1. Globalization is a term used to describe the increased liberalization and rapid expansion of world trade and investment. It has gathered speed at an unprecedented rate in recent years, forcing countries to be increasingly interdependent, and leaves them only the option of either adapting rapidly in order to benefit from the prospects of growth and development that it holds out, or condemning themselves to an irreversible process of political, economic and social marginalization.

2. For the developing countries, where over 95 per cent of the world's working children are to be found, adaptation to a globalizing economy basically means two things: first, they must be able to expand their exports; and second, they must be able to attract a greater volume of direct foreign investment.

A. Relationship between globalization and child labour
3. There are very few specific case studies from which to draw any serious conclusions on the relationship between globalization and child labour. The following issues, however, warrant consideration.

4. Is child labour indispensable to the competitiveness of developing countries' industry in international commercial markets? On this subject, a survey conducted with ILO support on the handwoven carpet industry in India suggests that, as a proportion of the final price of the carpets to the consumer in the industrialized countries, any labour-cost savings achieved through the employment of children rather than adults are surprisingly small: between 5 and 10 per cent according to the type of carpet. American carpet importers, questioned in the course of the survey, indicated that they would not stop buying carpets from India unless the import price rose by more than 15 per cent. The authors of the survey therefore dismiss as unfounded the widespread idea that children are, for economic reasons, irreplaceable in the carpet industry, which would no longer be competitive without them. They also consider that carpet exporters and importers could easily absorb the added costs of hiring adults only.

5.Does child labour give developing countries a competitive advantage in international trade? In its examination of this question, but with reference to all core labour standards, a recent OECD survey concluded that there was nothing to indicate that countries with poor labour standards achieved better export results globally than countries with high labour standards. This conclusion seems particularly relevant when it comes to the question of child labour. Indeed, in the conditions in which it is often carried out in developing countries, child labour impedes children's intellectual development and prevents them from becoming productive adults. Moreover, child labour could well place a country at a disadvantage since, in a globalized economy characterized by fierce competition, countries need to have skilled workers, technicians and managers and must therefore invest heavily in the development of their human resources.

6. In fact, the prevalence of child labour is already creating an obstacle to developing countries' exports. Public opinion in the industrialized countries is putting increasing pressure on importers and governments to penalize countries that allow such practices. For example, the campaigns in Europe and America against the use of child labour in the handwoven carpet industry in certain South Asian countries were undoubtedly one important reason for the dramatic decline in imports of carpets from those countries since the mid-1980s. These fell by almost a third in value, from 229 million US dollars in 1983 to 152 million ten years later.

7. Does child labour create an obstacle to direct foreign investment? It would appear not. As the OECD survey mentioned above bears out, decisions by multinational corporations to invest in a particular developing country are scarcely influenced by the manner in which the country observes core labour standards. The criteria that count in favour of investment are of a different kind: economic and political stability, a favourable attitude towards private enterprise, clear and transparent government attitudes to foreign investors, absence of restrictions on the repatriation of profits, etc. Conversely, developing countries that decided to observe core labour standards more strictly would not run the risk of adverse repercussions on the flow of direct foreign investment.

8. Is globalization likely to bring about increased use of child labour, or will it in fact reduce it? It is reasonable to suppose that globalization will be beneficial in the long term. Indeed, the increase in direct foreign investment in developing countries and the wider access to world markets for goods manufactured in those countries by local or foreign firms should boost their exports, enable them to acquire more foreign currency as well as advanced techniques and skills, improve labour productivity and substantially increase the number of productive jobs in the modern sector of the economy. While multinational corporations have created relatively few jobs in developing countries in recent years, they may reasonably be expected to create employment opportunities at a much more rapid rate as they increase the rate of their investments in these countries. Thus, the greater numbers of adult workers recruited generally in the non-structured sector of the economy, will see their situation improve thanks to more stable and remunerative employment. This in turn will relieve the families concerned of the economic necessity of setting their children to work. As far as the long term view is concerned, developing countries' successful adaptation to a globalizing economy should be accompanied by a significant reduction in the incidence of child labour.

