting the hours for workers under 18.
There was some anecdotal information about the prior use of child labor
in the garment industry in Central America. Labor union representatives
stated that about two years ago, the garment export industry began to
dismiss young workers to avoid adverse publicity in importing countries.
Often plant managers no longer hire young workers (14-17 years of age) even
if they meet domestic labor law or company code of conduct requirements.
However, there are also some reports of fraudulent proof-of-age documents
being used by child workers to seek jobs in the garment industry. There
continue to be allegations in Guatemala of children working for small
subcontractors or in homework in the San Pedro de Sacatepequez area.
Meanwhile, it is clear that children continue to work for subcontractors
and in homework in the Philippines and India. They perform sewing, trimming,
embroidering and pleating tasks. It is also the case that children are not
prevalent in the larger factories in the Philippines, and that recently
plant managers in India have become more concerned about not using child
While most survey respondents indicated they have distributed their code
of conduct to all suppliers, many said they were not certain if workers knew
about their code. Field visits in six countries revealed that:
- Managers of two-thirds of the plants visited indicated that they were
aware of codes of conduct prohibiting the use of child labor, particularly
of the codes issued by their U.S. customers. However, not all of the
companies that indicated they were aware of codes of conduct had available
a copy of the code of conduct (or contractual provision) that they could
show and discuss with the visiting Department of Labor official.
- Formal training of plant managers and supervisors about the codes of
con duct was not common in the six countries visited. About 30 percent of
the facilities visited where managers indicated awareness about codes of
con duct stated that they had received some formal training regarding the
U.S. companies' code of conduct. However, more than half of these
facilities produced for just two companies. Also, it was evident that the
intensity of the training varied widely from company to company.
- Posting of a U.S. garment importer's code of conduct is not
commonplace in most of the countries visited. In all, 21 of the 70 plants
visited by the Department of Labor officials had posted a code of conduct
of a U.S. customer; 7 of such plants (out of 8 visited in that country)
were in El Salvador. The number of plants visited in each of the other
countries where codes of conduct were posted was: Dominican Republic, 2;
Honduras, 1; Guatemala, 2; India, 2; and the Philippines, 7.
- Although a significant number of suppliers knew about the U.S.
corporate codes of conduct, and codes were posted at 30 percent of the
plants visited, meetings with workers and their representatives in the six
countries suggested that relatively few workers are aware of the
existence of codes of conduct, and even fewer understand their
- Department of Labor officials found a mixed record regarding the
extent to which host governments, NGOs, and business organizations were
familiar with codes of conduct and their implications.
While most respondents monitor foreign suppliers for quality of product
and scheduling coordination, monitoring of child labor policies is far less
common. Field visits revealed that:
- All plants exporting garments to the U.S. that were visited confirmed
that they are subject to regular visits by their U.S. customers or their
agents to verify product quality and to coordinate production and delivery
schedules. About 90 percent of the companies visited stated that
monitors/inspectors verifying product quality generally also examined
"working conditions" in the plant, with emphasis on safety and health
issues (climate control, ventilation systems, fire escapes, etc.).
- Monitoring for compliance with provisions of the codes of conduct of
U.S. garment importers dealing with labor standards and child labor in
particular is less common. Foreign suppliers that are wholly owned by a
U.S. corporation, or contract directly with a U.S. corporation with a
presence abroad, seem to be subject to the most frequent and most thorough
monitoring of codes of conduct, including child labor and other labor
- A few U.S. corporations particularly manufacturers tended to have
structured monitoring of all aspects of their codes of conduct and
subjected their foreign subsidiaries to such disciplines.
- There was also evidence from the field visits of numerous instances of
contractual monitoring of codes of conduct. A reliance upon a form of
contractual monitoring is most prevalent in the case of U.S. retailers
which do not have a significant presence abroad. In these situations, the
burden of monitoring compliance with the U.S. importer's child labor
policies rests with the foreign agent, contractor or subcontractor,
typically through a certification process. The role of the U.S. importers
in monitoring these situations is minimal.
- Site visits confirmed that some U.S. importers screen foreign garment
con tractors prior to entering into a supply relationship.
Foreign plant managers said factories that have passed the screening
process and have become contractors of U.S. apparel importers may face a
range of corrective measures should they fall short in complying with codes
of conduct. Examples of corrective measures cited included changes to the
physical plant (improvement of bathrooms, eating facilities, lighting,
ventilation), monetary penalties, immediate dismissal of young workers, and
termination of contracts.
Foreign plant managers and other industry officials stated continued
access to the U.S. market is a very large incentive for overseas garment
producers to meet quality/timeliness requirements and comply with codes of
E. Conclusions and Recommendations
Based upon the information collected from the voluntary survey of 48 U.S.
apparel importers and site visits to six countries producing garments for
the U.S. market, the Department of Labor found that codes of conduct can be
a positive factor in solving the global child labor problem. Most of the
large U.S. apparel importers responding to the voluntary questionnaire have
adopted codes prohibiting child labor in garment production and some are
clearly committed to their implementation. This is a remarkable change in a
matter of just a few years.
Codes of conduct are not a panacea. Child labor remains a serious
problem, with hundreds of millions of working children around the world.
However, the presence of children in the garment export industry may be
reduced by the implementation of codes of conduct. It is also possible that
changes induced by codes of conduct could have positive spillover effects
for children more generally, e.g., a greater commitment of a foreign country
to compulsory education for children. However, this relationship requires
Finally, because codes of conduct seem to be tools used by large apparel
importers, there may remain smaller importers without codes of conduct still
willing to overlook the working conditions of the plants in countries from
where they purchase their garments. This question also deserves further
Consistent with the important efforts already undertaken by many U.S. apparel importers, the Department of Labor recommends that U.S. companies
consider whether some additional voluntary steps might be appropriate:
1. All actors in the apparel industry, including manufacturers,
retailers, buying agents and merchandisers, should consider the adoption of
a code of conduct.
If all elements of the apparel industry have a similar commitment to
eliminating child labor, this would have a reinforcing impact on the
efforts that the leaders in the industry have made. Trade associations
should consider whether they could increase their technical assistance to
help assure that the smaller companies in the industry can achieve this
2. All parties should consider whether there would be any additional
benefits to adopting more standardized codes of conduct.
There is a proliferation of codes of conduct. Some foreign companies and
producer associations are even drafting their own codes. The definition of
child labor differs from code to code, thereby creating some uncertainty for
business partners and workers as to what standard is applicable.
3. U.S. apparel importers should consider further measures to monitor
subcontractors and homeworkers.
Since most of the violations of labor standards, including child labor,
occur in small subcontracting facilities or homework, U.S. apparel importers
should consider further measures to monitor subcontractors more closely.
4. U.S. garment importers particularly retailers should consider
taking a more active role in the monitoring/implementation of their codes of
The implementation of codes of conduct is a complex matter, and a
relatively recent endeavor. Implementation seems best and most credible when
U.S. companies get directly involved in the monitoring. There is little
incentive for foreign companies to comply with a U.S. importer's code of
conduct if there is no verification of actual behavior.
5. All parties, particularly workers, should be adequately informed
about codes of conduct so that the codes can fully serve their purpose.
In the supplying countries, managers of enterprises are generally
familiar with the codes of their clients. Workers, however, are seldom aware
of codes of conduct of the U.S. corporations for which they make garments.
NGOs and foreign governments are also not fully informed about codes of