Part Two: Six Labelling Intiatives that Target Child Labour
The most publicized and best known of all social labelling initiatives with reference to child labour is the Rugmark programme, which arose after European consumer groups became aware of the extent and conditions of child labour in the production of hand-knotted carpets in South Asia, chiefly India, Nepal and Pakistan. This initiative occupies much of this part of the study, and consists of four subsections, devoted respectively to the Rugmark Foundation in India, Rugmark operations in Germany, the fledgling Rugmark initiative in the United States, and Rugmark in Nepal. A consideration of the Kaleen label, the Indian Government's effort to introduce its own labelling initiative for carpets, follows. There is then a brief note about Pakistan's relation to both Rugmark and Kaleen. Two other non-Rugmark labelling initiatives concerning child labour in the hand-knotted carpet industry are also presented: the STEP label of Switzerland and Care & Fair of Germany, which is an initiative of carpet importers and retailers.

Leaving the hand-knotted oriental carpet industry, the study then presents a labelling initiative in garments and textiles, the Double Income Project of Switzerland, and the "child-friendly" labelling initiatives currently taking place in Brazil.

The Rugmark label is now two years old but was several years in gestation. It originated through the collaboration of a number of consumer, religious and humanitarian organizations working to eliminate the use of child labour in the carpet industries of South Asian countries. The production of hand-knotted carpets was a traditional occupation in which child workers were used, often as apprentices but also sometimes as bonded labourers. The abusive treatment of some child carpet workers was well known in India and Nepal and had stimulated child rights activism of various kinds on the part of indigenous humanitarian and child welfare associations.

In recent years, and especially beginning around 1980, the massive carpet export drive of India, Nepal, Pakistan and Bangladesh had greatly expanded the industry, and the concomitant increase in competition had entailed recourse to the frequent use of child workers: many children, sometimes of very young ages, were brought from poorer areas as paid or bonded labourers to work at the looms or in other rugmaking operations, often in appalling conditions.

Public awareness and the idea of carpet labelling. The humanitarian and religious organizations of consumer countries began to introduce public awareness campaigns about child labour in hand-knotted carpets in the mid 1980s, and in at least two countries these campaigns were accompanied by filmed documentation of children at work at the looms, which greatly aroused public opinion. A sharp drop in the demand for hand-knotted South Asian carpets resulted, to the point where producer-country governments, exporters and manufacturers realized that measures needed to be taken to regain lost market share. These parties were willing to consider the labelling of carpets - attaching a "Guaranteed made without child labour" label to them - as one such measure. The extent to which these organizations and individuals actually supported (or now support) labelling will be made at least somewhat clearer in this study.

The major markets for handmade oriental carpets. The major countries importing hand- knotted oriental carpets in 1993 were, in declining order of the dollar value of their imports, the United States with over $66 million, Germany with over $57 million, and following far behind with less than $6 million each were Switzerland, Canada, the Netherlands, Australia and New Zealand, Belgium and Luxemburg, and Austria. The world total of $152 million in 1993 constituted a decline of $77 million from ten years earlier, which gives some idea of the order of magnitude of negative consumer reaction to the "revelations" about child labour. In fact, religious and humanitarian organizations in some countries had called for an outright boycott of such carpets. (Imports in 1983 had increased fourfold over those of 1979; the period of the early 1980s was that of the major carpet-country export drives.)^{( Endnote 2)}

The Rugmark label. The Rugmark label, which is actually a hand-drawn logo depicting a smiling face with the word "Rugmark", became a legally binding international trademark in December 1995 and April 1996 in the two major carpet-importing countries, Germany and the United States. The name and logo now also enjoy patent protection in all other major markets, and the Rugmark label has been given national and international endorsements, the most important being those of branches of the German and United States governments.

The Rugmark organizations. In the countries from which Rugmark-labelled carpets come, the organizations responsible for operating the labelling initiative are the non-profit Rugmark Foundations, which currently exist only in India and Nepal; the latter is just starting up. There are importing-country organizations in Germany and the United States. (Although both the German and American Rugmark operators maintain that Rugmark initiatives also exist in other carpet-importing countries, no direct evidence has been found to support this.) In Germany and the United States the Rugmark organizations are recent and are independent of each other, although an "international" structure is under discussion. The Rugmark foundation in India has been fully functioning for somewhat more than a year. All in all, the Rugmark labelling initiative has a limited track record. It is a new endeavour that must take shape in a complex environment, characterized not only by local economic and political realities in the producer countries but also by the need to operate across several continents.

A description of the Rugmark Foundation in India appears below, followed by discussions of the Rugmark programmes in Germany and the United States. There is then a note about the current status of Rugmark in Nepal and Pakistan. The section on the Rugmark label concludes with a summary of some of the issues regarding Rugmark.

The Rugmark Foundation in India is a non-profit private limited company responsible for operating the labelling initiative in this carpet-producing country and affixing labels to carpets prior to export. The Indian Rugmark Foundation is located in New Delhi but maintains inspection offices in the carpet-producing areas and operates the inspection and certification infrastructure. The focus in what follows is on Rugmark's present day operations, and only a brief mention will be made of the foundation's origins.

India's "carpet belt" is in the northern state of Uttar Pradesh, with loom sheds scattered over a very large area; twenty or fewer sheds are found in each individual village. It is widely reported and well documented by legal and humanitarian organizations in India that a large (although unknown) number of the children working in the loom-sheds are either bonded labourers or are kidnapped from their poverty-stricken natal villages, sometimes in the neighbouring state of Bihar, and are mainly of lower caste, Harijan or unscheduled tribal origins.

The creation of Rugmark. The original idea for labelling carpets came from SACCS (the South Asian Coalition on Child Servitude, an association of child rights organizations) in discussions with Bread for the World in Germany. Beginning in 1991 meetings were held to unite NGOs, carpet manufacturers, importers, exporters, international agencies such as UNICEF, and consumer organizations in order to initiate such labelling. The impetus for at least some cooperative effort was the sharp fall in the developed country demand for Indian carpets that resulted from unfavourable film and press coverage of the use of child labour in this industry. However, the groups interested in a labelling initiative did not always agree about the requirements for it, and the initial progress toward establishing a label was slow and difficult. The Rugmark Foundation was finally created in 1994.

At the time of its inception, the Rugmark Foundation received sporadic declarations of support from the Indian Textile Ministry through its Carpet Export Promotion Council (CEPC) and some support from smaller carpet producers grouped into an "alternative" manufacturers' association (the Carpet Manufacturers' Association Without Child Labour). (Some larger manufacturers have since joined this association.) From the beginning, the Foundation received encouragement from a broad range of domestic and international organizations including UNICEF, the Indo-German Export Promotion Programme (IGEP) of the German Government's Agency for Technical Cooperations (GTZ), the German Protestant agency Bread for the World, and other local and foreign NGOs. The GTZ financed some of the Foundation's startup operations, specifically some of the management and inspection functions. Much local NGO support was channeled through SACCS, which is on the Rugmark board and which also maintains offices and activists of its own in many of the villages, both those where carpets are produced as well as in those very poor areas further away from which the child labourers often originate.

The Indian Government and Rugmark. The Indian Government began to look favourably on a Rugmark labelling initiative in the early 1990s when American Senator Tom Harkin and Representative Don Pease introduced a bill (the Child Labor Deterrence Act) to ban the importation into the United States of products made by child labour. At that time, it was clear to the Indian Government that some anti-child-labour action needed to be taken to protect one of India's primary exports. However, when in early 1994 it became evident that the Harkin bill would not pass through Congress in that session, the Indian Government's support for Rugmark weakened, never to revive. IGEP, a founding organization of Rugmark, was a joint venture by the Indian Ministry of Commerce and the German GTZ, but the Indian Government had never made any public declaration of support for Rugmark. More recently the Government has sponsored another carpet labelling initiative, Kaleen, which will be briefly discussed later.

Rugmark goals and licensing procedures. The Rugmark labelling programme has the following goals: 1) To organize individuals and companies in the carpet industry to cease the use of child labour; 2) to establish an independent, professional and internationally credible monitoring and certification system for carpets manufactured without child labour; and 3) to rehabilitate and educate former child carpet workers.

Registration with the Rugmark Foundation is voluntary, and some 100 carpet manufacturers and exporters in India are now licensed to use the Rugmark label. As of September 1996, some 15 per cent of all Indian carpets exported to Germany (India's main market) have carried the label. According to Rugmark, a further 100 Indian manufacturers are waiting to become licensed. In order to do so, they will be required to sign a statement that they are committed to the total removal of all children under the legal working age of 14 from carpet production except family members, who however must also attend school. They must regularly submit to the Rugmark Foundation an updated list of all the sources of their carpets, certify that they will register with and provide details about all their looms to the Carpet Export Promotion Council (CEPC), and commit themselves to pay at least the minimum wage to the weavers. They must pay an initial licencing fee of Rs. 5000. During the application period, Rugmark will inspect 35 per cent of an applicant's loom sheds, unannounced; if working children are found, the loom owner is given a short time in which to replace them with adults, and if children are found again during a second surprise inspection, the licence application will be rejected.

A new licensee must quickly provide details of all looms and other sources of carpets, plus sales figures covering the past two years. This information goes into a central data system, and Rugmark personnel compute whether the total claimed production and sales corresponds to the declared number of looms and workers. Rugmark licensees also commit themselves to pay an additional 0.25 per cent of the FOB value of the Rugmark-labelled carpets they export, and this has now become an important source of financing of Rugmark's day to day operations.

Although initial adherence to Rugmark is voluntary for loom owners, manufacturers and exporters, Rugmark's rules and regulations become legally binding once an enterprise has made a commitment to be a Rugmark licensee. Rugmark will not license exporters who purchase from unknown sources or who are not in a position to oversee the production process for a given carpet, which can take up to a year. The use of brokers who farm out production to assorted loom owners makes an exporter ineligible to be a Rugmark licensee.

