Young boys carry bricks at a construction site in New Delhi. Scenes such as this are common in India, which the United Nations calls the world capital of child labor. Photo by Jean Pierre Laffont

Shahpur Jat Village – a tiny, underdeveloped urban neighborhood on New Delhi’s south side – is best known among Indians as the location of the 1951 Asian Games Village and, more recently, an up-and-coming hub for the country’s fashion industry. But beneath Shahpur Jat’s hip veneer lurks a seedy underworld that is a poorly kept secret in New Delhi but virtually unknown outside India.

That changed Oct. 28, when the British newspaper The Observer splashed an undercover investigative report across two pages detailing child labor in a textile factory that produced garments for American retail chain Gap Inc.’s GapKids line.

The damning report alleged that children as young as 10 toiled in conditions described as “close to slavery” – they were observed working from dawn until late in the evening in dimly lit rows of garage-like tailoring units flowing with excrement from a clogged toilet. The children also told the newspaper that they were routinely threatened, and those that cried were hit with a rubber pipe or forced to take an oily sock in their mouths.

The revelations provoked outrage in Western nations, where people have grown accustomed to reading about India’s rise as an economic power, and rocked San Francisco-based Gap, which adopted rigorous social audit systems several years ago to weed out child labor and improve the working conditions in its production processes.

“We strictly prohibit the use of child labor. This is a nonnegotiable for us – and we are deeply concerned and upset by this allegation,” Marka Hansen, Gap North America president said in a statement issued the same day The Observer published its report. “As we’ve demonstrated in the past, Gap has a history of addressing challenges like this head-on, and our approach to this situation will be no exception.”

Gap has worked to hard to shed the “sweatshop retailer” image it gained in 2004, when it admitted to widespread problems – from unsafe machinery to child labor violations – in the thousands of factories it uses around the world to produce clothing for its retail chains.

The company detailed the findings in a 42-page “social responsibility” audit that year, which revealed some of its suppliers engaged in abuses like forced labor, physical punishment, coercion, child labor and paying workers less than minimum wage. Gap followed the report by severing ties with 136 vendors that it determined manufactured garments in deplorable working conditions, and in 2006 the company ended contracts with an additional 23 suppliers that were found to be in violation of the company’s own Code of Vendor Conduct and international labor standards.

Upon learning of the situation at the Shahpur Jat factory, Gap destroyed the garments that were produced there and canceled its contract with the vendor, which Hansen did not identify.

“As soon as we were alerted to this situation, we stopped the work order and prevented the product from being sold in the stores,” Hansen added. “While violations of our strict prohibition on child labor in factories that produce product for the company are extremely rare, we have called an urgent meeting with our suppliers in the region to reinforce our policies.”

The scandal highlights the widespread problem of child labor in India, which the United Nations has labeled the world capital for child labor – the International Labor Organization, a U.N. agency, estimates that India is home to 40 million to 50 million workers under the age of 14 who account for roughly 20 percent of the country’s gross domestic product – and raised concerns about large retail chains outsourcing their clothing production to India. Some of the largest Western retail clothing brands source their products from India, including Polo Ralph Lauren Corp., J.C. Penney & Co., Hennes & Mauritz AB (a trendy Swedish chain operating as H&M) and Mothercare, a British chain that sells clothing and other products for babies and young children.

The Indian government officially responded to the allegations contained in The Observer report Oct. 30, when Commerce and Industry Minister Kamal Nath suggested at a global business conference in New Delhi that they displayed ulterior motives. Though he did not specifically cite the newspaper, Nath said the country is seeing “increasing efforts, driven by nongovernmental organizations, to come up with reports that show India in bad light.”

Nath also said that developed nations are displaying an increased tendency to erect nontariff barriers, some of which are based on campaigns that portray India negatively. “There will be pressure on India to take retaliatory measures,” he added, without providing any details.

Indian business leaders have reacted with similar anger. The day after Nath made his comments, Amit Mitra, secretary general of the Federation of Indian Chambers of Commerce and Industry, said in a speech at the Higher Education Summit 2008 in New Delhi, “Do you think they can do this [media coverage] in China?”

Child labor is an unregulated, gray area of the Indian economy, so statistics illustrating the scale of the phenomenon vary considerably. The Indian government estimates some 13 million of the country’s children are employed in agriculture, as domestic helpers, in roadside restaurants and in factories making glass, textiles, and countless other goods. Many charities and nongovernmental organizations around the world argue the figure is much higher.

