A young boy builds a small storage house in a cocoa producing village close to town of Oume, Ivory Coast. (Photo: Schalk van Zuydam/AP)
WASHINGTON — Almost two decades of advocacy work and multi-stakeholder discussions have resulted in nearly universal acknowledgement of the crushing labor and inequity issues that characterized the chocolate industry for much of the previous century, and have sparked substantive and ongoing action to rectify some of these problems.
However, a two-year study, released this week by a labor watchdog group, has found numerous gaps in these initiatives. The report, titled “The Fairness Gap,” paints a picture of an industry that, despite strengthening efforts over the past few years from many of the biggest Western companies, continues to place too little emphasis on ensuring living or even minimum wages for its cocoa farmers, most of whom are in West Africa.
As a result of what advocates say is an ongoing series of unrealistic priorities along the industry’s supply chains, farming families aren’t able to make ends meet and thus aren’t able to hire laborers at fair wages. These structural problems could also be leading to a rise in what had long been two of the industry’s most pressing concerns: child labor and human trafficking.
“Such low earnings … make it difficult for farmers to pay hired laborers to harvest the crop at the legally required minimum wage, fuelling the need for child labor and, especially in Cote d’Ivoire, the trafficking of casual workers (including children) from neighboring Mali and Burkina Faso,” the report, from the International Labor Rights Forum (ILRF), an advocacy group here, states.
“Estimates indicate that 500,000 to 1.5 million children are engaged in agricultural labor on cocoa farms – much of which is considered hazardous child labor. … Even more concerning, recent research indicates that child trafficking may be on the rise.”
The chocolate industry is incredibly lucrative, with some estimates suggesting the sector’s global value could come close to $100 billion by 2016. The roughly five million tons of cocoa beans produced each year are processed into both high- and low-end products, purchased almost exclusively by a handful of Western traders largely for Western brands.
Meanwhile, nearly two-thirds of the world’s supply of cocoa comes from just two West African countries, Cote d’Ivoire and Ghana. On the one hand, farmers in these countries have been able to use recent changes in the industry to raise prices for their products by around 20 percent, advocates say.
On the other hand, this still means that farming families are living well below the poverty line, making do with an average of 40 cents per dependent per day, the researchers found. In Cote d’Ivoire, for instance, the minimum wage has been set at around $4 per day, but the ILRF found workers were receiving far less.
“A 20 percent price premium sounds significant, but it’s not when you’re earning a little over $2 a day for a family of six,” Judy Gearhart, the ILRF’s executive director, told MintPress News.
“A huge problem is that the major players are not looking holistically at how to improve farmer income. The chocolate companies and traders have talked a lot about how to strengthen income by improving yield – they can say they’ve tripled yield, but can’t yet say how much net income increase this has achieved for the farmers.”
Starting in the late 1990s, reports began appearing about high levels of forced and child labor in plantations supplying some of the most well-known companies in the world, including industry giants like Hershey and Nestle. At first, these companies refused to take responsibility for most of the allegations, noting that any wrongdoing was taking place far down in their supply chains, carried out by suppliers.
Public, government and civil society pressures began to build, however. Over the past four years in particular, significant progress has been made in getting the largest companies to focus on ensuring greater accountability throughout their supply chains.
Recent years have also seen the growth of a robust sub-industry in fair trade chocolate, as well as the creation of multiple, though varying, certification schemes around both social and environmental concerns. Hershey and Mars, for instance, have pledged to source only certified cocoa by the end of this decade.
“There has been a lot of progress. But from a development policy perspective the focus has been largely on stopping child labor and building schools, and that’s only a piece of it,” Gearhart said.
“What we also need is more investment in strengthening the farmer associations, to figure out how the pricing mechanisms can be managed in a way that ensures that farmers make a larger proportion of the cocoa proceeds.”
To a great extent, the focus on child labor has come about due to significant prodding from the U.S. government, starting in 2001. Through a Department of Labor program, the government has been able to push the chocolate industry first to acknowledge the problem, then to work toward goals for its reduction.
A U.S. government working group’s goal is now to reduce the worst forms of child labor in the sector in Cote d’Ivoire and Ghana by 70 percent by the end of this decade. A 2011 review of these efforts reported only “mixed results,” though new analysis will be made available in January.
These are important accomplishments, of course. But the new report suggests that failure to address the root causes of poverty among cocoa farming communities could actually be propagating conditions that lead to both human trafficking and child labor.
“It’s great that the companies are now putting some money into development in West Africa, but most of these are still small-scale pilot projects,” Elizabeth O’Connell, the director of fair labor campaigns at Green America, an advocacy group, told MintPress. “Further, we need to make sure that these are the right projects and that they’re actually targeted at making sure that children are not working in hazardous conditions.”
Green America has been central in mobilizing public pressure to push the big U.S. chocolate brands to take greater action around labor concerns in their supply chains. In this, O’Connell says that significant progress has been made on several fronts.
“There is clearly a growing consumer awareness of labor issues affecting cocoa, and that’s been matched with increased demand for sustainable chocolate,” she said. “My main hope for next year and going forward is that all of this concern around child labor and long-term sustainability will lead to longer-term and more direct relationships between the chocolate companies and farmers.”
Focus on traders
The entities closest to the cocoa farmers, however, are not typically the major brands. While the prominent manufacturers have proven susceptible to public pressure, far less open – but far closer to the farmers – are a handful of major intermediary groups that actually buy the cocoa and sell it onto the global market.
Just five of these behemoths – groups such as Cargill and ADM – purchase the vast majority of the world’s supply of cocoa. Given this monopoly and their on-the-ground placement, these companies continue to hold major influence over the farmers and the sector as a whole.
The traders are able to dictate sometimes onerous harvest scheduling requirements, for instance. They can also have a key role in explaining to farmers the various certification schemes that have cropped up in recent years.
Yet reaching these traders can be a convoluted process. For the most part, advocates simply hope that the public pressure on the major brands will in turn lead to knock-on pressure on the traders.
“It is really the traders that can set up unrealistic structures in terms of demand, but we have very little access to these companies,” ILRF’s Gearhart said.
“The traders tend to want to stay in the background, not engaging. But this is really an important moment to figure out what the role of the traders should be, and for that we need to find more space for frank conversation.”