Child labour is an illegal practise that has been in existence for a significant period. Many companies, including renowned multinational corporations, still practise child labour, despite the negative connotation associated with this practise (International Labour Organization, 2010).
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The practise is rife in the developing world where regulatory frameworks are feeble and poverty levels are high. The practise of child labour is too common in these countries that it is considered as normality. This paper seeks to elaborate the reasons behind the use of child labour in some corporations and the general ways child labour affects the conditions of the children involved.
The assumption in many quarters is that child labour is a past practice that has been contained. However, many countries still practice the menace almost unabated. According to the International Labour Organisation (ILO), 215 million children continued working as labourers across the world by the year 2010.
An overwhelming number amongst these children, about 115 million, performs potentially hazardous work (International Labour Organization, 2010, p. 4). In terms of regions, Africa has made the least progress in as far as efforts employed to address the practise are concerned. High poverty levels in Africa usually play a critical role in aggravating the situation (International Labour Organization, 2010, p. 4).
Companies consider the option of child labour as a measure of cutting down costs in the contemporary highly competitive global business perspective where companies compete with each other in search for markets. Most multinational corporations (MNCs) are relocating from their traditional homelands to establish operations in countries where labour costs are low (Rahman & Khanam, 2012, p. 63).
This, in turn, helps them to build some competitive advantage over their rivals because it lowers the overall operational costs. Developing countries offer a perfect alternative for the MNC’s to establish their production operations because there are fewer employment opportunities, despite the large populations.
High poverty levels in these countries further give the MNCs greater bargaining power when it comes to determining the wages of their workers (Wahba, 2006, p. 823).
Child labour in the least developed countries, by extension, allows the corporations to pay even lesser rates in wages. Children are willing to accept the lowest amounts of wages because of the harsh conditions in these countries. Some multinational corporations take full advantage of this situation and exploit children as labourers.
Children are also less concerned about other rights that adult workers would, otherwise, demand. The likelihood of child workers downing their tools and organising strikes, for instance, is minimal compared to adult workers (Wahba, 2006, p. 84). In other words, corporations are assured of minimal or zero interruptions in their operations when they employ child labour than when they employ adult workers.
One of the greatest impacts of child labour is its influence on school attendance. For instance, 38.9% of children between 10 and 14 years are economically active in Bangladesh, which is among the countries worst affected by child labour in the world.
This translates to 6.77 million children out of the country’s 17.43 million children (Khanam, 2008, p. 77). In total, 11% of the country’s overall labour force is made up of children between the ages of 10 and 14 years (Khanam, 2008, p. 77). It is critical to point out that children are supposed to be at school pursuing their education at this prime age.
Most households in the country use children as sources of earning livelihoods because of the high levels of poverty. Thus, the labour demands that the children are expected to fulfil denies them the opportunity to go about their schooling as usual.
Most parts of Bangladesh register low school attendance and poor grades in school (Khanam, 2008, p. 77). Most garment factories have established operations in the country and they seek to benefit from the cheap child labour that is available readily in most parts of the country (Heal, 2008, p. 166).
Research findings also indicate damaged physical, social, or mental development for children who engage in labour. The children who are employed as workers often suffer from malnutrition because of high poverty levels. Participating in physically strenuous activities for children already suffering from malnutrition increases their chances of experiencing stunted growth.
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It is notable that child labourers are often shorter and lighter in weight compared to other children who do not participate in child labour. According to Rahman and Khanam (2012, p. 59), children working as labourers are at a higher risk of losing some critical body organs, thus ending up handicapped in the long run.
In Bangladesh, close to 0.6 million of the country’s 7.4-million child labour force gets injured or sick when performing their employment duties (Rahman & Khanam, 2012, p. 59).
This translates to 7.6% of the entire child labour force in the country suffering from injuries and handicap. Death incidents involving child workers are also reported. In 2000, for instance, up to ten children working for about $11 a month each died in a garment factory following a fire incident (Rahman & Khanam, 2012, p. 59).
The children also suffer emotionally because of consistent abuse that they are subjected to. The children lack sufficient playtime with their peers. This denies them an opportunity to socialize with their colleagues (Rahman & Khanam, 2012, p. 59).
Most children grow up as semi-skilled, semi-illiterate, or illiterate adults faced with unemployment or underemployment because of the little or total lack of the opportunity to attain an education. The adults suffer from poverty and subject their children to the same vicious cycle of child labour and lack of education (Rahman & Khanam, 2012, p. 59).
NIKE and Child Labour
Nike has been outsourcing labour services from Pakistan where mainly children and mothers have manufactured its branded balls. The production of the company’s branded balls was aided by child labour at some point through its local partner firm SAGA sports.
Nike strengthened its monitoring of international laws to ensure that its business partners in Pakistan did not forfeit the stringent labour rules and laws of the company to support child labour (Boje & Khan, 2009, p. 9). It set up a code of conduct that requires all the business agents and partners in Pakistan to sign and adhere to before winning contracts.
The Pakistan government has established anti-child labour laws that seek to prohibit the use of underage children in industries as workers. The Pakistani government has attempted to enhance the related regulatory framework since the highlight of the Nike-child labour case.
However, Pakistan is a developing nation that still grapples with high poverty rates. The existing anti child labour laws are not implemented fully because the government looks at child labour as an opportunity for making more money for its impoverished population (Locke et al., 2007, p. 21).
Concerted efforts by various groups against the child labour practise raised the alarm against Nike’s illegal practice. These groups called for the boycott of Nike branded footballs as a way of expressing market displeasure towards the child labour practise that was being condoned by the firm. This pressure forced Nike to act with speed in eliminating the practise (Locke et al., 2007, p. 21).
