04 September, 2009

Malawi's children pay dearly for the world's cheap tobacco

Ian Wishart
September 2, 2009

Tens of thousands are just ''collateral damage'' to multinational companies.

THE tobacco industry in Myrtleford died in late 2006 when British American Tobacco and Philip Morris decided they could buy tobacco leaves cheaper elsewhere. Indeed they could, with about 85 per cent of global production now coming from developing countries such as China, Brazil, Zimbabwe and Malawi. What they didn't reveal is the human cost of this low-priced leaf.

Seventy-eight thousand children are employed in the tobacco farms of Malawi in conditions barely better than slavery, daily enduring gross violations of their rights. They are paid just two cents an hour, working up to 12 hours a day. The work is unrelenting and pay is often docked for the cost of any food the employer might provide. The children are routinely abused, both physically and emotionally, to make them work harder and longer. Girls in particular are subjected to sexual abuse, often coerced by threats of withholding food, pay or employment.

The children also work without proper protective clothing or equipment. As a consequence, many suffer from the symptoms of what is known as green tobacco sickness, essentially nicotine poisoning. Their handling of the green tobacco leaves is equivalent to a "50-a-day" habit. Consequently these youngsters experience severe headaches, abdominal pain, muscle weakness, coughing and breathlessness.

Economists often use words such as "externality" that hide the true meaning of things. This is where there is an impact - positive or negative - on a party that is not directly involved in an economic transaction. For the tobacco companies, the harmful impact of child labour on tobacco farms is, conveniently, a negative externality. Think of it as the economic equivalent of collateral damage.

Tobacco multinationals have form when it comes to externalities. They have consistently treated the adverse cost of smoking as an externality that is not their responsibility. Only aggressive regulation and legal action in the developed countries of the world has managed to rein them in.

Tobacco companies will argue that in a capitalist system it is their responsibility to purchase raw material cheaply to increase shareholder returns. They say that when they buy tobacco leaf in the markets of Malawi they are simply buying at the market price; that they are not responsible for how the tobacco is produced or who is involved in its production.

This view of economics and the limits to corporate responsibility is untenable in the 21st century. More responsible multinationals have already realised they must take responsibility for their global supply chains, which is why we can buy Rainforest Alliance Certified coffee (even in fast-food restaurants) and sweatshop-free sports shoes.

Tobacco companies try to suggest that it is up to the Government of Malawi to enforce child labour laws. This view conveniently ignores a massive power imbalance.

Children do not work in the tobacco farms because they prefer it to school. They work because it is a marginally better option than starvation. Malawi maintains a rock-bottom-priced tobacco production industry because it has precious little else to sell besides tobacco leaf, which makes up 70 per cent of its export revenue. Neither the children of Malawi nor the country are in any position to bargain. Poverty and vulnerability drive this situation at both the household and the national level.

Yes, Malawi should act to ensure that children are paid decent wages, treated with respect and given access to education and medical care. But the free-market response of multinational tobacco companies would no doubt be to stop buying tobacco in Malawi, finding somewhere cheaper.

This is effectively a race to the bottom in which the multinational companies hold all the cards - a painful experience of powerlessness that the people of Myrtleford know about.

The only way this can be stopped is for multinational companies to self-regulate their supply chains or for some form of global regulation to be enforced. But for now the free market seems completely free to impose nasty externalities on children without conscience or responsibility. No thought is given to the duties the companies have to these children.

It has become painfully clear that the damaging externality of carbon pollution must be internalised in our market system. It should be equally clear that global capitalism and the wonders of free trade need greater civilising limits if impoverished children are to be kept from becoming collateral damage.
Ian Wishart is chief executive of Plan International in Australia. The report Hard Work, Long Hours and Little Pay: Research with Children Working on Tobacco Farms in Malawi can be found at plan.org.au.

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