Nestlé comes out top in report assessing chocolate companies for their progress tackling child labor

By Jenny Eagle contact

- Last updated on GMT

Stop the Traffik launches A Matter of Taste report. Picture: Stop the Traffik.
Stop the Traffik launches A Matter of Taste report. Picture: Stop the Traffik.
Nestlé Cocoa Plan has come out top in a report by Stop the Traffik and Baptist World Aid Australia assessing the progress made by chocolate companies and certification organizations in tackling child labor in Côte d’Ivoire and Ghana. 

Its report, ‘A Matter of Taste​’ found Nestlé’s Child Labor Monitoring and Remediation System (CLMRS) is doing impressive work in terms of child protection, establishing child labour monitoring and remediation systems across the cocoa supply chain and increasing access to education in rural communities. 

Working conditions

In 2013, the International Labour Organisation (ILO) estimated 1.42m children were working in Côte d’Ivoire, 37.8% (539,177 children) of whom were in hazardous working conditions. 

Hannah Boles, researcher and author, ‘A Matter of Taste’, said from November 2016 to February 2017, there was a 25% decrease in the price of cocoa. This is negatively impacting farmers livelihoods and has the potential to undermine the programs designed to impact their lives positively. It may also increase susceptibility to child labor and human trafficking. 

Given that child labor is a social ramification of poverty, companies are starting to embrace their role as agents of development as advocated by the United Nations​,” she added. 

The report looks at companies including Ferrero, Hershey, Lindt & Sprüngli, Mars, Mondelez and Nestlé.

It found Nestlé is committed to continuing to report on the progress of its CLMRS as part of its 2030 ambition to improve the livelihoods of 30 million people in communities directly connected to its business activities. 

Boles said under the Nestlé Cocoa Plan, launched in 2009, the CLMRS is helping identify children working in cocoa and proposing tailored remedies for each child at risk. Nestlé is concentrating on growing the system in West Africa as it is the area of highest risk of child labor. 

Through a partnership with the International Cocoa Initiative, Nestlé has invested in building schools, delivering school kits, facilitating access to birth certificates and developing alternative income generating activities for families. 

Through CocaAction, Nestlé is promoting best practices and learnings from the CLMRS, including the benefits of transparency and of third party impact assessments carried out by the Fair Labour Association. 

Child labor

There is a lot to be positive about in the chocolate industry. Addressing child labor is firmly on the agenda. Furthermore, the chocolate companies are moving beyond best practice to incorporate investment at community level​,” said Boles.

As child labor is a product of the structural poverty experienced by farmers, investing in local communities is more likely to tackle the underlying causes of rural West African poverty than an annual audit against international labor standards​. 

At Stop the Traffik we are impressed by the recent developments and sincerely support the continuity of the current efforts. Nevertheless, there remain improvements to strive for​.” 

In comparison to Nestlé, the report found Ferrero has committed to 100% certification of its cocoa supply by 2020. Through its partnership with Fairtrade, the company has committed to the development of cocoa growing communities in Côte d’Ivoire. Child protection is one of the main focuses across its community development work. In Ghana, it has developed the Ferrero Cocoa Community Commitment (F3C ) to improve farmer productivity and improve social conditions. 

However, Boles said progress is conveyed mainly through the percentage of certified cocoa purchased rather than via monitoring and evaluation of program impact and outcomes. Also there were no publicly available impact reports on Ferrero Farming Values program and the firm does not use certfication logos on its products providing no point of sale communication to consumers about the steps it is taking. 

She said Hershey has embraced verified voluntary best practice through certification, having committed to 100% certification by 2020. 50% of its cocoa bean supply is certified. The aim for 2017 is 75%. It is also moving towards adopting a community-based approach, through its Learn to Grow programme (a farmer training programme to increase productivity and improve farmer livelihoods).

Hershey 

The report's criticism was Hershey has a lack of transparency regarding its supply chain, such as the value of premiums paid to farmers. There is limited public information available on its West African initiatives and having embraced community development, the company has ‘a long way to go to reach all cocoa farmers they source from’. 

Rather than going down the certification route, Lindt & Sprüngli has opted for company control ofits entire supply chain. It has devised its own verification framework, which monitors child labor on farms and adherence to the company ’s standards of best practice, which is externally verified by The Forest Trust.  

In 2008 it established the Lindt & Sprüngli Farming Program to improve cocoa yields while also focusing on agricultural and community development to encourage farmers to continue farming cocoa in the future. 