Critical Review of the Case
Nike is a well established firm that originates from the USA, which is a first world country. The strict regulatory framework in the USA does not offer an opportunity for firms, such as Nike, to explore and exploit child labour.
As such, the company, together with other rival manufacturers such as Reebok, Adidas and Kmart, has established its football production activities in Pakistan (Montero, 2006, para 3). This is a strategic move by Nike to lower its operating costs as it seeks to optimise its overall revenues and profits.
The stringent labour policy and practice adopted by Nike forbidding practices such as child labour, however, pass as mere market gimmicks meant to hoodwink buyers. The corporate policies on child labour are formulated to align with the US national labour laws, but the firm does not necessarily intend to implement them.
It is clear that Nike does not enforce the application of its labour policies and practice, although its operations in Pakistan are overseen by a different entity. Nike’s poor supervision allows Saga Sports to flout the rules set out by both Nike and the international labour convention to enhance earnings (Miller, 2006, p. 14).
Nike only reacts after other concerned groups and societies raise an alarm over the unabated use of child labour. It is critical to point out that Nike cannot escape the blame, although it reacts by severing its contract links with Saga Sport. Nike usually accuses the contract firm for failure to observe the acknowledged labour practices (Montero, 2006, para 2).
Nike would have taken the lead in closely monitoring how Saga Sport conducted its operations if it had intended to follow its labour regulations and policy strictly. However, the focus on higher profits and business seem apparent in this case. Nike did not consider it as an illegal practise to employ children because Saga Sport gave it higher returns in its operations.
Nike’s concerns over Saga Sports’ actions only came to the fore after the societal groups threatened to initiate a market boycott for all Nike branded products (Miller, 2006, p. 15). The company’s business was facing a major threat that would have resulted in its exit from the market. This prompted Nike to save its face by taking drastic measures like ending its business contract with the local trade partner, Saga Sport, prematurely.
This position is highlighted further by the fact that other contracting firms working on the behalf of Nike in different countries have also been caught up in almost similar cases. In most instances, the contract firms do not observe the labour regulation laws and policies adopted by Nike, yet the firm does very little to monitor the situation.
The Pakistani government, on the other hand, is lenient in enforcing the internationally accepted labour regulations and practises. The economic challenges faced by the country, which have resulted in rising poverty cases, have seen the authorities condone such illegal practices.
In the eyes of the Pakistani government, Nike is looked at as a global firm that has a great potential of cushioning the local population from the biting poverty levels (Haan, 2011, p. 925). Thus, the main concern is on how to maintain the revenue earned as licensing fees and other taxation revenues, although the authorities may be aware of the illegal child labour practices involving Nike and Saga Sport.
The government is also satisfied that more of its population is engaged in employment by Nike, thus insisting on enforcing the labour regulations could trigger a backlash from the multinational. In other words, the child labour practise is a complex labour dilemma that might not be addressed effectively, even though efforts are put in place each year to address the practise (Haan, 2011, p. 925).
Child labour denies the children involved in it the opportunity to receive education. It also promotes unfair labour practices because children are remunerated less than the actual amount deserved (Rahman & Khanam, 2012, p. 60).
Child labour practise is still a thriving activity, despite the many counter efforts implemented to address the menace. Poor countries, mainly in Africa and Southern Asia, register higher instances of child labour. Multinational firms target these countries as the perfect destination to establish their operations because of the readily available and cheap labour.
Children workers are less likely to agitate for higher wages and involve themselves in strikes and go slows that would eventually interrupt performance in firms. The idea of maintaining low production costs is pushing firms into operating in poor countries as market competition intensifies amongst rival industry players. Multinationals enjoy a higher bargaining power in terms of wages and salary negotiations in poor countries.
Nike has exploited this trend by condoning child labour practise in Pakistani, although its labour policies and practices admonish child labour strictly. The multinational firms are interested in higher revenues and profits and they use available loopholes to condone the practise until such a time when concerns are raised by other industry players.
Strict international labour laws should be enforced by the ILO. Companies that do not abide by the laws should be fined heavily to address this global challenge. Consumer groups also need to take a leading supervisory role in initiating global boycott campaigns targeting companies that are found guilty of condoning the practise of child labour.
List of References
Boje, DM, & Khan, FR 2009, ‘Story-branding by empire entrepreneurs: Nike, child labour, and Pakistan’s soccer ball industry’, Journal of Small Business and Entrepreneurship, vol. 22, no. 1, pp. 9-24.
Haan, SC 2011, ‘Federalizing the foreign corporate form’, St. John’s Law Review, vol. 85, no. 3, pp. 925-1008.
Heal, GM 2008, When principles pay: Corporate social responsibility and the bottom line, Columbia University Press, Ney York, NY.
Khanam, R 2008, ‘Child labour and school attendance: evidence from Bangladesh’, International Journal of Social Economics, vol. 35, no. 1, pp. 77-98.
Locke, R, Kochan, T, Romis, M, & Qin, F 2007, ‘Beyond corporate codes of conduct: Work organization and labour standards at Nike’s suppliers’, International Labour Review, vol. 146, no. 1, pp. 21-40.
Miller, J 2006, Nike to the rescue? Economic Affairs Bureau, Somerville.
Montero, D 2006, ‘Nike’s dilemma: Is doing the right thing wrong? A child labor dispute could eliminate 4,000 Pakistani jobs’, The Christian Science Monitor. Web.
Rahman, MM, & Khanam, R 2012, ‘Child labour: the effects of globalisation’, The Journal of Applied Business and Economics, vol. 13, no. 4, pp. 59-71.
International Labour Organization, 2010, The global challenge of child labour: Going for the goal. Web.
Wahba, J 2006, ‘The influence of market wages and parental history on child labour and schooling in Egypt’, Journal of Population Economics, vol. 19, no. 4, pp. 823-852.