The Small Hands of Slavery

India's Bonded Child Laborers and the World Bank

by Lee Tucker and Arvind Ganesan

Multinational Monitor January/February 1997

Whether they are sweating in the heat of stone quarries, working in the fields 16 hours a day, picking rags in city streets or hidden away as domestic servants, India's 60 to 115 million working children-the highest number of any country in the world-endure miserable and difficult lives. They struggle to make enough to eat and in some cases to help feed their families as well. They do not go to school; more than half of them will never learn the barest literacy skills. Many of them have been working since the age of four or five, and by the time they reach adulthood they may be chronically sick or irrevocably deformed. They will certainly be exhausted, old men and women by the age of 40, likely to be dead by 50.

Most of these working children are compelled to work, whether by their parents, by the expectations attached to their caste or by simple economic necessity. At least 15 million of them, however, are working as virtual slaves. These are India's bonded child laborers.

"Bonded child laborers" are children that work under conditions of servitude to pay off debts. The debts that bind them to their employers are incurred not by the children themselves, but by their relatives or guardians, usually a parent. In India, these debts tend to be relatively modest, ranging on average from $14 to $214, and are usually incurred for necessities such as food, emergencies such as treating illnesses or a marriage dowry.

As the cost of living and unemployment in India increase, the rate of child labor and bonded child labor is also rising. A 1995 report by the government-appointed Commission on Labour Standards and International Trade found child labor to be increasing in India at the rate of 4 percent a year, "while the working conditions of the children have remained unchanged, if not deteriorated." Children sold to bond masters work long hours over many years in an attempt to pay off these debts. Due to the astronomically high rates of interest charged and the abysmally low wages paid, they are usually unsuccessful. Many will pass the debt on, intact or even higher, to a younger sibling, back to a parent or on to their own children.

The past few years have seen increasing public awareness in India itself, but particularly in the international arena -of the high incidence of child servitude in the carpet industry of South Asia. But bonded children also make up a significant part of the work force in agriculture, and in the production of silk and silk saris, beedies (hand-rolled cigarettes), silver jewelry, synthetic gemstones, leather products (including footwear and sporting goods), handwoven wool carpets and precious gems and diamonds. Bonded child labor is prevalent in service areas including prostitution, small restaurants, truck stops, tea shops and domestic work.

Culture of exploitation

Child debt servitude has been illegal in India since 1933. Since independence, India has adopted a plethora of additional protective legislation, most importantly the Bonded Labour System (Abolition) Act, 1976, which strictly out laws all forms of debt bondage and forced labor.

These extensive legal safeguards mean little, however, without the political will to enforce them. In India, whether due to corruption or indifference, this will is sorely lacking. All existing labor laws are routinely flouted, with virtually no risk of punishment to the offender. In the rare cases of prosecution, offenders typically receive negligible fines. India-the Indian government, the ruling elite, business leaders and the populace as a whole-tolerates this slavery in its midst largely due to a vast and deeply entrenched set of myths. These myths hold that bonded labor and child labor are inevitable products of India's poverty. They represent the natural order of things; if they are to be changed at all, it can only be through slow evolution.

In fact, poverty is only one of many factors at play in creating and sustaining the conditions that facilitate endemic bondage. In India, other key factors include: a paltry social welfare scheme to safeguard against hunger and illness; a non-compulsory and unequal educational system; insufficient employment opportunities and living wages for adults; the lack of small-scale loans other than from bonding for the rural and urban poor; corruption and indifference among government officials; and societal apathy.

Most importantly, the Indian government has failed to protect India's most vulnerable children. When others have stepped in to try to advocate on their behalf, Indian leaders and much of the country's media have attributed these actions to ulterior commercial motives.

In response to the international focus on child labor in export industries and the threat of sanctions against exports made with child labor, the Indian government has accused its international critics of "protectionism" benefiting wealthy nations. The government has adopted superficial remedies designed to assuage international concerns about goods made for export with child labor while continuing to ignore its legal obligation to identify, release and rehabilitate bonded laborers.

World Bank bonds

Additional responsibility for the growing use of bonded child labor rests with multilateral lending institutions, notably the World Bank. In its effort to promote export-oriented industrialization, the Bank has neglected to ensure that the projects it funds do not involve the use of bonded child labor. The silk industry exemplifies the serious consequences of this neglect.

The production of silk thread and saris is historically one of India's most important industries. With substantial government and international subsidies for silk projects and marketing schemes, the industry has been expanding rapidly over the last several years. The bulk of Indian silk thread and silk cloth is consumed domestically, but silk exports are growing rapidly. Silk exports earned India approximately $260 million in 1995, and the Indian government expects silk exports to reach an all-time high of $300 million in 1997.

