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.

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.

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.

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.

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.

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.

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.

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

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.

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.