9. The above reasoning should, however, be qualified by the following considerations:

(i) Although the foreign subsidiaries of multinational corporations do not employ children directly, many of them sub-contract part of their production to small firms or to families (home work), which rely heavily on child labour. Moreover, sub-contracting is practised even more extensively by large export-oriented national enterprises, some of which restrict their activities to marketing products manufactured in this way (in the garment industry, for example). Consequently, the positive effects on child labour of direct employment creation by the foreign subsidiaries of multinational corporations may be partially offset by the negative effects of increased recourse to sub-contracting.

(ii) Many developing countries are still suffering from economic instability, huge external debt and galloping inflation rates. Only after a long and patient economic adjustment and reform process will they be able to start benefiting from the fruits of globalization in terms of growth and job creation. In the short and medium term, this continued adjustment effort will diminish the possibilities of improving living conditions for the poorest families and reducing their need to set their children to work. Therefore, countries should avoid adopting radical measures, such as sudden, massive lay-offs or the abrupt withdrawal of government subsidies for staple products, because such measures could increase the number of families in absolute poverty and, consequently, the supply of child labour.

(iii) Although measures to enable a country to exploit the advantages of globalization to the full provide the key to sustainable economic growth and increased productive employment, they will not be enough to eliminate poverty and mass under-employment. In fact, even where such measures may result in a high level of labour absorption into the modern sector, the bulk of the population will continue for a long time to be dependent for their livelihood on traditional agriculture and the urban informal sector, two sectors in which the large majority of child workers are employed. If globalization of the economy is to have a beneficial effect on child labour, it is imperative that developing countries also adopt measures leading improved productivity in traditional agriculture and the urban informal sector.

B. Government initiatives
10. The rapid globalization of the economy has given rise in recent years to an extensive debate on the measures that should be taken to protect workers' basic rights, which are considered to be under threat from fierce competition in the world's commercial and financial markets. This debate has led to initiatives linking, or seeking to link, trade with developing countries to the observance of certain minimum standards, especially in respect of child labour. These initiatives are described below.

Government initiatives at national level
11. The United States Generalized System of Preferences. The United States has a system of trade preferences which is conditional on respect for workers' rights. The American system, in operation since 1976, exempts from customs duties certain products imported from specific developing countries designated by the President of the United States. Reference to internationally recognized workers' rights was included in this system in 1984. These rights comprise freedom of association, the right to organize and bargain collectively, the fixing of a minimum age for admission to employment, prohibition of all forms of forced or compulsory labour, and a guarantee of adequate conditions in respect of minimum wages, hours of work, and occupational safety and health. To benefit, or continue to benefit, from this system, a developing country must prove to the satisfaction of the United States Government that it is taking steps to ensure that these rights are observed. American citizens or their representative organizations, such as workers' organizations, may file with the sub-committee responsible for administering this system a petition against a beneficiary country for failure to respect any one of these rights. If the sub-committee considers the petition to contain grounds to justify an investigation, this investigation is conducted through public hearings, consultations with government trade departments and contacts with representatives of the country concerned. On a few occasions, this procedure has led the President of the United States to withdraw some or all of the trade preferences granted by the system.

12. The inclusion in the American system of trade preferences of a criterion concerning internationally recognized workers' rights has been criticized by developing countries, which see in it a threat of penalties. For example, in a joint letter to the United States Government in 1993, when the system was being renewed, representatives of thirteen beneficiary countries argued that their governments were "in need of incentives, not penalties".

