by Lionella Pezza, Director of Impact Research. Excerpted from the Q2 2024 Impact Update.
Since 2021, more than 250,000 unaccompanied children have crossed the U.S. southern border. Many are facing economic pressures to seek employment. Thousands of these unaccompanied minors have sadly ended up working in illegal and dangerous jobs in the supply chains of large American companies, mostly in the food and manufacturing industries, some even operating heavy machinery, or working night shifts, often leaving them too tired to go to school during the day. Children are much more likely than adults to get injured on the job, especially when handling machinery. Many private auditors, whose job is to ensure compliance with labor law in factories, have failed to identify children for several reasons, including because audits are announced rather than unannounced, infrequent night shift audits, and use of fraudulent identification documents to secure a job.
In 2024, several large U.S. companies have started to take concrete steps to address the issue, as discussed on page 4 of this issue. These actions include hiring night-shift workers directly, increasing audits for night shifts, and strengthening suppliers’ code of conduct. The jobs that children were working often have less desirable wages or working conditions, making them a higher risk for child labor exploitation. Companies can help address this by maintaining policies and practices to protect fundamental labor rights, including freedom of association and collective bargaining, non-discrimination, worker health and safety, and encourage participation in worker-driven social responsibility initiatives.
In early 2024, Amazon convened companies, including Disney and PepsiCo to discuss how to work towards eliminating illegal child labor. Twelve companies, including General Mills, Mondelez, and Unilever, hired a nonprofit, Verité, to promote responsible labor practices and to retrain 600 American suppliers and staffing agencies and to assist employed children. To prioritize and identify areas of greatest risk, Verité carried out a geographic risk analysis to map the absolute number of unaccompanied children by state and county, per capita, and where there was overlap of this presence with major centers of industries and high employment demand. This risk modeling allows companies to determine how to prioritize next steps and avoid child exploitation. For example, when children are found in supply chains, they should be supported and provided with some kind of a remedy, not simply fired.
The work Verité is doing is essential in helping companies identify possible risk areas, but companies need to establish their own supply chain mapping, an up-to-date code of conduct for suppliers, and a robust, sophisticated auditing system to understand the local context.
Through the years, as part of its research process, Domini has developed a system to analyze how companies manage their supply chains. We seek to invest in companies that publish a list of their suppliers, have an auditing system where visits are unannounced and conducted by an unassociated third party (not by the company itself) or participate in worker-driven social responsibility initiatives. We also seek companies that disclose the percentage of suppliers audited year on year, the findings of their audits, and their remediation practices once an abuse is identified.
We know that a definitive solution to child labor and exploitation will have to come from a collective effort. Governments, companies, non-for-profit organizations, and investors all have a role to play. We welcome the actions of some of our portfolio companies to step up and take collective action to tackle such a troubling systemic problem. We will continue to do our part.