An Examination of Unethical Practices in the Cocoa Industry

An Examination of Unethical Practices in the Cocoa Industry

(Food Empowerment Project)

Introduction

This semester we looked intensively at the use of slave labor in the chocolate industry, and the responsibility of chocolate companies to do their part in ensuring that the chocolate they sell is not coming from unethical child labor. Top chocolate selling companies like Nestle and Hershey have all taken accountability for their role in the problem and pledged to fight to eliminate child labor in the production of cocoa.  In fact, a couple of years ago, Nestle made the news with its pledge that its iconic KitKat bars would be made with cocoa that has been verified by third party agencies to ensure that it was supplied from ethical sources. Yet, KitKat is only one type of bar that Nestle makes, and no statement was issued regarding whether or not the rest of their chocolate products would be subjected to this new guideline. This small step was not highly regarded by those looking for chocolate companies to take legitimate steps towards fighting this issue. Although Nestle hoped that their pledge would take some pressure off of them, it had no such effect. In 2018, a U.S. federal appeals court reopened a lawsuit filed by a group of former child slaves accusing Nestle of perpetuating child labor in the Ivory Coast. (Bellon) Nestle was also sued by a legal firm who alleges that they deceived consumers about the use of slave labor to provide cocoa for their brands Crunch and Butterfinger. This same legal firm has also opened a lawsuit against Hershey and Mars on similar grounds. So, the three largest chocolate companies in the world, are all facing lawsuits over using chocolate that is the result of slave labor. Anyone who is familiar with the horrors children face on cocoa farms would surely be angered and disgusted. Due to the history of this country, the term slavery should be enough of a trigger word alone to dissuade any company from wanting to be associated with any product that is the result of slave labor. This, coupled with the fact that chocolate companies are consistently being sued for their role in perpetuating slave labor on cocoa, makes me wonder why chocolate companies are not doing more to distance themselves from these unethical cocoa farms. 

Background

First, let’s take a look at some statistics that contribute to the problem. There are about 5 to 6 million cocoa farmers in the world, and another 40-50 million who depend on the cocoa industry for their livelihood. (USDOL) Almost 70% percent of the world’s cocoa comes from West Africa. Nearly 40% of the Ivory Coast’s population is involved in some form of cocoa farming and 60% of the Ivory Coast’s export revenue is funded by the cocoa industry. (USDOL) As you can see, West African countries heavily depend on the cocoa industry for economic stability. For many of them, it is their most consistent and stable form of income for the country. Thus, it makes sense that they want to minimize their costs as much as possible. The typical cocoa farmer in the Ivory Coast and Ghana is paid an average of $2 per day. This forces many farmers to turn to the cheapest form of labor possible, child/slave labor. Because many in West Africa live in poverty, children are often forced to start working to help support their families at very young ages. This makes them a lot more susceptible to being trafficked, kidnapped, or sold into slave labor. The children can work up to 100 hours a week and perform a number of dangerous tasks such as: operating a machete, carrying bags of cocoa pods that weigh over 100 lbs, and operating in close proximity with chemicals without protective gear. (slavefreechocolate) If they try to escape or aren’t working fast enough, they are beaten and whipped. Some of the children involved in slave labor are as young as 5 or 6 years old.

 (International Labor Rights Forum)

Chocolate Companies’ Role

With the knowledge of all the horrors children face in the cocoa industry, it would seem that everyone, including the major chocolate companies, would want to fight to end this issue. Yet, chocolate companies have been largely idle. In 2001, the US House of Representatives decided to take action and voted to consider a bill which would require all chocolate companies to confirm that they were child labor free and to label their products this way. (Willow) American chocolate companies responded with a fierce lobbying campaign against this law. They argued that there was no way for them to control what happened on cocoa farms across the world, and that cocoa supply lines were usually so long and complex that it was nearly impossible to verify that the cocoa they receive came from a farm that did not make use of child labor. Because of the lobbying efforts of American chocolate companies, the protocol the house wanted to vote on was watered down and released in 2001 as the Harkin-Engel Protocol. (Willow) The Harkin-Engel protocol did not require companies to verify that their chocolate is not supplied by slave labor, and the issue of labeling seemed to be completely forgotten. We are almost 20 years removed from the release of the protocol and almost nothing substantial seems to have been accomplished. Even KitKat’s gesture is not even close to the type of support needed to spark real change in the industry. This was a major win for chocolate companies, whose response to the original protocol is indicative of the fact that they just don’t have any real interest in solving this issue.