13. Although in favour of the system, the United States trade union movement criticizes it on several counts, particularly the fact that it does not explicitly state that internationally recognized workers' rights are those substantively defined by the relevant ILO Conventions. Another criticism concerns the wording used in the system, which merely imposes on governments an obligation to "take steps" with a view to ensuring the application of these rights. The American unions regard this wording as ambiguous, in so far as a government may very well take steps without, however, fully respecting workers' rights. They also criticize the United States Government for often suspending investigation of petitions once it has received a pledge from the government concerned that remedial measures will be taken. According to the unions, such pledges are rarely honoured.

14. The United States Government maintains that the incorporation of a conditionality criterion in connection with observance of internationally recognized workers' rights is not intended to limit developing countries' access to the trade preferences provided for by the system, but to encourage them to make progress in applying these rights. In point of fact, the Government appears reluctant to withdraw these preferences. The President has only rarely decided to do so, and then usually as a result of petitions filed with regard to serious violations of freedom of association. Surprisingly enough, the charge of resorting to child labour has been made in only a very small number of cases. Nonetheless, it is for this reason, among others, that Pakistan was deprived of certain advantages of the system in November 1995.

15. The Harkin Bill in the United States. In the United States a bill introduced in 1993 by Senator Harkin (the Child Labor Deterrence Act) will, if enacted, prohibit the import into the United States of minerals obtained or manufactured goods produced with child labour. The mere threat of trade sanctions implied in this bill induced employers in the Bangladesh garment industry to lay off tens of thousands of children, girls for the most part. An ILO survey based on a sample of children laid off found that these had turned to other, in many cases more hazardous, activities, and that none of them had returned to school. This example shows that the child labour issue must be addressed globally, and not sectorally, if the problems are not to be simply transferred from one sector of economic activity to another. It also shows that removal of children from work has to be carefully planned; otherwise, they may be thrust into a far worse situation, in which they will find themselves totally destitute.

Intergovernmental initiatives at regional level
16. The European Union's Scheme of Generalized Tariff Preferences. This scheme, in operation since 1971, consists in granting a reduction of the Common Customs Tariff duties in force for a list of products imported from a number of developing countries. These reductions can amount to 15, 30, 65 or 100 per cent of such duties according to the nature of the products in question. Moreover, these duties are totally suspended for all products covered by the scheme in the case of the least developed countries as designated by the European Council.

17. Under the terms of the European Council Regulation of December 1994 concerning the renewal of the scheme of Generalized Tariff Preferences for the years 1995 to 1998, the Council may decide to withdraw temporarily all or part of the benefits of the scheme in a certain number of cases, particularly where there exists any form of forced labour as defined in ILO Convention Nos. 29 and 105 on forced labour. This practice can be denounced before the European Commission by member States of the Union, and by any natural or legal persons, or associations not endowed with legal personality, which can demonstrate an interest in such withdrawal. During the eight working days following the denunciation, consultations are held within the Committee for the Management of Generalized Preferences, which consists of representatives of the member States and is chaired by a representative of the Commission. If at the end of these consultations, the Commission considers that there are sufficient elements of proof to justify initiating an investigation, it officially announces the opening of such an investigation and notifies the competent authorities in the beneficiary country concerned. This investigation should last at least one year and may be extended if need be. The Commission seeks all information it deems to be necessary, conducts hearings, sends its own experts to the country in question, if required, and gives the latter an opportunity to provide explanations and refute the allegations against it. Once the investigation has been completed, the Commission submits its findings to the Committee for the Management of Generalized Preferences. If the Commission considers temporary withdrawal of preferences to be unnecessary, it publishes, after consultation with the Committee, a notice of termination of the investigation setting out its main conclusions. If, on the other hand, temporary withdrawal of preferences is considered to be necessary, the Commission submits an appropriate proposal to the Council, which decides on it by a qualified majority vote. This procedure for temporary withdrawal of preferences from the scheme has been used once, on the grounds of forced labour.

