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Child labor in the BRICs countries is growing supply chain risks

Maplecroft, the leading source of global risks analysis, published a new report on child labor statistics in BRICs countries. The results of this study are strategic for companies whose supply chains are located in Brazil, Russia, India and China because child labor is far from decreasing in these rapidly growing economies, which causes “potential supply chain and investment risks”.

The first country on Maplecroft’s Child Labor Index is India, which has the “highest number of child workers in the world”. This number is estimated by NGOs, “between 60 and 155 million children”. They mainly work in, “hazardous industries, such as mining, ship demolition and manufacturing, or are trafficked and exploited in the sex industry”, which makes India a “challenging environment” for supply chains.

The situation is not any better in China and Brazil. Actually, China is rated as an “extreme risk” country because of its “highest prevalence of child labor violations” in the agricultural, manufacturing, textile and electronic sectors. Child workers are also frequently used in Brazil in agricultural and manufacturing sectors, and are often the victims of inappropriate working conditions. In 2006, more than 270, 000 child workers were injured in accidents, often due to chemicals and machinery . These alarming statistics highlight the dangerous working environment that children face in the industrial and agricultural sectors.

As for Russia, which is ranked 75 out of 196 in Maplecroft’s Child Labor Index, the child-labor risk is significant: “The Federal Labor and Employment Service found over “10, 000 child labor violations in 2008”. The Maplecroft report explains that child workers in Russia also suffer from hard working conditions and receive low wages for their work.

"Child labor in the manufacturing sector is hard to identify. It often occurs down the supply chain when production is outsourced to home-workers," explains Professor Alyson Warhurst, CEO of Maplecroft. "This means that companies need to be especially diligent when it comes to auditing their supply chains."

As it has been said, Brazil, Russia, India and China are the fastest growing economies in the world, and their workforce is much cheaper than in Europe or in the US. In these Developing Countries, children are often forced to work to prevent their families from extreme poverty. Several aspects of child labor were shared by the four countries evaluated in the report: child workers are used in industrial and agricultural industries, where work conditions are extremely difficult and dangerous for them. Western companies which plan to delocalize their factories or suppliers to these countries must be aware of the child labor risk for their supply chains and pay a close attention to the repercussions of their initiatives by regular audits.

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