Between June 2022 and March 2023, Transparentem investigated labor conditions on cotton farms in the Khargone and Barwani districts of the Indian state of Madhya Pradesh and found evidence of child labor, including, in some cases, the worst forms of child labor. The International Labour Organization’s (ILO) definition of the “worst forms of child labor” includes “all forms of slavery or practices similar to slavery” and “work which, by its nature or the circumstances in which it is carried out, is likely to harm the health, safety or morals of children.”1 Investigators also found evidence of issues that the ILO has recognized as indicators of forced labor: debt bondage, abusive working conditions, and abuse of vulnerability,2 as well as payment of wages below the State minimum wage. Transparentem also found evidence of potential organic integrity concerns on farms connected to the supply chain of Pratibha Syntex.

Since September 2023, Transparentem has been engaging buyers and suppliers to urge them to provide remediation to those harmed, strengthen their due diligence to prevent abuses, and work together to transform the sector into a more attractive destination for sourcing sustainable and ethically produced cotton.

Child labor and debt bondage are widespread, interrelated problems on cotton farms in India. Low wages and a lack of opportunity in Indian rural communities leave families trapped in poverty and debt, creating pressures to send their children to work.3 Once children begin working, they face significant barriers to completing their education. These children miss out on opportunities to develop the knowledge and skills required to secure better jobs as adults—thus reigniting the cycle of low wages, lack of opportunity, poverty, and exploitation.4 There are also important health and safety risks associated with the tasks that children told investigators they performed on cotton farms. Children are particularly vulnerable to the health effects of pesticide exposure. Even if they are not directly involved in mixing or spraying pesticides, children can still experience adverse health impacts when they work in fields after pesticides have been applied.5 Longterm exposure, even at low levels, has been linked to chronic and severe health issues in children, including cancer and the impairment of their neurological and reproductive development.6

Transparentem accessed evidence that connected investigated cotton farms to the supply chains of two Indian suppliers that produce cotton yarn, textiles, and apparel through their cotton sourcing programs: Pratibha Syntex and Remei India. Both suppliers have due diligence systems that allow visibility into the cotton farm level and include steps to prevent these types of abuses, which Transparentem applauds. Reinforcing those steps is now required. Transparentem also accessed evidence that connected an additional set of farms to ginning mills that sold cotton bales to several companies, including a third supplier that produces cotton yarn, textiles, and apparel: Maral Overseas. Transparentem then traced the supply chains of those three suppliers and connected them to several international buyers. Transparentem contacted 60 of those buyers, focusing on consumer-facing brands and manufacturers that had greater opportunities for exerting leverage on upstream actors. The selection of buyers was determined by assessing the number and value of shipments, other evidence of supply chain connections, and relevant sustainability commitments. While Transparentem connected investigated farms either directly or indirectly to these suppliers’ supply chains, this does not indicate that cotton from these farms was used in specific products of the suppliers or buyers. Transparentem reported investigation findings to the three suppliers but did not send the evidence gathered, provide the names of interviewees, nor disclose the specific locations of investigated farms. Transparentem’s confidentiality policy does not provide for the disclosure of such information, in order to protect sources from potential retaliation. Accordingly, the three suppliers were not able to confirm their connections to investigated farms nor verify independently that the conditions Transparentem reported were present at those farms.

Pratibha Syntex told Transparentem that it and its associated group of companies are committed to transparency and continuous improvement of their systems. Pratibha Syntex added that it promotes Vasudha Swaraj as an independent entity tasked with supplying Pratibha Syntex with sustainable cotton. Pratibha Syntex acknowledged that despite its own and Vasudha Swaraj’s efforts over the past two decades, problems may not have been eradicated completely, and continued improvements to their systems are required.

Remei Aktiengesellschaft (Remei AG) told Transparentem that in Madhya Pradesh, Remei India invests in direct cooperation with smallholder farm owners to ensure transparency, establish human rights due diligence, and develop a reliable system for organic farming. It added that it regularly assesses and eliminates any identified abuses and risks in its supply chain. In fact, Remei AG stated that it created a program in this area to develop a more responsible cotton supply chain within communities that already faced high risks. Transparentem applauds these efforts and Remei’s achievement of full visibility at the farm level. Transparentem acknowledges that this very visibility allowed Transparentem to more easily connect investigated farms directly to Remei. It is more difficult to draw such connections with suppliers who have achieved lesser visibility. Remei also told Transparentem that it has processes in place to remediate identified cases of abuse, which it could not activate because Transparentem did not provide access to the evidence gathered during the investigation, the names of farm workers, or the specific locations of investigated farms. (Transparentem’s confidentiality policy does not provide for disclosure of such information, in order to protect sources from potential retaliation.) Transparentem noted that cases identified during its investigation were not isolated but representative of systemic issues in the cotton sector of Madhya Pradesh and India that require systemic responses.