18. From the point of view of the fight against child labour, the above-mentioned European Council Regulation contains a particularly interesting provision. It introduced, with effect from 1 January 1998, special incentive arrangements in the form of additional preferences to be granted to beneficiary countries covered by the scheme, provided that they can prove that they have adopted and actually apply domestic legal provisions incorporating the substance of ILO Convention Nos. 87 and 98 concerning freedom of association and protection of the right to organize and to bargain collectively, and of ILO Convention No. 138 concerning minimum age for admission to employment or work. Such arrangements are the result of a request made to the Commission by the European Parliament in its 1994 report on the introduction of a social clause in bilateral and multilateral trade agreements. With a view to the implementation of these incentive arrangements, the Commission was instructed to prepare a report on the results of the studies carried out in international fora, such as the ILO, on the relationship between trade and labour rights. This report will provide a basis on which the European Council will review this relationship in 1997. In the light of that review and on the basis of internationally accepted, objective and operational criteria, the Commission will submit a proposal for a Council decision on the magnitude of the special incentive arrangements and on the modalities for implementing them. The ILO considers this development to be particularly important as regards the relationship between international trade and basic workers' rights. In fact, this is the first time that the threat of trade sanctions against countries that do not respect these rights has been counterbalanced by a promise of more substantial trade advantages for countries that can prove that they apply them in their national legislation and practice. The extent to which the special incentive arrangements will have induced developing countries to intensify their efforts to abolish child labour remains to be seen.

19. The North American Agreement on Labor Cooperation. This agreement was signed on 13 September 1993 by the Governments of Canada, the United States and Mexico. It supplements the North American Free Trade Agreement (NAFTA), concluded in December 1992 with a view to liberalizing trade between the three countries. It was negotiated as a result of fears expressed in the United States, particularly by the trade union movement, that NAFTA would ultimately lead to job losses and to lower wages and poorer working conditions for American workers.

20. This supplementary agreement makes it possible for a signatory country to file a complaint against another signatory country for repeated non-compliance with its legal provisions in respect of minimum wages, occupational safety and health or child labour. It contains no reference to an agreed minimum that would be binding on all three States. The minimum to be respected is that determined by the legislation in force in each country, and there is nothing in the agreement to prevent a signatory State from changing its legislation to the detriment of the workers. Moreover, the complaint may not be examined unless the complaining country can prove that repeated infringements of national legislation have a bearing on trade, in other words that they penalize it in respect of trade with the other country.

21. The supplementary agreement provides for trade sanctions against offending States. These can be decided on after a conciliation procedure, if this has not been successful. In the initial stage, sanctions involve a fine; if the offending State does not pay it or if it continues to breach its own laws and regulations, it may be temporarily excluded from the NAFTA.

22. In actual fact, such sanctions are unlikely to be imposed. There is a dispute settlement procedure which affords the countries concerned the possibility of finding common ground, first through ministerial-level discussions within the Labor Cooperation Commission, which was established to supervise the implementation of the agreement. However, there is always the possibility that such discussions will not be successful, in which case the complaint is examined by an evaluation committee composed of independent experts. If the complaining country is not satisfied with the committee's conclusions, it can demand the appointment of an arbitration panel. If the latter finds that there have indeed been shortcomings in the implementation of national labour legislation, the countries concerned have 60 days to negotiate a plan of action to remedy these. If negotiation fails, the arbitration panel itself proposes a plan of action. It is only if this plan of action is not implemented that sanctions may possibly be applied.

23. For the first time, with the North American Agreement on Labor Cooperation, a multilateral trade agreement - in this instance, NAFTA - contains a social clause with provision for trade sanctions for failure to respect certain workers' rights. The impact of this agreement, which has been in force only three years, has not yet been evaluated, particularly regarding the extent to which child labour is used.

