Part One: Social Labelling as a Way of Combating Child Labour
About labelling. A label is information that the manufacturer or marketer of a product provides to the consumer at the point of sale. The label may indicate the size and composition of the product, the name of the manufacturer or retailer, the country of origin, directions about how the product is to be used, prepared, cared for, etc. Some labels now fairly well known in many industrialized countries inform consumers about the ecological benefits of using, or the environmentally safe mode of production of, specific products. Some labelling information may be attached to the product or its packaging; sometimes instead it appears on a sign in the store or on the merchandise rack. A label usually contains words and numbers, but it might contain only a logo and the name of an organization, in which case its meaning must depend on knowledge acquired or provided elsewhere, as is true for some of the labels discussed in this study.

About social labelling. The kind of labelling this study is concerned with is often referred to as voluntary social labelling. Social labels are intended to inform consumers about the social conditions of production, in order to assure them that the item they are about to purchase was produced under fair and equitable working conditions. This puts pressure on producers to introduce such conditions. The proponents of most social labelling initiatives concerning child labour, for example, are trying to initiate change by starting from the consumer and moving back through the marketing chain to affect modes of production and improve the lives of working children, either by pressing for the complete removal of child labourers from the production process or the amelioration of their working and living conditions. These labelling initiatives usually have another aim as well: that of directly contributing to improvements in the situation of child labourers and their families and communities by setting up local projects financed through the labelling initiative itself. Social labelling, then, also has economic components.

Social labelling is usually referred to as voluntary because the producer, wholesaler or retailer who places a social label on a product or service does so by choice, rather than in response to government legislation or import requirements, and the consumer freely chooses to purchase the labelled item. Social labelling has been advocated and advanced principally by groups and organizations which are concerned with poor working and living conditions, principally in the developing countries where most of the labelled products are now produced and from which many of them are exported to the industrialized countries. There are however some historical examples of voluntary social labels that originated in the industrialized countries and referred to products produced in those same countries. One such label is a "union label" that still exists in a modified form and was in very widespread use in the United States before garments began to be manufactured in volume overseas. This label was sewn into every garment manufactured by members of a large American trade union, the International Ladies' Garment Workers' Union, and one of its early versions read: "Look for the Union Label When You Shop For Women's and Children's Apparel...Symbol of Decency, Fair Labor Standards and the American Way of Life." An attempt to create a new label for garments made in the United States, the "No Sweat" label, is now under discussion.

Features all social labelling initiatives share. All voluntary social labelling initiatives currently in existence share at least the following features.

• The physical labelling of certain products, or of the retail establishments that offer these products for sale to the public, by using either a descriptive label or a logo that has a specific social meaning for its sponsors. The label or logo implies that certain standards have been met concerning the social conditions in which these products were produced.
• The labelling initiatives necessitate outreach towards consumers, in order to communicate to them the importance and social implications of purchasing the labelled products rather than others.
• The relation between labelling and social standards requires some form of oversight function in order to ensure that the social standards that are the object of labelling have actually been realized or are being maintained in the countries of production.
• The labelling initiative collects funds (a levy) from the retailers or importers of the products in order to improve specific conditions in the region of production (or in the case of a Brazilian initiative described here, expects companies themselves to fund improvements). These levies are usually a very small percentage of the sales volume or import volume of the product, and may increase the actual unit price of the product to consumers by up to 2 per cent.

Why some social labelling initiatives target child labour. The numbers of children employed in the industrial sectors of developing (and sometimes also industrialized) countries, and whose labour is used in making goods that will be sold to industrialized country consumers, has increased dramatically as industrial production has globalized and commercial markets have become more competitive. Press and film coverage has vividly illustrated the kinds of work children do and its often negative consequences. Consumers have learned from the media that a number of the products they purchase have been made by child labour even though they could not have known this from the products themselves, and they have begun to seek assurances that with "their" purchases they are not responsible for the exploitation of children (for most consumers in the developed countries, child labour is virtually by definition child exploitation). There have been threats of consumer boycotts, and some developed-country governments have reacted as well by considering possible limitations on the importation of products known to be made by children (e.g. the Harkin bill in the United States). Pressure has come from human rights groups. Negotiators of trade agreements and preferential tariffs have been asked to take child labour into account. Not irrelevant to all this activity has been the extensive change in employment patterns in many developed economies, where part of the labour-intensive production has been increasingly outsourced to low-wage developing countries. Social labelling initiatives targeting child labour are therefore sometimes accused of having the underlying motivation of protectionism.