The monitoring of production sites. The Rugmark Foundation in India bears the heaviest responsibility for the Rugmark label's credibility, for it must certify that the carpets exported have been made without child labour. Its main activity is in fact the inspection of production sites. All Rugmark licensees must permit surprise inspections of their loom-sheds. Moreover, NGOs have permission to inspect independently in order to verify compliance with the certification criteria. An empty seat at a working loom is taken as having been vacated by a child and requires explanation by the loom owner. Any young-looking weaver present may be questioned, and age, school attendance, and claimed membership of the loom owner's family are all verified. Every loom bears a number, as does every Rugmark carpet from the moment of its inception. The findings of inspections are recorded in a computerized database which is continuously updated and which can be made available at any time for the purpose of verification or documentation; therefore a Rugmark dealer or purchaser should be able to trace a carpet back to the actual loom on which it was woven.

Inspectors ( there are currently 13) are not told beforehand where they will be inspecting the next day, and the composition of the two-person inspection teams is changed regularly to discourage corruption. Inspectors are also well paid (for the same reason) but can be fired without notice in case of any irregularities. Between September 1995 and June 1996, inspectors discovered over 700 children working at 408 looms, but some of these children were family members of the loom owners. Rugmark licenses were withdrawn from 164 looms due to persistent child labour violations by their owners.

Upon export a numbered Rugmark label that identifies the maker, location and exporter is attached to each carpet. The "registration" of a given carpet and its loom with Rugmark from the time weaving begins, the certification system, and the numbering of finished carpets all make it difficult for an exporter to register some looms and at the same time contract out additional carpets to other non-registered loom owners who may employ children. However, it is claimed by many critics that this is frequently done and that some Rugmark licensees also conduct unlicensed (unlabelled) parallel businesses as well. This is not the same as using the trademark illegally, for which there are criminal penalties.

Schooling and rehabilitation for former child weavers. The Rugmark Foundation supports the creation of schooling and rehabilitation alternatives for former child weavers. Until this year, school centres were run entirely by NGOs or UNICEF. Recently a Rugmark-initiated primary school was founded in Bhadohi, in the carpet belt, with six teachers and 250 children. A rehabilitation centre will be opened in Mirzapur, also in the carpet belt, in November 1996. This school is a boarding school which will also offer vocational training. The Rugmark Foundation has some hesitation in returning former child weavers to their families, out of fear that they may again be sent out to work, this time in more dangerous occupations such as making fireworks or glass bangles if carpet-weaving is closed to them.

Rugmark's impact in India, and recent developments. There appears to have been a notable decline in the numbers of children employed in the Indian carpet belt over the last two years; many children have apparently returned to their homes, often in the state of Bihar. The Bihari government has established a number of new schools in an attempt to keep children from moving to the carpet belt.

It is not possible to determine now, or probably ever, to what extent the Rugmark labelling of carpets has contributed to the decline of child labourers in the carpet belt. Other organizations have been very active, such as SACCS, the South Asian Coalition on Child Servitude, which groups together a number of NGOs. They have been working extensively in rural villages in Bihar to educate parents not to send their children for work in carpet production. The return to rural villages of recently trained child activists who themselves worked for years often as bonded labourers in the loom-sheds and who were subsequently "rescued" has also played a role. NGOs and SACCS have pressured local and state governments in the area to step up their own activities, ranging from support for the identification and freeing of bonded child workers to the setting up of local schools. Opinion from outside the carpet area has also had its effect. The use of child labour in carpet-making in India and Nepal has received continuous publicity in consumer countries since the late 1980s, and international and humanitarian agencies condemned in public meetings and official fora the employment and exploitation of children. All these combined pressures have rendered it more "uncomfortable" for those producing carpets for export to continue to openly employ children and for the Indian Government to tolerate their doing so. Indian laws made illegal the employment of children in the carpet industry in 1938.

The reaction of some of the carpet producers is perhaps indicative of the extent of recent change. Some have transferred their operations to other formerly non-carpet-making areas, chiefly Rajasthan and other parts of Uttar Pradesh outside the traditional carpet belt, where child workers are said to be easier to find and where operations are - at least for the time being - less liable to frequent monitoring by the various organizations, including Rugmark. Others have moved to remote rural areas within the carpet belt, thereby making inspections more difficult and time-consuming to carry out and perhaps also less frequent. Rugmark inspectors - and the NGOs and other organizations whose objective it is to improve the situation of working children - are obliged to gradually follow at least some of these relocations.

Criticisms of Rugmark. Criticisms of or doubts about Rugmark in India began early on and have been numerous and continuous. They have come from many different quarters, from child rights advocates to members of the carpet industry, but often they converge. The most frequent criticisms are presented below.

In April 1995, criticisms appeared in three separate New Delhi publications. On 20 April in the newspaper Asian Age, Swami Agnivesh of the Bonded Labour Liberation Front publicly accused Rugmark of favouring some producers over others and thereby excluding some producers from export markets. He also questioned the Rugmark organisation's ability to carry out inspections in the immense area of the carpet belt. "The main carpet weaving area in India is well over 260,000 sq. km. It is also very rural. How many people, and who, will do the actual monitoring, and who will pay for them?...This is the first time that India is experimenting with such a logo or a trademark [but] no credible method has yet been found to mark such products." Finally, Swami Agnivesh expressed his feeling that Rugmark was in some sense anti-Indian. "Why is Germany [the primary supporter and importer of Rugmark-labelled carpets] singling out India and Indian carpets? Carpets are also made by children in Nepal, Iran, Turkey, Pakistan and Morocco and no steps are being taken against exporters there." (Swami Agnivesh's own proposed solutions to the problems of child weavers included educating child carpet workers about their rights, providing "immediate and universal" education along with training in work skills, and offering food rations and minimum wages.)

In the same month, the newspaper The Pioneer carried criticisms of Rugmark by a cross-section of child rights activists and sociologists. These critics felt that buying only rugs with the Rugmark label would not help end the problem of child servitude. The doubts about the difficulty of inspection and monitoring expressed above were also expressed in this article, on the grounds that carpet weaving is a cottage industry scattered across the vast Ganges plain and that it is impossible to certify with any degree of credibility that a given set of carpets has been manufactured without child labour. Dr. Neera Burra, a sociologist quoted in the article, feared the possible misuse and corruption of the monitoring process. "Which NGO has the capacity to effectively police and say with 100 per cent certainty that no child labour has been used?" The possible anti-India effects of Rugmark were also hinted at. Western buyers might be prejudiced against the purchase of other traditional Indian products, and legal or trade sanctions might result. Finally, it was felt that Rugmark was a good concept but needed legislative backing in order to be effectively implemented. (It has never obtained such backing in India.^{( Endnote 3)} )

In The Economic Times, on 23 April 1995 the All India Carpet Manufacturers Association raised doubts concerning misuse of the Rugmark label. "Obviously, unless a certification is monitored closely, misuse renders the label meaningless."

Reviewing the criticisms. Why has India in particular been singled out by Rugmark and anti-child-labour activists? The reply appears to be at least partly that India's highly visible and egregious uses of child labour in carpets was seized upon and publicized by the media more than in other countries. In other countries that are less democratic than India, the presence of child labour is also less accessible to the press and film crews. Moreover, India's democratic political system and its heavily export-oriented carpet production make it especially susceptible to the free circulation of news and also to a labelling initiative.

The Rugmark label, like all social labels, has often been criticized for facilitating exports for some producers and hindering them for others. This is an obvious aspect of all social labelling, and it is very much a question of policy preferences whether an individual or organization supports creating a linkage between trade-based sanctions and reprehensible social conditions, in this case child labour. In fact, as noted by P. Harvey in his report of October 1996, "NGOs in India are sharply divided on questions of trade policy, i.e. whether trade sanctions or pressures should be used to exert influence on government policy regarding child labor. Many NGOs relying on government funding to conduct programs for working children have been hesitant to challenge government policies sharply. Others believe genuinely that such economic pressures are simply stratagems designed in foreign countries to put India at a competitive disadvantage. Whatever the reasons, the divisions within the NGO world are real."^{( Endnote 4)} It is also worth pointing out, however, that in India and Nepal the Rugmark is a voluntary labelling programme open to any producer or exporter who cares to comply with its standards, and that in any case the standard of "No Child Labour" in the carpet industry (except for family members) is the legal code of the respective national governments concerned.

Concerning the difficult issue of monitoring and inspection, many share Swami Agnivesh's opinion (e.g. the Carpet Export Promotion Council, an Indian government agency) that no inspection infrastructure would be sufficient to cover an area such as India's carpet belt. The area to be inspected is very large and also expanding rapidly as some loom owners move to less accessible areas or into neighbouring states, often to conceal their use of child labour from the authorities.

However, it is not Rugmark's intention to provide universal monitoring, but to inspect and monitor only those loom sheds of employers and producers who have been licensed by Rugmark. A spirited defence of Rugmark's capability in this regard is provided in the ILRF report: "All the Rugmark officials interviewed [in May 1996] expressed satisfaction with their current capacity and believed they could grow fast enough in personnel to absorb new licensees." He has provided some figures that give an idea of the number of inspections to be done and how many currently fall to each inspector. With a total of 13,000 looms under inspection, each of the 13 inspectors must keep track of 1,000 looms. "The director of the inspectorate indicates that each team of two inspectors visits eight to 12 loom-sites per day. With a five-day week, that totals 40 to 60 loom-sites per week, and between 2,000 and 3,000 looms per year."^{( Endnote 5)} However, also noted is the fact that until now inspections of each loom have occurred only twice per year, on average, because of a shortage of inspectors. Moreover, some loom owners have recently moved some of their looms (and any under-age weavers) to very remote sites difficult for inspectors to access. The Rugmark Foundation in India is now intensifying its inspections in such outlying areas, while at the same time inspections in more easily accessible areas are becoming less needed because fewer violations are found. SACCS activists are working in many of the villages in the area and would immediately notice if children were being used.