Maral Overseas told Transparentem that based on the details provided by Transparentem about its investigation, the connection between the investigated farms and Maral Overseas was not clear. The supplier also reported that its purchases amount to approximately 2% of the total cotton crop grown in Khargone and Barwani. Maral Overseas added that conventional cotton farm owners sell cotton in the spot market or in some cases, to ginning mills, and at the ginning stage, the cotton from many different farms is mixed together, making it impossible to connect specific cotton from specific farms to a spinner or 6 Executive Summary manufacturer. Maral Overseas added that despite this lack of visibility, it has established social development and awareness activities for farm owners to prevent unethical work practices like child labor and bonded labor. In its investigation, Transparentem accessed evidence that connected a set of farms to ginning mills that sold cotton bales to many companies, including Maral Overseas. Transparentem does not claim that this indicates that cotton from investigated farms was used in Maral Overseas’ products but conveys the company’s connection to investigated farms because of Maral’s purchases from specific ginning mills. Maral Overseas advised that it has not mapped the conventional farms from which the cotton in its products originated and that traceability to the cotton farm level requires access to and verification of purchase and sales documents from ginning mills. As a result, there are risks that cotton from investigated farms may have been incorporated into products sold to Maral Overseas. Despite the indirectness of the connection identified between cotton from investigated farms and Maral Overseas, the company told Transparentem that it is committed to improving conditions on cotton farms by supporting the development and implementation of Fair Labor Association (FLA)’s Harvesting the Future (HTF) – Cotton in India.

Transparentem is encouraged that many buyers and all suppliers are collaborating with stakeholders to develop remediation plans and improve their understanding of conditions on cotton farms in the region. (Reported actions and company responses are detailed in written questionnaire responses and other correspondence with buyers, which are on file with Transparentem and may be available upon request.) In response to Transparentem’s investigation, the FLA is implementing a project with buyers and two of the suppliers—Maral Overseas and Pratibha Syntex—called Harvesting the Future (HTF) – Cotton in India, which has the potential to begin to address many of the key issues identified in Transparentem’s investigation. Although more than one year has passed since Transparentem shared its findings with buyers, none of them have told Transparentem the specific financial amounts they committed to support the implementation of FLA’s Harvesting the Future (HTF) – Cotton in India. FLA told Transparentem it received sufficient funds to undertake activities for the first two years of the project and that implementation had already started. FLA added that it will explore additional funding in the coming year in collaboration with the companies that are supporting the implementation of the Harvesting the Future – Cotton in India project. Public disclosure of the budget and company contributions, however, is important for stakeholders to be able to effectively assess the project’s potential effectiveness in carrying out planned activities and achieving its objectives.

Remei India and its buyers have responded separately and in a different manner from the buyers of Pratibha Syntex and Maral Overseas. Because Remei India already had well developed processes and relationships down to the farm level, Remei India, Remei AG, and their buyers will conduct a complete study of registered cotton farms in Madhya Pradesh to better understand the experiences of workers and farm owners. (bioRe conducted a similar study in 2005, at which time the primary focus was on the economic challenges faced by smallholder farm owners and only to a lesser extent on the situation of workers.) The full scope of the new study, which intends to cover every farm in its supply chain for the first time in more than a decade, has the potential to improve this supplier’s existing prevention and case-based remediation strategies to address instances of child labor and other abuses. Transparentem will be able to 7 Executive Summary better assess the effectiveness of this approach if Remei India and Remei AG publicly share the results of the study and any remediation plans upon completion. Remei AG told Transparentem that it expects the study to be complete by February 2025. Some buyers—including several that are also participating in group actions—appear to be taking steps individually to establish more ethical cotton sourcing strategies and improve traceability and/or transparency. Other buyers did not respond at all, and some responded but did not engage significantly.

Some buyers told Transparentem or produced evidence that indicated that the raw cotton used by the suppliers to produce their products did not originate from the investigated region, Madhya Pradesh, or India.

The cases identified during the investigation were not isolated but representative of broader systemic issues in the cotton sector of Madhya Pradesh and India. Transparentem acknowledges that our policy to keep the identities of interviewees and farm locations anonymous may present difficulties in providing remedy promptly to the specific workers who were interviewed. (Transparentem’s policy is necessary to protect vulnerable individuals from possible retaliation.) While there are inherent challenges in addressing complex and systemic issues, Transparentem continues to urge the suppliers and buyers to move with urgency toward implementing remediation plans to prevent and respond to all identified risks so that children and workers do not continue to suffer.

Suppliers and their buyers working together have a significant opportunity to provide remedy to workers, end child labor, and transform the cotton sector in Madhya Pradesh. If undertaken, this would set a global precedent. Overall, Transparentem urges all contacted buyers and suppliers to include further development of community and worker-led remediation and monitoring systems and define clear steps towards meeting living wage standards, which could transform this region into a preferred sourcing area. Additionally, Transparentem strongly urges buyers that have not responded or taken any action, as well as any mills, suppliers and buyers that Transparentem did not contact but that are sourcing cotton or cotton-based products from Madhya Pradesh, to become part of the solution. These companies should take action individually or collaboratively, including by joining group efforts outlined in this report.

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