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Use of Child or Forced Labour-Trade Implications
Tas Luttrell
Foreign Affairs, Defence and Trade Group
The exploitation of child labour and forced labour have emerged as serious
international issues in recent years. Their importance was indicated by
the United States' attempt to include a "social clause" in the
final Uruguay Round agreement to penalise countries failing to uphold
internationally accepted labour conditions. No consensus was achieved
on that occasion because many of the developing countries saw the proposal
as the thin edge of a protectionist wedge. In February 1996, a Tripartite
Working Party Report to the Australian Government on Labour Standards
in the Asia-Pacific Region, noted rising concern in Australia and pressure
for elimination of these practices.
The US and the European Union in particular wish to eliminate the use
of child and forced labour as soon as possible, if necessary by the use
of sanctions. Developing nations see these practices quite differently;
some see them as internal matters, others as economically essential or,
simply, not issues for discussion in the trade arena. They refer to reports
of "sweat shops" in countries like the United States (and Australia)
and suggest that the developed countries put their own houses in order
first.
Australia's position is somewhat ambivalent - while eager to see the
abolition of labour abuses, the Australian Government prefers to deal
with such issues through the International Labour Organisation (ILO) rather
than the World Trade Organisation. The ILO, however, cannot enforce compliance
with agreed standards or apply sanctions.
One point that has emerged clearly from international discussions, is
the need to differentiate between employment of children
and their exploitation. In many countries, family-run farms
or small-scale manufacturing businesses need the assistance of their children
and often do not place severe burdens on them. Attempts at blanket elimination
of child labour could bring unnecessary hardship and would, in any case,
be unrealistic. Even where undesirable conditions do exist, policies
must be carefully thought through so that the children are not further
disadvantaged. For example, Australia is unlikely to ratify the ILO 138
Minimum Age Convention which does not allow for children under 15 being
permitted to work on a paper round or in a fast food outlet in their spare
time or school holidays. These activities are common in Australia and
are controlled by legislation.
The Problem
The first problem concerns the use of young children of school age in
the workforce before they complete basic education, or where they are
deprived of freedom or subjected to working conditions detrimental to
their health. The second is the use of prison or forced labour.
A US Government report "By The Sweat and Toil of Children"
found available statistics on child labour to be fragmentary and suspect.
The report quoted an ILO estimate of 100-200 million child workers world-wide.
More than 95% of these are in developing countries; over 50% of them in
Asia. The most common occupations are family-based agriculture, services
(such as domestic servants, restaurants or street vending), prostitution
or small-scale manufacturing. In most cases these occupations are not
regulated by national laws.
The most important factors leading to abuse of labour standards established
by the ILO are social and economic factors (such as traditional customs,
famine and poverty); faulty implementation of international standards;
poor enforcement of existing laws; governmental indifference; corruption
and direct government action (e.g. forced prison labour).
Trade Effects
Evidence presented in the US Government report mentioned above, indicates
that only a small percentage of children are employed in export industries.
The statistics, however, cannot support a detailed analysis. Complex sub-contracting
and relabelling arrangements are used to disguise the use of child labour
behind a screen of middlemen. In some cases, parts are manufactured in
one country and then assembled in another before final shipment, so as
to disguise their real source.
In some countries, the demand for employment of children or forced labour
may have been increased by Government encouragement of exports of labour
intensive, low skill products. Similarly, the competitive nature of international
markets provides a powerful incentive for the employment of labour at
minimal wage rates. Humanitarian aspects aside, such production incorporates
an unfair trading advantage, similar to dumping.
There are negative long-term effects for producing countries also but
these tend to be ignored for the short-term gains. It is widely recognised
that the key to development is the availability of an educated workforce,
able to learn new skills and to undertake processes which add value to
the final product.
An economy depriving children of their education and relying on the
employment of unskilled children and forced labourers loses the opportunity
to develop the potential skills of its citizens. This has serious implications
for future development prospects.
Proposed Solutions
One proposal is for the application of sanctions, through the WTO, on
the trade of any country using exploited child labour or forced labour.
Another suggests that funding from International Financial Institutions
be made contingent on the application of acceptable labour standards.
Each of these proposals faces the problem of identifying offending products,
a task made doubly difficult by the techniques used by producers seeking
to avoid detection.
There is general agreement that the long-term solution lies in sustained
development and growth in the countries concerned. Only with sustained
growth will it be possible to make real progress in eliminating the causes
of child and forced labour: the poverty that sustains the bonded labour
system, the competitive need to employ unskilled workers at minimal rates
of pay and the economic necessities which deny young children their basic
education.
This consensus leaves another group to argue that the most effective
methods lie in technical assistance and development co-operation programs.
These programs can be focussed on the key sectors-poverty; lack of educational
and health facilities; and inadequate infrastructure. Such programs have
the additional benefit of not threatening the recipient country's sovereignty;
avoiding one of the major weaknesses in the use of sanctions.
References
Report on Labour Standards in the Asia-Pacific Region by the
Tripartite Working Party on Labour Standards, AGPS February 1996.
By the Sweat and Toil of Children, Bureau of International Labor
Affairs, US Department of Labor, vol. 1 1994 & vol. 2 1995.
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