Major US FMCG brands are doubling down on addressing child and forced labor across their supply chains: How can digital tools support?

Supply chains
Major US FMCG brands face child and forced labor in their supply chains. Digital tools like diginexLUMEN can aid in monitoring and addressing these issues.
Written by
No items found.
Published on
July 20, 2023

Child labor instances in U.S. supply chains


What do Ben & Jerry’s, Ford, Fruit of the Loom, Frito-Lay, General Mills, General Motors, J. Crew, Quaker Oats, Target, Walmart and Whole Foods have in common?  These well-known brands were all recently reported to have benefitted from child labor in their U.S. supply chains.  While not directly employing child labor themselves, the direct suppliers of these brands were found to have employed child labor at their manufacturing facilities largely as a result of the use of staffing agencies to recruit and vet workers.  These well-known brands are not alone.  The Labor Department saw a nearly 70% increase in child labor violations[1] since 2018, including in hazardous occupations. In the last fiscal year, 835 companies were found to have violated child labor laws.[2]  Many of the children found to be working at U.S. manufacturing facilities are migrant children from Central America who came to the U.S as unaccompanied minors.     


While a number of factors have contributed to this national crisis, which include systemic issues of poverty in the children’s home country, U.S. immigration policy, and the weak safeguards when unaccompanied migrant children are placed with sponsors, responsibility also lies with companies.  The U.S. Department of Labor (DOL) has fined suppliers for violations of federal child labor laws and has indicated that they also intend to hold companies with child labor in their supply chains accountable.  One of the tools that the U.S. DOL can use is the “hot goods” legal provision that would allow the agency to stop the interstate transport of goods when child labor is found in the supply chain of that product.


Unaccompanied minors migrating to the U.S. are extremely vulnerable and face pressures to send remittances home to support their families.  Traffickers have exploited these children’s vulnerabilities.  Authorities have found indicators of forced labor situations with migrant children having debts to repay to both smugglers and sponsors and being coerced with threats of deportation.  U.S. authorities interviews with migrant youth describe that there are indicators of “exploitation from debt bondage (repaying smuggling debts).” They added that an unnamed “third party labor service company” made the youths believe it could have them removed from the United States.  “Some children expressed fear of deportation based on comments made by company officials to them,” the notes said.[3]


Expectations on Companies


Many companies have strong codes of conduct including zero tolerance for child labor.  Many companies also require their suppliers and subcontractors to incorporate compliance with their code of conduct into their supplier contracts.  However, many of these companies continue to face challenges in monitoring and enforcing their codes of conduct, particularly with respect to issues of child and forced labor.  Supply chains have become so complex that companies have thousands of suppliers to monitor, while also having very limited visibility on the practices of actors in the supply chain beyond their direct suppliers.   This includes lack of visibility on use of staffing agencies by their direct suppliers and the recruitment and hiring practices of these agencies such as whether they have a robust age verification process.[4]   Companies are facing regulatory and consumer expectations to take a proactive approach in their due diligence of suppliers.  Given the very real potential risks of child labor in their supply chains, companies are also expected to use their leverage with their suppliers to ensure suppliers implement due diligence on their business partners, such as staffing agencies.  If cases of child labor are identified, companies should also work with their suppliers to remediate the harm to impacted individuals.


Leveraging technology for effective monitoring


diginexLUMEN, a proprietary supply chain due diligence platform developed in collaboration with Coca-Cola and Reckitt and civil society organisations, helps companies assess and manage social compliance risks.   The platform enables companies to undertake due diligence in three ways: First, by deploying both expert-built and/or customized supplier assessments to quickly gather standardized and comparable data on salient human rights risks such as child and forced labor.  Second, by enabling first-tier suppliers to further cascade due diligence assessments to second-tier or third-tier suppliers and beyond and cascading assessments to recruitment actors such as recruiters, labor providers and staffing agencies.  Third, diginexLUMEN is integrated with diginexAPPRISE, a worker survey tool that enables worker-led due diligence by offering workers an opportunity to provide confidential and anonymous feedback on critical issues that are generally unseen by standard social audits. 


The due diligence results from both the supplier assessments, recruiter assessments and worker surveys are triangulated in diginexLUMEN and built-in algorithms and data analytics help companies to compare the risk-levels of their suppliers and identify the high risk issue areas within their supply chain.  Once issue areas are identified, the system provides recommendations and companies can agree on specific action and set timelines for implementation of improvement plans.   

By deploying diginexLUMEN companies will be able to quickly identify human rights risks in their supply chain in order to better focus on mitigating or remediating any identified adverse impacts. The industry participants need to make concerted efforts to not only identify continuing areas of child labor risks, but to also undertake urgent interventions to prevent and mitigate harms to children.

Mary Ho: Mary is a lawyer and human and labour rights specialist in the Global Supply Chains team at Diginex.  With a passion for positive impact on people, Mary applies her legal acumen towards developing tools that help companies comply with mandatory human rights due diligence.  She enjoys helping companies develop and implement strategies for supply chain due diligence using technology.


[1] The violations of child labor include minors working overnight shifts, children working in dangerous conditions, such as handling  heavy equipment and work on assembly lines with fast moving machinery, and exposure to chemicals.

[2] “U.S. to crack down on child labor amid massive uptick” Reuters By Nandita Bose and Mica Rosenberg (February 27, 2023)

[3] “Child workers found throughout Hyundai-Kia supply chain in Alabama” Reuters By Mica Rosenberg, Kristina Cooke and Joshua Schneyer (Dec. 16, 2022) 

[4] Migrant children often use false identification and find jobs through staffing agencies that do not verify their Social Security numbers.


About the author:

No items found.