However, Stop the Traffik found child labor monitoring is via 250 Lindt & Sprüngli field agents rather than a community based system. There are no published impact reports and the social side of its Farming Program needs to expand. 

Mars is committed to 100% certification of its cocoa bean supply chain by 2020 as its primary sustainability endeavour. It is investing in local community development through its Vision for Change ( V4C ) program, which has a strong emphasis on gender empowerment. 

The report states Mars acknowledges through a program of its own it cannot reach every farmer in the supply chain but it hopes with certification it can ‘reach further down the supply chain than we could on our own.’ 

Limitations were a lack of transparency regarding origins of cocoa beans supply and premiums paid to farmers. No publicly available reports on the impact of Vision for Change’s community development or child labor strategies and even though Vision for Change started as a pilot project in 2010 Mars Chocolate has only just started to incorporate Vision for Change farmers into its supply chain. 

Mondelez International’s Cocoa Life sustainability program aims to reach 200,000 cocoa farmers over a 10-year period. It focuses on: Farming; Community; Livelihoods; Youth; and Environment. 

Cadbury

At present the Cocoa Life programme supplies 21% of its cocoa beans. Its goal is to source 100% of its cocoa beans sustainably. In 2017, Cocoa Life will start supplying the cocoa for all Cadbury products in the UK and Ireland, which will start to bear the Cocoa Life label. 

The report criticism is the company only just introduced Child Labor Monitoring and Remediation Systems. Its aim is to have them fully functional across Ghana by the end of 2017 and will start implementing them in Côte d’Ivoire in 2017. There is no projected date for achieving 100% sustainability and given the relatively recent implementation of Cocoa Life, its level of impact is still to be seen. 

Nestlé has taken a combined approach of certification and investment in local cocoa communities. The Nestlé Cocoa Plan focuses on increasing farmer yield and child protection. 

Boles said the Nestlé Cocoa Plan is externally verified via certification. In Côte d’Ivoire 76% of Nestlé Cocoa Plan cocoa beans are certified by UTZ and 12% by Fair trade. In Ghana 100% are certified by UTZ. 

Nestlé makes the case certification is not enough and further approaches are needed to improve livelihoods and drive rural development. As a result, it has devised the Nestlé Rural Development Framework , a policy document on developing sustainable producer communities. 

The report found emphasis on local input into community development projects in the start-up of the programmes has been limited. However, through CocoaActionNestlé is starting to incorporate local voices by drawing up 10 community action plans in 2016. 

No commitment date for 100% certification worldwide has been given. (100% of Australian, New Zealand and UK produced products are certified).

Conclusion 

The report recommends companies need to:

Commit to paying a living income. Until farmers are paid a fair price for their cocoa no amount of income diversification or increased cocoa productivity will lift all West African cocoa farmers out of poverty.

A Living Income calculation for Ghana and Côte d’Ivoire agreed to industry-wide is essential.

A commitment to ensuring steps are taken to provide a living income for cocoa farmers by chocolate companies is critical.

Consumers in the end will need to be prepared to pay more for their chocolate and in doing so know that they too are part of growing a supply chain which is sustainable and free from child labour and human trafficking. 

At the moment the community programmes sound very promising. However, CocoaAction acknowledges they ‘are currently reaching about 300,000 farmers in the start-up phase, less than 5% of total global producers​,” added Boles. 

To combat child labor and human trafficking, corporate programmes need to reach all cocoa-farming communities, not just a select few that can be brandished across Corporate Social Responsibility reports​.” 

Companies need to publish externally conducted impact reports. Unlike NGOs who have a responsibility to report back to their donors, the actual impact and related outcomes of these corporate community programmes remain largely obscured from the public.

As a result, there is very little accountability. Consumers want to know more than what is being planned or even implemented. They want to know if it is making a difference. 

They need to continue to increase community participation and program ownership. The agenda of community investment should be set by the community to meet their needs and not the company’s. The development of Community Action Plans is imperative. 

Companies should continue to partner with and learn from NGO’s on how best to engage in community consultation and planning for the purposes of lifting a community out of extreme poverty. 

To reach all cocoa farmers, companies need to consider how to make programs self-sustaining beyond the initial investment, so funding can be allocated to a large number of programs​,” added Boles. 

While there remains lots of work to do, this report concludes overall there is reason to be hopeful for the future of cocoa farmers in West Africa and encourages companies to continue considering their suppliers in their business dealings​. 

Progress is happening but it needs to increase significantly to end child labor and human trafficking within the chocolate industry​.”

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