Child labour can only be eliminated by greater accountability in supply chains

The World Day Against Child Labour campaign says that, “it’s time to inspire legislative and practical actions to eliminate child labour for good.” 

According to the latest global estimates, 152 million children are in child labour, including in global supply chains. A recent report compiled by the ILO, OECD, IOM and UNICEF recognises that the unique complexity of global supply chains can hide abuses. 

Supply chain liability would make a significant impact on the prevalence of child labour and take a step forward to achieving the campaign’s objective and greater accountability in supply chain would greatly assist with the elimination of child labour and benefit millions of children who are currently being seriously harmed from the dangerous and exploitative working conditions that they are forced to work in when making many household products and commodities that we use on a daily basis.   

What is supply chain liability?

Supply chain liability is where a company is held liable for harm that is caused by business partners in their supply chain. 

Liability of a company for harms in the supply chain fits a trend of previous tort cases recognising the possibility of parent company liability i.e., where a parent company is liable for the actions of its subsidiary in another jurisdiction (Chandler v Cape Plc). This is a type of supply chain liability but as companies have sought to create more distance between the end product and the manufacturing of that product by outsourcing to third parties, it has been easier to avoid liability in the traditional parent company subsidiary context.

The 2019 UK Supreme Court decision in  Vedanta v Lungowe expanded the situations where a parent company may owe a duty of care to those impacted by the operations of their subsidiary but also recognised that this may not apply only to a parent/subsidiary relationship and arguably the same principles could be applied to a non-parent business partner such as in respect of a company’s supply chain. These principles were further affirmed by the UK Supreme Court in 2021 in Okpabi v Shell. 

Increased supply chain liability fits a recent trend in which international organisations and institutions have been recognising the responsibility of companies to ensure that their supply chains are free from abuse including in particular child labour. For example, the European Parliament on 10 March 2021 adopted a draft directive on Corporate Due Diligence and Corporate Accountability which would require companies to carry out effective due diligence throughout their supply chains in relation to human rights issues including child labour (for more information on the draft directive see our previous blog here).

There have been calls to prevent products from entering markets which stem from child labour. Countries like the US have tools at their disposal to stop those products from landing in their market.

In January 2021, the US announced that it would use its Tariff Act to block imports of all cotton and tomato products from the Xinjiang region of China over forced labour concerns. The European Parliament is now requesting a similar instrument to allow import bans on products relating to severe human rights violations, such as child labour.

The recent developments in respect of parent company liability have paved the way for claims to be brought against companies who purchase products produced by children working in illegal and dangerous conditions. Some examples of recent on-going cases are: 

• A claim brought by Leigh Day on behalf of thousands of Malawian tobacco farmers and their families (including children) against British American Tobacco and Imperial brands. The claims seek to hold the companies liable in respect of, inter alia, child labour and forced labour in their supply chains. Children as young as three work alongside their parents in dangerous and illegal conditions. Children work illegally long hours from 6am to midnight seven days a week. Despite the huge amount of work output, farmers receive unjustly low wages, and child labourers receive no payment at all. The claims are brought in negligence, conversion and unjust enrichment. 
• Litigation has been brought in the US against chocolate companies, including a class action lawsuit on behalf of child labourers against Nestle and Cargill. The lawsuit argues that the companies substantially assisted plantation owners in Cote D’Ivoire who used forced child labour performing hazardous work. The claimants are of Malian origin and describe being beaten, whipped and forced to work 14-hour days, unable to leave, and then not paid at the end of the season. The claim is brought under US human rights legislation as well as common law claims of negligent supervision, intentional infliction of emotional distress and unjust enrichment.
• Another US claim seeks to hold technology companies including Apple, Google (through its parent company Alphabet, Inc), Dell, Microsoft and Tesla responsible for the deaths and severe injuries of children, including claims for crushed body parts requiring amputation. The defendants use cobalt sourced from the mines to manufacture the rechargeable lithium-ion battery used in smart phones, laptops, tablets and other electronic devices. The claims rely on US anti-trafficking and damages are also sought for forced labour and unjust enrichment.

How would supply chain liability affect child labour?

Although there are international due diligence instruments that can help companies fulfil their responsibility of having child labour-free supply chains, as the European Parliament recently made clear, the voluntary nature of these instruments hampers their effectiveness and the effects of such have proved limited, with a restricted number of companies voluntarily implementing human rights due diligence.

Where voluntary commitments have failed to protect children from illegal labour, the recognition of supply chain liability can provide the necessary incentive for companies to ensure that no child labour is occurring within their supply chains. 

As well as penalising those companies and providing access to justice for children being harmed, the resulting publicity that may be generated from a case may have detrimental financial and operational consequences. For example, Standard Life Aberdeen, the United Kingdom’s largest asset manager, recently disposed of almost all of its stock in the fashion company Boohoo following allegations of poor working conditions in the company’s supply chain.

Greater access to justice may provide a route to compensation for children in child labour enabling them to leave treacherous jobs and return to school to provide them with greater employment prospects thereby interrupting the child labour cycle. 

Compensation may also include restorative justice measure such as funds to establish programmes aimed at the educative development of children and medical support for children who have suffered physical and psychological harm during the course of working in hazardous and illegal conditions. These measures would hopefully assist with removing child labourer claimants from child labour. 

Clearly there is a desire in many nations to address the issue of child labour and hopefully that is not an empty hope as to achieve this it requires much stronger action by countries implementing legislation that allows for greater accountability. Where that does not happen, it will be for the courts and principles of private law to continue to lead the way.