Human Rights Watch, a New York-based organization that tracks more than a dozen issues, puts the number of child laborers in India at 60 million to 115 million.

The U.S. Department of Labor’s 2006 international child labor report estimates that 4.1 percent of boys and 4 percent of girls ages 5 to 14 are forced to work in India. Most work in agriculture, but children are employed in many other, often hazardous, industries. Living conditions frequently are poor, and abuse is common. According to Bachpan Bachao Andolan (South Asian Coalition on Child Servitude), a New Delhi-based nongovernmental organization that fights child labor, children may be purchased for labor in impoverished villages of India for as little as $12.50.

Child labor laws have been in place in India for decades; among the earliest was the Children Pledging of Labor Act of 1933, which prohibits bonded labor. Indian lawmakers severely restricted the use of children in the workplace in 1986 when they passed the Child Labor Prohibition and Regulation Act, which bans employment of children under 14 in factories, mines and hazardous employment, and regulates the working conditions of children in other employment. Most recently, the government enacted a law in October 2006 banning domestic help and hotel work by children under 14. However, it provides no protection for children between the ages of 14 and 18, who also face exploitation and abuse by their employers.

“If you look at their labor laws, on the Ministry of Labor’s Web site, the laws are spelled out very clearly, but it is very easy to find loopholes in them,” James MacNeil, senior office manager at Boston-based World Education Inc. said. “For example, India’s labor laws list the kinds of child labor that are prohibited, but agricultural labor is missing. Agricultural labor involves tending livestock and helping out on the family farm; livestock require a human body to follow them around and kids like doing that. All this gets back to the question of why so many Indian children are not in school.”

MacNeil lived in New Delhi recently for about two years, working on a World Education project that aims to get Indian children who were not attending school back into the classroom. Registered as a private voluntary organization, World Education provides training and technical assistance in nonformal education in more than 50 countries in Asia, Africa and Latin America, as well as in the United States.

While it is easy for families and employers to circumvent India’s anti-child-labor laws, MacNeil said the bigger problem remains putting them into place and enforcing them. “India needs to do a better job implementing and enforcing its laws, because that’s where things get a bit dodgy,” he said, noting that Indian lawmakers have yet to ratify the “Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labor,” a resolution adopted by the International Labor Organization at its 182nd convention that identifies bonded child labor as one of the “worst forms of child labor.”

Despite the extensiveness of India’s child labor problem, the country is taking steps to eliminate it, as demonstrated in the four days after The Observer published its story. During that period, New Delhi police carried out a trio of raids in Shahpur Jat that freed more than 100 children who were found working in miserable conditions:

•The afternoon of Oct. 28, police descended on the same factory that the newspaper accused of using child labor to produce Gap-branded clothing, finding 14 children in a single workshop. Children's aid workers and journalists accompanied the police.

•The next morning, police – acting on a tip from Bachpan Bachao Andolan – raided the factory again, freeing 28 children. Factory managers ordered reporters who were covering the raid to leave the premises, but not before they recorded images of barefoot, shirtless boys at work. One boy – 10-year-old Sheikh Ali – told police that he had been in training, without pay, for the last three months.

•Police carried out their largest raid Nov. 1 when they rescued 77 boys, 8 to 14 years old, who were embroidering saris and Indian wedding clothes in dingy rooms. Kailash Satyarthi, the founder and current head of Bachpan Bachao Andolan, said the boys were mostly from poor families in Bihar, India’s most impoverished eastern state, and had been brought to New Delhi to work in its small embroidery factories.

 “These children were trafficked and sold by middlemen. Such incidents show that holistic perspective is required in eliminating child labor,” Satyarthi said. “We firmly believe that mere cancellation of orders is not a solution. The business houses must ensure that the contracted manufacturing units do not employ children. They also have to regularly monitor their contractors and sub-contractors for the compliance of labor laws.”

The U.S. Department of Labor, which in 2004 partnered with the International Labor Organization and the Indian government to launch the INDUS project – a $40 million program to combat exploitive and hazardous child labor in India – has expressed its support for India’s efforts to end the practice.

"The US supports India's efforts to end abusive child labor and prosecute those who prey on children," Elizabeth Fitzsimmons, a spokeswoman for the U.S. Embassy in New Delhi, said.