Gap Under Fire: Reports Allege Child Labor

Oct. 28, 2007 — -- Retail giant Gap has been tied to accusations of child labor through a vendor that produces some of its children's clothing line.

The allegations originally appeared in the British newspaper The Observer today and said children worked as bonded laborers to make embroidered blouses for Gap Kids.

The clothes were going to be shipped to outlets in the United States and Europe, just in time for the Christmas shopping season.

Video taken by Dan McDougall, a freelance journalist in New Delhi, India, and acquired by ABC News, showed Gap labels being stitched into garments and the location of a work room in a slum.

McDougall said the children working in the sweatshop were between the ages of 10 and 13 and slept on the roof.

"There was an overflowed latrine, bowls of rice covered in flies, a lot of mosquitoes, quite a putrid smell inside the sweatshop," he said.

While Gap continues its investigation, the company said the garments made by the children never will be sold in its stores and the order has been scrapped.

'We Do Not Ever Condone Child Labor'

The company quickly responded to the charges, saying in a statement, "These allegations are deeply upsetting and we take this situation very seriously.

"We firmly believe that under no circumstances is it acceptable for children to produce or work on garments," the statement added.

On "Good Morning America Weekend Edition" Sunday, Gap North America president Marka Hansen reiterated that the company does not support child labor.

"We do not ever -- ever -- condone child labor in making our garments," she said. "This is completely unacceptable."

Hansen said many of the vendors that work with Gap are committed to its rules and goals, which includes disallowing child labor.

When vendors do not adhere to company standards, they are dismissed, she said.

In fact, last year the company fired 23 factories for not adhering to Gap standards, Hansen said.

"Quite frankly, I am glad that this was brought to our attention because it allows us to double down on our efforts," Hansen added.

The company employs 93 inspectors who conduct random, unannounced inspections at 2,300 factories, she said.

But a Gap executive said a subcontractor in New Delhi likely farmed out an order to the factory in question without the company's knowledge.

"One of our vendors did obviously, in subcontracting the product, did not ensure that this product was not going to be made with child labor," said Gap senior vice president Dan Henkle. "And again it's completely against our policies."

Hansen added, "The actions will be swift."

But Hansen stopped short of saying the company would close factories in India, saying the vast majority of the vendors there are in line with Gap policies and have worked with the company for 15 years.

"I think for us to pull our business out of there would undermine the economy as well," Hansen said.

Struggle to Stop Child Labor

Like many global clothing companies, Gap subcontracts huge orders in the developing world, where child labor is virtually endemic.

Many American companies have struggled to enforce labor standards in developing countries around the world. For example, in 1996 a human rights group reported TV personality Kathie Lee Gifford's clothing line, which was sold at Wal-Mart, was manufactured by sweatshop labor.

Gifford asked the U.S. government to investigate and later crusaded against the use of child labor.

The United Nations said the number of child laborers around the world has decreased by 11 percent, from 246 million to 218 million, between 2000 and 2004, according to the most recent statistics.

But human rights advocates said there remains still a lot of work to be done.

"There are millions of children working in India, and many in horrific conditions including conditions that amount to slavery," said Sama Coursen-Neff of Human Rights Watch.

Image Is Everything

The allegations may put a blot on a company acutely aware of its image. Gap sells clothes in five continents and last year it mounted a huge campaign in support of product red, a charity to benefit Africa launched by U2 musician Bono.

"I don't think it should undo the good that we do overall," Hansen said. "I think it was an isolated incident."