Gap Inc. Social Responsibility

We asked Dorianne Beyer, Esq. to write about the complexities of child labor and, more importantly, her ideas for minimizing it. She is well qualified to do so. An international labor standards expert, she has consulted to governments and corporations on a wide range of labor policies, with a particular focus on child labor. Beyer is a founding member of the Advisory Board of Social Accountability International.  Her article is below.
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We all love a story with a promising beginning, a challenging middle and a gratifying end. Unhappily, the long history of child labor cannot fulfill that universal desire: Its rocky path has traced both a society’s view of the role of its children, and that society’s economic stage of development.

I. The World of Child Labor

In the earliest recorded cultures, children learned skills that would integrate them into the culture of their elders and enable them to survive. Hunting, fishing, shelter-building — these skills belonged to all in the tribe, family or village. “Child labor” does not describe or apply to these family roles. 

Even in the 21st century, most family, village or tribe-based sustenance work is still not defined as “child labor.” It is not banned by the primary source of international labor standards, the U.N.’s International Labor Organisation (ILO) — as long as work neither interferes with children’s schooling nor involves hazardous equipment, materials, or worksites.

ILO Conventions do outlaw youngsters under the age of 15 from work that is dangerous or interferes with education. But this enlightened prohibition has not changed economic pressures in areas, usually in the developing world, where children as young as five help prevent family starvation or homelessness by working for what few cents they may contribute.     

Child laborers can be found in trinket-assembly workshops hidden off the main roads of impoverished towns in China’s interior, or in Pakistani factories producing metal medical tools, or breaking rocks into gravel in Guatemala. Working conditions are harsh; health and education are stunted.

When I first entered the arena of laws, facts and policies of worldwide child labor 30 years ago, very few people outside the academic and international-aid worlds thought about child labor. It was not on the agenda when trade agreements were hammered out; most “donor” nation governments had no department or division dedicated to child labor. You could hold a meeting of all donor states’ non-governmental organizations (NGOs) devoted to child labor remediation in a movie theater — and we did. 

Over my decades of listening, observing, conferring and reading, “expert” views on child labor have evolved, but the single most dominant approach has always been prioritizing universal education.

That cannot be dismissed: Historically, education has advanced any population in any state on any continent. However, my view today has expanded: I now know that we need a full quiver of remedial arrows to advance the lives of child laborers of today and tomorrow. Education is indeed a crucial arrow, but only one.

Times have profoundly changed. Globalized sourcing and trade, increased governmental involvement and the rise of the informed and concerned consumer have permanently altered the child labor playing field. Gap’s corporate awareness has evolved as well — as a result of those changes, and as a stimulus to further change. 

Gap started its internal social responsibility department in 1996, a time of epic shifts in child labor concerns. Its pro-active policies, on-site inspection of each prospective supplier, and ranking of suppliers by their social accountability compliance (along with Gap’s product and quality criteria), were true innovations, emulated by no other branded apparel company.

The timing of Gap's commitment to progressive accountability systems and practices in the mid '90s was no accident. Global outrage at exploitative child labor had reached critical mass. International media, and Western consumers, stock analysts, parents and children were appalled at the commercial exploitation of children, particularly in the export industries of the poorest states.

By 2008, there were about 250 million child laborers worldwide, aged five to 17 (although the oldest youths are generally barred only from hazardous or dangerous labor activities). Almost 50 percent of all child laborers — one in six of the world’s children — work in hazardous circumstances, including working directly with dangerous machinery, tools, materials, or processes. 

In the vast majority of nations, education is the alternative to gluing shoes together on the outskirts of Wuhan or carrying pails of water up and down the steps of Rio’s favelas. And yet . . . about 20 percent of the world’s children, laboring or not, still receive no education. 

II. 2007 — The System is Tested

Such is the environment within which Gap’s Corporate Social Responsibility (CSR) team operates. And what an operation Gap presided over in 2007-8! Garments and goods were manufactured at about 1,500 production sites in more than 50 countries, all under the monitoring, support, and control of G­ap’s highly developed CSR department — more than 80 dedicated and continuously trained professionals. 

In 2007 this system was about to be uniquely tested. Gap had to absorb and respond to a severe and publicized child labor problem. In the end, however, this scandal was a vital learning experience.

This account briefly dissects what happened, and selected elements of what the company did about it. It illuminates the larger context Gap operates in as well as the influence it shares with newly energized stakeholders and colleagues who play a part in most similar situations today.

There is little disagreement about the facts: In October 2007 a reporter from the (London) Observer advised Gap’s CSR personnel of a story about to be printed regarding the discovery of child embroiderers working on shirts for the GapKids label. The BBC, Good Morning America, international newspapers and national ones, picked up that report, all wanting comment. The publicity snowballed.

Gap quick-tracked an investigation. An approved supplier had referred handiwork to a small embroidery company. That company was supposed to get the work done in an approved community center outside of Delhi. Instead, the company subcontracted out a portion of its production to an unauthorized shanty in Delhi that one Gap executive accurately called a “hellhole.” 

