Unethical Practices: Hershey Corruption Domestically & Internationally

The United States of America is one of the most powerful countries in the world: we have an established democracy protected by a series of checks and balances, a burgeoning universal health care system, social services aimed at helping the impoverished, and we rank among the wealthiest countries in the world. Our success and that of other first-world countries has lead to global partnerships aimed at reducing extreme poverty and its many dimensions. Corporate America plays a unique role in this philanthropic commitment, on one hand providing international support to various civil rights groups and on the other lobbying in Washington to ensure their businesses secure the most advantageous positions possible. These contradictory positions collide cataclysmically in the chocolate industry.

Hershey’s public image is inspiring: founded in 1894 on Mennonite ideals by Milton Hershey, the company is now “controlled by a multi-billion-dollar child-care charity for the poor” (Fernandez). In reality, however, the company’s economic power has allowed them to use the Trust how they please, with no concern for the orphans, as the Pennsylvania attorney general looks the other way. Hershey’s web page is covered in links relating to their philanthropic endeavors, with titles like “A World of Good: Our Vision for the Future,” “Nourishing 1 Million Minds by 2020,” and “1.7 Million Gallons and 10,500 Acres Saved.” But behind this calculated presentation lies a history of corruption traversing the Atlantic. Over the past two decades, countless reports have been published credibly documenting the widespread use of child labor in the countries from which the chocolate industries, including Hershey, source their cacao. Gubernatorial action, such as the Harkin-Engel Protocol, have proven useless in motivating Hershey to divest from its unethical supply chain and will continue to be ineffective until the government is able to successfully escape the grasp of Corporate America. By allowing Hershey’s domestic and international transgressions to go unnoticed by the public eye, the government has indirectly enabled the chocolate industry’s continued abuse of human rights.

Milton Hershey: History & (Intended) Legacy

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Milton      &     Kitty     Hershey,     1910. Source: Hershey Community Archives

Milton Hershey was a man of humble beginnings. Born in 1857 to a poor family in rural Pennsylvania, Hershey dropped out of school after the fourth grade to apprentice in a confectionary shop. His first two candy businesses failed before he successfully founded Lancaster Caramel Company (D’Antonio). After attending the 1893 World’s Columbian Exposition in Chicago, Hershey became fascinated by chocolate-making and bought two chocolate making machines. After much trial and error, he was able to create a unique recipe using skim milk that allowed him to mass-produce chocolate, selling bars at prices afforded by all. Hershey sold the Lancaster Caramel Company in 1900 and used the proceeds to buy farmland near Derry, Pennsylvania where Hershey began constructing his empire, building a state-of-the-art chocolate manufacturing factory, houses, businesses and churches.

Hershey was particularly devoted to his wife, Kitty, who suffered from an unknown disease that left her chronically sick and in pain. Due to her disease, the couple were unable to have children, prompting the foundation of the Hershey Industrial School (D’Antonio). In an interview with the New York Times, Hershey is quoted explaining his decision to found the school: “Well, I have no heirs – that is, no children. So I decided to make the orphan boys of the United States my heirs” (Fernandez). The Deed of Trust created by the Hershey family specified that the boys attending the orphanage had to be “fatherless, white, healthy, between the ages of four and eight, and good companions”. The boys would live in group home and attend school while performing age-appropriate chores on the farms and in the houses.

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Milton    Hershey    &    Milton    Hershey        School       students.  Source: Hershey Community Archives

In 1930, “Hershey put the entire assets of the Hershey company – along with the Hershey mansion, Cuban sugar plantation, thousands of acres of Pennsylvania and the town of Hershey itself – into the huge and sophisticated legal trust ‘exclusively devoted’ to his orphanage, that was to exist into perpetuity” (Fernandez). The Trust came to have the controlling share in the company and the board of the Trust was meant to ensure the legal stipulations specified by Hershey in the Trust were upheld.

Domestic Corruption

After Hershey’s death, profit at the Hershey company soared and by 1962 the total value of Hershey’s orphans’ fund was over $395 million. Many recommendations in accordance with the Deed were made to use the profit to improve the lives of orphans, including admitting more types of students (i.e. races, genders) and modernizing the tuition-free Junior College or converting it to a low-cost four-year university. However, the president of the board, Sam Hinkle, an alumni of Penn State, pushed for the funds to be used to build a medical university for the state college. This technically violated the Deed and would not have received the approval needed had the board not found a loophole. The attorney general at the time, Alessandroni, was looking to make a run for governor and the board privately presented their idea to him, emphasizing the thousands of jobs the medical center would create. Ultimately, the money was given to fund the medical university but the board did not follow official channels with no taken appeal, written opinion, or official reports (Fernandez). Throughout the next few decades, the board would repeatedly find backroom ways to use the Trust, that was to be exclusively devoted to the orphanage, to support the failing Hershey Entertainment and Resort Company. These purchases include the controversial Hershey Links Golf Course, purchased in the early 2000s for nearly three times its independently appraised value (Miller).

