Weaving a Global Society Free of Child Labor
Location
RugMark's innovation is to remove the market demand for child-made goods and raise the financial cost of using illegal child labor in carpet manufacture.
About You
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Your idea
Sector Focus
Business
Year the initative began (yyyy)
1996
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Positioning of your initiative on the mosaic diagram
Which of these barriers is the primary focus of your work?
Profitability of slavery
Which of the principles is the primary focus of your work?
Expose slavery’s hidden role in commerce
If you believe some other barrier or principle should be included in the mosaic, please describe it and how it would affect the positioning of your initiative in the mosaic
This field has not been completed. (333 words or less)
Name Your Project
Weaving a Global Society Free of Child Labor
Describe Your Idea
RugMark's innovation is to remove the market demand for child-made goods and raise the financial cost of using illegal child labor in carpet manufacture.
Innovation
What is your signature innovation, your new idea, in one sentence?
RugMark's innovation is to remove the market demand for child-made goods and raise the financial cost of using illegal child labor in carpet manufacture.
Describe your innovation. What makes your idea unique and different than others doing work in the field?
The movement to end child labor has developed over more than a century and includes thousands of agencies. Many work to erect and advocate a legal infrastructure that protects children, such as ratifying conventions on Minimum Age and Worst Forms.
In every carpet-producing country where RugMark operates, national laws dictate the conditions under which child labor is illegal. While governments don’t consistently enforce these laws, markets can.
RugMark addresses the two factors that truly perpetuate child labor: its invisibility and profitability. It’s difficult to notice children hidden in dark loom sheds and it’s difficult to convince manufacturers not to employ the cheapest labor possible.
RugMark shines a light on this inhumane practice; creates a transparent trading system through an inspection and monitoring system on the ground; identifies slavery-free goods with its certification label; and rescues, rehabilitates and educates former victims. The innovation includes a self-financing component: a percentage of sales of certified child-labor-free rugs are invested back into the work of ending child slavery.
Delivery Model: How do you implement your innovation and apply it to the challenge/problem you are addressing?
RugMark USA ensures that no one can profit from or claim ignorance of this injustice through its Most Beautiful Rug consumer awareness campaign. The goal is that everyone who sets out to buy a hand-woven rug is informed of the RugMark option. Through a combination of strategies including advertising, branding, media outreach, event participation, point-of-sale materials, and an online presence, RugMark offers manufacturers of certified child-labor-free rugs preferential treatment and enhanced visibility in the American marketplace.
How do you plan to grow your innovation?
Today 2.1 percent of rugs imported to the U.S. carry the RugMark® label. With The Most Beautiful Rug campaign, RugMark aims to double its market share in 2008 and hit 7 percent by 2009. Ultimately, RugMark believes it can reach 15 percent within the next decade, the estimated tipping point to end child servitude industry-wide in South Asia.
In the coming year, increased attention will be paid to the industry’s most influential players, including engaging the largest national retailers of handmade rugs, as well as the interior design community and sales associates.
The other expansion will be of RugMark’s international network with feasibility studies in two new producer countries slated to begin. Since the demand for certified rugs has met supply, RugMark will need to look for new ways to grow in the market.
Finally, RugMark USA is launching a process this year to document the learning from its model and look for ways to replicate it in other industries plagued by exploitative labor practices.
Do you have any existing partnerships, and if so, how do you create them?
RugMark's innovation relies upon private sector partnerships. This includes RugMark’s 50 importer licensees and more than 1,000 showrooms and retail outlets. When rug companies become licensees, inspectors in South Asia gain access to looms and factories, enabling the rescue and deterrence of more children from exploitation and generating more funds to support schooling for former carpet kids.
In RugMark’s first organizational phase, companies that joined the certification program were mainly compelled by a moral imperative. RugMark USA’s current business development strategy involves one-on-one business outreach, tradeshow participation and other activities engaged to convince more companies driven by the profit motive.
RugMark also counts some eight media companies as sponsors of The Most Beautiful Rug campaign. Sponsors run dedicated public service advertising, and assist in other ways to build RugMark’s brand awareness. Prospective media partners were identified through extensive demographic research and priority was given to those most likely to reach the largest numbers of individuals who could effect change in the carpet industry: rug purchasers.
Impact
Provide one sentence describing your impact/intended impact.
Market share growth of RugMark certified rugs means children being educated not exploited, companies converting to an ethical supply chain and consumers making principled purchases.
What are the main barriers to creating or achieving your impact?
