Gap Uses Child Labor--And Takes A Hit Where It Hurts
Saturday, January 26, 2008 / KW
Here's a noteworthy story from the website of the World Business Council for Sustainable Development dealing with the current child-labor scandal in which the clothing retailer Gap has found itself embroiled.
Among other things, the scandal is an object lesson in the complexity of today's value chains and the enormous challenges involved in policing them thoroughly. In this case, it appears that the misdeeds--using small children laboring long hours at miserable pay scales to do detail work on clothing for The Gap--were perpetrated by a subcontractor to a Gap contractor.
To its credit, Gap is responding aggressively, announcing steps that hold out hope of alleviating the problem if not eliminating it altogether. They are also taking actions that will cost them money:
Money is the universal standard of value in business. The best way to get and keep the attention of managers in any company is not to reprimand or publicly embarrass them but to do something that will impact their bottom line--as the destruction of the clothes made by children in this case does. There's no "scarlet letter" in business quite like the shame of having red ink on your P&L at the end of a quarter or a year.
Reading that Gap has taken these relatively costly steps gives me, an outside observer, the sense that they take the issue of child labor seriously and view it as more than just a public relations problem.
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Among other things, the scandal is an object lesson in the complexity of today's value chains and the enormous challenges involved in policing them thoroughly. In this case, it appears that the misdeeds--using small children laboring long hours at miserable pay scales to do detail work on clothing for The Gap--were perpetrated by a subcontractor to a Gap contractor.
To its credit, Gap is responding aggressively, announcing steps that hold out hope of alleviating the problem if not eliminating it altogether. They are also taking actions that will cost them money:
Gap has suspended half of its orders with the supplier for the next six months and has placed the factory on probation, demanding "significant improvements to its oversight of subcontractors". It also destroyed all of the garments made by the children to ensure they were not sold in its stores or elsewhere.In a case like this, it's important for the responsible corporation not only to take remedial action but also to quickly and publicly accept a financial hit. I say this not out of vindictiveness but because such action underscores the seriousness with which the company takes the rights violations.
The retailer has vowed to pay the children back-wages, educate them and continue paying them until they are of working age, when it will offer them full employment.
Money is the universal standard of value in business. The best way to get and keep the attention of managers in any company is not to reprimand or publicly embarrass them but to do something that will impact their bottom line--as the destruction of the clothes made by children in this case does. There's no "scarlet letter" in business quite like the shame of having red ink on your P&L at the end of a quarter or a year.
Reading that Gap has taken these relatively costly steps gives me, an outside observer, the sense that they take the issue of child labor seriously and view it as more than just a public relations problem.
Labels: Gap, Human Rights and Child Labor
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