However, the most frequent doubt expressed about the Rugmark label, which is raised by well-intentioned child labour advocates and carpet purchasers as well as non-labelled carpet producers and industry trade associations, is that the Rugmark guarantee of "100% Made Without Child Labour" on a carpet is an untenable claim, and that it is beyond the realm of possibility to provide such certainty, however much good will and effort may be expended to do so. Rugmark, it is felt, is inevitably misleading consumers when it publicizes the Rugmark label as representing a child-labour-free product. Some of the details of Rugmark's operations, as outlined above, may provide the reader with some basis for assessing the Rugmark claim. It is undoubtedly the case that many (an unknown number) of the Rugmark-labelled rugs are indeed made without child labour. A child labour activist in Uttar Pradesh who sits on the board of the Rugmark Foundation declared in 1995 that "No inspection can verify that a carpet was made without child labour. When we get to the edge of the village, we see children running to the fields to hide."^{( Endnote 6)}

Some visual evidence also exists in a recent film on Rugmark made by German television, which contains footage shot in and around an Indian loom shed. This film shows children working at carpet manufacturing operations other than weaving (in this case the washing and trimming of carpets). In this film, called "Guaranteed Made Without Child Labour", which was aired in September 1996 on Arte, a Franco-German TV network, the German Rugmark spokesperson, Ingo Herbst, clearly acknowledges that Rugmark has not yet been successful in eliminating children from these other carpet-making operations the way it has for children doing the actual weaving. He indicates that this is a project for the future: "Rugmark is a young organization and we cannot carry the world on our shoulders." This visual testimony and Mr. Herbst's acknowledgment may conflict with a key point of written Rugmark inspection procedure, namely that "if child labour is found working on the carpet, or elsewhere in the same loom-shed, the loom owner is warned and a second surprise visit is made within a few weeks. If children are found again, the loom owner is decertified as a Rugmark producer. No further carpets for this or any other exporter can be accepted for a Rugmark label" (my italics).

In the Rugmark report referred to earlier, the question is raised of what constitutes compliance: "No system of inspection or certification in the world can truthfully guarantee 100% success...[and] to accept as a criticism...that Rugmark can't guarantee 100% compliance is to impose a standard that ensures Rugmark (or any other system) will come up short." Rugmark compliance does consist, in the words of the report's author, of "a high probability that violations will be discovered and penalties imposed. In fact, a significant number of violations have been found and violators excluded from the programme. A serious if not large number of illegal child labourers have been found, and their masters censured and, in some cases, removed from the programme. However, in the course of 18 months of operation in a climate in which the non-participating exporters have demonstrated keen interest in showing Rugmark up to be a fraud, not a single case of fraudulently or falsely labelled carpets has been discovered. One of the unstated but critically important informal elements of compliance monitoring is the mutual watching of each other by licensees, so that their competitors are not able to use the label without compliance. Even this informal, but effective, mechanism has failed to find a single instance of non-compliance. We concluded, therefore, that the implied "guarantee" of "no child labour" is well earned, inasmuch as a tight and effective system to prevent and punish non-compliance is in place and, after the labeling of more than 260,000 carpets, no case of mis-labelling has been discovered, or even charged."^{( Endnote 7)}

Also worth quoting here is an early statement (1994) by the Carpet Export Promotion Council about the requirements of a certification system. According to the CEPC, "An honest and credible certification of carpets made without child labour must include a system where the origin of the carpet being exported can be traced back to day one when the weaving of the carpet began and the monitoring of that loom should have been done during the entire weaving process".^{( Endnote 8)} The CEPC, as an organization that registers all carpet manufacturers, concluded that such monitoring of the entire industry was not possible because of the variations in the level of engagement in production by exporters and because of the size of the geographical area which would have to be monitored. On this basis, the CEPC came to reject the idea of a child-free production label.

Huschmand Sabet, a carpet dealer in Germany who was one of the founders of Care & Fair, another labelling initiative (see below in this study), has made another point worth noting.Discussing Rugmark in a recent interview, he stated: "In the country of origin, for instance in India, it must be assured that...producers have really fulfilled the conditions entitling them to carry the Rugmark. The trust that has been put on them in advance can be lost more quickly than most people suspect." He went on to note that policing of the veracity of the label is a major and unending task. He criticized what he considered an insufficient inspection network, and stated that "a ... thorough control is, if at all possible, extremely expensive. My opinion is based on forty years of experience in India [and] this will be a permanent problem, if the Rugmark Foundation wants to have some money left for the large scale and urgently needed help for children and families." Producers lose nothing by joining Rugmark, he noted, since they can have other firms producing carpets that do not carry the label. "Should they be caught - as has happened several hundred times - in employing illegal child labour or in paying less than minimum wages, they can still maintain that these carpets were produced for the firm that does not hold the Rugmark licence."^{( Endnote 9)}

Germany is, after the United States, the most important consumer market for hand-knotted oriental carpets, and it was also the first country to import carpets with the Rugmark label. As already described, several German organizations, grouped into the Indo-German Export Promotion Project (IGEP), helped to formulate the Rugmark concept and set up the Rugmark Foundation in New Delhi. Given the extensive consumer boycotts of Indian carpets, IGEP's objective was to improve the image of Indian carpets abroad and support especially the small and medium carpet producers and exporters. The voluntary labelling system was chosen to do this because, as outlined in an IGEP statement of 1994, "it seems to be the simplest, cheapest and most convincing activity to avoid severe damages for many thousands of entrepreneurs and artisan families."

The first shipment of Rugmark-labelled carpets was displayed in January 1995 at the Domotex Fair. However, IGEP had already presented some child-labour-free carpets at a Domotex Fair two years earlier, before Rugmark-labelled carpets were present in any retail establishments; according to one witness, busloads of people came to the fair at that time "to celebrate the birth day of Rugmark". Rugmark makes the claim that, as of November 1996, some 330,000 Rugmark-labelled carpets have now been shipped from India to Germany by 120 Rugmark-licensed exporters in India. Individuals associated with the other carpet-labelling initiative in Germany, Care & Fair, have some doubts about these figures, and they point out that Rugmark measures their imports in numbers of carpets whereas it is actually more accurate to measure them in numbers of square metres.^{( Endnote 10)}

Sources of support and financing. In Germany, some big NGOs, and especially those associated with the Catholic and Protestant churches, were very active in supporting Rugmark from the beginning. Rugmark also obtained influential public endorsements by a broad range of political figures and by the national government, which supports Rugmark financially (see below). During a visit to India in February 1995 the German Minister of Labour, Norbert Blüm, made some very strong statements of support for Rugmark labelling. Regarding child labour in the carpet industry, the minister said he would "in his capacity as a consumer in Germany buy no products which were made using child labour. He knows that most Germans think the way he does and he would continue to fight for his conviction. Carpets from India, which have a label indicating that they are made without child labour, for example rugmark, are most welcome in Germany."^{( Endnote 11)}

In fact German Rugmark is not financially self-sustaining but has depended on financial support from the German government through the GTZ, the German Agency for Technical Cooperation, which signed a contract lasting until December 1996 but extended it for one more year; the most recent allocation was 650,000 Deutschmarks to support the Rugmark offices in Gottingen, Germany, with two full-time and one part-time employees. Earlier sums were less per year, and NGOs such as Bread for the World also contributed substantial sums. In October 1996, Ingo Herbst of the German Rugmark office wrote that "Rugmark depends on the permanent support of the big NGOs, big business companies, and the media." Mr. Herbst felt at that time that Rugmark would have a chance of becoming self-supporting by the end of 1997 with the commencement of functioning of Rugmark Nepal (in December 1996). He estimated that German Rugmark would require approximately 700,000 DM per year in income to be self-sustaining.^{( Endnote 12)}

The levy fees. After the legal establishment of Rugmark in Germany, and the conferral of international patent protection on the Rugmark label in 1996, German importers of Rugmark-labelled carpets began to contribute a one per cent levy on their imports, earmarked for the rehabilitation and schooling of former child weavers. This money was transmitted through UNICEF to India; accounts differ as to whether it was 30,000 or 50,000 DM.^{( Endnote 13)} Now, however, the Rugmark Foundation in India has established both a school and rehabilitation facility directly paid for solely by funds from German Rugmark licensing fees from importers, with some minor contributions of materials from exporters.^{( Endnote 14)}

Selling labelled carpets. German Rugmark succeeded quite early in securing sales outlets for labelled carpets among large retailers and mail order houses; the Kibek company became its principal importer. At present, a total of approximately three importers import only Rugmark-labelled carpets, and there are in all some five or six major wholesalers and retailers, not all exclusively carrying Rugmark carpets. However, the coverage of the market is such that all major department stores and the principal mail order companies now stock Rugmark-labelled carpets, although often not exclusively. Much of the pressure to impose the Rugmark label appears to have come from these few large importers, not the general public. The importer Kibek, mentioned above, may have played an especially large role by actually paying the licensing fees for some exporters in India in order to get them to register with the Rugmark initiative. It appears that some Rugmark-licensed exporters have set up new companies in India expressly for this purpose, keeping their other carpet operations unlicensed.^{( Endnote 15)}

One large and well established American importer and retailer who has been in the oriental carpet trade for many years wrote after recently returning from Germany that "The Rugmark label has pushed hard for recognition and use." However, this importer also made the surprising observation that "everywhere I went visiting wholesalers, they professed to be unaware of Rugmark." (Several German observers of the Rugmark initiative say this is an impossibility.) An interesting side note is that this importer, who prefers to remain anonymous, sent us a rather plain 3" by 3" printed label (green print on a white ground, with a green border design but no logo) that reads "Certification: No child or bonded labour is used in the manufacturing of this carpet. Sr. No. 00960". The number had been crudely stamped on with a numbering machine. The importer says this label was given to him in Germany by a carpet exporter from Pakistan "who was affixing the enclosed tag to his rugs. When asked if he was sure his rugs were free of child labour, he shrugged." In assessing carpet labelling, or indeed any labelling, it is important to remember the temptation of some dealers to falsify certification once consumers begin to demand certain assurances.

Publicizing the label to consumers. In the view of German Rugmark organizer Mr. Herbst, the general public is quite aware of the widespread illegal child labour in the carpet industry and in other industries in the developing countries. However, he notes that the public is largely unaware of the Rugmark label. "After one year of [our] marketing activity, private consumers cannot yet recognize the Rugmark label as a positive solution to this problem [of child labour in the carpet industry]. Only five per cent of consumers say that they have heard the name of Rugmark, and when asked what Rugmark stands for, the correct answers come close to zero. This will be the marketing challenge for 1997 and 1998."^{( Endnote 16)} German Rugmark's major problem is therefore to communicate the label's existence and social significance to German consumers. As already pointed out in the Rugmark India section, the German television network Südwestfunk recently produced a twenty-minute documentary film entitled "Guaranteed Made Without Child Labour" that explains German Rugmark's goals and operations in detail. It includes footage shot in both Germany and India, and discusses Rugmark's problems as well as its successes. Because of its candid but on the whole sympathetic portrayal of Rugmark, it probably did much to advance the Rugmark cause in Germany. Rugmark has also been placing paid advertisements in magazines and journals especially aimed at target groups that have a "multiplier" effect such as teachers, doctors, journalists and other educated people. "This is part of our pull strategy. At the same time we try to convince the traders [dealers] to adopt Rugmark either by articles in their special magazines, public presentation in fairs and meetings or direct contacts. This is a form of push strategy."^{( Endnote 17)} In May 1996 the GTB German Trade Union for Textile and Apparel publicly advocated purchase of only products that have a social label, "such as Rugmark for carpets".

