Number of companies pledging to avoid Uzbek cotton Zooms past 100

By Reid Maki, Director of Social Responsibility and Fair Labor Standards

The Cotton Campaign recently passed an important milestone in the fight to protect children in Uzbekistan from forced child labor: more than 100 companies have signed a pledge to try to avoid purchasing Uzbek cotton. Consumers will recognize a lot of the names on the list—Levis Strauss, Fruit of the Loom, GAP, Ann Taylor, Wal-Mart—comprising many of the largest apparel companies in the world. To date, 124 companies have signed the pledge.

Each fall, the country of Uzbekistan compels hundreds of thousands of school children to leave their classrooms and perform back-breaking labor harvesting cotton. The children typically earn only pennies for their work and experience harsh, uncomfortable conditions. In many countries of the world cotton is harvested with machinery, but in Uzbekistan using school children, college students and adults forced into labor has proven to be a cheap solution to harvest needs and picking by hand results in cotton that can draw top prices. Ruled by a totalitarian dictator, Islam Karimov, Uzbekistan is the only country in the world whose government is compelling the widespread use of child labor for non-military purposes.

For years, the members of the Cotton Campaign, including the National Consumers League (NCL) and the Child Labor Coalition, which NCL co-chairs with the American Federation of Teachers, have applied pressure on companies that use cotton to eliminate their use of Uzbek cotton until Uzbek leaders allows the International Labour Organization to monitor the cotton harvest and until Uzbekistan eliminates exploitative child labor and forced adult labor from the harvest.

According to reports coming out of Uzbekistan during this fall’s harvest, more schools have remained open this year and the use of child labor has fallen somewhat. Apparently, Uzbekistan has allowed some younger children to focus on their studies by turning to increased forced labor of older kids in the 15- to 19-year-old range. Advocates see this as a sign that pressure is beginning to work. And having 100 companies sign the pledge to avoid Uzbek cotton sends a powerful message to Uzbekistan: you must do more to eliminate the use of forced labor and child labor and you must let the ILO monitor your next cotton harvest.

One obstacle that companies face who have signed the pledge is ensuring that no cotton actually enters their supply stream—despite their intentions to keep it out. Advocates and companies are working to make certain that the pledge is meaningful and that cotton does not pass through so many middlemen that its country of origin is no longer recognizable.

NCL and the Child Labor Coalition encourage consumers to look at the list of companies that have signed the pledge and if their favorite company is not yet on the list, let it know that it should be.

For more information about child labor in Uzbekistan’s cotton fields, please visit the Cotton Campaign here. Readers may view a video of children working in the fields here.

SEC adopts reporting rule to help with human rights issues

By Reid Maki, Director of Social Responsibility and Fair Labor Standards

The primary mission of the Securities and Exchange Commission (SEC) is to protect investors from unfair or unscrupulous practices. Last week, however, the SEC did something remarkable: It agreed to adopt a rule with the goal of diminishing the human rights consequences of business practices.

The SEC voted by a narrow 3-2 margin to require companies that use so-called “conflict minerals”—metals like gold, tantalum, tin, and tungsten which end up in a wide array of products like cell phones, computers and other electronic devices—to file reports about the use of minerals that have been fueling violent conflict and abetting widespread social abuses like the use of child soldiers. The rules were mandated under section 1502 of the Dodd-Frank financial reform bill and targeted towards minerals extrated in the Democratic Republic of the Congo and neighboring countries.

Although two commissioners debated whether the SEC’s core mission of protecting investors should be expanded in this way, they agreed that conflict in the DRC and neighboring countries is a pressing problem and that warring groups are using profits from mineral extraction to engage in armed conflict and a wide variety of human rights abuses. Commissioners Troy Paredes and Daniel Gallagher voted against adopting the rule, arguing that there was no clear evidence that the reporting requirement would help solve civil rights abuses and that the SEC had no jurisdiction to tackle human rights problems. Gallagher complained that the SEC’s proposed rule had no exemptions for small businesses and said the reporting requirements might be overly burdensome.

SEC chair Mary Schapiro joined  commissioners Luis Aguilar and Elise Walter in voting for adopting the reporting rule. The three commissioners were quick to point out that the SEC was under a congressional mandate to implement the provisions and that the humanitarian crisis in sub-Saharan Africa is severe and required action.

The nonprofit community in general is pleased with the adoption of the reporting requirement, although some groups complained that the rules could be tougher and shouldn’t allow companies to list the origins of their mineral use as “indeterminable” for a two- to four-year period.

The hope is that by making the use of “conflict minerals” transparent, companies will be under pressure from stock holders and the public to seek “cleaner” minerals that are not tied to armed conflict or abuses. At the National Consumers League, we applaud this expansion of SEC’s role. It is our hope that supply chain transparency will help move the region’s intractable problems toward solutions and nudge war-torn countries like the DRC towards greater peacefulness. As a co-chair of the Child Labor Coalition, NCL has long worked for the protection of children from military exploitation and the use of child soldiers in this region has been endemic for years.

At the same hearing on Wednesday, August 22nd, the commissioners voted by a 2-1 margin (with two commissioners recusing themselves) to require companies extracting resources—like fossil fuels and minerals–to report payments of $100,000 or more to foreign governments. NCL joins the nonprofit community in hailing this rule as an important step toward greater supply chain transparency.

Politicians take note: Wall Street protests reflect popular sentiment

By Sally Greenberg, NCL Executive Director 

NCL has joined with consumer and labor groups over the last few years on measures to reign in the egregious executive compensation provided to heads of American corporations. Since the 1970’s, executive pay has more than quadrupled while the salaries earned by average workers has fallen by 10 percent. The Dodd-Frank Act passed in 2010 included provisions requiring companies to report the spread between the highest and lowest paid employees.

I’ve often been surprised at the lack of public outrage when CEO pay hits these ridiculous levels – rising well beyond $10 million in many companies. But now we are finally seeing public outrage in the form of the “Occupy Wall Street” protests about the excesses of too many banks and corporations – including getting bailed out with taxpayer funds, as they were several years ago, and then distributing generous bonuses and benefit packages to executives.

To their credit, the anti-Wall Street protests are going far beyond executive compensation and bailouts. They are tapping into what the Washington Post’s polling shows is widespread anger and mistrust of Wall Street: 68 percent of independents and 60 percent of Republicans have an unfavorable view of big financial institutions. Polls also show that 65 percent or so of Americans believe that millionaires should pay higher taxes – and the same number supports the President’s jobs plan.

I don’t know whether these anti-Wall Street demonstrators have begun a movement that will last – I hope they have – but I think the leadership in the House and the minority in the Senate, which has blocked the higher tax on millionaires and the Obama jobs plan, should take notice of this movement that is spreading to cities, not only in America, but across the globe. They ignore these protests at their peril.