(Bellon, 2018)

 There are a couple reasons the chocolate giants are disinterested in putting forth any real effort towards solving the child/slave labor issue we have examined so far. One, as stated earlier, is that it would require effort on the part of the chocolate companies to ensure that their cocoa is produced ethically. Supply chains in the cocoa industry are long and complex, and because of the enormous child labor problem in Western Africa, it would take a lot of verification on their end to determine that the companies they are buying from are using ethical practices. However, second and probably most important, is the fact that it would require chocolate giants like Hershey and Nestle to sacrifice some of their profit. According to the Prime Minister of the Ivory Coast, chocolate companies will have to pay around 10 times the current price of price of cocoa if they want to end the use of unethical child labor there. This would obviously drive up the price of their products, and cut into a big percentage of their profits. Any strategy that encourages corporations to sacrifice profit in the name of morality is one that is flawed. So, let’s look at some alternative ways to end dangerous child labor on the Western Africa cocoa farms.

Causes

The biggest reason that this situation exists is poverty. The West African economy depends so heavily on the cocoa industry, however there is not even a minimum wage or minimum price for farmers to sell their cocoa. This was not the case until the cocoa industry was privatized in 1999. Once the industry was privatized, cocoa prices fell drastically, poverty became widespread, and the government stopped spending money on necessities such as healthcare and education. (USDOL) This all came at the expense of the cocoa farmers who work in isolation on small farms with no way to communicate with each other about market cocoa prices. World cocoa prices have been well below the price of production costs since the industry was privatized. Some countries refuse to buy cocoa from West African countries who they suspect of using slave labor on their farms. This causes West African farmers to have to sell their cocoa at an even lower price. Farmers do not even make enough money to afford trucks to transport their beans so they are forced to rely on exploitative middlemen, who give them cash for the beans and haul them away. Without the knowledge of the worth of their beans, farmers are unable negotiate better prices for them. Instead, they must just accept the prices that these exploitative buyers are willing to pay or risk not selling their beans at all. So, even if cocoa prices rise, the farmers themselves will not be able to benefit from it.

Solutions

A major step towards a solution would be for more advanced countries, like the United States, who purchase large amounts of cocoa from countries who use slave labor and are concerned about slave labor in Africa to invest in the farmers in those countries. Equipping farmers with something simple like trucks to transport their beans to markets would allow them to have an understanding of world prices, negotiate better prices for themselves, and cut out exploitative middlemen who take away a lot of their profit. This alone would increase producer surplus exponentially and allow farmers to be able to rely on more ethical forms of labor to produce their cocoa. Another possible solution would be a mandate of a minimum price for cocoa. Thanks to Fair Trade Certified producer groups, this is the case in some countries in Western Africa. These groups cover different nine African countries and represent thousands of farmers. Chocolate companies who buy from farms belonging to a Fair Trade Certified group pay the farmers the world market price plus a stipend that guarantees farmers have livable wages. (Food Empowerment Project) Farms that belong to these groups are inspected once a year and there is zero tolerance for unethical labor practices. Although only a small portion of the world’s cocoa is produced on Fair Trade Certified farms, they represent a possible solution to the problem. A more drastic approach would be to standardize groups like this, and to force all farms to join a group like this in order to be legally able to sell cocoa beans. This approach would likely be seen as problematic because the chocolate giants are not buying their cocoa from Fair Trade Certified farms. However, to combat that point, we must hold large chocolate-selling companies like Nestle and Hershey accountable. Countries who allow these chocolate giants to sell their products should pass legislation similar to that of the original Harkin-Engel protocol proposal. These companies should not be allowed to sell their products without verifying that their cocoa is supplied by ethical sources. This is extremely important because, like the farmers, these companies are looking to minimize their production costs. Changing the way the farmers do business won’t completely eradicate child labor if the chocolate giants are not forced to also make the switch to more ethical practices. Forcing the chocolate companies’ hand will ensure that the farmers are not the ones who suffer the consequences of changed legislation. Because, as we have seen, when the farmers suffer, they turn to cheap, unethical solutions.

Conclusion

West African countries depend heavily on the cocoa industry for economic success. Their reliance on this industry, cocoa farmers struggle to sell their product for a livable wage and chocolate companies refusal to acknowledge their role in the situation resulted in this large-scale slave labor problem that we see today. If we truly want to eradicate this problem in Western Africa, solutions like the one laid out in this paper are a good start. I hope that through this paper you have a better understanding of the horrors of slave labor on cocoa farms. However, I also hope that you are optimistic about the future, because solutions are right in front of us. We just have to hold the major players in this cruel game accountable.

References

Media Citations

  • International Labor Rights Forum, 2014

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