That sweatbox — scant ventilation, no bathrooms, highly flammable fabric strewn all over — was the scene of a labor nightmare. Children, reportedly as young as 10, were applying the embroidery that would make the garments so appealing to 10-year-old consumers in the shopping malls of the developed West. 

The use of this factory was miles outside of the clear and firm terms of Gap’s Code of Vendor Conduct and its Vendor Compliance Agreement. These require not only supplier compliance with Gap’s CSR requirements, but also that suppliers implement the Code and Agreement throughout their own supply chains. 

In fact, Gap’s qualifying process for vendors is almost a textbook example of “the right thing to do.” It involves an initial and continuing series of orientations, trainings and on-site visits by CSR field associates. The Vendor’s CSR responsibilities are always included in its contracts, along with clear consequences for any breach.

Gap’s reputation for authentic and progressive supplier and supply chain management was deep and broad — and served the company well during this squalid episode. A less admired company might have seen the story accelerate with, for example, investigative tangents exploring its overall labor practices. Media charges could have become ominously inflated over time, damaging Gap’s customer confidence. But Gap’s CSR department was so respected, and its responses to the crisis so prompt and clear, that media coverage began and ended in a week, with this single incident.

Gap took full responsibility — and immediate action in support of its Vendor Code, Agreement and policies. It canceled the product order and barred the embroidery subcontractor from any future GAP involvement. The finished garments would, of course, never be sold. A summit meeting of all Indian suppliers reinforced Gap’s zero-tolerance policy on child labor, and the consequences of non-compliance.

After internal debate, Gap decided not to strike the supplier — a model of labor compliance for many years — from its approved list. Causing the collapse of the supplier would throw many well-trained and dedicated workers out of work, further impoverishing the area. This recognized that general economic development must be added into the mix of concerns to be balanced in such situations. Had the supplier’s CSR record not been so exemplary, it is likely that the result would have been opposite. The supplier was, however, disciplined by a 50 percent cut in their order for at least six months; other requirements included enhanced sub-supplier oversight procedures.

III. Gap and its Broad Societal Partners

Gap relied on the expertise of external stakeholders to return the affected children to a healthier childhood and to turn this disaster into a landmark of progress. 

The newly activist Indian government led the external process, fulfilling both enforcement and programmatic roles. Working with a local child labor NGO — Bachpan Bachao Andolan (BBA) — the government managed initial remedial efforts: The children were removed from the sweatshop, given medical care, reunited with their families where applicable, and given some financial support through supplier fines. 

Gap’s longer-term initiatives illustrate some progressive trends in the field. These included grants to BBA to serve as public educators in the “embroidery belt” area of Eastern India, educating parents about the grim lives of trafficked children. A mobile van (the “Freedom Bus”) travels to area villages, and former child laborers spread their message about the degradation of a working childhood.  With an eye to greater sustainability, Gap has also given funding to the Self Employed Women’s Association (SEWA) to establish local centers employing only adults in the handwork trades. The success of these efforts may create a viable, replicable model of how to achieve sustainable economic development, and therefore child labor reduction, in other industries and places.

Another element in Gap’s longer-term plans is membership in an alliance to create a global forum of similar brands and retailers, along with government officials, factory owners, trade unions and NGOs, to create holistic solutions to child labor. This effort to organize industry-wide strategies against child labor may begin to erode such barriers as intra-sector competition and confidentiality.

 IV. The 21st Century Approach to Child Labor 

A number of Gap’s 2008 actions are aimed at broad economic development, recognizing that child labor arises from the lack of a viable economic foundation. Seen through that lens, it becomes clear that effective remediation must address the benefit of all community members — children/students and adults/parents/workers.

This is the 21^st Century paradigm: Parents who can feed and house their families are the strongest barrier against child trafficking and child labor.

The objective then becomes transforming known areas of child labor from chronic poverty zones to “economic empowerment zones” that facilitate sustainable employment for adults.   

The challenge is significant: Corporations that lead the initial phase will only see rewards in the longer term. Initial steps might include funding a zone’s pre-production planning, building and training. Or schools: Educating children has consistently yielded (to the entire community’s economy) six or seven times the amount of any initial investment.

Companies can work with other stakeholders to gather funding for the early stages of economic development. They can mobilize other industry purchasers to agree to multi-year orders for finished goods made by adults earning adult wages — and supporting their children. Now that’s a path to the future that would change the world.

To learn more about international child labor:

Untied Nations: www.unglobalcompact.org

International Labor Organisation (ILO): www.ilo.org

and for its child labour programme (IPEC): www.ilo.org/ipec/

Unicef: www.unicef.org/protection/index.html

U.S. Department of Labor’s international child labor program: www.dol.gov/ILAB/                                            

Dorianne Beyer, Esq. (LLM, JD, BA) has consulted widely to governments, corporations and public and private institutions, providing international and voluntary labor standards and employment policies, policy analyses, strategies, programs, and trainings, particularly relating to child labor and in developing states. She is a former Executive Director of Defence for Children International-USA. 

She is a Founding Member of the Advisory Board of Social Accountability International and contributed significantly to its widely used SA8000. She is a member of Rainforest Alliance’s Sustainable Agriculture Network International Standards Committee, revising its agricultural labor standards.

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