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17 February 2020

One bittersweet quest for a child labour free chocolate

Photo: This is Africa (TIA) / Flickr.

Chocolate is an all-time favourite. But the truth is, more often than not the cocoa beans are grown and harvested by children between 5 and 17. Most of them work on their parent’s farms, helping to spread pesticides, cutting ripen cocoa pods with machetes and carrying hulking sacks with the beans during harvest.

In 2001 the chocolate industry has pledged to eradicate the worst forms of child labour by 2005. However, to date, none of the chocolate giants like Mars, Nestle and Hershey, can guarantee that their supply chains are child labour free. Indeed, it seems like the companies did not quite grasp the nature and the magnitude of the challenge when they announced their pledge, but they managed to make some progress all the same.

By leaps and bounds

For instance, Nestlé, one of the world’s largest food and beverage companies with more than 2000 brands globally, reports that they have managed to reduce child labour in their supply chain by 51% as of 2017. The company has helped to develop the Child Labour Monitoring and Remediation System (CLMRS), which is being adopted by other chocolate producers and manufacturers.

Darrell High, Cocoa Manager at Nestle explained further: “When we started working with child labor, we realized that imposing a ban does not work. People send their children to work on farms mainly out of poverty. So, when child labor is banned, people don’t stop hiring children, but instead learn to hide it better, which only complicates monitoring, creating a setback for progress. ”

High devised the Nestlé Cocoa Plan, the company’s sustainability strategy for cocoa, and has led it since it was launched in 2009. Initially, the plan emerged as a response to the falling quality of cocoa and the associated difficulties for the business, but numerous reports about child labour provided direction for the social responsibility of the Plan.

Photo: © Nestlé / Flickr.

These are the three pillars of Nestlé Cocoa Plan: better farming, better lives, better cocoa. The first one is about improving the productivity, production and income at farms. The second is about the eventual elimination of child labour and includes tackling some of its root causes. The third is about the cocoa supply chain. “One goal here, for instance, is to minimize the presence of middlemen who are untraceable and don’t keep records of where they buy the cocoa. Instead, we aim to build long-term relationships with farmer groups so we can see where our cocoa is coming from and encourage better quality,” says Darrell High.

He continues: “Nestlé recognizes that child labour in cocoa cultivation is a challenge, but we do not condemn. We have local contact persons (The Community Liaison Person, CLP) in communities. They are trusted and respected and can spot if children do the tasks they are not supposed to do. This allows us to develop targeted interventions and help farmers send their children to school.”

Businesses, especially those with the large-scale operation, can make fast progress and deliver huge impact. However, companies like Nestlé are not the only stakeholders in the cocoa sector.

The awareness about children’s rights among the growers and suppliers, as well as among the governments of the cocoa-growing countries is low. Hence, the enforcement of these rights is weak. After the UN Convention of the Rights of the Child was adopted in 1989 UNICEF created several implementation guidelines, including specific recommendations for businesses and for the member states. But the global reduction in child labour has been rather scant – only 3% between 2012 and 2016, according to International Labour Organization, ILO.

Photo: Eliot76 / GettyImages.

Child labour is a complex issue with multiple perverse incentives. It requires close attention and persistent awareness work in every community, as well as improved enforcement of the Convention on the Rights of the Child and favourable conditions for its effective implementation.

However,  even when people do know that child labour causes long-lasting and at times irreversible harm to mental and physical health, little can be done without reducing poverty.

Most of the cocoa producers are smallholders with suboptimal productivity because of depleted soils, older unproductive trees and lack of access to the latest farming know-how and technologies. So, it is difficult for them to get a good price for their beans, and their income is low, as is often of their whole community. Often this means they don’t have the ability to improve productivity or increase their knowledge about agricultural business and farming. In such conditions, the entire family needs to work to make end meet. And that is how children end up working on the farms.

“Solutions must take cultural, economic and social structures into account,” says High. For example, communities without schools are more likely to have child labourers, so the company can take responsibility by building a school to help. According to Anne Barkelund, Corporate Communications and Sustainability Manager for Nestlé in Sweden, the company has helped to build or refurbish more than 40 schools in Ivory Coast- a major cocoa producer.

Nestlé also works with the network of suppliers who buy from co-operatives that are part of their Cocoa Plan. This way they can determine where their cocoa comes from and establish a connection with farmers, adding value by providing them with education about improved farming techniques so they can professionalise, get certified and receive a premium for their cocoa beans. And, hence, would be less likely to use their children as labourers.

Photo: © Nestlé / Flickr.

Bottom line sustainability

So even though its undeniable that Nestlé has made progress by halving the amount of child labour in its supply chain they only control just over 10% of the global chocolate market and, unfortunately, twenty years after the industry-wide pledge, much of the chocolate we buy still depends on child labour.

Improving yields and investing in community initiatives looks logical, however, it might be that these measures can only provide marginal poverty reduction. The inadequateness of this approach is starkly displayed at the level of certification schemes – farmers do receive a premium for selling certified cocoa, but they also need to pay for the certification audit and update from the same income. Changing climate and the subsequently increasing costs of growing cocoa are not making things easier either.

Producer associations at the World Cocoa Conference in 2014 concluded that little real progress would be made unless farm gate prices are set significantly higher, an assertion validated by data in the Cocoa Barometer 2015 produced by the VOICE Network that unites international NGOs striving for sustainability reforms in the cocoa sector.

Understandably, businesses need to make profit, but cocoa farmers only receive 3% of the retail price of a chocolate bar, while the profits of companies like Nestle and Mars count in the billions of dollars. Moreover, a new study  economic incentives  estimates that eliminating the worst forms of child labor would only require to increase the price premiums of cocoa by 2.81%, while eradicating child labour entirely would need a 11.81% premium. This way, farmers would be able to hire qualified adult labourers, while manufacturers would still be able to make money, considering the growth in chocolate market.

The difference between what the producers and the companies make has become so stark that it pushed the governments of Ghana and Ivory Coast suspend forward sales of cocoa beans for the 2020/21 season until the buyers agree to raise the floor price from about $2,124 to $2,600. The industry agreed to meet these demands almost immediately, which is a promising step forward as well as an indication of their dependency on the producers, but this price is still $600 short of what is recommended by the VOICE Network.

If the companies are really serious about eradicating child labour, which they can’t do without addressing poverty, they need to reconsider the way they do business, not only by making supply chain sustainability adjustments, but by paying the people who grow the cocoa fairly.

Because as Antonie Fountain, Managing Director at the VOICE Network puts it: “Unless we start talking about the money, we will not be talking about sustainability at all.”

Reporting by Caroline Augustsson and Ekaterina Bessonova. Caroline is a communications intern at SIANI. She is in the process of acquiring a Master’s degree in the Rural Development Agronomist Programme from the Swedish University of Agricultural Sciences (SLU). Her final thesis focuses on gender relations in cocoa production at the household level. Ekaterina is a communications officer at SIANI.