Inspection and monitoring and the No Child Labour guarantee. German Rugmark, along with its American counterpart, relies on the Rugmark Foundation in India (and now also Nepal) to hire, train and field inspectors. The Indian Rugmark Foundation's monitoring and inspection system has already been described. German Rugmark has however set up a detailed tracking system that links an individual Rugmark carpet imported into Germany with its place and loom of origin in India. Rugmark personnel in Germany inspect the Rugmark numbers and distinctive features of the incoming carpets and compare them with the features on file in India. German Rugmark maintains that these cross-checks discourage fraudulent misuse of the Rugmark label and provide the assurances the label must offer to purchasers in order to maintain its own credibility. However, the German Rugmark organization does not deny that its "guarantee" of no child labour is not 100 per cent watertight.

The Rugmark Campaign began in the United States in January 1995 with the aim of making labelled oriental carpets available to American consumers, who are the world's largest purchasers of handmade oriental rugs. The American Rugmark campaign presents the Rugmark label to consumers as certifying carpets made entirely without child labour - that the manufacturers of Rugmark-labelled carpets have complied with stringent requirements including the complete removal of children from all carpet production. Campaign literature states this as follows: "The Rugmark label provides consumers with a guarantee that a hand-knotted rug is made free of child labor...No other labels, pledges, or assurances provide the same level of integrity and accountability." Following the trip to India of a delegate from the American organization, the delegate stated: "Even and especially in the Carpet Belt ... the staff of the [Indian] Rugmark Foundation have the reputation of being absolutely incorruptible. The present inspections meet the highest possible standards. The label is credible and the inspection and monitoring process is well in place." Unlike the German Rugmark initiative, the American initiative does not express publicly any doubts about the child-labour-free nature of its labelled carpets.

The American campaign was started and has been run up to now by the Child Labor Coalition, a Washington, DC-based organization that represents 45 diverse humanitarian, children's, women's, labour, religious, educational, public interest and consumer groups throughout the United States. In July 1996 United States Rugmark was incorporated as a non-profit foundation, and it will now direct the campaign in close conjunction with the Child Labor Coalition. The first Rugmark carpets were brought to the United States in April of 1996 and a silent auction was held to celebrate their arrival. The new foundation is now in the process of formulating a marketing programme. United States Rugmark maintains contacts with the German Rugmark organization but they are officially independent.

Financing and support. The two most active member groups of the Child Labor Coalition insofar as the Rugmark campaign is concerned are the General Federation of Women's Clubs and the Women's Division of the United Methodist Church, which together have over one million members. In October 1995 the campaign received the endorsement of the United States Department of Labor, and in opening remarks at a DOL hearing on child labour in June, 1996, the then Secretary of Labor Robert Reich advocated that a type of "Rugmark" on a broad range of products be introduced in the United States on the grounds that consumers need more information about the products they purchase. At this hearing, a broad range of American NGOs also testified in support of a labelling initiative and many cited Rugmark as a positive example even though it was not yet operational in the country.

One declared long term goal of the United States Rugmark campaign is in fact to generate consumer pressure for similar child-free labels on other products sold in American markets. However, the American initiative operates on an extremely modest budget, without government or foundation financial support. This has precluded the use of any full-time personnel, as well as restricting its range of activities and its ability to communicate its message to the public. Funds from nonprofit organizations and large scale donors have not been obtained, to the best of our knowledge. Tax-deductible donations are actively solicited.

Importing carpets and collecting levy fees. The campaign must obtain supply commitments from importers and retailers in order to make Rugmark carpets available to consumers. To date, one importer has agreed to import labelled carpets from India and another two from Nepal. Potential Rugmark carpet importers, retailers and industry leaders received letters and calls from campaign organizers. The supporters of labelling have passed out leaflets in front of carpet retailers' premises and have circulated petitions (obtaining some 14,000 signatures so far) requesting importers and retailers to stock Rugmark carpets. Supporters are also encouraged to pay individual calls on local retailers to request that labelled carpets be made available for purchase. Since one of the objectives of the American campaign is to improve conditions for former child weavers in India and Nepal, the campaign also intends to request that the importers of labelled carpets self-impose a two per cent surcharge on any sales, funds to be earmarked for the rehabilitation and education of displaced child carpet workers. Campaign literature does not detail how these funds will be collected, transmitted to the countries of origin, or put to use there.

Publicizing the label. The campaign is strongly communications-based, in that its primary objective is to publicize the Rugmark label to consumers and to encourage them to purchase only Rugmark-labelled carpets. Volunteer groups throughout the country disseminate information to consumers. The campaign has distributed information packets and guidelines for campaign organizing to potential volunteer individuals and groups, and mailings have been sent out to approximately 100 organizations throughout the country. The campaign has set up information booths at community and state fairs. Consumers have been urged to write to influential individuals in order to publicize their intention to avoid purchasing non-labelled carpets. (The United States Rugmark campaign stresses that it is not a campaign to boycott hand-knotted oriental carpets but a campaign to educate American consumers. "Consumers are not asked to stop buying hand-knotted Oriental rugs, but we ask consumers to purchase rugs with the official Rugmark label," states a campaign leaflet.) Campaign organizers have also attended carpet industry trade shows to meet with the press and report on the campaign's progress. Placing advertisements in the printed media has been financially out of reach but there has been intensive media coverage through press releases to newspapers, television and radio stations. The campaign also publishes a periodic newsletter for its supporters.

American resistance to Rugmark. There was initial resistance to Rugmark labelling from the Oriental Rug Importers Association but this has begun to wane, according to campaign organizers. Daniel Hodges, an importer and spokesman for the Association, was quoted on 6 September 1996, in the Philadelphia Inquirer as saying, "I'm not opposed to Rugmark. I think it's a wonderful idea." But he would not encourage his association members to take part in any carpet labelling programme because "I don't think a labelling scheme is the answer. The only people who win in a labelling scheme are the people who manufacture the labels...All that's going to end up happening is that manufacturers are going to start making their own labels, which will do nothing more than confuse the consumer." According to the journalist, Hodges "takes issue with petitions he says are circulated by activist groups that represent Rugmark to consumers as an 'absolute assurance that this carpet is woven free of child labor'. Any label that purports to be a guarantee, he says, is 'misleading and fallacious'".

One American oriental carpet dealer when personally questioned claimed that "I and my fellow dealers support the idea wholeheartedly...The use of Rugmark would be welcome in the United States, but there is no outcry for its use. Without exception, no potential customer [of mine] has not purchased because of its [the label's] not being there."

The co-owner of one of the Rugmark import companies in the United States, Masterlooms Inc., made the observation (as quoted in the Philadelphia Inquirer article cited above) that "there are really a lot of people [in the producer countries] who do not have children working on the carpets, but they have not bothered to become involved with the Rugmark program [because they] feel that since there are laws in India and Nepal...they do not need to subscribe to a private organization."

In Nepal, a Rugmark Foundation was registered with the government as a non-profit organization in December 1995 and six months later had the adherence of forty Rugmark-licensed carpet manufacturers, who together represented over 70 per cent of Nepalese carpet exports. Most Nepali-Rugmark carpets will go to Germany, which is traditionally the largest market for Nepali carpets; only a small portion are imported into the United States. In October 1996 the German government through its GTZ announced that it will provide financial aid for the marketing of Rugmark-labelled carpets from Nepal in Germany; Germany is among the top aid donors to Nepal. Other support for the programme comes from UNICEF-Nepal and the Asian American Free Labor Institute (AAFLI). The board of the new Rugmark Foundation is made up of carpet manufacturers and Nepalese non-governmental organizations.

The Nepal example is interesting in that a broad group of Nepali businesses and organizations, including the Nepal-German Chamber of Commerce and Industry and the Nepal Children's Organization, had already formed an association, Naspec (National Centre for Protection of Children and the Environment), to take action in these areas. Naspec is the implementing agency for an action programme on phasing out child labour in the carpet industry, just beginning and which is taking place with the technical support and financial help of ILO-IPEC. Thus the Rugmark initiative of labelling carpets and assuring that they are free of child labour will occur in a setting where many forces are sympathetic to its goals if not its method. The foundation will carry out inspection and monitoring, with oversight by the international supporters of the initiative. However, unlike India, where loom sheds are spread over thousands of square miles, the carpet industry in Nepal is geographically concentrated and production occurs in large factories. It is much easier to ascertain whether a production unit is using child labour. However, the planners of the Rugmark programme in Nepal want carpet manufacturers to phase children out of the production process only at the pace at which it is possible to place them in schools or other facilities, or to return them to their families.

In Pakistan, the Government considered joining the Rugmark initiative but more recently has shown some interest in setting up a carpet labelling scheme modelled on the new Indian labelling initiative Kaleen. As of October 1996, the Pakistani government declared that a child-care foundation had been established to deal with child labour engaged in both the carpet and sports goods industries. This foundation will consider the adoption of a proper certification system denoting child-labour-free goods.

It would be premature to form any conclusions about the Rugmark labelling initiative since it is so recent. This section summarizes some of the issues and concerns raised by the initiative.

One of these is the question of whether Rugmark labelling is really voluntary for carpet producers. In order to obtain access to the German market, which is the major market in Europe, and eventually to other western markets as well, adherence to Rugmark by producers and exporters may become not only desirable but necessary. Some producers and exporters who do not wish to join Rugmark, however honest and upright their employment policies, may eventually be penalized by the export market.

On the other hand, it is not yet clear whether Rugmark labelling will become widely diffused. There are financial and other shortcomings in both the German and American Rugmark programmes. Communications are costly, and it is not certain that either of these Rugmark programmes will have the means to engage in the extent of communications required to make the Rugmark label really "take off."

