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Curbing Child Labor: Rugmark Label on the Mat Arvind Panagariya An important battle which India and many other developing countries will have to fight at the first World Trade Organization (WTO) ministerial at Singapore in December 1996 and its aftermath is that against the introduction of a social clause in the WTO charter. Though the danger is not imminent, if the United States and European Union (EU) eventually succeed in their demands for such a clause, WTO members will acquire the right to impose trade sanctions on other members judged to have low labor standards in certain areas. The principal labor practice under attack by the United States and EU is child labor. With an estimated 40 million children participating in the work force—some sources place the number at as much as 115 million—, the potential damage to India's exports from such a clause could be very substantial. Indefensible
Case
As the leading international economist
Jagdish Bhagwati has argued, the case for a social clause in the WTO
charter is indefensible. His
arguments, detailed in the 1996 Presbisch lecture, leave little doubt that
the demands for the social clause are yet another manifestation of growing
protectionism in the United States and EU.
While rejecting the case for a social clause,
however, many developing country critics of child labor have suggested
that alternative strategies be adopted to combat the practice.
Among these is the use of “social labeling” which effectively
gives the consumers the option to refuse to buy goods produced by child
labor.
Thus, in 1994, the Indo-German Export
Promotion Program, the South Asian Coalition on Child Servitude, which
claims to be a conglomeration of 200 NGOs, UNICEF, and a few carpet
exporters came together to form the Rugmark Foundation.
The Foundation, in turn, took it upon itself to certify through the
Rugmark logo that the carpet in question is "not made by child
labor." Under current
procedures, carpet exporters must apply for the logo. If, upon inspection,
the Foundation finds that the exporter does not employ child labor, it
gives the latter the logo.
But even this strategy has serious problems:
it could well be ineffective, even counter-productive.
Let me explain why. First, the practice of child labor is widespread:
children are employed in virtually all industries in Inda.
Zeroing in on a single industry such as carpets can simply push
children from that industriy into others like textiles and clothing,
household services or construction with virtually no impact on the total
number of child workers. Dual
Markets Second, the effect of introducing Rugmark on the carpet industry itself could be ambiguous. The separation of carpets by the label need not move children out of the carpet industry in significant numbers. It could simply create dual markets: a low-price market for carpets made by children and a high-price market for carpets made by adults. Thus, the production and marketing of carpets made with child labor could continue, only the wages paid to children would decline due to the decrease in the price of carpets made by them. Third, if "social labeling" in the carpet industry or on a wider scale is successful in moving children out of employment, it can very well lead to adverse social effects. On the one hand, it could lead to increased juvenile delinquency and, on the other, to destitution and prostitution among children. Lest this seems pure speculation, consider a recent experience of Bangladesh. The proposed Harkin Bill in the US Congress against imports from countries using child labour and threats by the US child labour coalition, an NGO, to campaign against garments from Bangladesh led to fears in Bangladesh that it might soon lose access to the lucrative US garments market. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) responded on an emergency basis and induced garment factories to lay off thousands of young workers. The result was more, not less. distress for children. With no place to go—NICEF later found—some of the children ended up becoming prostitutes and welders. The BGMEA had to reverse its decision. Later, a tripartite agreement was worked out among BGMEA, ILO and UNICEF. Taking recourse to constructive ambiguity, the agreement stipulated that child labour will be phased out of the garment industry “an early date" but no children will be retrenched without being rehabilitated. Fourth.
Entrusting an agency such as the Rugmark Foundation, whose resources are
limited, with the authority to certify whether or not an exporter uses
child labor is likely to result in an abuse of the authority.
The Foundation was created in October 1994 with five full-time
inspectors and the plan was to raise the number of inspectors to eight by
the end of April 1995. Given that the carpet industry is mostly, rural in
character and is spread over a vast area of 100,000 square miles, it is
simply not possible for a handful of inspectors to verify the absence of
child labour even once, let alone repeatedly, in a significant proportion
of the industry. The inability to monitor could result in charges of
fraud. This could then hurt
even “good" firms, which could become unwitting victims of the problem:
Rugmark will survive but not the firms. Not
a Change Fifth,
the existence .of Rugmark introduces an inevitable bias in favour
of large factories. Regular inspections required for effective enforcement
are feasible only when production is concentrated in large establishments.
It is unlikely that tiny operations located in remote villages will be
able to obtain the Rugmark logo even if they never used child labour.
Thus, the essentially rural, cottage-industry organisation of carpet
manufacturing will have to give way to large factories. This is not
necessarily a change for the better.
Finally, labeling such as "no child labour" is prejudicial,
given the indiscriminate agitation
against
it, which does not distinguish in the political domain between exploitative
and other uses of child labour. How are labels designed and by whom
does matter. "Eco-labeling" aimed at distinguishing
"environment-friendly” products from other products has been a
contentious issue. Even the
involvement of the International Standards Organisation (ISO) in
developing guidelines for eco-labeling has been a matter of debate in the
WTO Committee on Trade and Environment. These arguments lead to the conclusion that though developing countries share the developed countries' goal of ending child labor, there are few sensible paths to achieve it in a short period of time. In the ultimate, the main vehicles for achieving the goal are economic growth and expansion of primary and secondary education. The former will raise adult incomes and eliminate the families’ dependence on child labour for survival. The latter will offer a natural alternative to children as they are moved out of the labor force. Times
of India, November 14, 1996 |
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