UNICEF USA Report: Child-Centered Solutions to Address Child Labor in the U.S.

The most effective compliance systems consider the stakeholders and connections across an organization’s supply chain. So, the initial — and potentially most critical — step in the compliance framework is to identify and map those relationships. Your stakeholders, including corporate executives, recruiters, supervisors, subcontractors, communities, parents/ caregivers and, of course, children themselves, should help shape and implement elements of the framework.

Engaging diverse perspectives can help you identify risks, establish controls and take corrective action. Certain stakeholders — including employees, civil society organizations and industry associations — may have perspectives on related compliance initiatives in other sectors and/or geographies, offering insights into how to improve implementation of your organization’s compliance policies and practices.

Ongoing stakeholder communication allows you to provide timely updates on risk-factor and relationship changes and to monitor any shifts in stakeholder expectations.² Consistently engaging all partners like this reinforces accountability, maintains trust and captures pertinent feedback.³

Frequent engagement also helps organizations “refresh” their compliance approach as needed. Your organization may find it useful to create advisory councils to strengthen stakeholder engagement and input.⁴

Key Resources

• UNICEF and Unite for Children’s Engaging Stakeholders on Children’s Rights: A Tool for Companies
• UNICEF: Child Labour and Responsible Business Conduct: A guidance note for action

Preventing child labor in the corporate supply chain requires clear standards and expectations for compliance, supported by a framework that lays out responsible corporate officials and decision-making and escalation processes.

Although potentially helpful, organizations do not necessarily have to develop a standalone child rights policy. Most companies can include a statement of commitment to promoting all human rights — including children’s rights — in a more general human rights policy, as well as existing policies and codes of conduct.⁵ When material, call out specific policy elements and code-of-conduct provisions that address specific child rights impacts.

By integrating children’s rights into corporate governance, your organization can:

• Embed children’s rights considerations into lines of business.
• Ensure that children are expressly considered in a broader human rights program.
• Inform risk-mapping and mitigation processes.
• Alert downstream suppliers of necessary measures to protect children from potential risks.
• Design appropriate remedies to address harms.

Key Resources

• ILAB Comply Chain: Develop a Code of Conduct
• UNICEF and Save the Children: Children’s Rights in Policies and Codes of Conduct
• The Centre and CORE: Child labor in the US: A Call for Corporate Responsibility
• Fair Labor Association: Guidance on preventing and addressing child labor in supply chains

Risk and impact assessments at every level of the supply chain are critical to preventing, or at least mitigating, harm to children. To ensure respect for the human rights of your employees, supply chain partners and communities, you must evaluate a broad range of processes, information, agreements and relationships, including:

• Reviewing internal processes
• Gathering salient information
• Analyzing agreements and vendor practices
• Soliciting worker feedback through various channels, such as interviews, surveys and – critically – on-site discussions

The specific contexts in which your business operates — industries, geographies and markets, among others — must also be evaluated for heightened risk. Organizations may also supplement their findings with data available from external reporting by watchdog groups, the media or governments, among others.

Comprehensive risk assessment depends upon the detailed stakeholder mapping and a nuanced review of the actors involved at each step to address risks and tailor compliance practices, if necessary.⁶ For example, corporations often know more about their upstream suppliers than about their vendors and subcontractors, who require particularized compliance training, monitoring, reporting and resourcing.

Organizations in cyclical industries may need to dedicate extra resources to child labor compliance during peak seasons when age verification processes may be overlooked, inadvertently or deliberately. An influx of unaccompanied migrant children into a worksite community may require surge resourcing to ensure a supplier or partner has the bandwidth to comply with your program.⁷

Often well-intentioned companies engaged in a tiered, risk-based approach to compliance overlook or exclude markets with lower child labor risks or more effective regulatory enforcement, like in the U.S. Multinational corporations may focus so heavily on their foreign operations risks that they ignore or fail to scrutinize those presented by their domestic or U.S. operations. Ignoring the U.S. market creates a significant compliance gap that likely has contributed to the recent spike in child labor abuses here.⁸ A particularized assessment of U.S.-based activities and operational risks is critical to developing an effective child labor compliance program.