Many sceptics doubt that sufficient carpets for a labelling initiative can, over the long term and in the appropriate quantity, be guaranteed made without child labour in South Asia. Some western activists against child labour in the carpet industry even believe that corruption is ubiquitous in the carpet industries of India, Pakistan, Nepal, etc., thus making it impossible for any labelling system such as Rugmark to function honestly for long. It is however clear from studying the Rugmark experience that for the moment one of its strongest points is the series of checks and counterchecks it has succeeded in building into its operations thus far.

There has recently been a decline in the numbers of child carpet workers present in the Indian carpet belt. But, as discussed earlier, there may be several reasons for this, of which Rugmark labelling may be only one. In order to reach and convince the purchasing public, however, Rugmark campaigners in the United States tend to overstate Rugmark's role in this diminution, claiming credit where credit may not be entirely due. In actual fact, none of the credit for this particular change can be attributed to Rugmark in the United States because Rugmark-labelled carpets are just beginning to be marketed there now.

Rugmark campaigners have not fully concerned themselves with the fate of the children removed from carpet-making. Once a period of schooling or rehabilitation is over, what then? If the carpet industry is "off limits", what long-term alternatives are being created for these children to keep them out of more hazardous industries and provide them with better ways of surviving? If Rugmark in the consumer countries is "selling" schooling and rehabilitation as a reason to ask for (or even demand) levies from importers and higher carpet prices from consumers, it will have to become more of a social actor in the producer countries than it currently is. Put differently, raising the longer-term prospects of children needs to become the cause, and the connection between Rugmark in the consumer countries and the schooling and rehabilitation activities of the Rugmark Foundations in the producer countries needs more emphasis. At the same time, in the Indian hand-knotted carpet industry the numbers of children needing to be "saved" appears to be diminishing, as many are now remaining in their natal villages and not entering the carpet industry to begin with - in which case there would appear to be fewer reasons for collecting a levy from the importers of Indian carpets and perhaps less justification for a labelling programme at all. More attention will need to be paid to what these children are doing, if they are working, what working conditions they now have, and whether they are producing goods for the export sector. Rugmark will need to refocus its activities, with the welfare and future of the children being its foremost concern. It may also need to pay separate attention to the specific conditions in Nepal and other major carpet-producing countries where carpets are produced for export.

There are no consumer marketing surveys to confirm that well-meaning consumers, faced with a choice between a labelled and an unlabelled carpet, will be socially aware enough to select and purchase the former. The supposition that they will is not without foundation, but it is as yet unclear whether it is (or can become) sufficiently widespread within the consuming public to make a Rugmark labelling initiative's expenditure in human effort and communications actually pay off in an outstanding success for labelled carpets. Marketing surveys in this area are badly needed in order to substantiate additional efforts for labelling carpets. The issues become more complex when it is remembered that all carpets are not equal and their purchase depends very much on personal taste. Carpets are expensive, purchased infrequently and chosen carefully. To some extent they define who the customer is, as do other choices in interior decoration. Should personal taste dictate a preference for the unlabelled carpet, there must be very compelling reasons to reject it. Worth remembering also in this connection is that the high figures for German Rugmark carpets refer to importation, not sales, and that they are stocked in retail establishments which also stock unlabelled carpets. We do not possess actual sales figures for the Rugmark-labelled carpets, much less comparative sales figures for labelled and unlabelled carpets over a specific time period, and it would undoubtedly be too early to arrive at any sure conclusions about them even if we did.

In mid-1995, the Indian Government through its Carpet Export Promotion Council (CEPC) decided to create its own carpet labelling programme. The government had been upset by the media coverage of child labour in the carpet industry; in June 1995 the Minister for Textiles publicly warned television producers of strict action if they televised any "false" programming on this subject, as it would hurt the nation's interest.^{( Endnote 18)} A labelling and certification procedure called Kaleen or Kalin (meaning "carpet") was planned, although it has not yet begun to operate. Kaleen is intended to make Indian carpets more acceptable to foreign buyers, who have been wary of purchasing Indian carpets following the international publicity concerning child labour. The CEPC also felt it could provide a much better and more reliable system of certification than Rugmark and still have the full support of the carpet industry, as well as satisfying the demands of some carpet exporters who perceived Rugmark as unnecessary foreign intervention in Indian commercial affairs because of its partly German affiliations. It is often remarked that another of Kaleen's objectives was therefore to pull the rug out from under Rugmark, which had already begun labelling when the idea arose to start Kaleen.

Support for Kaleen. The Textile Ministry in India initially offered sporadic support for Rugmark but has since turned to Kaleen. The Ministry of Commerce gave its support to Kaleen later, after being accused by Indian observers and the Textile Ministry of favouring Rugmark. Support also comes from members of the carpet industry, who did not wish to join such a stringent labelling initiative as Rugmark but who none the less realized that some sort of labelling was necessary in order to revive the overseas markets for Indian carpets. The Textile Minister visited Germany in June 1995 to counter the fears of German importers and NGOs about carpets made in India, and he spoke there with both importers and NGO representatives. At that time, the participation of NGOs in Kaleen was envisaged in two ways: to help in both the monitoring of looms and the spending of the levy funds collected from producers and exporters by the CEPC. However, it is not clear whether Kaleen currently has support from any NGOs or international foundations, a point also discussed below.

How Kaleen will operate. The Kaleen label will be attached to individual carpets and will read: "A portion of the proceeds of this sale is going to the rehabilitation of children". The CEPC intends the label to be attached to all carpets exported from India, and administered directly by the CEPC. In August, 1996, the Ministry of Commerce issued a ruling making it mandatory for all carpet exporters to become members of the CEPC. The blanket requirement for membership is adherence to an anti-child-labour "voluntary code" and the contribution of 0.25 per cent of all carpet export earnings to a special fund for improving the welfare of children in the rural carpet-weaving centers. Exporters' general written commitment to the cause of abolishing child labour is considered sufficient, rather than their assurance that each individual carpet they produce has been made without child labour.

As a government agency, the CEPC had already established a loom registration procedure and also registered exporters. The CEPC does not intend to set up a separate and independent monitoring and inspection capability, and as far as can be ascertained, the Kaleen initiative will depend upon self-regulation by the carpet industry through the CEPC, "closely monitored by an appointed government committee of experts" (according to the Textile Minister addressing German importers in June 1995, as quoted in Indian Express on 21 June). In his presentation to these importers, the Textile Minister said the new oversight committee would be composed of government and trade officials, representatives of NGOs, and "UN-affiliated agencies".

Kaleen and the other carpet labels. The coexistence of four different labels (Rugmark, Kaleen, STEP, and Care & Fair) for Indian oriental carpets may bring some confusion to potential purchasers. However, neither the United States nor German Rugmark initiatives appear unduly worried about the encroachment of Kaleen. The United States Rugmark sponsors, according to a June 1995 statement from the Child Labor Coalition, "will continue to promote the Rugmark label as the only credible child-labor-free label". In October 1996, the Rugmark spokesman Ingo Herbst wrote that "On the marketing side Rugmark will not have any problems with the Kaleen concept. Compulsory labels issued under the participation of vested interests will not gain any support or credibility with media, customers and the general public. The exporters in India will have some problems with the compulsory and additional fee which is asked for by Kaleen. We feel that this move makes the Indian carpet unnecessarily expensive."^{( Endnote 19)} STEP and Care & Fair, described in the next sections of this study, have recently expressed interest in collaborating with Kaleen, although what form this collaboration may take is not known.

It is not clear how Kaleen will identify and remove children working in the carpet industry, or how the membership fees and levy monies that accumulate with the CEPC will be used. Kaleen appears not to have made yet any provisions for alternative activities or occupations for children no longer working in the carpet industry, or for any kind of schooling or rehabilitation effort.

It is not clear yet either how the self-regulation of the industry will work, what guidelines producers and agents in the industry are expected to follow, or what kind of monitoring oversight the CEPC will exert. Random inspections of loom sites are occasionally mentioned in literature referring to Kaleen, but we have no details about them. Similarly, the oversight or advisory body is of unknown composition, and what actual leverage it will have in the shaping of Kaleen policies is unknown.

The levy fees made obligatory by the CEPC for those who wish to export their carpets may be a hardship for smaller exporters and/or loom owners. The financial burden of satisfying government fee requirements might push marginal exporters and producers out of the export market.

On the consumer side, there is some danger that prospective carpet purchasers could be confused by the proliferation of carpet labels. In this respect, the desire of both STEP and Care & Fair to collaborate with Kaleen is therefore promising, but it requires careful planning. Will it result in a single label? What significance would such a label have where child labour in carpets is concerned, and how would it be marketed and explained to the public?

Care & Fair represents the collective desire of many German carpet importers and retailers to create better living prospects for children and their families in the carpet-making regions of India and Nepal. At the same time, Care & Fair is a professional association of the carpet trade in Germany, with the goal of preserving the reputation of and trade in oriental carpets by advocating socially responsible production processes. Care & Fair sponsors rehabilitation projects of various kinds for former child labourers, and projects that will create better living conditions for their families. The 100 per cent child-labour-free status of each carpet sold is not, however, a claim that Care & Fair makes with its label because of the various difficulties involved in assuring that all carpets, even those made in remote villages in private homes, are made without child labour. The Care & Fair label is not attached to individual carpets but can be displayed in the sales area by the retailer or used in publicity if desired. It is intended to assure consumers of the socially responsible behaviour of its member dealers.

Based in Hamburg, Care & Fair was started as a non-profit organization in September 1994, with membership expected to be based on moral responsibility and voluntary commitment. The most recent membership figure is 350 dealers and importers, with some members also outside Germany. In Germany, Care & Fair-affiliated importers and retailers are now represented in around 1,000 shops selling only oriental carpets, in some 3,000 soft-furnishing shops with large oriental carpet departments, and in 1,000 outlets of other kinds. The director of the organization is Dr. Klaus Beekmann, who is also the president of the German carpet importers' trade association.

Since Care & Fair is an organization with a business membership, it does not seek charitable contributions or government financial support. It has however obtained endorsements from prestigious public figures. The first issue of the Care & Fair magazine in January, 1996, for example, carried front-page endorsements by Mikhail Gorbachev, Ernst-Ulrich von Weizsäcker, and the German Minister of Labour Norbert Blüm, who has also endorsed Rugmark. The latest endorsement was received at the end of October, 1996, from Prof. Rita Süssmuth, president of the German Bundestag. Care & Fair has received no church or NGO sponsorship or endorsement.