While market share is growing, large-scale importers still hesitate to join. Certified rugs are not as easily accessible to consumers at a variety of price points, placing RugMark products in a niche rather than mainstream market. RugMark must move beyond those companies motivated by the moral imperative by increasing the value of the RugMark label and thus increasing the profit motive for industry membership. A revamped consumer campaign will roll-out in 2009, offering fresh collateral and improved branding, as well as repositioning.
The second obstacle that RugMark USA faces is on the supply side of the equation. For RugMark to successfully partner with large national retailers and expand its market share, it must offer more product selection of certified rugs. This means more volume, more price points, and more geographic diversity. RugMark must strengthen its capacity in existing producer countries (India and Nepal) and expand to other major export markets.
How many people have you served or plan to serve?
In RugMark’s first decade, child labor decreased by as much as 60 percent in the carpet belt of South Asia (from 1 million to 300,000). Today, over 3,000 children are enrolled in RugMark rehabilitation or education programs in India and Nepal.
RugMark has estimated that for every percentage point market share earned, 750 children are rescued from the workplace, 1,000 are saved from entering, and 2,200 jobs are given to adults rather than children.
Directly
RugMark’s primary beneficiaries are the 300,000 children, aged 4 to 14, who are kidnapped or sold into South Asia’s handmade carpet industry. They suffer malnutrition, impaired vision, and deformities from sitting long hours in cramped, dark loom sheds. They contract respiratory illnesses from inhaling wool fibers and wounds from using sharp tools. Girl weavers are particularly vulnerable as Nepal’s carpet factories are known gateways to Bombay’s brothels and considered a source for traffickers.
Indirectly
RugMark benefits weaving communities, socially responsible carpet businesses, and conscious consumers.
The carpet sector is critical to several South Asian economies. What began as a cottage industry in Nepal with the influx of Tibetan refugees now accounts for nearly 60% of the country’s overseas trade. India, considered the motherland of crafts, ranks first in volume and third in value in the world carpet industry.
Millions are employed by the rug industry. Their livelihood is threatened by the prolific and illegal use of child labor. Child labor drives down adult wages, often replacing experienced artisans altogether. When children sacrifice their education, the cycle of poverty continues.
Other beneficiaries include the companies who join RugMark, utilizing the label to improve their public image and bottom line. RugMark also rewards socially responsible manufacturers and offers consumers the choice to purchase according to their values, building a private sector that emancipates and empowers poor producers.
Please list any other measures of the impact of your innovation?
RugMark measures impact using various indicators:
Market growth – market share data, number of licensees and participating retailers.
Consumer awareness – number of advertising, editorial and website hits and consumers reached; awareness year-on-year; retail sales of certified rugs.
Social impact -- incidence of inspectors finding children; dollars raised for children’s education; number of children studying with RugMark support.
Signs that RugMark is realizing its vision include: market growth rate; widespread availability of certified rugs; quantity and quality of partnerships; and involvement of major retailers.
Is there a policy intervention element to your innovation?
RugMark’s innovation is bringing the child labor issue into the business space and demonstrating to economic actors how the roles they play can either perpetuate or eradicate the problem. RugMark engages in policy intervention to the extent that it influences international trade and directly affects our market-driven approach. For example, when legislation is proposed to enforce quotas or sanctions on import products made with child labor or from countries with poor labor records, RugMark will submit testimony and get involved.
Exactly who are the beneficiaries of your innovation?
RugMark serves South Asia’s quarter million ‘carpet kids’ by removing them from slave-like conditions, reuniting them with family, and raising funds for their rehabilitation and education.
RugMark fosters integrity in an industry critical for the literal and cultural survival of countless people. While overall sales of handmade rugs declined in 2007, sales of RugMark certified carpets increased 20%, keeping more adult artisans employed.
RugMark offers the millions of conscious consumers independent verification that their rug was manufactured in a humanitarian fashion.
This Entry is about (Issues)
Sustainability
How is your initiative financed (or how do you expect your initiative will be financed)?
In 2008, RugMark’s funding is as follows: charitable donations represent 51% of projected revenue, industry payments 26%, in-kind services 22%, and interest the rest.
Ultimately RugMark believes that industry should pay for its own regulation. Importers pay RugMark USA a 1.75 percent royalty on the net import value of carpet shipments on a quarterly basis. Sixty percent of these fees support the rehabilitation, education and social welfare programs that RugMark provides in South Asia. The remainder is dedicated to market development for child-labor-free rugs.
RugMark’s licensing fees, totaling $187,000 in 2007, have grown by 34% over the past three years. Sales of RugMark rugs since 2000 have generated over a half million dollars to assist and educate victims and those at risk of becoming enslaved.