Key Resources

• UNICEF (in partnership with LEGO Group): Child Safeguarding Toolkit for Business
• UNICEF: Children Are Everyone's Business: Workbook 2.0
• ILAB Comply Chain: Assess Risks and Impacts
• UNICEF: Child Labour and Responsible Business Conduct: A guidance note for action
• Responsible Sourcing Tool
• UNICEF and Danish Institute for Human Rights: Children’s Rights in Impact Assessments Tool
• Verité Training: Responding to Child Labor and Forced Labor in U.S. Manufacturing
• ILO Supplier Guidance on Preventing, Identifying and Addressing Child Labour
• Consumer Goods Forum: The Converged Human Rights & Environmental Due Diligence (HREDD) Assessment Tool and Guidance Manual
• BSR: Managing migrant labor human rights risks in US food value chains

Child rights should be prioritized in creating and assessing compliance policies, especially at supply chain points at which there are risks of engaging underage children in hazardous work. From recruiting to day-to-day oversight and monitoring, an organization’s policies should articulate how it expects suppliers to treat, and protect, children in their employ.

Clear policies promote widespread compliance

Policies should be simple and clear, delineating legal and organizational age requirements, hours and task restrictions, and articulating the accountability measures for both internal teams and supply chain partners.⁹

These policies include, but are not limited to:

• Codes of conduct
• Employee handbooks
• Age verification procedures
• Training requirements
• Grievance mechanisms
• Investigative processes

Each should be accessible to employees at all levels and consider any unique needs within those populations (e.g., translation of materials into stakeholders’ primary language, verbal communication for illiterate populations, accommodations for those with disabilities).

Published policies inform all stakeholders of child rights commitment

Organizations should consider publishing their policies to guide third parties who observe or hear about child labor violations in the supply chain.

Making policies publicly available also informs prospective employees of the organization’s commitment to protecting children in the workplace. To the extent possible, subcontractors should be required, pursuant to their contract, to adhere to an organization’s child labor compliance policies.

Tailored procedures and training drive greater compliance

Companies should provide tailored training to supply chain stakeholders that highlights the greatest risks and emphasizes the critical compliance program elements.¹⁰ The U.S. Department of Labor advises:

[H]igh-quality training should be targeted to different stakeholders, including those beyond the first tier, including: (1) company employees; (2) vendors or agents, if applicable; (3) suppliers at various tiers of a supply chain; (4) labor brokers, recruiters, and employment agencies, if applicable; (5) workers and trade unions; and (6) communities and civil society groups.¹¹

The Department of Labor indicates that the following topics should be covered in all stakeholder trainings:

• The standards included in the company’s code of conduct.
• A comprehensive overview of the company’s social compliance system, showing all components and how they fit together, to help everyone understand their part in the system.
• Company expectations for each component of the system, who is responsible for which components, and how to hold them accountable.
• What is involved in an audit, and how audit data are independently verified.
• The company’s remediation policies and procedures.
• Workplace values, including mutual respect and honesty.
• The company’s public reporting process, including timeline and methodology.
• Opportunities for input, including grievance mechanisms.¹²

Key Resources

• ILAB Comply Chain: Develop a Code of Conduct
• ILAB Comply Chain: Communicate and Train Across a Supply Chain
• UNICEF (in partnership with LEGO Group): Child Safeguarding Toolkit for Business
• UNICEF: Children Are Everyone's Business: Workbook 2.0
• UNICEF and Save the Children: Children’s Rights in Policies and Codes of Conduct
• Responsible Sourcing Tool
• UNICEF and Danish Institute for Human Rights: Children’s Rights in Impact Assessments Tool
• ILO Supplier Guidance on Preventing, Identifying and Addressing Child Labour
• UNICEF: Child Labour and Responsible Business Conduct: A guidance note for action
• Fair and Ethical Recruitment Agencies – Toolkit
• Age Verification for Working Children
• Verité Training: Responding to Child Labor and Forced Labor in U.S. Manufacturing
• American Association of AgLabor Providers (AAALP): Four-part training

To eliminate pernicious child labor practices from the corporate supply chain, companies must monitor compliance with organizational policies and applicable laws and address any areas of noncompliance to mitigate risk.¹³

Organizations should take a holistic approach to tracking compliance by gathering information from a variety of sources. An accessible grievance and reporting mechanism, like an anonymous hotline, for example, encourages internal stakeholders to report potential compliance violations, investigate complaints and salient information to identify compliance gaps and assess the scope of the violations.