Care & Fair's basic principles. The Care & Fair charter (Statement of Demands) contains nine points, including the stipulation that producers must undertake not to produce or supply carpets that have been manufactured using illegal child labour. Bonded labour must be abolished immediately. The children of carpet workers should be given the opportunity of regular schooling "and where there are no state schools, producers/suppliers undertake to promote school-building and foster the educational system". Other demands do not specifically concern children. They include "humane working conditions", minimum wages, the observation of employment laws and regulations, and the provision of basic medical care for workers and their families. There is also a provision in the charter permitting the examination [inspection] of purchasing conditions "with the assistance of aid organizations".

This charter must by signed by all members and be part of all their conditions of purchase from producers and exporters in India and Nepal. Members are required to maintain a register of producers and suppliers who fail to comply. If it is found that a Care & Fair member has grossly violated the charter, he or she may be expelled from the organization. Care & Fair expects its importer members to exert pressure during their sourcing visits to their respective producers and suppliers; a producer or supplier who violates Care & Fair's principles and is discovered may have the purchasing contract for a carpet order cancelled immediately or further deliveries suspended, and the purchasing member can even claim compensation. For those producers who do observe the principles, Care & Fair members will try to help improve production processes and management capacity.

Care & Fair does not itself directly engage in any monitoring or inspections of worksites, nor maintain an office or foundation in the carpet-producing countries that does so. (It is now considering some kind of working relationship with Kaleen in India, but it is as yet unknown what this will imply.)

The label and the levy. The members of the association can purchase advertising and display materials publicizing their membership in Care & Fair and explaining its goals. The label reads "Care & Fair for Children's Welfare" and shows two children sitting happily on a carpet, with the words "Action Against Child Labour" written above them. A dealer's label will contain that dealer's year of membership and must be renewed annually.

Care & Fair collects a levy of between one per cent and two per cent of the carpet import value per square metre from its membership in order to finance projects in the carpet-producing areas; these levy fees are passed through to consumers. Members also pay a yearly membership fee of DM 250. By the end of its first year, in January 1996, Care & Fair had already collected 1.4 million Deutschmarks in its development fund.

Projects in the producer countries. Care & Fair has the aim of offering long-term support for school and education to the children of carpet-weaving families. In January 1996, eighteen school and health projects were being supported in India, Nepal and Pakistan by the development fund. Care & Fair claims credit for having actually built six schools which provide free lunches and have a good attendance rate; at that time 1692 children were in primary school. One of the main schools is in Pakri, Bhadohi, in the carpet belt. Care & Fair has also built children's clinics and supported operating costs in existing clinics in both Nepal and India which employ a total of 39 adults and serve child weavers and other children. The organization publishes and distributes a four-page brochure with 15 colour photographs advertising its accomplishments, as well as carrying news of them in its periodic magazine.

Future plans. Care & Fair is hoping to organize micro-credit projects similar to the Grameen Bank in Bangladesh. Small unsecured loans will be made mainly to women to enable them to organize small-scale commercial activities to help support their families "so that they are no longer forced to pawn their children [in bonded labour]. Their only obligation is to send their children to school. The banker of these mini-credit banks accompanies each mini-project and helps with advice without depriving the families of their own responsibility."^{( Endnote 20)} It will also continue to support mobile and stationary health programmes and intends to work together with local and regional NGOs.

Even though sizeable, the monies collected by Care & Fair are viewed as insufficient for its future projects. According to Huschmand Sabet, "the contribution of 1% as a voluntary self-commitment...is only the first step... The ultimate aim is the introduction of a compulsory 2% duty on all carpet imports into the European Community. This requires some unusual lobbying in Brussels where this tax is to be collected together with the normal customs duty but handed over to the Care & Fair Foundation. This would amount to 50 to 60 million marks. This sum would be sufficient to establish the prerequisites for the schooling and training of some hundred thousand children - these are far more children than those employed in the carpet factories."^{( Endnote 21)}

These two initiatives are both operating in the same country and with the same product, oriental carpets. A brief comparison may be useful.^{( Endnote 22)}

Care & Fair and German Rugmark have very different approaches. Rugmark provides a "guarantee" to consumers, producer-country monitoring operations to back it up, and a certain number of sales points in Germany where consumers can purchase Rugmark-labelled carpets. The licensing and labelling are both done by a non-profit organization in the producer country, and additional random inspections occur in Germany. The exporters and importers involved in the trade in labelled carpets are licensees who have permission to use the label and who pay a levy. Some retailers of substantial size have agreed to stock Rugmark carpets, although very few of them are exclusively Rugmark dealers; they can also run concurrent non-Rugmark-labelled importing or retail operations as well, and these unlabelled carpets obviously compete with the labelled ones. Rugmark depends upon German government financial aid and on financial help from other organizations, many of them church-affiliated, to pay its basic expenses, and it will probably be obliged to do so for at least another year. The Rugmark label has received considerable publicity within and outside Germany, but consumers are not yet very aware of its existence. The success of Rugmark depends, ultimately, on such awareness and on purchasers' willingness to buy labelled rather than unlabelled carpets.

In the Care & Fair case, no guarantee of child-free production is provided to consumers but producers and exporters are expected to abide by the principles of the association, including no illegal child labour. There is no producer-country inspection operation, and the good faith of importers who are Care & Fair members is the consumer's only assurance that the carpet he or she purchases was produced in "humane" working conditions for adults and without illegal child labour. (The charter contains a provision for oversight by NGOs but there is no indication that this has actually occurred.) Care & Fair is a trade organization with a large business membership and collects substantial sums of money in levies from its dealer-members; it makes the claim that since it is a non-profit, "100% of the money goes to the children", in the words of a Care & Fair spokesperson. This money is used for schools, clinics and educational and medical equipment in the carpet-producing countries. Care & Fair relies on no outside source for funding and has lower overhead costs, since it maintains no in-country foundation or monitoring operations. About the same age as German Rugmark, it has already funded about four times the number of in-country projects. It is unknown, however, how many child carpet-workers are actually still working to make rugs that are then imported into Germany by Care & Fair member-dealers, or how many have benefited by being removed from their jobs on either a full- or part-time basis to attend school. It is not clear how this outcome could be effectively measured, given all the other changes that have occurred recently in the carpet industry in both India and Nepal. Care & Fair receives endorsements and publicity in Germany but it is not entirely necessary that consumers be aware of the organisation's existence. Consumers purchasing carpets from Care & Fair retailer-members, who are very numerous, pay higher prices by two per cent whether they are aware of the existence of Care & Fair or not, and they are therefore contributing by their purchase to improve conditions for carpet workers in developing countries whether they desire to do so or not.

STEP is a small Swiss foundation that began in October 1995 with the objective of bringing fair conditions to the production of and trade in hand-knotted oriental carpets. STEP differs from Rugmark but is similar to Care & Fair in that it does not and will not label individual carpets; instead it licenses retailers to use the STEP label in their stores and publicity. It was also started by members of the carpet trade. However, unlike Care & Fair it also undertakes some monitoring; one of its activities, introduced in Spring 1996, is the monitoring and inspection of production sites in India, Nepal and soon Pakistan.

In October 1996 STEP held a "first birthday" press conference at a large hotel in the centre of Berne, where it is headquartered. Speakers there defined STEP's goals: to bring better working and living conditions to carpet weavers and to all those employed in the carpet industry; to work against abusive child labour; and to encourage production that respects the environment. "STEP is based on a tripartite partnership between Swiss merchants, the producers of the South, and development organizations."

Financing and support. STEP was founded in part by an organization called IGOT, the Swiss Association for an Honest Oriental Carpet Trade, which itself was set up in 1986 by eight oriental carpet dealers who made a joint commitment to maintain honest business relations with consumers and to promote good publicity for oriental carpets. The other founders of STEP were five organizations promoting aid to developing countries: Bread for All, which is the organization of the Swiss League of Protestant Churches for Development Services; the Swiss Lenten Fund of Catholics; Caritas; Swissaid, an independent, private non-sectarian foundation; and the Berne Declaration, which is an independent private society that advocates balanced economic and social relations between Switzerland and developing countries. All of these are members of the STEP Foundation, whose president is the executive secretary of Bread for All and whose vice-president is from the Berne Declaration. Some of the same NGOs that support Rugmark in Germany support STEP in Switzerland, although the two labelling initiatives are quite different.

STEP continues to receive financial support from its founding members; it has received no government financial aid. A government delegate for trade agreements in the Federal Office of Foreign Economic Affairs did write a supporting statement that appeared in a recent issue of the STEP newsletter.

What the STEP label means. STEP conceives of its label (an oriental-appearing red circular block-print design with the word "STEP" in the middle) as standing for a process - that of trying to bring change to carpet producers, to weavers and other carpet workers, to merchants and retailers, and to consumers. The label is not affixed to individual carpets and does not signify "100% guaranteed made without child labour" because STEP does not believe such a guarantee can reasonably be given. STEP feels that change will come slowly, and only if producers and others in charge of change are given the space in which to change. It is incumbent upon STEP-licensed importers and retailers to convince their producers and suppliers that carpets must be produced under a certain set of conditions. STEP officials feel that this pressure from outside, combined with local educational efforts carried out by STEP, will bring changes in the modes of production; however, this process must respect the local conditions in which production takes place, as well as the needs of local producers who must benefit from it. In the consumer countries, consumers must also be educated into the awareness that a carpet purchase is a choice that has social consequences.

STEP licensees and suppliers. STEP signs agreements with carpet dealers in Switzerland that "commit the signatories to promote fair conditions in the production and sale of oriental carpets, with the goal of bringing lasting improvement in economic and social conditions and in particular of actively fighting against the abusive use of child labour" (Article 1 of the contract). The contract contains a six-point Code of Conduct that STEP licensees agree to follow in their commercial dealings, including the rejection of the use of child labour. The STEP Foundation is careful about each enrolment: A prospective licensee needs, in addition to two references from present licensees, an inspection of its operations by STEP to ascertain the business's respect for quality and its seriousness.

