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Brazil, China, India, Indonesia and Philippines expose companies to high levels of supply chain risk

Maplecroft's Child Labour Index 2012

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An annual study by risk analysis firm Maplecroft has revealed that 76 countries now pose ‘extreme’ child labour complicity risks for companies operating worldwide, due to worsening global security and the economic downturn. This constitutes an increase of more than 10% from last year’s total of 68 ‘extreme risk’ countries.

The Child Labour Index 2012 evaluates the frequency and severity of reported child labour incidents in 197 countries. Worryingly, nearly 40% of all countries have been classified as ‘extreme risk’ in the index, with conflict torn and authoritarian states topping the ranking. Myanmar, North Korea, Somalia, Sudan are ranked joint first, while DR Congo (5), Zimbabwe (6), Afghanistan (7), Burundi (8), Pakistan (9) and Ethiopia (10) round off the worst performers.

The Child Labour Index has been developed by Maplecroft to evaluate the extent of country-level child labour practices and the performance of governments in preventing child labour and ensuring the accountability of perpetrators. By doing so, the index enables companies to identify risks of children being employed within their supply chains in violation of the standards on minimum age of employment. The index also analyses the risk of the involvement of children in work, the conditions of which could have a negative impact on the health, safety and wellbeing of child labourers.

Maplecroft suggests that the global increase in the use of child labour is mainly caused by a deteriorating human security situation worldwide. This has resulted in increased numbers of internally displaced children and refugees who, together with children from minority communities, continue to be the groups at most risk of economic exploitation. Sub-Saharan Africa is identified as the region posing the most risk in this respect but most of the growth economies have their own unique conditions in respect of child labour and its remediation.

Difficult and uncertain economic conditions in many countries of the world, as a result of the continuing effect of the 2008 financial crisis, have also led to many more children working to supplement family incomes.

According to the International Labour Organisation, there are over 215 million children working across the world and of these 115 million are thought to be involved in hazardous work. The number of those between the ages of 5-14 and engaged in child labour is estimated by UNICEF at around 150 million.

Child Labour Index 2012

Maplecroft's Child Labour Index 2012
Legend
Extreme risk
High risk
Medium risk
Low risk
No Data
Rank Country Rating
1 Myanmar Extreme
2 North Korea Extreme
3 Somalia Extreme
4 Sudan Extreme
5 DR Congo Extreme
Rank Country Rating
6 Zimbabwe Extreme
7 Afghanistan Extreme
8 Burundi Extreme
9 Pakistan Extreme
10 Ethiopia Extreme

Emerging economies pose ‘extreme’ supply chain risks to companies

Maplecroft highlights the supply chains of companies as being particularly exposed to the risk of child labour in some of the largest growth economies, including the Philippines (25), India (27), China (36), Viet Nam (37) Indonesia (46) and Brazil (54), all of which are classified as ‘extreme risk.’

“Business can be directly implicated or can be deemed complicit in violations of the prohibition of child labour if children are found to be working within their operations or are used by their suppliers in circumvention of relevant ILO standards,” states Maplecroft Human Rights Analyst, Chris Kip. “Companies should ensure stringent human rights due diligence within their supply chain is undertaken to reduce the risk of damaged reputations, litigation, investor alienation and consumer backlash.”

According to Maplecroft, the emerging and growth economies pose distinct risks to companies because they form critical links within multinational supply chains. In India, for instance, the majority of child labour in the country occurs in agriculture and the informal economy, but evidence shows that children are found working in factories, gemstone cutting, quarrying, hybrid seed production, brick kilns, rice mills, garment assembly, silk thread production and textile embroidery.

Definitive child labour figures for India do not exist, but according to a 2009 UNICEF report, more than 200,000 children were working in hybrid seed production alone. The US Department of State estimates that there are 10 million to 11.5 million child labourers in neighbouring Pakistan.

“Child labour requires a responsible solution. It is not just a question of eliminating children from the workforce, but checking on the impacts of doing so, as children need help to get back into education, if schools exist, and families may depend on the income from child labour, pushing children into precarious working conditions. Details of a responsible approach to child labour can be found within the Maplecroft / UNGC project entitled “,” said Professor Alyson Warhurst, CEO of Maplecroft.

The Child Labour Index forms part of Maplecroft’s Human Rights Risk Atlas 2012. The Atlas analyses 23 types of human rights violations within the categories of human security, labour rights, civil and political rights, and access to remedy. It has been developed by Maplecroft to enable organisations to identify and monitor risks in their operations, supply chains and investments.

A WebEx on the will be held on 18th Jan 3pm GMT, 10am EST. Professor Alyson Warhurst, Founding CEO of Maplecroft and Honorary Professor at Warwick Business School will present the HRRA 2012 findings, analysis, methodology and outlook for business and investors in the growth economies. Register at – please note that places are limited.

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