Regular and ad hoc employee surveys, quizzes and certifications help ensure thorough compliance tracking. Observing worksites and engaging with workers, management, recruiters and others can reveal how the compliance system is functioning and highlight any areas for improvement.¹⁴

Qualitative data are critical to assessing your compliance program. Organizations are also increasingly relying on integrating quantitative metrics and key performance indicators (KPIs) into management systems for tracking. KPIs may include the number of:

• Reported violations
• Confirmed violations
• Site visits
• Stakeholder interviews

Finally, organizations often engage in regular and systematic key stakeholder audits along the supply chain. Audits often reveal potential and actual violations and apprise management of employees’ and subcontractors’ policy comprehension and compliance. Analyzing audit results over time may reveal patterns that inform future policy development and risk assessments.¹⁵

Key Resources

• ILAB Comply Chain: Monitor Compliance
• UNICEF (in partnership with LEGO Group): Child Safeguarding Toolkit for Business
• Responsible Sourcing Tool

Ensuring accountability for compliance violations typically involves three elements:

1. Clear grievance mechanisms through which concerns may be aired, escalated and triaged
2. Effective remediation of any harms
3. Transparency regarding complaints and how they have been addressed

1. Grievance mechanisms

Establish a clear reporting process that is accessible to everyone within the supply chain. Ideally, stakeholders outside the organization or supply chain would also have access to the reporting mechanism. A child labor violation reporting mechanism that is predictable and consistent will establish its legitimacy and encourage reporters to participate.¹⁶

Eliminate barriers, such as language and literacy, that might preclude certain stakeholders, including children, from reporting.¹⁷ Given the vulnerable populations most affected by child labor practices, organizations must establish measures ensuring stakeholders can report child labor concerns without fear of retaliation or adverse consequences.¹⁸

2. Remediation

Reporting should lead to harm remediation and new measures to prevent recurring abuses, from policies and processes to gathering pertinent information and identifying potential violations.¹⁹

In an ideal scenario, children, the most obvious source of information about abuses, could consent to speak with investigators.²⁰ Because of children’s vulnerability and potential for revictimization, investigators must be trained in child safeguarding principles when interviewing or otherwise interacting with children.²¹ The specific remediation that has been taken to cure abusive practices should be explained to the affected children and/or their parents or guardians.²²

A thorough investigation will highlight the exact risks and circumstances that harmed children to help prevent similar violations. The nature of the violations²³ and the affected children’s circumstances will determine the most effective remediation for those children.²⁴ Per UN Guiding Principle 25, Access to Remedy, options include:

• Apologies
• Restitution
• Rehabilitation
• Financial or non-financial compensation
• Punitive sanctions (whether criminal or administrative, such as fines)
• Injunctions or guarantees by the organization that the abusive practices will stop

Remedial procedures should be impartial, free from corruption and political or other pressures, and crafted with the community in mind, where appropriate.

3. Transparency

While it may seem counterintuitive, public reporting of child labor abuses can increase trust in organizations and with consumers when disclosed with details about the company’s actions to remediate abuses, its code of conduct and its approach to investigating violations and preventing recurrence.²⁵ Sharing such information demonstrates an organizational commitment to transparency on children’s rights.²⁶

Each element above should reflect UNGP 31, Effectiveness Criteria, which provides a benchmark to design, assess and revise nonjudicial mechanisms. Pursuant to UNGP 31, any nonjudicial grievance mechanism to address child labor in the domestic supply chain must be: legitimate, accessible, predictable, equitable, transparent, rights-compatible and a source of continuous learning. Operational-level mechanisms should be based on engagement and dialogue with stakeholders.

Key Resources

• ILAB Comply Chain: Report Performance and Engagement
• UNICEF: Children Are Everyone's Business: Workbook 2.0
• UNICEF and Unite for Children: Children’s Rights in Sustainability Reporting: A guide for incorporating children’s rights into GRI-based reporting
• UNGP 31, Effectiveness Criteria
• Impactt: Operational procedures for the remediation of child labor in industrial contexts (CLOP)

Engaging Stakeholders

Stakeholder engagement must be an ongoing activity across every element of the proposed compliance framework. Stakeholders include employees and employee organizations, suppliers and other vendors, surrounding communities and civil society organizations, NGOs and INGOs, shareholders and investors, and, of course, children themselves.

While there are several well-regarded and successful models for stakeholder engagement, none applies specifically to the U.S. supply chain. For example, the ILO’s Child Labor Platform (CLP), a business-led forum, supports buyers, factory owners and suppliers with comprehensive child labor-focused compliance policies and practices globally, including with respect to stakeholder engagement. The forum also provides tools for assessing risks, measuring impact and facilitating dialogue with governments, employers’ and workers’ organizations and others.

