The Gap Sweatshop Story: Child Labor in India. What happened?

By now you’ve seen it: newspapers all over the world are carrying the headline about Gap’s link to bonded child labor in an India sweatshop. The U.K.’s Sunday Observer broke the story on the child workers producing for Gap after a journalist captured video footage of the New Delhi slum.

So, what’s the deal?

Children, sold to the factory by their parents, were found laboring in squalid conditions to produce a line of Gap kids clothing intended for the Christmas season. The children were tattooed with the number of the sweatshop to which they were bonded. They have been told they must work off the debt of the payment made to their parents to provide them jobs but they earn no wages while they are still “learning.” They work 15-20 hours a day and are beaten regularly. They are hit with rubber pipes if they cry. The workplace is reportedly hot, filled with flies, and with raw sewage leaking from toilets into aisle ways.

One boy says he wants to work there so he has a place to sleep at night. He wants to earn money to buy a house for his mother. But he is not being paid for his work and his sleeping quarters are on the roof.

The reporter’s first hand accounts and video footage, available in the video feeds from the BBC and ABC News, are as depressing and appalling as the text descriptions.

How did this happen?

It appears that the Gap supplier in India subcontracted the work order to this unnamed operator without notifying the Gap. According to one article, the sweatshop manager “gloated as he explained to us how the child labour deal was arranged. He claimed one of the multi-national firm's Indian suppliers sub-contracted it to his bosses with a handshake, promising cash on delivery. ‘It's how we do business here in India," he told us. "You westerners are too quick to judge life here.’”

What was Gap’s response?

Gap responded by canceling the order, committing to destroy the goods that were produced by children, launching an investigation, and calling an emergency meeting with all regional suppliers.

Dan McDougall, the journalist that broke the story, said, “I’m satisfied with that response. I think they’re doing everything they can, but in terms of the broader issue, perhaps more money could be invested in auditing their suppliers and more monitoring on the ground. That’s the key because clearly the systems they have in place failed.”

What now?

This story has galvanized anti-poverty campaign group War on Want to push Prime Minister Gordon Brown for independent regulation of the clothing sector. According to War On Want spokesman Paul Collins, “This is the latest of a series of scandals that have emerged over almost a year … So long as retailers like Gap are allowed to regulate themselves, rather than have an independent regulator look at their factories and their subcontractors - then these scandals will continue to emerge."

Interestingly enough, the timing of this corresponds with a similar debate in the U.S. Just last week, a U.S. Senate panel heard testimony on sweatshops in the toy industry. U.S. Senator Byron Dorgan is “pushing legislation that would make it illegal to import or sell goods in the United States that are made abroad in sweatshops or by prisoners…” [see a related article for more details.] More on this testimony to follow in a later blog.

Don’t forget the subcontractors

Gap has a larger social compliance program than most companies. They employ 90 internal social compliance staff to work with their supply chain, including suppliers in India. They report having ceased relationships with 23 suppliers last year due to labor standards concerns.

If they have dedicated so many resources to this area, how can they still face such grave challenges in the supply chain? What about those companies concerned about labor conditions but have less resources available than the Gap?

I think one lesson for companies looking at this event is: don’t forget the subcontractors. [see a related article on this topic.] I don’t mean to suggest that Gap has forgotten them. I imagine that they have purchase order requirements that forbid unauthorized subcontractors and that this Indian supplier simply ignored the contractual agreements. However, many companies are not even considering the second and third tiers in their supply chain. As Dan McDougall notes, “This isn’t a problem for Gap; this is a problem for every High Street retailer. They all subcontract to the developing world.”