The board of the Hershey Trust all but neglected the orphanage, failing to update practices as new studies and research were done in child psychology. No members of the board were child-care experts and school enrollment began to fall. In a recent decade, more poor children dropped out or were kicked out for misbehavior than graduated (Fernandez). The Milton Hershey School has also failed to protect the wellbeing of its students: by 2013, the school had suspended at least thirteen children diagnosed with depression, including Abbie Bartels who was barred from her eighth grade graduation; Abbie later committed suicide (Eisenberg). In 2012, the school denied admission to a boy with HIV, violating the Americans with Disabilities Act of 1990 (CBS News). The school later settled out of court, paying the family $700,000. Despite being the wealthiest secondary school in the nation with an endowment of over twelve-billion-dollars AND a founding mission to assist the impoverished population with limited resources, the school felt they were unable to help these children.

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Hershey Links Golf Course & Rear of Clubhouse. Source: Dan Gleiter

Attorney General Kathleen Kane began to investigate the board’s actions in allocating the Trust’s dividends but ultimately ruled publicly that they had not violated their fiduciary duty (Malawskey). The board did make minor changes before this statement was published, closing the golf course to build student homes on the land just eight years after declaring their plan to run a “championship-caliber golf course” in a press release. A spokeswoman of the Trust has said that the five-million-dollar restaurant and bar was build with the intention of repurposing it in the future for the poor students, although remains vague about what exactly those intentions are. It is interesting to note that Kane’s top aide is the brother-in-law of one of the Trust’s board members. The announcement of these modifications right before the ultimate decision of Kane’s two-year judicial review of the board is oddly coincidental.

Trouble in Africa

In the early 2000s, the documentary Slavery: A Global Investigation was released and the world began to take notice of the unethical practices of the chocolate industry. The film explores cacao plantations in Côte d’Ivoire, interviewing young workers who vividly explain the “beatings, starvation diets and foul living conditions” they are forced to endure to make the delectable treat so often taken for granted in the developed world (Off 134). One of the people interviewed, “Diabe Demeble, president of the Malian Association of Daloa, a major city in western Côte d’Ivoire in the heart of cocoa land, made the controversial (though not provable) statement that ninety per cent of the cocoa farms probably used child labor or slaves” (Off 134). The scenario presented in Côte d’Ivoire sounded eerily similar to the São Tomé and Principe scandal of the early 20th century, when the major chocolate manufacturers disregarded reports of forced labor that were ultimately verified.

Trailer for another documentary about child trafficking and labor, The Dark Side of Chocolate, released in 2010: https://www.youtube.com/watch?v=y882AajKo1s

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The Big 5 Chocolate Companies Source: Wikimedia Commons

A similar series of articles about the cacao plantations in West Africa, Knight Ridder, reached the desk of Congressman Eliot Engel in 2001. Concerned, Engel added a rider to an agricultural appropriations bill about to be voted on in the House of Representatives that proposed a “labelling system for chocolate that would proclaim the candy to be ‘slave free’ if it could be documented that the product hadn’t involved the work of exploited children” (Off 139). The rider passed easily in the House of Representatives but the chocolate industry quickly enlisted the help of lobbyists before it reached the Senate. On the behalf of the Big 5 chocolate companies, the lobbyists argued that the cocoa chain was outside of their control and that it was the government of Côte d’Ivoire’s responsibility to guarantee ethical cacao. Ultimately, Congress and the Big 5 settled on what is now known as the Harkin-Engel Protocol, a voluntary “six-point program designed to eliminate child slave labor in the cocoa chain by 2005” (Off 144). Congress warned that if “the industry failed to eradicate ‘the worst forms of child labor’ on cocoa farmers within that time,” they would reevaluate the the previously proposed ‘slave free’ labelling system (Off 145). Timing played an interesting role in this compromise: elections of 2002 were less than a year away and candidates needed money to finance their elections, much of which comes from big corporations. Tom Harkin, chairman of the Senate’s Agricultural Committee who championed the bill in the Senate, received sizeable donations from Archer Daniels Midland, sugar companies, and the dairy industry, all of whom would have suffered with the passage of the originally proposed labelling system.