Licensees who receive the STEP label have the right to use and to publicize it. Because the label is not attached to individual carpets, the company is "responsible" with regard to all of the carpets it stocks. The list of licensees is published regularly by the STEP Foundation.

STEP also maintains registers of acceptable producers and suppliers in the export countries, and importers in Switzerland have access to them. In India STEP has identified 16 acceptable suppliers which are regularly visited by the local STEP monitor. In Nepal STEP has seven suppliers which are also visited by the local STEP monitor. STEP also carries out intensive local information campaigns to encourage producers to adapt to STEP's requirements. For example, STEP scheduled "information days" in the Indian carpet belt and gave an educational seminar in November 1996 for producers, workers, NGOs and trade unions.

The levy fees. Licensees pay to the STEP Foundation a fixed sum per square metre of carpet they sell (right now S.Fr. 3-, or in other words approx. S.Fr. 10 - 12 total for an average size carpet). STEP uses this contribution to initiate development projects in the production areas, to monitor the behaviour of producers, and to provide information and education about its work. The projects in India and Nepal are managed by the Swiss charitable organizations and their local NGO partners. These projects are four thus far:

According to a STEP press release of October 1996, "The projects in which STEP takes part are aimed at reinforcing local efforts relative to social issues, human rights and training, and which contributive effectively to the struggle against abusive child labour in the carpet-producing regions."

Monitoring production. At present STEP has only two monitors, one in India and one in Nepal, although monitoring is expected to become more exacting in the future and a Pakistan monitor is also about to be hired. In Nepal, where 80 per cent of carpet production takes place in small factories of 20-200 people, the monitor goes to factories and also to those homes where carpet looms exist. In India, where 70 to 80 per cent of production is decentralized, homes and loom-sheds are visited. The STEP Foundation's secretary stated at the October 1996 press conference: "The results obtained thus far should not deceive us or give the impression that large-scale monitoring is in place. Also, it is apparent that it is not possible to have independent controls in important producing countries such as Iran or China, where the political situation denies us access." STEP is also discussing possible collaboration in monitoring with Kaleen in India so that STEP will have more monitoring capacity: Kaleen will monitor and STEP will countercheck to verify Kaleen's findings.

Communicating to consumers. STEP is aware that the success of its labelling campaign depends upon the willingness of consumers to purchase labelled carpets, and it feels it has made progress toward this goal. Its president stated in October 1996: "After one year of activity STEP has demonstrated that there exists a market for carpets produced in fair conditions - as is already the case in the food area."

IGOT, a founding member organization, carries out some education of sales personnel, and retailers provide brochures describing STEP's aims. Retailers publicize STEP as well as their own merchandise in their advertising; one example is Pfister Furniture, which owns a number of retail outlets in Switzerland and which actively advertises that it is a STEP licensee. Its advertisements sometimes describe what STEP is and does; however, other widely disseminated Pfister advertisements in full color, for carpets from five or six different countries, imply that STEP has given its organizational approval to the entire stock. Pfister may thus be felt to have capitalized on the STEP label in its marketing.

Other STEP dealers are more straightforward. A STEP dealer from Lausanne stated at the October 1996 press conference that prospective purchasers of carpets often raise the question of how a carpet was produced and whether children worked on it. "I cannot ignore it. Entire regions live by this artisanal work. This work is often done at home and constitutes an additional activity which is generally the only source of money income for the farmers. The investment for each workplace is low and a carpet guarantees from six months to a year of work for the weaver. The effect on the environment is, or could be, weak...These people need this activity in order to live, and they need us in order to sell their products, and they need consumers in order to appreciate their work."

Achievements and problems. STEP has signed up nine retailers with 31 retail sales points in Switzerland, accounting for approximately 20 per cent of the yearly Swiss oriental rug market. It is currently in talks with the national retailer Migros (operating in both Switzerland and France); if these are successful, Migros then would use an importer acceptable to STEP. STEP has identified and registered 23 acceptable producers in India and Nepal and has hired two monitors, with plans to hire a third. However, according to the president of the STEP Foundation, STEP is progressing more slowly than anticipated, especially as regards work in the producer countries and success with producers. Within Switzerland STEP recognizes that its labelling initiative has been started at a difficult time; the market is not doing well, competition is keen and profit margins are low. It is sometimes time consuming to convince companies to sign up to become licensees.

STEP hopes eventually to expand to other carpet-producing countries such as Morocco, Egypt, and the Islamic Republic of Iran. It would also like to sign up more dealers in Switzerland, hopefully an additional ten or twenty by the end of 1997, so that STEP dealers cover a total of 25 to 28 per cent of the Swiss market. It will also increase its public information campaign to Swiss consumers.

STEP relies heavily on the moral probity of the retailers using its label, for the label's significance ultimately rests on it. The label is meant to signify that a licensed retailer imports carpets only from producers represented in the STEP Register or who have been approved of by STEP. How STEP can be sure that this is the case is unclear. A STEP-licensed retailer could, if he or she desired, stock carpets from other producers alongside carpets imported from producers approved by STEP, with the store's STEP license "labelling" the entire stock by implication. This is what is actually happening in the case of Pfister cited above, although the other carpets labelled by implication are coming from other than STEP-monitored countries. STEP also does not carry out inspections of retailers' premises or check the origins of their carpets. Nor does STEP inspect the books of retailers to ascertain that the levy is being paid on all the retailer's sales volume.

The levies paid thus far by STEP-licensed retailers have been under S.Fr. 100,000. It is likely that some (unknown) part of this sum has gone to support STEP's own operating expenses in Switzerland, the difference needed coming from charitable financing. It is unknown how long STEP's office and monitoring operations will continue to depend upon charitable financing and whether STEP can eventually become a self-supporting initiative.

Founded in March 1995 by Paul Ketterer, the Double Income Project (DIP), based in Switzerland, provides labelling for textiles and garments imported into Switzerland from developing countries. Its goal is to try to raise the standard of living among industrial workers in low-wage countries by enforcing the following principles of factory production:

DIP currently has two offices, one in Zurich with one employee and one in Nairobi with three employees.

How the "Double Income" works. The Double Income Project is unlike any of the other social labelling initiatives described in this study. It expects its textile and clothing manufacturer licensees to "double" the wages of their workers (which are very low in the countries of production, currently Kenya and India) and donate the second part directly to the Project, which then invests this money in various welfare projects for the workers' benefit. In exchange for having complied with this DIP requirement, manufacturers receive DIP certification and the right to use the DIP label as a marketing tool. The bulk of production is imported into Switzerland, and for each labelled product imported, the Swiss importer also pays one US dollar to the DIP Joint Venture Project. DIP therefore collects from both the producer and the importer.

The logic underlying DIP's wage-doubling requirement is explained by Mr. Ketterer as follows: "In Europe, companies usually pay social costs for each employee in addition to direct wages. Why not pay an additional sum also in the developing countries, where there is no reliable social insurance or social protection for the workers?"^{( Endnote 23)} In a way, the wage-doubling payment could be said to be somewhat equivalent to the levy imposed by the other initiatives described in this study, although it is larger and the rationale given is different.

DIP establishes, then, a triangular arrangement between the manufacturer in the developing country, the importer/wholesaler in the marketplace, and DIP, with the aim of implementing social-ethical production and ensuring that the workers are provided for. The beneficiaries of this wage-doubling are usually adult workers, since No Child Labour is one of DIP's fundamental principles. DIP will however sometimes pay for the education of children who would otherwise be working.

Obtaining a label. The DIP label, which is attached to individual products, certifies that the products have been made in accordance with DIP principles. The label, which is in English, reads: "Double Income Project: DIP-approved trade 'N' aid; Let's Stitch Together." This label is registered and legally protected throughout Europe. The requirements for obtaining and using it are registered with the Swiss government, with a penalty for fraudulent use of one and a half years in prison or a S.Fr. 100,000 fine. This legally protects any manufacturer who becomes a DIP licensee.

Factories applying for DIP licenses have to show that they already observe some tenets of social-ethical production. For example, DIP is currently considering licensing a company that has already to its credit the planting of a large number of trees and the construction of a school and a clinic. This company will have much better chances of getting the DIP label than another company that has not already demonstrated some elements of social awareness. In practice, DIP-licensed factories generally have much better wages and conditions than government legislation requires. The licensees must sign an 18-page contract (in English) with DIP, including a guarantee of at least minimum wages.

Wherever possible, the initial licensing inspection by DIP is a well-publicized event with the media in attendance. In Tirapur, India, at the licensing in 1996 of a producer with 250 employees, DIP representatives from Switzerland were present to ascertain that the company fulfilled all of DIP's requirements. Also present were the president of the Swiss Textile Retail Association, who is also the vice-president of the European Textile Retail Association and responsible for its consumer affairs in Brussels, and a German TV team from Westdeutscher Rundfunk (WDR) which made a half-hour documentary about the event.

DIP-licensed factories have thus far always been able to make the additional payments to DIP over and above the actual cost of wages. The Project has found ways for licensed factories to save on other expenditures, e.g. in Kenya six DIP licensees now purchase their packaging materials in common, resulting in cost savings.

Financing and support. DIP initially received a small grant from the Swiss Government for technical training in DIP-licensed factories in Kenya but currently receives no financial support from any source. It is registered as a non-profit foundation, not a charity, and will accept donations, which are tax-deductible. The founder and his collaborators have been using their personal funds to meet their necessary travel expenses. DIP has no affiliations with any church group or with any international organization. The Swiss churches that are involved in developing country aid were in the beginning "a major problem", according to DIP's founder, as they were reluctant to see a Swiss initiative bypass them and arise directly from the business community.^{( Endnote 24)}

Current activities. At present DIP has licensed factories in India and Kenya, chiefly textile and garment manufacturers, although DIP has also recently begun to certify some jewellery and handicrafts manufacturers in South America, mainly Peru. DIP is now in discussions with a large Indian-Swiss multinational which is an entirely integrated operation from cotton plantation to marketing outlet. It has also agreed to license the Indian suppliers to Spengler, a large Swiss retailer with 16 stores and catalogue operations. In all, 53 retailers in Switzerland with 150 sales outlets are currently stocking DIP-labelled products.