Maintaining Independent Oversight

Internal compliance tracking, conducted in tandem with third-party verification, ensures accountability and builds trust with consumers and partners.²⁷ Regular independent reviews can assess the overall compliance system and provide unbiased feedback about policy and practice effectiveness and areas for improvement.²⁸

In assessing the effectiveness of independent oversight, regulators may ask:

• Whether any members of the board of directors have compliance expertise
• If the board and/or its external auditors have held executive sessions with corporate personnel responsible for the compliance and control functions
• What types of information the board and external auditors have reviewed in exercising their oversight responsibilities²⁹

Promoting Good Governance

Corporate governance comprises the system of rules, practices and processes by which a company makes decisions and exercises authority. It involves relationships among stakeholders, including shareholders, donors, management, employees, customers, suppliers and the community. Strong corporate governance reflects a commitment to legal compliance and ethical practices, including prohibitions on hazardous child labor.

A sound corporate governance structure:

• Provides a framework for effective decision-making and strategic planning
• Establishes accountability and transparency
• Builds trust among employees, management, customers and other stakeholders
• Mitigates legal, financial and reputational risks

Good governance is critical to building a culture rooted in ethics and compliance.

Recent studies promote child-centric governance models for businesses, particularly when addressing issues that involve or affect children. Child-focused models actively consider children’s needs, rights and agency through:

• Holistic Child Development: Child-centered governance recognizes that children are active participants in their own development. Child-centric governance models emphasize holistic growth that encompasses physical, cognitive, emotional and social aspects of a child’s well-being.
• Participation and Agency: Recognizing that children possess unique insights and perspectives, child-centered strategies involve children in decision-making.
• Rights-Based Framework: Child-centered governance aligns with the principles of the UN Convention on the Rights of the Child, which recognizes that children possess fundamental rights, including the right to education, health and protection.
• Inclusive Design: Child-centered governance promotes the creation of products and services that accommodate children’s diverse abilities, backgrounds and preferences.
• Collaboration with Appropriate Stakeholders: Child-centered strategies involve collaboration with parents, guardians, educators, policymakers and NGOs.

Embedding a Compliance Culture

Developing an organizational culture that prioritizes child rights is imperative to identifying and remedying child labor violations in the supply chain. Buy-in from all management levels encourages honest feedback and more vigilant risk detection, reporting and remediation. Importantly, leadership sets the tone.

Per the U.S. Department of Justice: “Beyond compliance structures, policies, and procedures, it is important for a company to create and foster a culture of ethics and compliance with the law at all levels of the company. The effectiveness of a compliance program requires a high-level commitment by company leadership to implement a culture of compliance from the middle and the top.”³⁰

Effective implementation requires empowering those charged with compliance oversight to take action and providing them with adequate, appropriate resources.³¹ In other words, your child labor compliance program leaders should be relatively senior and have direct access to the board. They should act independently, possess strong decision-making skills and know about child labor matters, specifically, and compliance programs, generally.

Finally, engaging with communities invested in each supply chain link helps develop a company culture of compliance by championing child rights in all contexts in which the company operates.³²

As we seek to address the growing child labor concerns in the U.S. market, our framework and repository not only align with international standards and covenants, but with U.S. regulatory guidance as well:

• International human rights standards and covenants, including
  • U.N. Convention on the Rights of the Child (CRC)
  • U.N. Guiding Principles on Business and Human Rights
  • OECD Guidance for Responsible Business Conduct
• U.S. regulatory guidance, such as:
  • U.S. Department of Justice, Elements of an Effective Compliance Program
  • Department of Labor, Comply Chain

International frameworks developed by the U.N. and OECD serve as the overarching approach for human rights due diligence (HRDD) and a starting point for companies. While aligned, our framework seeks to build upon these standards with a distinct focus on child labor in the U.S.

To that end, our analysis is grounded in the common elements of both international human rights law and U.S. regulatory compliance best practices.

• Human rights practitioners have observed that “[c]ompanies seeking to enhance their human rights approach often will consider leveraging existing anti-corruption frameworks designed to assist company compliance with the U.S. Foreign Corruption Practices Act, the UK Bribery Act and other laws. That approach is particularly appropriate given the traditional correlation between corruption and negative human rights consequences.”³³
• Also, “[a]lthough there are important and concrete distinctions between human rights/ESG and anti-corruption [compliance], many of the dynamics and steps are the same, which has contributed to companies seeking to leverage internal resources and tools from anti-corruption … programs when implementing human rights/ESG due diligence.”³⁴
• That said, because the risk assessment for corruption may not map precisely with the assessment of child labor risk (e.g., the U.S.), child labor risk should also be considered separately.