Essays on Nestle Child Labor Essay

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The paper 'Nestle Child Labor' is a great example of a Management Essay. Child labor is a longstanding phenomenon that is still a critical concern in the contemporary world. An important rationale is the protection of a child’ s human rights. Despite this, the current rate of globalization, which has intensified market competition and economic crises, has made human rights concerns, such as child labor, very unequivocal (Baland & Robinson 2000). Some companies such as Nestle have been criticized for taking advantage of relaxed labor regulations in developing countries to exploit children, who work as child laborers.

While some companies have agreed that maximizing profits is a central aspect of their business objective, others have argued that such an approach could affect their ethical values. Hence, the question, is it justifiable to use child labor? This essay argues that Nestle should not use child labor to lower production costs and that it should have a duty of care towards preventing child labor among its suppliers. Situation A report by the Fair Labour Association (FLA) exposed cases of violation of labor code by Nestlé ’ s cocoa supply chain in the Ivory Coast.

The report indicated that cases of child labor were prevalent despite the efforts to discourage the employment of children in the industry. FLA investigations traced the trend to Nestlé ’ s major suppliers, which represented around 80 percent of the company’ s cocoa supply in the Ivory Coast (Giblin 2012). Further revelations indicated that attempts to enforce fair labor practices had been greatly challenged at numerous stages of the company’ s supply chain since few parties at the end of the chain are knowledgeable about labor code. As the biggest food company globally, sourcing some 10 percent of the cocoa from the country, the company is well-positioned to have a significant impact on the lives of workers harvesting cocoa in the Ivory Coast by ensuring contiguous remediation and methodical improvement in the long-term (Giblin 2012). Critical Discussion on related Management Processes, Ethics The International Labour Organisation (ILO) defines child labor as the employment or hiring of individuals below the age of 15, or the national minimum working age.

Nestle was involved in multiple serious violations of labor laws (child labor), which persisted since there were no local laws set up to guarantee fair and safe working conditions.

Estimates by the US State Department indicates that some 10,000 children in the country are victims of human trafficking and slavery, while those subjected to child labor are over 109,000 (Giblin 2012). The cocoa contributes to child labor due to the high demand for reasonably priced chocolate products in the developed nations. This has triggered a competitive market for cocoa farmers. On the other hand, the low cost of child labor and slavery has triggered increased demand for cheap child labor (Giblin 2012).

The rationale for perpetuating or prohibiting child labor can be explained by a number of theories. The decision by parents in Ivory Coast to perpetuate child labor can be explained by the theory of multiple equilibria. According to the model, parents’ decision to withdraw children from labor is based on their level of income. Child labor is a mass phenomenon that happens due to parental poverty or concern for household survival (Basu 1999). Although this assumption has the potential to make an underlying rationale to ban child labor to lose its force, the assumption on parental decision-making in addition to that of substitutability in production between adult and child labor can cause multiple equilibria in the labour market: one where the wages of adults is high and children do not work and the other where children work because the adult wage is low (Brown, Deardorff & Stern 2002; Edmonds 2005).

This presents an ethical dilemma in justifying child labor. However, the ethical theory of right negates such a rationale.

The ethics of the right theory states that if an individual has a right, then it would be unjustified to interfere with the right even if several people are bound to benefit from the interference.

References

Baland, J & Robinson, J 2000,“Is child labor inefficient?, Journal of Political Economy 108: 663-679.

Barauna, F 2005, Managing and Addressing Child Labour in Supply Chains, viewed 22 March 2014, http://edissertations.nottingham.ac.uk/58/1/05MBAlixfbdm.pdf

Basu, K 1999, ‘Child Labor: Cause, Consequence, and Cure, with Remarks on International Labor Standards’, Journal of Economic Literature, vol. 37, No.3, p.1083-1119

Bharadwaj, P & Lakdawala, L 2013, Perverse Consequences of Well-Intentioned Regulation: Evidence From India’s Child Labor Ban, viewed 22 March 2014, http://econ.msu.edu/seminars/docs/ChildLaborBan.pdf

Brown, D, Deardorff, A & Stern, R 2002, The Determinants of Child Labor: Theory and Evidence, School of Public Policy The University of Michigan Ann Arbor, Michigan 48109 -1220 Discussion Paper No. 486

Edmonds, E 2005, “Does child labor decline with improving economic status?”, The Journal of Human Resources, Vol. 40 p.77-99

FLA 2012, FLA Highlights Underlying Challenges of Child Labor After Extensive Investigation of Nestlé Cocoa Supply Chain, Fair Labour Association, viewed 22 March 2014, http://www.fairlabor.org/blog/entry/fla-highlights-underlying-challenges-child-labor-after-extensive-investigation-nestl%C3%A9

Fredborg, I 2009, Corporate Approaches to Child Labour– A Northern European Perspective, viewed 22 March 2014, http://www.diva-portal.org/smash/get/diva2:227810/FULLTEXT01.pdf

Giblin, C 2012, Eliminating child labour from the supply chain, The Guardian, viewed 22 March, 2014, http://www.theguardian.com/sustainable-business/eliminating-child-labour-supply-chain

IFC 2002, Good Practice Note in the Workplace and Supply Chain Addressing Child Labor, Good Practice Note, No. 2, p.1-19

Nestle 2014, Child Labour, viewed 22 March 2014, http://www.nestle.com/csv/human-rights-compliance/human-rights/child-labour

Piedade, L & Thomas, A 2006, "The Case for Corporate Responsibility: Arguments from The Literature," SA Journal of Human Resource Management, Vol. 4 No. 2, p.57-64

Ravallion, M & Wodon, Q 1998, Does Child Labor Displace Schooling? Evidence on Behavioral Responses to an Enrollment Subsidy, viewed 22 March 2014, http://www.cid.harvard.edu/archive/events/cidneudc/papers/neudc_qw.pdf

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