Monitoring production. Inspections are held frequently, and are carried out by retired Swiss executives who either come from Europe to do them or already happen to live in the producer country; they are all volunteers. DIP will not accord a license to any company unless it knows it already has an inspector who can monitor it. Factory owners agree to inspections because they know it is in their own interest to do so. They are acquiring a label that will make it possible for them to sell their products in Europe. If an inspection should demonstrate that a factory is failing to observe DIP's principles, DIP may set up small reform projects to try to improve the situation . The goals of such projects are achieved in steps: improving working conditions, improving health support, establishing social security. DIP also does some technical training, e.g. in the implementation of quality control and bringing production up to Ecotex standard.

The label as publicity. Most of DIP's publicity is achieved via the label. According to DIP organizers, many consumers know what the DIP label means because it has been described in all the Swiss consumer magazines. DIP's director, Mr. Ketterer, has calculated that during the last year alone DIP has received nearly two million Swiss francs worth of press coverage and that the total market value of the radio and TV coverage DIP has received would be impossible to calculate. DIP considers Switzerland its test market and considers later expansion into Germany.^{( Endnote 25)}

At present DIP depends heavily on personal contacts and on self-financing. When Mr. Ketterer, the director, was asked whether he thought this labelling initiative could become large-scale, he replied: "My hope is that in the near future it will become unnecessary, because the world garment trade will check things and make sure production is done in a social-ethical way."^{( Endnote 26)}

There remains open, then, a real question surrounding DIP's future progress and whether this kind of labelling will achieve its goals. The financial arrangements between the DIP organization in Switzerland and the factory-licensees are not made public, and it is also unclear whether the double income payments would be sufficient not only for improvement and welfare projects but also to support DIP's administrative expenses were the present incumbents no longer willing to do so out of their personal generosity. The monitoring and inspection function depends on the personal energy and dedication of retired Swiss executives. As long as DIP centres on projects in two or three limited geographical regions this may be manageable, but if DIP grows or chooses to expand its territory it may constitute a serious limitation.

Another set of issues concerns the range of activities undertaken for the benefit of the workers, and which parties are responsible for the relevant decision-making and implementation. It is also unclear how much surrounding communities are helped by DIP, and, more broadly, what the attitudes of local and national governments and trade associations are toward the project.

Brazil is said to have about four million child labourers under the age of 14, and their numbers are expanding while the unemployment of their parents increases.^{( Endnote 27)} The Abrinq Foundation for Children's Rights, as one of its many activities, has attempted to encourage child-friendly companies and provide labelling for their products. The goals of this initiative are to increase awareness about child labour, especially among entrepreneurs, and to motivate companies to avoid employing children, as well as to encourage the development of programmes that contribute to better future possibilities for children. Abrinq offers child-friendly labels to companies that do not employ child labour and that also contribute to child development.

The intensification of awareness about and desire to do something about child labour (as well as all the other problems concerning children) in Brazil dates especially from the mid-1980s. Abrinq arose in the south-eastern part of the country, in the São Paulo area, where socially conscious entrepreneurs had already started an organization and were looking for ways to bring about a new kind of development. In addition to this group of entrepreneurs, two other organizations played a role in starting the Abrinq Foundation, the Brazilian Association of Toy Manufacturers and UNICEF, and the Foundation was founded in 1990 as an independent association. It aims to uphold children's rights and to promote social and entrepreneurial participation and commitment in the search for solutions to children's problems.

From the beginning, the Foundation has attempted to defend the rights of the most disadvantaged and exploited children in Brazilian society and has developed a wide range of action projects in the fields of health, nutrition, education and the community. In April 1995 it began a programme specifically aimed at companies and child labour, called the Child-Friendly Enterprise Programme (Empresa Amiga da Criança). This program has its own eighteen-member administrative board and an advisory board, plus a statutory audit committee.

Financing and support. Abrinq's activities have received support from the ILO, from UNICEF and from other national and international organizations and foundations as well as from a number of Brazilian companies in diverse sectors of the economy. The Foundation has today a network of over 2,000 members and associates who contribute to maintaining it. The specific Abrinq programme Child-Friendly Enterprise receives ILO-IPEC support for maintenance of its data bank.

The "Child-Friendly Enterprise" Programme. This special Abrinq programme has two related aims: to mobilize entrepreneurial commitment to avoid using child labour, and also to increase the level of company support for helping children to attend school or, for adolescents, vocational or professional training. The programme also promotes the inclusion of a social clause in commercial contracts, so that a company makes a commitment to combating child labour in all its relations with other companies. It offers an incentive (a label, which acts as a seal of approval) and a condition (the commitment to exclude child labour). Abrinq is convinced that only by organizing consumers to recognize and reward companies will such employers be prevented from employing children or benefiting from the products and services of other supplier companies that employ children. Companies have also been encouraged to join a network for the exchange of experiences regarding child labour, and they are helped to implement policies and social programmes so that children under the age of 14 stay in or return to school.

Obtaining a "Child-Friendly Enterprise" label. Companies that meet the Abrinq Foundation standards can use the Child-Friendly seal on their products, on company letterheads, or in the printed and televised media, as they wish. In order to qualify, companies must demonstrate a commitment to fostering education for children or vocational training for adolescents, or to helping children in some way that has Abrinq's approval. Enterprises that are not involved in manufacturing can be awarded the right to use the label by providing assistance to children. Abrinq started the label as an outgrowth of one of its earlier actions - the printing of children's rights on the packaging of the products of several companies. It was also encouraged to introduce labels when it saw that labels were beginning to be used or considered for use in some other countries. The Administrative Board of the program has now met many times to consider and analyse requests by companies to receive the label.

The label is conferred on a company and not on individual products. The company must make a formal commitment to respect the legal minimum working age of 14 years and to announce this commitment to its network of suppliers and clients. It must also develop or support some type of social programme directed towards child development and teen training, and must submit documents, receipts and other solid evidence to this effect. These are all examined by a network of Abrinq collaborators that includes labour unions, employees, NGOs, and other relevant organizations. This phase of ascertainment, as it is called, is followed by analysis by committees within Abrinq itself. Finally the company receives a letter and a seal, and "there is a public ceremony to award the diploma, an important part of the procedure when every attempt is made to make the event known, both by inviting authorities and celebrities and mobilizing the written and televised media."^{( Endnote 28)} The label is valid for one year, at the end of which it can be renewed after new investigations.

At the end of the programme's first year, 150 companies had been authorized to use the label. They operate in many fields: agro-industry, manufacturing, commerce and services, finance, and airports; some are state-owned or partly state-owned. The activities these companies performed for children as a condition for receiving the label somewhat resemble those carried out by the other labelling initiatives considered in this study, the two differences being that (1) the company itself rather than the labelling initiative chooses the preferred area of activity, and acts upon this choice; and (2) no levy monies pass through the labelling organization, as the company directly funds its chosen activity. In practice this is equivalent to a kind of levy, with the difference being company autonomy in the management of the money; yet without some verifiable expenditure that can be shown to the programme, a company would not receive the label. The range of projects acceptable to the labelling initiative is also somewhat broader than most. It includes, in addition to funding schooling and/or professional or vocational training, technical and financial cooperation with organizations that defend children's rights in one way or another, and sports and recreational activities for young people. A company receiving the label can even fund its own foundation to carry out projects for young people.

The first company to receive the label and the accompanying diploma was the São Paulo Power Company (Companhia Energética de São Paulo) and the company to lend greatest visibility to the label has been the Estapar Parking Facilities (Estapar Estacionamento). The only company denied a label was Petrobrás, the state oil company, for purchasing alcohol from mills that use child labour. Unlike most of the initiatives considered in the present study, as can be seen, the companies in the Child-Friendly Enterprise initiative do not all produce products for export, and some do not manufacture products at all but provide services.

(There are also a number of companies - including some of the foremost multinationals operating in Brazil - that have adopted the principles of the programme and signed public commitments to acquire products and services only from companies that do not exploit children, but that do not wish to acquire and use the label.)

Monitoring and inspection. One of the aims of the Child-Friendly Enterprise programme, and of Abrinq as a whole, is to strengthen the normative and inspection capability of state and other organizations. Abrinq urges many government ministries and departments to increase their monitoring and inspection activities for child labour. However, in the case of the labelling programme, monitoring is achieved by the programme itself, through the normative activities surrounding the approval to use the label. These activities are repetitive: a company will be reinspected each year in order to renew the label.

The programme's impact. One effect of the labelling programme has been to encourage others to spring up. A new institute, Instituto Pró-Criança, which is a short form of Instituto Empresarial de Apoio a Formação da Criança e do Adolescente, was formed by the local Shoe Industry Association entrepreneurs in the area of Franca, state of São Paulo, where most footwear is produced for export by outsourcing and where children under the age of 14 often work in their homes at stitching benches. This institute very recently introduced a label for the shoe industry on the model of that used by the Child-Friendly Enterprise Programme, and it has now been conferred on 49 local enterprises that "have assumed the commitment of not employing children under 14, and of not subcontracting work to companies that use child labour in their production". The institute retains the legal rights to the label and manufacturers are permitted to attach it directly to shoes as well as to display it in their commercial transactions. The label reads: "This product has not used child labour in its manufacture" below the institute's name and logo. Each employer using the label pays a monthly fee of R$50 to the institute, so that in this new initiative there is not an actual levy but a regular payment to a central organizer.

Because this shoe industry label was only three months old at the time of writing, no decision about how the collected fees will be used has been made. Nor does any evaluation of its operation yet exist. However, the Franca workers' union has already expressed its concern about how to control these companies and to monitor their commitment.

Labelling as part of a national anti-child-labour effort. It is important to point out that these two labelling initiatives in Brazil are only one part of a multifaceted national effort to eradicate child labour which is being carried out on many fronts by many actors and organizations, and in which governments at various levels also play an important role. Participation in the Child-Friendly Enterprise Programme or the Instituto Pró-Criança are just two ways in which companies can contribute to this national effort. Others include the construction or "adoption" of a school or public day-care centre; the development of courses for adolescents; the participation in or financial contribution to programmes to reduce the numbers of children working in specific industries, e.g. the charcoal kilns or the sugar/alcohol sector, and to aid their return to school, etc. Abrinq is active in many of these activities, and various means for generating enterprise participation are being used. It is also active in sponsoring regional conferences where employers, trade unions, workers, Chambers of Commerce and Industry, local government and international organizations gather together to discuss how to improve conditions for children and adolescents in their area.