It was disappointing and frustrating to see the use of child labour in a globally recognised perfume and cosmetics brand.
We understand the complexity and challenge of Third Party Risk Management – we know the process is long, and in a multi-layered supply chain, it is difficult to know what the n’th chain in the link is doing – but how can we promise to eliminate child labour, then reduce budgets, knowing that the person on the bottom end of the rung is going to get squeezed. While the perfume retails for an average of 370AED ($100), the flower picker earns barely $1.
There is little point in exploring why this happened – its obvious that businesses aim to improve margins, and reduce Cost of Goods Sold (COGS). The implication of this, is that suppliers further down the chain are squeezed. Where workers have little choice or opportunity for better work, they are effectively forced to work for meagre wages.
This is why Decent Work and Economic Growth has been set as UN Sustainable Development Goal 8. Further target 8.7 aims to eliminate child labour (amongst other targets.)
So if an organisation is truly serious about eliminating modern slavery and child labour, then they must invest in end-to-end auditing and enforce ethical, responsible behaviour.
While the story might be suppressed to prevent reputational damage, wouldn’t it be better to pay working parents a fair wage? This would reduce the need for child labour, and the increased salary costs would likely outweigh the expenses associated with reputation damage and PR efforts.
How can organisations do better and meet their ESG goals? Set realistic goals and pursue them diligently. This situation exemplifies the need for comprehensive Governance Risk Compliance (GRC). Identify risks, monitor them, audit, and implement corrective actions.