Intergovernmental initiatives at international level
24. The increasingly fierce competition between nations created by globalization of the economy has given rise to concern that the ensuing pressure will have harmful repercussions on social progress. It has given rise to the proposal that a social clause be included in international trade agreements. Under this proposal, countries engaging in international trade would assume an obligation to respect certain workers' rights, including the right of children not to be forced to work before a certain age, even if the countries in question had not ratified the relevant ILO Conventions. Moreover, trade sanctions would be imposed on them if they failed to respect these rights. This proposal has provoked strong reaction. On the one hand, its defenders - mainly some governments in industrialized countries and workers' organizations - have been accused of seeking to impose minimum levels of wages and working conditions regardless of the level of a country's economic development, and consequently of trying to destroy through a sort of disguised protectionism the comparative advantage of developing and emerging nations. On the other hand, its opponents - most governments, especially in developing countries, and employers' organizations - have been accused of seeking, by maintaining low standards in respect of workers' rights, to improve certain countries' competitive position on world commercial markets, and of engaging in unfair competition against countries that respect these rights. However, a consensus seems to be now emerging. The final Declaration of Singapore contains a very significant statement: "We renew our commitment to the observance of internationally recognized core labour standards. The International Labour Organization (ILO) is the competent body to set and deal with these standards, and we affirm our support for its work in promoting them."

25. Discussions in the ILO. This question of the social clause has been raised in the ILO, and in June 1994 the ILO Governing Body decided to set up a Working Group on the Social Dimension of the Liberalization of International Trade. The title given to this working group clearly illustrates the determination not to limit examination of the social clause to the question of trade sanctions, which would only lead to sterile confrontations, but to extend it to the broader question of the machinery to be put in place to ensure that the economic progress generated by liberalization is reflected in a new breakthrough on the social front.

26. The working group is continuing its discussions, but certain conclusions can already be drawn:

(i) Broad agreement has been reached on the international labour standards that should be considered fundamental in relation to the liberalization of international trade. It has been accepted that Convention No. 29 concerning forced labour, 1930, and Convention No. 138, 1973, concerning minimum age for admission to employment or work, both so important as regards the fight against child labour, should be included among these. The same may reasonably be expected in the case of the proposed Convention on the elimination of the extreme forms of child labour, if it is adopted by the International Labour Conference in June 1999.

(ii) It is recognized that the ILO possesses a long-established framework for determining what decent and fair labour standards should be, as well as proven, vigorous and apolitical machinery for supervising compliance with obligations assumed within this framework. The working group stresses the essentially voluntary nature of the ratification of ILO Conventions and on the fact that the ILO does not have, nor should it seek to have, any coercive powers with regard to countries that do not respect Conventions which they have freely ratified. It considers that the ILO should confine itself to exerting moral pressure on such countries.

(iii) While fears and suspicions have not been totally allayed, the working group has made it possible to define what is involved with regard to the social dimension of the liberalization of international trade. Those in favour of a social clause have confirmed that they were not seeking to establish a universal minimum wage or uniform working conditions everywhere. They consider that such a clause should be confined to certain genuinely core workers' rights and should recognize that developing countries are entitled to make the most of their comparative advantages. For their part, those opposed to the social clause have expressed their support for workers' fundamental rights and reaffirmed their commitment to improve social conditions.

(i) that the ILO should continue its campaign to secure the ratification of core Conventions;

(ii) that the special procedure for supervising the application of Convention Nos. 87 and 98 on freedom of association and the right to organize and to bargain collectively should be extended to other fundamental ILO Conventions, such as Convention No. 29 on forced labour, which is relevant for the fight against bonded and forced labour of children. This special procedure, which is based on the principle that respect for workers' basic rights constitutes an implicit obligation on an ILO member State, makes it possible to file a complaint regarding violation of Convention Nos. 87 and 98 against any country, whether or not it has ratified those Conventions. The extension of this procedure to other fundamental ILO instruments remains a subject of contention and reflection;

(iii) that machinery be established to examine the efforts made by member States for ensuring fair distribution of the benefits and constraints of international trade liberalization. Supporters of this proposal invoke the principle whereby ILO member States, which are at the same time members of the World Trade Organization, cannot disregard the general commitment that they made when they joined the ILO - to strive for social progress "in good faith", i.e. to promote social objectives within the limits of their economic means. They consider that this commitment implies that they do not artificially maintain bad social conditions for their workers in order to gain an unfair comparative advantage in international competition. The proposed machinery should not be repressive, but should aim at exposing certain shortcomings and identifying solutions enabling member States to pursue two objectives concurrently: successful adaptation to a globalizing economy, on the one hand, and social progress, on the other.