Some distinctions among these initiatives. All the social labelling initiatives described in this study have the goal of improving the situation of child labourers, but there are differences among them. Some of these differences are quite fundamental, especially the first three:

• some initiatives want to totally eliminate child labour from any role in the production of the labelled product or products, while others want to improve the conditions for children currently working, at the same time trying to help others from having to join the workforce;
• some initiatives label individual products and some instead label or license entire retail establishments, and by implication all the products sold in those establishments;
• some programmes monitor or inspect production sites and facilities to ensure that the standards the label stands for are actually being observed, while other programmes expect the individual producers and exporters to monitor themselves for observance of the labelling conditions;
• in some labelling initiatives, the label is meant to indicate that a full set of social standards, or a "charter", has been met in the production process, including a child labour standard, while in others the label refers only to child labour, e.g. a No Child Labour label. In other words, while the improvement of the situation of working children, their families and their communities, is an explicit aim of every programme considered in this study, in some of the programmes it is only one of a number of objectives while in others it is the sole aim of the labelling initiative and the reason for its existence;
• some programmes are more rigorous than others in conferring the license or permission to use the label;
• some programmes label only one type of product while others label a range of products in order to benefit child labourers in more than one industry. The more limited initiatives that target child labour for only one product or kind of product in only one industry are more numerous than those that label across products.

These features and others will be apparent in the descriptions that follow. Mention should be made here, however, of an important kind of social labelling that impacts upon the working lives of children but that will not be further discussed in this study. In both Europe and the United States, labelling initiatives have arisen in food importing and especially the importing of coffee, tea and chocolate in recent years. These initiatives purchase directly from small farmers at prices which are generous and comparatively stable relative to world commodity markets. They then repackage and merchandise the products in various consumer countries under specific trademarks or labels (e.g. Max Havelaar, Cooperation, Fairtrade, to name a few). Formerly disadvantaged small producers thus enjoy a relatively reliable income, and middlemen are avoided. These "fair trade" products, as they are collectively called, have made notable inroads particularly in some European countries, achieving up to four per cent of the total national market for some of these commodities. The non-profit associations that sponsor and run them also engage in social change activities in the producer communities (e.g. collective action for better housing and schools). These labelling initiatives are of great benefit to children, who often work as part of the family enterprise, but they are not discussed further in this study because improving the lives of working children is a by-product of general economic and social action and not one of their explicit goals. Child labourers are not mentioned as programme "targets" in any way in the descriptions provided to consumers on package labels or elsewhere.

This leads us to emphasize again what has already been mentioned: that this study is concerned only with initiatives that specifically and intentionally target child labour through the use of physical labels attached to merchandise or products, or otherwise presented to consumers. Other initiatives affecting child labour are not considered, and none of the generalizations made here are intended to characterize them.

Support for social labelling. Many national and international organizations and influential individuals have shown an interest in labelling initiatives, in the hope and expectation that consumer choice can act as a critical lever in improving conditions for at least selected populations of workers (mainly those who labour to produce for export to the markets of the developed countries). This improvement can take place in three ways. Two ways are through the social labelling programme itself. Labelled products are those that have been produced under better conditions; the more labelled products purchased, presumably the more people working under better conditions (or, in the case of some of the initiatives in this study, the fewer children working). Second, as mentioned above, a small percentage of the money resulting from the sales of labelled products is channeled back into local improvements in the region of production.

