In 1996, Life Magazine published an article about Tariq, a 12-year-old boy from Sialkot, Pakistan, who stitched soccer balls for Nike at 60 cents per ball. International media coverage, public outrage, and consumer pressure have forced major multinational corporations such as Nike, Adidas, Umbra, and Puma to be held more accountable for their labor practices, their products, and their monitoring of subcontractors. As well, public outrage led Nike to fire the contractor, Saga Sports, who they hired to produce the balls. A Nike spokesperson stated that child labor is difficult to monitor when the labor is conducted at home and the contract factory has broken its commitments multiple times. “Most importantly, the factory has failed its employees.“
Despite these issues articulated by Nike, on May 23, 2002, right before the Fifa World Cup, the Global March Against Child Labor announced that there still were many human rights violations in the Pakistani soccer industry, the producer of 75 percent of the world’s soccer balls. A study from the ILO noted that 7,000 children from the Sialkot region were stitching soccer balls, the most labor-intensive work in the process, around 10-11 hours a day for about RS20, about 30 cents, a ball. Many of these children developed eyesight problems and twisted fingers from the working conditions associated with ball production: sitting in the same spot, working in dark rooms for long hours, and pulling the strings back and forth. Leila Salazar, a corporate accountability director for Global Exchange, in 2001 stated that “[d]uring the last three years, Nike has continued to treat the sweatshop issue as a public relations inconvenience rather than as a serious human rights matter,” Furthermore, the company has also been recently accused of using slave labor in its factories in China. This story of child labor is one of millions as globalization and the advent of multinational corporations (MNCs) have developed relations between states and their labor force. This article will investigate the relationship between MNCs, developing states, and human rights, particularly looking at South Asia’s child labor.
History and Relationship Between MNCs and the Developing World:
From the period of colonization to present, MNCs have been a major contributor and player in developing world trade, globalization, and international trade law. Even today, many of the MNCs come from countries that were imperial powers or gained power after the World Wars.
During colonization, companies like the East India Company, while only a corporation, demonstrated enough power to control trade and international trade laws in what were prominent states at the time. Even now, though less powerful, many MNCs have tremendous monetary power as their budgets exceed certain states’ GDPs. As capital and trade increased, states opened their borders wider, but corporations were increasingly pressured to meet the demands in an unstable market. This only left workers more vulnerable as the demand for cheap labor rose; increasing the demand for child labor, particularly in the developing world. During colonization and industraliazation, slave labor was utilized for free labor. As society moved away from slavery, companies needed a replacement for cheap labor. This often came at the expense of human dignity and human rights.
Current Situation and Applying the Laws:
While there were hopes that globalization would allow MNCs to increase children’s working wages and earnings in developing countries, only the demand for child labor has increased. Today there are an estimated 250 million children working who are ages five to fourteen. For a single plant in Bangladesh for Hanes, Puma, and Walmart, about 200 to 300 children have been found working. In India, MNCs directly employ children to work in the diamond industry and various other labor-intensive low-skill jobs. Even in terms of protection to these children, the Worldwide Responsible Apparel Production Monitoring Group had approved the plant in Bangladesh claiming compliance with any relevant worker’s rights laws and standards failing to notice the extremely harsh work conditions the children working endured. Those included routine beatings and forced and excessive overtime without pay.
The subpar working conditions of developing nations are caused by the lack of enforceable labor laws and regulations. For example, many MNCs often avoid legal responsibility and accountability by shifting the blame to subcontractors. This prevents MNCs from being liable under multiple laws and regulations. While corporations may lack legal responsibility, they should be morally obligated to be responsible for the human rights abuses that their contractors and third parties commit. While some countries like India have enacted child labor acts that prevent young children from working in hazardous jobs and rehabilitating children who were involved in child labor, many nations cannot afford to do that. For many nations, enforcing labor laws means giving up development and making economic improvements. Multiple MNCs avoid national regulatory control and national jurisdictions by taking advantage of the lack of labor laws to obtain cheaper labor. At the onset of any new corporate rules and regulations to protect vulnerable workers, MNCs move to another developing nation where they can utilize their workforce instead, putting all those workers out of a job. While losing a job in the developed world means looking and finding another one, losing a job can be losing a means of providing and getting food and basic necessities for someone in a developing nation. This creates a fight for the bottom, pitting one developing nation’s legal system against another’s. An MNC leaving one country for a less strict one is not abnormal: it is the norm. For example, both Coca-Cola and Nike have left countries because of disagreements in tax exemptions and labor costs. The people who will be most affected will always be the ones who lost their jobs because an MNC left their country for another.
While many assume that higher incomes and economic growth decrease the incidents of child labor, that is not the case. Child labor is tied with poverty, poor governance, and ineffective legal regulations. The issue is an inability to regulate and apply national laws to MNCs. In the international economy before globalization during colonization, the only actors were states who utilized political and diplomatic power alongside monetary power. Now, there is a multinational economy where MNCs are one of the prominent and determinant actors of the global trade system whose actions often come at the expense of state sovereignty. The inability to regulate them demonstrates a major flaw and issue in the international regulation and governance of human rights.