C. Measures taken by the private sector
Codes of conduct
29. Many will remember the considerable publicity given in June 1996, on the occasion of the last European Football Cup, when the International Confederation of Free Trade Unions (ICFTU) accused the International Federation of Football Associations (FIFA) of using footballs manufactured with the help of large numbers of exploited child workers in the Sialkot region of Pakistan. This accusation led FIFA to negotiate with the ICFTU a code of conduct concerning social conditions to be respected in the manufacture of footballs bearing the FIFA logo.

30. In recent years, voluntary codes of conduct have increasingly been adopted by importing firms and multinational corporations based in the United States. This can be attributed to these firms' awareness of their social responsibilities and to their understandable concern to project a favourable image and to maintain, if not increase, their market share.

31. These codes of conduct, which are designed to regulate social conditions of production in the foreign subsidiaries and supplier firms of multinational corporations and importers, are strongly encouraged by the United States Government. For example, in March 1995, the Government requested all American enterprises operating abroad to adopt such codes and to base them on the directives it had issued concerning their desirable content. In 1996, the Department of Labor conducted a survey by questionnaire, backed up by visits to several Central American and Asian countries, with a view to examining the extent to which American firms importing items of apparel had adopted a code of conduct and the problems encountered in its application. The survey revealed that such a code existed in 36 of the 42 firms that had replied to the questionnaire (out of a total of 48).

32. In some cases, the code of conduct is a genuine code, whereas in others it is merely a letter addressed to foreign subsidiaries or suppliers, explaining the behaviour expected of them with regard to personnel management. Sometimes the code consists of no more than a few regulations included in the purchase orders sent to suppliers. In all cases, it is an individual initiative on the part of the importer or multinational corporation.

33. Prohibition of the employment of children under a certain age is one of the social conditions covered by the codes of conduct. These codes refer, in fact, to other workers' rights, such as freedom of association and the right to organize and to bargain collectively, a guaranteed minimum wage, and protection against occupational hazards, against discrimination and against excessive working hours. In respect of child labour, they themselves set the minimum age for admission to employment, which is sometimes higher than that laid down by national legislation, or they take as a reference such legislation or the minimum ages set out in ILO Convention No. 138.

34. The survey conducted by the United States Department of Labor, referred to above, gives a good idea of the difficulties encountered when it comes to the application of codes of conduct. While these are usually respected by the foreign subsidiaries of multinational companies, this is far from the case in the local enterprises with which these American companies or importing firms do business. They are even less respected among the many sub-contractors of these subsidiaries and local enterprises. One reason for this is that very few visits are carried out to inspect, in situ, the manner in which subsidiaries and suppliers conform to the rules laid down. Another reason is the ignorance of the persons most concerned. For example, according to the above-mentioned survey, visits to local enterprises exporting to the United States revealed that a third of them were unaware of the existence of the code of conduct, and that other enterprises, although aware of its existence, were unable to produce a copy. Moreover, the workers and their unions had not been informed about it at all. To remedy these shortcomings, it was proposed that independent inspectors hired and paid by the multinational corporation or importing firm be responsible for monitoring the situation, but this proposal seems - with a few exceptions - to have had no effect.

35. According to the Department of Labor's survey, American multinational corporations and importing firms have only very rarely been informed of cases of non-observance of codes of conduct prohibiting the employment of children. Questioned on what they would do if informed of non-observance, they replied that they would demand that remedial measures be taken and, in the event of repeated violations, they would consider cancelling their purchase orders or even terminating their business relations with the recalcitrant supplier.

