Child labour in supply chains and what businesses need to know

Child labour remains a widespread risk in global supply chains, with direct implications for business accountability, legal compliance, and reputational exposure.

For companies, the challenge is both recognising where these risks arise, while also understanding how they present and what effective action requires.

New guidance developed for Australian companies provides practical direction to identify, prevent, and respond to child labour risks. It is applicable to all sectors and global supply chains.

Child labour occurs across all regions, including in middle- and high-income countries.

Millions of children around the world are engaged in work that interferes with their education, development, or well-being, with many exposed to hazardous conditions or severe exploitation.

For businesses, this means child labour risks cannot be excluded based on geography. Risks can arise through suppliers, contractors, and in communities connected to operations.

Recognising where and how these risks occur is essential for effective due diligence.

Child labour does not always meet the threshold of modern slavery, but there is significant overlap.

The most severe forms of child labour, including forced labour, trafficking, and sexual exploitation, are recognised as modern slavery under international frameworks.

The presence of child labour can also indicate broader structural risks, including weak labour protections, informal employment arrangements, and limited oversight.

For this reason, child labour should be addressed as part of a broader approach to managing modern slavery risks.

Child labour risks are more acute in specific operating conditions. These include:

These risk factors exist across industries and jurisdictions, requiring businesses to assess exposure across all areas of their operations and supply chains.

Preventing and addressing child labour requires ongoing due diligence by companies and business leaders. This includes:

Practical steps include assessing recruitment practices, verifying worker age, reviewing working conditions, and training staff and suppliers to identify indicators of risk.

Responses should prioritise the safety and wellbeing of children. Where risks are identified, companies should work with suppliers and relevant experts to address issues and prevent recurrence.

Child labour risks are shaped by local economic, social and regulatory contexts.

This complexity can make it more challenging for businesses to translate international standards into operational actions.

Practical guidance supports businesses to identify risks, understand indicators, and implement appropriate responses within their specific operating environments.

The Human Rights Resources and Energy Collaborative has developed a practical resource focused on identifying and addressing child labour in supply chains.

The guidance outlines how risks arise, how they can be identified in practice, and what actions companies can take to prevent and respond to harm.

It is designed as a starting point, recognising that effective responses require ongoing assessment and engagement.

Read the Understanding Child Labour Risks in Your Supply Chain guidance for practical steps, examples, and tools to strengthen your approach.