If known, provide information on your finances and organization
ESTIMATED 2008 REVENUE AND EXPENSE $1 ,571,387
RugMark has secured approximately 87 percent of its charitable revenue for the year and has $100,000 still to raise. An anonymous donor has agreed to match new money, dollar for dollar, up to $50,000 in 2008.
Full-time staff: 6
What is the potential demand for your innovation?
A former child weaver in India, Asha, recently told RugMark: “Tell them, tell everyone, not to buy goods made by kids.” This sentiment demonstrates the urgent and ongoing demand for RugMark.
As the green economy and overseas manufacturing escalates, companies will increasingly turn to groups that offer third-party verification, market positioning and risk mitigation. RugMark’s model has already inspired initiatives in other industries and has been cited as an example for companies like Gap struggling to ensure a slavery-free supply chain.
What are the main barriers to financial sustainability?
Financial sustainability will be hastened as more and bigger companies join RugMark. RugMark’s licensing fees, totaling $187,000 in 2007, have grown by 34 percent over the past three years. Today, 17 percent of RugMark’s budget is covered by licensee payments and by yearend, this is projected to reach 45 percent. In 2010, RugMark anticipates that industry revenue will supersede charitable gifts. This would be a significant milestone, one that few nonprofits realize and even fewer in a decade of opening its doors.
The Story
What is the origin of this innovation? Tell us your story.
By the 1980s, after the release of several revealing studies by the U.S. Department of Labor and human rights groups, the carpet industry had earned worldwide notoriety for its use of child labor. Moral outrage alone was not going to end child exploitation and the looming threat of an international boycott would have only hurt indigenous weaving communities.
In 1994, a coalition of NGOs throughout South Asia led by Indian activist and Ashoka fellow Kailash Satyarthi, looked to the businesses and shoppers of the West. After decades of rescuing children from bonded labor only to see them replaced by others, it was time to instigate a change in the market. They created a label for handmade rugs produced without illegal child labor: the RugMark®.
RugMark now operates in five countries under an international affiliate network structure. As the world’s largest market for handmade rugs, the U.S. has the greatest potential and responsibility to address the injustices in this $1.2 billion retail industry.
RugMark USA opened its doors in 1999 with the hiring of the first staff person, Nina Smith. While most brands launch with a multi-million dollar campaign, RugMark USA spent less than $1 million and had only a two-person staff in its first five years. Nevertheless today over 2 percent of the handmade rugs brought into the U.S. carry the RugMark® label.
This domestic market growth brought results overseas. In 12 years of operation, child labor in the industry decreased by as much as two-thirds.
Please provide a personal bio. Note this may be used in Changemakers marketing material
Nina Smith is the founding Executive Director of RugMark USA, a nonprofit-business hybrid combating exploitative child labor in South Asia’s handmade rug industry. A fair trade advocate and marketing professional for 15 years, Nina was recipient of the Skoll Award for Social Entrepreneurship in 2005. Nina was formerly the Executive Director of The Crafts Center and President of the Fair Trade Federation. Her overseas experience includes a crafts development consultancy to the fair trade company The Tibet Collection in India.
Emphasis of Work
RugMark's model is designed to offer immediate assistance to enslaved and vulnerable "carpet kids" while providing a system solution that addresses the root causes of child labor. In short, RugMark's work can be viewed as both protection and prevention.
 | Amelia Forrest Kaye said: On July 16, 2008, the judges reviewed the entries for the Changemakers “Ending Global Slavery” Competition and would like to pass on the ... about this Competition Entry. - 1269 days ago read more > |
| Weaving a Global Society Free of Child Labor has been chosen as a finalist in Ending Global Slavery: Everyday Heroes Leading the Way. - 1297 days ago |
| RugMark USA said: Hi Dana, Good questions -- If a company passes along the actual cost of RugMark participation onto the consumer, the added cost to a ... about this Competition Entry. - 1309 days ago read more > |
| danafrasz said: Hi Nina, Are Rugmark rugs more expensive? If so, by how much? Who are the largest national retailers of handmade rugs? Who are the ... about this Competition Entry. - 1331 days ago read more > |
| RugMark USA said: Hi Laura, Thanks for your comments and questions. Since the process of licensing and inspection under RugMark's system is fairly ... about this Competition Entry. - 1331 days ago read more > |
| ljcardinal59 said: Dear Ms. Smith- I just finished reading your entry and it sounds like you are doing amazing work. Trafficking of person- regardless ... about this Competition Entry. - 1338 days ago read more > |
| MadeBySurvivors said: While it is illegal to import slave made items into the US, the reality is that there is no way to tell if that shirt you are wearing ... about this Competition Entry. - 1339 days ago read more > |