The World Bank has actively promoted the silk industry over the last decade and a half. From 1980 to 1989, the Bank loaned $54 million to support sericulture (the raising of silkworms) in Karnataka. In 1989, the World Bank provided two more loans totaling $177 million for the National Sericulture Project in Karnataka and Uttar Pradesh. In 1994 and 1995, the Bank loaned another $3 million loan to modernize the Karnataka silk industry and helped back a $157 million project to upgrade overall Indian silk production and quality. The Bank has also proposed a $190 million agricultural loan for Uttar Pradesh, part of which would promote silk.

The Bank's rationale for assisting with the promotion of sericulture is to create jobs, alleviate poverty and help disadvantaged groups.

But by failing to monitor or even restrict the use of bonded children, the Bank has, in effect, underwritten an industry which relies on bonded child labor at all stages of operation. In the two main stages of production, silk reeling and twisting, and silk handlooms, the bondage rate for child workers who are not the children of employers is reportedly 100 percent. In the Karnataka silk industry, there may be as many as 100,000 bonded children involved in every stage of silk production.

It is not unusual for children to begin working in the silk industry when they are five years old. These children earn very low wages, typically 10 rupees a day or less, and suffer occupational hazards and the threat of employer abuse. They are, in the words of R. K. Misra, who studied child labor in the sari industry of Varanasi, "cage-birds ... condemned from their very birth to be captive workers." Pomabhai is a 12-year-old boy. Both he and his older sister work in the silk industry; his other two siblings are in school and his father works as a waiter in a local hotel. When Pomabhai was eight, his father took a $126 advance in order to pay for his eldest daughter's marriage; Pomabhai was taken out of school and put in the factory, and he has been working there ever since. "I want to continue my education," he says. "But first, we have to eat."

In the Karnataka town of Ramanagaram, India's largest silk cocoon market, Ajad and Marukh, both 10 years old, have been working in the silk industry since the age of five. As reelers, the boys dip their hands into scalding water and palpate the silk cocoons, sensing by touch whether the fine silk threads have loosened enough to be unwound. They are not permitted to use spoons instead of their hands when checking the boiling cocoons, on the theory that their hands can more easily discern when the threads are ready to reel. At age 10, their palms and fingers are white with the thick tracks of fissures, burns and blisters.

Tens of thousands of children also weave the silk. Most silk looms are crowded together in dark, damp, poorly ventilated rooms. These crowded conditions encourage the spread of contagious illnesses among the child silk workers. In his 1985 study, "Child Labor: The Twice Exploited," B. N. Juyal of the Gandhian Institute in Varanasi identified tuberculosis and digestive disorders as "the occupational disease[s] of the weaving community." Cuts are also endemic and difficult to cure. A researcher in Kanchipuram reported seeing a boy with fingers so badly cut that he was unable to feed himself. Employers do not provide medical care or even first aid to injured workers, and those who are unable to work receive no wages for the day.

Human Rights Watch has called on the World Bank to suspend funding for the industry until the Indian government fully implements the Bonded Labour System (Abolition) Act, and the process of identifying, releasing and rehabilitating these children begins. Human Rights Watch has also urged the Bank to implement programs to ensure that these children are able to go to school, arguing that this is the only way to break the cycle of bondage.

The World Bank generally denies responsibility for, or complicity in, India's bonded labor problem. "Child labor has not been a major problem in Bank projects," says Durudee Sirichanya, a World Bank spokesperson. "We have regularly appraised" India's silk projects, Sirichanya says, and the problem of child labor "has not shown up in any of our reports . "

Sirichanya emphasizes that "the Bank does not condone the use of child labor in projects we finance." While "the issue of child labor is complex ... because in some areas child labor is essential for families to survive," she says, "the Bank has tried to look in terms of providing the environment to discourage child labor."

Smoking out child labor

Bonded child labor is also prevalent in non-export industries, including production of "beedies," cigarettes produced for the domestic market. More than 325,000 children work in the beedi industry, most in the southern state of Tamil Nadu.

The child beedi workers toil in brutal conditions, in a climate of fear and terror. "The agent would beat me with a stick if I was not there on time, he beat me if I could not roll 1,500 beedies a day and he beat me if I was tired," says Panjaran, a 10-year-old former beedi worker who was bonded at the age of six for a $14 advance. "If I looked around, he beat me. He made me put a matchbox under my chin; if it fell, he would beat me."

In 1991, the Supreme Court of India ordered the government to prohibit all child labor in tobacco manufacturing units which threaten children's health. In addition, the court ordered state governments to formulate a plan to either end child labor immediately or phase children out of the beedi industry within three years. By late 1996, however, no such plans had been implemented.

The search for political will

The eradication of bonded child labor in India depends on the Indian government's commitment to two imperatives: enforcement of the Bonded Labour System (Abolition) Act, and the creation of meaningful alternatives- schooling-for already bonded child laborers and those at risk of joining their ranks. Non-governmental groups will also have to shoulder enormous watchdog responsibilities, blowing the whistle whenever the government is lax.

Lee Tucker and Arevind Ganesan are consultants to Human Rights Watch's Children Rights Project

IMF, World Bank, Structural Adjustment