Helsinki (02.04.2014 - Heikki Jokinen)

Public debate following the exposure forced the company to remove one of their directors from his job.

Swedish media reported that suppliers for the Finnish-Swedish company, Stora Enso, are using children to collect waste paper from rubbish dumps in Pakistan. This paper is then used by the Stora Enso joint venture operation, Bulleh Shah Packaging.

Stora Enso has been operating in Pakistan since 2012, when it entered into a joint venture with the Pakistani company, Packages Ltd. Stora Enso owns 35 per cent of this joint venture.

The company knew back in 2012 that child labour was part of the supply chain, but chose to ignore claims to this effect.

Lauri Peltola, the executive director of Stora Enso Finnish division, admitted to Finnish TV-news that there is child labour "at the end of the supply chain". But he stressed that the fate of the children would be worse without child labour. "If we pulled out, five-year-old girls would become prostitutes the next day."

Mats Nordlander, the director of Stora Enso paperboard division, admitted that the company had become aware of the use of child labour in 2012. His statement provoked fierce public reaction, and Nordlander was transferred to another job inside the company.

Solution is decent salaries

Eventually, Stora Enso CEO Jouko Karvinen delivered an apology-both for the company statements and business practices in Pakistan. In an open letter to stakeholders he confessed that they knew "about not just risk but existence of child labour in the supply chain, although outside our operations, when the investment was made".

Karvinen says Stora Enso will fight against child labour. "This will take time, and we will report progress openly, as we cannot just force all supplies that have children involved out overnight, but must train the supply base and also work with the communities to find alternative income sources for the families of these children. Just walking away would cause nothing but even worse things to these children."

The Finnish industry watchdog, Finnwatch, view Stora Enso’s promise to educate subcontractors and end the use of child labour positively.

It stresses, however, that the real solution would be to pay decent prices for raw materials that makes it possible for parents to meet living costs and send their children to school. The main reason for the use of child labour is poverty, Finnwatch says.

Matti Tukiainen, the director of employment and sustainable growth at SAK, demands binding rules for Finnish companies operating abroad. The results from voluntary measures can be seen in Stora Enso actions in Pakistan, where it has sought publically to play down the use of child labour, he says.