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“Their attitude surprised me… I thought they would say ‘We don’t think this is a problem but we’ll investigate.’ Instead it was all    about    the   bottom   line.” – Congressman Eliot Engel  Source: Off; US Congress

The chocolate industry had not met all of the requirements of the Harkin-Engel Protocol by the deadline in 2005 and the U.S. Department of Labor awarded a contract to the Payson Center for International Development at Tulane University to evaluate the cacao supply chain in 2008/2009 and again in 2013/2014. Between these periods, the amount of children working in hazardous work in cocoa production in Côte d’Ivoire and Ghana combined increased almost 20% to 2.03 million: Côte d’Ivoire individually saw a 46% increase in children working in hazardous work in cocoa production (School of Public Health and Tropical Medicine). Progress was made and lost in various hazardous activities in cocoa agriculture, with less children participating in land clearing, down 29% in both countries combined, but more children children working with agro-chemicals, up 44% in both countries combined. The Payson Center found a 51% increase in the overall number of children working in the cocoa industry and that 1.1 million children were living in slave-like conditions, a 10% increase from the 2009/2008 report.

Over a decade after the original deadline of the Harkin-Engel Protocol, the chocolate industry is still using unethically sourced cacao beans in their production. Hershey has made a commitment to source 100% certified cocoa by 2020 and is expected to hit 50% this year, a year ahead of schedule (Gunther). This commitment may not be enough to put an end to child labor and hazardous working conditions: certification must be attained by individual farmers and is very expensive. There is corruption in the system and a failure to monitor standards (Martin).

Moving Forward

How can we expect to eliminate unethical practices in the chocolate industry if Corporate America continually avoids accountability and the government constantly makes exceptions for them? Isn’t it ironic that even Hershey, a company ‘controlled’ by a twelve-billion-dollar child-care charity for poor kids, is unable to make a real commitment to an ethical supply chain?

This is not an easy problem to solve: there are many actors, internationally and domestically, enabling the unethical use of child labor in the chocolate industry. Holding these corporations responsible for their transgressions will not solve the problem overnight but it is a step in the right direction. Government, both federal and state, need to commit to their oath of office and let the law and morality dictate their decisions, not the checkbooks of Corporate America. These corporations are ‘bottom line driven,’ and protecting them not only allows them to evade monetary consequences in the form of fines but also prevents the public from becoming aware of the situation and possibly altering their buying habits away from dirty chocolate.

References

D’Antonio, Michael. Hershey. New York: Simon & Schuster, 2006. Print.

Eisenberg, Pablo. “Suicide Of An Expelled Student Raises New Questions About Hershey Trust”. Huffington Post, 2014. Print.

Fernandez, Bob. The Chocolate Trust: Deception, Indenture And Secrets At The $12 Billion Milton Hershey School. Philadelphia: Camino Books, Inc., 2015. Print.

“File:Cadbury.svg”. Wikimedia Commons, 2008. Web. 2016.

“File:Logo Ferrero.svg”. Wikimedia Commons, 2008. Web. 2016.

“File:Nestle textlogo blue.svg.” Wikimedia Commons, 2014. Web. 2016.

Gleiter, Dan. The Hershey Links Clubhouse Seen From The Back.. 2010. Print.

Gunther, Marc. “Hershey’s Uses More Certified Sustainable Cocoa, But Farmers May Not Be Seeing The Benefits”. The Guardian, 2015. Print.

Hershey Co. “File:Hershey logo.svg”. Wikimedia Commons, 2014. Web. 2016

Hershey Community Archives. Milton And Catherine Hershey, 1910. 2011. Web. 2 May 2016.

Hershey Community Archives. Milton Hershey And Milton Hershey School Students, 1923. 2011. Web. 2 May 2016.

Malawskey, Nick. “Attorney General Kathleen Kane On Hershey Trust Reforms: ‘A Great Step Forward'”. Penn Live, 2013. Print.

Mars. “Datei:Mars-Chocolate-Deutschland.jpg”. Wikimedia Commons, 2010. Web. 2016.

Martin, Carla. “Lecture 10: Alternative Trade And Virtuous Localization/Globalization”. 2016. Presentation.

Miller, Barbara. “Golf Course Rezoning For Milton Hershey School Homes Approved In South Hanover Twp.”. Penn Live, 2013. Print.

Off, Carol. “Bitter Chocolate: The Dark Side of the World’s Most Seductive Sweet”. New York: The New Press, 2008. Print.

School of Public Health and Tropical Medicine. Survey Research On Child Labor In West African Cocoa Growing Areas. New Orleans: Tulane University, 2015. Web. 3 May 2016.

United States Congress. “File:Eliot Engel, official photo portrait.jpg”. Wikimedia Commons. Web. 2016.

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