However, a third and possibly more far-reaching source of improvement could be the response of producer-country governments and industry associations to labelling initiatives. Some developing country governments and employers prefer not to see a segment of their export production labelled, or else rendered unexportable to certain countries because it does not satisfy an initiative's requirements for being labelled. To see local producers' operations subject not only to labelling but also to monitoring and inspection might also be politically unpalatable. The proactive step of improving conditions, for example by a more conscientious enforcement of relevant labour laws, ILO Conventions, etc. could perhaps help to forestall the eventuality of labelling (or other trade-related actions) and at the same time result in long-term improvements for children.

In the presentation of specific labelling initiatives in this study, the support received by each is mentioned. Where it is known that this support was financial this is also noted, although it has not always been possible to obtain actual figures.

Among the international bodies that have extended cooperation and support to labelling initiatives are UNICEF and a variety of world-wide NGOs, as well as many more locally active NGOs. Public officials in both the United States and Germany have advocated voluntary product labelling (in the United States both President Bill Clinton and former Secretary of Labor Robert Reich made mention of its importance and potential impact in public pronouncements in 1996.^{( Endnote 1)} The German Government, with its contribution to Rugmark, is the only government to have contributed financially to any social labelling initiative, to the best of our knowledge, and Minister of Labour Norbert Blüm made public statements of support for Rugmark labelling in 1995.

Objections to social labelling. Objections to social labelling initiatives have come from a number of different quarters. For present purposes they can be distilled into three kinds, although this is a topic that will come up again later in this study.

• Social labelling is a way of attempting to change or modify the prevailing production and commercial practices and operations of an industry or region of production. All those individuals and companies who are stakeholders of one kind or another and whose livelihood or political survival depends upon the existing relations or practices object to what they consider the undue interference of "outside" forces, especially since the latter are not usually direct stakeholders themselves but are often NGOs, agencies that may or may not be supported by foreign governments, or international organizations. A social labelling initiative can have a substantial effect on production practices in an entire export industry in a large country. This obviously affects stakeholders' feelings of national and personal independence and also their production cost structure.
• The international business and commercial communities, grouped into associations and organizations, are not direct stakeholders in the same way as the individuals and groups above, but the general tenor of thought and attitude underlying globalization and informing most of their business operations today rejects any measures or behaviours that might tend to link social clauses or causes of any kind with economic activities of any kind. The voluntary social labelling of products is one example of such a linkage, in that the products that consumers are encouraged to purchase carry a label that is not benign but has economic and social consequences. Social labelling is perceived as one form of restraint of trade, namely the imposition of social costs and the restraint of freedom in the pursuit and practice of business. It is not viewed as voluntary by the business community.
• The third set of objections to voluntary social labelling comes from many individuals and organizations who may deeply sympathize on a personal level with its aim of positive economic and social improvement but who are suspicious of the hidden (and not so hidden) difficulties involved in rendering labelling initiatives successful, and who for that reason cannot in good conscience act as advocates for them or give them financial support. In this camp are many knowledgeable and socially concerned individuals in the international organizations and others, whose personal motives for their objections are beyond reproach.

Some alternatives to labelling. A number of international companies with operations in countries, industries or environments where child labour is frequently found and/or in which voluntary social labelling might become an issue have made decisions about how best to position themselves for product and market survival sans labelling. One step - at once proactive and defensive - that has occurred with increasing frequency in the last several years has been the formulation of a company code of conduct, or a social and economic charter of good practices drawn up by the company itself, sometimes with the help of a specialized advisory service. In such codes, companies undertake to voluntarily initiate economic and social improvements, for example concerning working conditions, the elimination of child labour, etc. These codes generally include company assurances that they will increase supervision and control over the conditions of production used by their various sources, mainly wholesalers and subcontractors, although some companies have actually decided to ban subcontracting and homework in the production of their goods because of the difficulties inherent in monitoring such operations. Companies have also engaged in other company-sponsored or industry-wide initiatives to bring about improvements, sometimes with the advice and technical help of individual NGOs or international organizations.