Benefits of MNCs and Needed Reform and Methods to Change the System:
As highlighted earlier, many countries need the economic benefits that MNCs bring. A major corporation can benefit a host nation by providing not only foreign direct investment, but increased employment opportunities, increased access to technology, economic diversification, and overall economic improvement reducing poverty. For example, many developing nations find that sweatshops and factories create a substantial amount of job diversification and provide better alternative employment to what employees previously had. These employment opportunities often either pay fair or substantially more than the living wage in the country. Sometimes they provide better working conditions than a domestic company might as well. While creating spaces to work for MNCs in the host nation, MNCs can help with local infrastructure and have “spillover effects”. MNCs might invest in domestic companies and can strengthen their abilities to have competitive advantages. Unlike domestic companies, MNCs face more pressure from the international community in industrialized nations to avoid human rights abuses through bad press. Some MNCs might follow corporate codes of conduct to fight against child labor and sometimes have eliminated or advocated for end child labor in developing nations they work in. MNCs in those circumstances can be major advocates and can influence local policies and customs.
Suggestions for Reform:
Most international law regulates states’ actions and state violations of business-related human rights abuses. Since MNCs often have the same monetary power as small developing nations, it is often suggested that MNCs be placed in the same category as states. This would hold them accountable for human rights violations the same way states are. The issue with just applying the Human Rights doctrine and corpus iuris to MNCs is that MNCs do not have the same public functions and public purposes as states do. There are a couple of other alternative ways to curb corporate legal power. First, there are increased efforts to create a universal standard for MNCs corporate behavior. Secondly, activists utilized developed nations’ legal systems in order to enforce judgments that would not be admissible in the local area. These courts would be more favorable to human rights opinions and legal arguments. Third, is the utilization of soft law to enforce measures. Lastly, there are efforts to increase corporate self-regulation codes. These are all voluntary by the corporations themselves who are looking to further human rights in areas they have invested in.
The Situation in the Host Country:
While MNCs can be blamed for allowing and searching for developing nations to take advantage of their systems, we must also consider the national system that allowed them to do so. Pakistan had no programs to aid impoverished, nor are there any banks loaning money to them. Under international law and Pakistani law, the use of bonded children is prohibited, yet there are not sufficient regulations to enforce these measures. Pakistan is required under law to prohibit all forms of slavery, child servitude, forced labor, and child exploitation. While Pakistan is a signatory to the Convention on the Worst Forms of Child Labor and The Convention on the Rights of the Child, they are not bound to these treaties. Back in Sialkot, Pakistan, selling children to factories has become normalized. As a Pakistani mother said, “[w]hen my children were three, I told them they must be prepared to work for the good of the family. I told them again and again that they would be bonded at the age of five. And when the time came, they were prepared and went without a complaint.” Companies often use thekkars, recruiting agents, look for families that are barely surviving to bond to factory work. Companies search for these children as they are “cheaper, more motivated, more efficient, obedient, don’t form labor unions, and don’t strike.” Some argue that these children would be starving otherwise and this type of work is preferable to the alternatives such as prostitution. There are also local employers who do not embrace the abolition of child laborers. Imran Malik, a wealthy industrialist has stated, “The National Assembly must not rush through reforms without first evaluating their impact on productivity and sales…(and) avoid so-called humanitarian measures that harm our competitive advantages.” Lastly, there are those who also do not embrace it for nationalistic reasons. An advisor to a Ministry of Labor once said in an interview, “Westerners conveniently forget their own shameful histories when they come here…Europeans addressed slavery and child labor only when they became prosperous. Pakistan has only now entered a period of stability that will allow us to …address social concerns.”
Many developing countries have opined that Western countries often demand human rights reform from developing countries in a manner different from themselves without offering alternative methods or solutions to address these problems. Historically, developed nations gained economic stability and wealth during colonization and the industrial revolution through exploitation of colonies and mass human rights abuses. In comparison, developing nations had their wealth and rights taken away during colonization and faced mass human rights abuses to their people. Developing nations were never given equivalent monetary compensation or reparations for the damages that they committed on developing countries’ soil. Many would argue that this hypocrazy comes with the
The People We Fight With:
Despite the sadness of the situation, there is a light: the company that Nike fired, Saga Sports. Taking accountability for the child labor used in his companies, the CEO, Mr. Khurshid Soofi took action. He realized that to end child labor, he needed to eliminate outsourcing altogether and switch to custom-made company stitching facilities. Saga Sports spent over RS 270 million building 12 facilities for its workers. Alongside the building of the facilities, the company enforced several corporate social responsibilities measures. The company did not hire anyone under the age of 18 and required legal documents to verify their age. The company allowed unions, provided medical insurance, life insurance, and disability insurance. They started offering free meals, tea breaks, and transportation to and from their villages. The company invested in a company hospital. They organized fire drills and other health seminars, offered Eid bonuses, and community infrastructure like bridges. Mr. Soofi also contended that by investing in his employees, they now have changed from sitting near the washroom to asking for their own chair, table, their own cup, and other things to make their work experience more personal and welcoming. The culture and the worker’s expectations changed into wanting more for themselves. Furthermore, the company took action to allow women to come work at women’s facilities too, expanding human rights. They sent teams to meet with elders and parents, inviting them to see the facilities and offering to take them from and to work to ensure their safety. The company states that now people come to them saying “please hire our daughters; we feel secure…”. Saga Sports made it possible and changed the culture. While the entire system and multiple people involved are fighting to prevent change and to support human rights, at least we know that there are people willing to fight against it, and able to do so successfully.