The 9th Circuit Court of Appeals said last Thursday that the firms may have tolerated child slavery on cocoa farms to keep production costs low.
“Driven by the goal to reduce costs in any way possible, the defendants allegedly supported the use of child slavery, the cheapest form of labor available,” said senior circuit judge DW Nelson. He said that the companies controlled the Ivorian cocoa market and instead of using that control to stop slavery, they facilitated it.
The appeal court in December last year said that corporations could be sued under the Alien Tort Statute. The claimants were invited to resubmit their case and the latest ruling allows the lawsuit to proceed. It means a 2010 district court decision that had dismissed the case on grounds that US courts had no jurisdiction for abuses committed by companies outside US territory has been overruled.
A panel of three circuit judges in a US Court of Appeals said that the Alien Tort Statute - a US Law that allows foreign citizens to seek remedies in US courts for human-rights violations – applied to corporations as well as states.
By majority, the court allowed the claimants - three former child slaves - to amend their complaint.
'Forced to drink urine'
The lawsuit was originally filed by three individuals from Mali in July 2005, known as John Doe I, II and II. They claim to have been trafficked as children into Côte D’Ivoire in the 1990s and forced to work unpaid on cocoa farms for 14 hours a day.
They said they were fed scraps, were whipped and beaten and locked in small rooms at night. One of the claimants witnessed guards cut open the feet of children who tried to flee and another claimant said that guards forced failed escapees to drink urine.
Who’s in control?
Nestlé, ADM and Cargill do not own cocoa farms, but have buyer/seller relationships with the farms to maintain a supply of cocoa. “We work with farmers and cooperatives to process their cocoa and connect them to world markets." Louis de Schorlemer, EMEA Corporate Communications Manage, told ConfectioneryNews.
But Nelson said “…the defendants effectively control the production of Ivorian cocoa,” adding that it was the companies’ unilateral goal to find the cheapest source.
He said that doing business with child slave owners did not in itself show purpose to support slavery, but doing so to reduce production costs did.
Circuit judge Rawlinson said in a dissenting judgement that although child labor may be the cheapest form of labor for harvesting cocoa, the court should not make an “inferential leap” to say that the companies purposely aided and abetting child slavery. She was overruled by two to one.
The chocolate industry lobbied against a 2001 US bill that would have required US manufacturers to ensure imported cocoa was ‘slave free’. A voluntary system was adopted instead.
The 2010 district court decision was reversed and the case has now been remanded to allow the claimants to amend their claim.
“While we are disappointed in the ruling, we are confident that we will ultimately prevail in this suit,” said Cargill’s De Schorlemer.
Lydia Méziani, senior corporate spokesperson for Nestlé, said: "We continue to believe that the trial court was correct in its 2010 dismissal of this case."
"The appellate court’s decision relates to purely procedural issues and is not determinative of the allegations against Nestlé, which remain unproven. Nestlé follows and respects international law and it does not tolerate illegal or discriminatory labour practices."
ADM spokesperson Jackie Anderson said: "We disagree with the panel’s decision. We are examining the decision and anticipate that the defendants will file an en banc petition with the full Ninth Circuit." An en banc session is a where a case is heard before all the judges of a court.
All the companies subject to the lawsuit operate their own cocoa sustainability programs, but have made no commitments to purchase only third party certified cocoa.
Hershey is also facing a US lawsuit for alleged complicity in child labor in West Africa. The case launched by Hershey shareholder Louisiana Municipal Police Employees' Retirement System (LAMPERS) was allowed to proceed in a ruling in March.