In almost all cases, the companies that adopt codes of conduct or sourcing guidelines prefer to monitor their own operations; very few contract out their monitoring functions to the existing independent inspection services, which none the less are farsighted enough to envision that some form of "social policing" (in addition to technical inspection, their customary expertise) may become a possible avenue of increased business in the near future. The degree to which a company is actually able to implement its code of conduct is crucial: even with the best and most honorable of intentions, multinational companies' very numerous and frequently altered production locations, from country to country and supplier to supplier, render such implementation and its monitoring difficult to do in any thoroughgoing way. A second issue is the different labour standards of the many countries in which such companies operate. A simple example might be the different ages at which children are legally permitted to join the workforce in various countries and industries, plus the standards advocated by international bodies such as the ILO. To what standards should multinational companies adhere? And what penalties should they mete out to subsidiaries and subcontractors who refuse to observe them? Abandoning a necessary subcontractor, or, worse, a number of subcontractors for persistent violations of the company's code of conduct could have steep economic repercussions. Moreover, the subcontractors may be acting in good faith: the standards embodied in the company code of conduct they are being asked to follow may be neither the legal standards nor the best business practices that prevail in their own countries. These issues also concern social labelling initiatives but not on such a broad scale, partly because the dimensions of social labelling initiatives are far smaller. Also, if a social labelling initiative embodies some elements of a social code, as most do, it will have been drawn up in almost all cases with a specific producer country's practices and legal arrangements already in mind.

Some companies have, through their well-publicized codes of conduct, come to be nationally known in their consumer markets for their "good practices" regarding their suppliers - that is, their observance of a range of social standards such as fair wages and working conditions, no child labour, etc. This has increased their economic currency, or in the current terminology of the balance sheet their bottom line. Although such companies are not within the purview of this study, it is worth pointing out none the less that their "good name" now functions much as a label does: the public perceives it as a "guarantee" of "politically correct" economic and social behaviour. However, this garnering of publicity and its attendant financial benefits has usually occurred without outside monitoring or oversight of the company's widely scattered operations, and such positive images could therefore turn out to jar grievously - and publicly - with the reality. Blanket self-labelling by companies should therefore always be considered subject to revision. This is why some companies with well-known codes of conduct upon which their reputations rest with the public consider engaging one of the several independent private services (e.g. Société Générale de Surveillance, Det Norske Veritas AS) now expanding into the domain of social as well as technical inspection.

Consumer preferences. As has already been emphasized, the success of social labelling rests, in the final analysis, on consumers' willingness to prefer labelled over unlabelled products. However, the advent of social labelling is recent and the evidence of consumer receptivity is scattered and inconclusive. Nor is there direct and irrefutable evidence of a propensity of consumers to support labelling regarding the specific cause of child labour.

This should not be a reason to dismiss social labelling out of hand. Although no major marketing survey has been done anywhere concerning social labelling, and none at all has been done with regard to child labour labels, a series of considerations points to consumers' potential interest in seeing such labelling come into being. Briefly:

• small and informal surveys concerning attitudes to social labelling done in the United States and Europe indicate consumer willingness to bear the slightly higher retail costs of socially labelled products;
• the sales of the "fair trade" agricultural products discussed above have not only reached 4 per cent of the national market in some developed countries but continue to grow annually at a respectable rate, which varies from country to country;
• the success of labelled carpets from India and Nepal has been noteworthy (cf. the German Rugmark example in the present study);
• eliminating child labour in particular is a "social cause" that pulls people emotionally toward it. It is perceived by the purchasing public as politically neutral. It is therefore possible to choose a labelled product over an unlabelled one without making a political commitment in any direction;
• finally, advocates of voluntary social labelling draw on the example of the eco-labelling movement. Ecological and "green" labels have proliferated in many markets and are now easily recognized by consumers. Considerable success has also characterized at various times certain "national" labels: Buy American, Made in France, Buy Union, etc. Proponents of "child-labour-free" labels feel that the success of these fore-runners offers good grounds for assuming that the new label will also gain adherents and meet with success in the consumer markets of developed countries.

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