36. Multinational corporations and importing firms that have adopted a code of conduct do not appear to have accompanied this measure with any form of action designed to help the children removed from work as a result of applying the code. The World Federation of the Sporting Goods Industries is concerned to provide, concurrently with the adoption of its code, viable alternatives for children currently employed in the manufacture of footballs in the Sialkot region of Pakistan. To this end, it intends to collaborate in an action programme that the IPEC is about to launch for these children.

Social labelling
37. Following the considerable response of public opinion in the industrialized countries to campaigns denouncing the exploitation of child labour in certain export industries in developing countries, the social label was introduced by the private sector as another means of attempting to remedy the situation. This label guarantees consumers that a given product has been manufactured without recourse to child labour, or that the children who engaged in its manufacture did so in strict conformity with the relevant legal provisions.

38. These labelling systems are of recent origin, the oldest of them dating back only to 1994. Some have been in operation only for a few months, while others are still in the development stage. For this reason, it is too early to evaluate the results as regards the effect on the numbers or the plight of child workers. Nor are they very numerous. An ILO report under preparation lists the following systems: for the carpet industry, the Rugmark system applied in Germany, the United States, India, Nepal and the Netherlands, the Fair and Care system in Germany, and the Step system, whose head office is in Switzerland; for the textile and garment industries, the Double Income Project, also based in Switzerland; and for the footwear industry, the system established by employers in this sector in Franca, in the State of Sao Paulo in Brazil. The number of countries involved in labelling systems is also very small: among the industrialized countries, there are Germany, the United States and Switzerland, and among the developing countries, Brazil, India, Kenya, Nepal and Pakistan.

39. Advocates of labelling systems point out that the pressure that consumers can exert through the preference they show for products bearing the social label is taken very seriously by sellers and importers, who in turn intervene determinedly with exporters and producers in developing countries to make them change their ways in respect of child labour. They refer to the great success achieved by labelling systems that seek to modify production processes so as to make them more environment-friendly, and they fail to see why a label designed to raise public awareness of the child labour issue should have any less success with consumers. They reject the charge made against the labelling systems, i.e. that they practise a disguised form of protectionism. Finally, they draw attention to the fact that the wide publicity given by the media in industrialized countries to labels referring to child labour has made individuals and organizations become aware of child labour and react to the problems it creates in poor countries. This in turn has helped to turn the international spotlight on the problems.

40. Labelling systems give rise to various objections and difficulties:

(i) They may be regarded - at least it was so viewed by the government and exporters in one South-Asian country - as unacceptable external interference in local production patterns, because of the inspections conducted at workplaces in parallel with those conducted by the official services. Their effects on production costs are considered to be far from insignificant, especially in the case of small enterprises. They also accuse the promoters of these systems of tarnishing the national image on world commercial markets, in respect not only of the product concerned, but also of other products the country wishes to export.

(ii) Opponents argue that these supposedly voluntary systems are not really voluntary. There is the fear that foreign markets may well be increasingly closed to products that are not labelled, even where they have been manufactured without child labour.

(iii) Social labelling initiatives that guarantee to consumers that absolutely no child labour has been involved in the manufacture of a product are criticized for promising something that does not correspond to the facts. Taking the example of carpet weaving in India, which is carried on in a multitude of craft workshops scattered over a vast region, some critics consider it impossible to provide a 100 per cent guarantee that children are not involved.

(iv) Social labelling initiatives are often accused of putting the cart before the horse, i.e. of wanting to release children from work before creating infrastructures whereby they can be rehabilitated and reintegrated into the school system.

(v) Labelling systems are criticized on the ground that they create in the industrialized countries a truncated perception of the child labour issue by concentrating on a limited number of export-oriented sectors. They are also criticized for "going it alone" and not coordinating with other interventions at national level to reduce the incidence of child labour or to improve the plight of working children.