U.S. senators demand more federal action to stop cocoa imports made with forced child labour

U.S. Senators Ron Wyden (D-OR) and Sherrod Brown (D-OH) sent a letter to Kevin McAleenan, Acting Secretary of the U.S. Department of Homeland Security, calling on the Administration to enforce existing law and investigate and block any cocoa imports produced with forced child labour.

The Senators’ letter follows a Washington Post report detailing the prevalence of child labour in the production of cocoa imported to the U.S. by large chocolate companies. These companies, including Hershey, Mars and Nestle, originally agreed to eradicate child labour from their supply chains in West Africa by 2005.

“The global cocoa trade is significant, and the U.S. is a large importer of cocoa products.  In 2018 alone, the U.S. imported $608 million of cocoa beans from the Ivory Coast, in addition to $100 million of cocoa paste. Given the prevalence of forced child labour in the Ivory Coast’s cocoa sector, it is clear at least some, if not a significant portion of those imports, were produced with forced child labour.  It is time the U.S. took more aggressive action to combat forced child labour in the cocoa sector and to fully enforce Section 1307 as Congress intended,” the Senators wrote.

"More than 20 years ago, the Department of Labour (DOL) and Congress worked with large chocolate companies to develop a framework to eradicate child labour from their supply chains in West Africa, which sources the vast majority of cocoa worldwide.  These companies committed to eradicating child labour from cocoa production in West African countries, including the Ivory Coast, by 2005.   Unfortunately, they missed that deadline and several subsequent ones, and the widespread use of child labour in the sector persists.  According to DOL, more than two million children continue to perform the hazardous work of harvesting cocoa in West Africa." 

In their letter, the Senators press Acting Secretary McAleenan to instruct Customs and Border Patrol (CBP) to block cocoa imports made with forced labour and, where appropriate, pursue criminal investigations.

A copy of the Senators’ letter can be found HERE.

Illegal cocoa in Swiss chocolate

From: RTS
In Côte d’Ivoire, the Maraouhé park is one of the last remaining wild forests,  a sanctuary for the last 200 to 400 elephants in the country.
This forest is however threatened by cocoa. Illegal growers cut old trees and replace them with cocoa trees, as the RTS (French-speaking Swiss television company) was able to verify on the spot. Once in the warehouses of local cooperatives, the beans are mixed with cocoa from other plantations. Traceability is lost. These bags with mixed cocoa are resold as UTZ cocoa and end up in a regional headquarters of Cargill.  Local Cargill employees explained to the RTS that the cocoa is resold to Nestlé and exported to Europe.

Read François Ruchti's article and watch the RTS report.

Living income for cocoa producers in Ghana and Côte d'Ivoire

One of the objectives of the Belgian "Beyond Chocolate" partnership is to achieve a "living income" for cocoa producers by 2030. Here are the latest studies on living income for cocoa producers in Ivory Coast and Ghana.

Around the world, it's the methodology first developed for the ILO by Richard and Martha Anker (Anker methodology) that is used to calculate a living wage.  In July 2018, the Living Income Community of Practice, co-hosted by GIZ, ISEAL and the Sustainable Food Lab and the GIZ Programme “Sustainable Supply Chains and Standards” produced “Considerations for the use of the Anker methodology for calculating living wages to inform living income estimates.”

The Living Income Community of Practice calculates ‘Living Income’ Benchmarks for the cocoa producing regions in Ghana and Côte d’Ivoire. The Living Income Benchmark studies estimate the net income required for a decent standard of living for a typical family in these regions.

Ghana

The study “Analysis of the income gap of cocoa producing households in Ghana” (KIT) estimates a Living Income Benchmark in rural cocoa growing areas of Ghana to be GHS 21,100 (USD 4,742) per year for a typical male-headed household (up to 4 ha of productive land) of 3.5 adults and 2.5 children. Female-headed households of 3 adults and 2 children have a Benchmark of GHS 17,806 (USD 4,001) per year. Male-headed households with large land size (more than 4 ha of productive land) composed of 3.5 adults and 3 children have a Benchmark of GHS 22,799 (USD 5,123) per year.

The study “Living Income Report Rural Ghana” (University of Ghana) estimates a Living Income in rural cocoa growing areas of Ghana (Ashanti, Central, Eastern, and Western Regions) to be GHS 1,464 ($329) per month for a typical family of two adults and three children.

Côte d’Ivoire

The study “Analysis of the income gap of cocoa producing households in Côte d’Ivoire” (KIT) estimates a Living Income Benchmark in rural cocoa growing areas of Côte d’Ivoire to be CFA 3,759,281 (USD 6,517) per year for a typical male-headed household (up to 4 ha of productive land) of 3.5 adults and 3.5 children.

The study “Living Income Report Rural Côte d’Ivoire” (CIRES) estimate a Living Income in rural cocoa growing regions of Côte d’Ivoire (Gôh, Loh Djiboua, Nawa, Mé, Agnéby, Tonkpi, Indénié-Djuablin, Sud-Comoé and San-Pedro) to be CFA 262,056 ($454) per month for a typical family of two adults and four children.

Earlier, in April 2018, True Price and Fairtrade published a study that estimates a living income for a typical 8-member household in Côte d’Ivoire to be USD 7,318 per year.

Having defined living incomes, strategies to close the income gap for smallholder farmers (Côte d’Ivoire and Indonesia) are needed. This piece of research has been conducted by AidEnvironment on behalf of the Living Income Community of Practice.

A two-day event was held in Bonn on the 30th and 31st of January 2019 to support learning, action and collaboration around the topic of Living Income. To access all of the presentations and resources from the event visit: https://www.living-income.com/bonnevent2019

'Envoyé spécial" documentary on cocoa: Children trapped

A documentary on child labour in Côte d’Ivoire deserves being watched (in French). It was first broadcast on 10 January 2019 for the French television’s ‘Envoyé spécial’ programme.

Côte d’Ivoire, globally the biggest producer of cocoa “has really endeavoured to stop a scourge which is a perceived disgrace to the country. Schools have been built; cocoa-growers have been trained. On TV people are frequently reminded that child labour is prohibited. Unfortunately, children are still exploited’.

In the very west of the country, at eight hours of the country’s capital, near the border with Liberia, in remote forests Paul Moreira, a journalist, came across children, some of which had been working for five years... for free on illegal plantations, before they were given a small plot of land to earn just… 200 euros per year. 

The children came from Burkina Faso to the Guiglo area. They were sold by their parents for approximately 200 000 FCFA (300 euros) to work in cocoa plantations. Approximately, because, as one dealer unveils in the documentary: “Like sheep on the market, they may be more or less expensive.”

Children, some of which are still very young, head for the plantations with chemicals sprayers on their backs. They wear no protective gear — which they would not be able to pay for — while they spray loads of glyphosate to kill the weeds on the plots before the remaining trees are burned down and cacao trees are planted.  

In just one week in Côte d’Ivoire’s south-western forests, Paul Moreira “discovered all crimes which the industry undertook to stop: slavery, child labour and the destruction of nature”. Meanwhile, bags of cocoa enter the mainstream cocoa trade circuit. These bags cannot be traced because they are not labelled and in this particular case are delivered to Cargill, which resells the cocoa to big chocolate brands.

Elsewhere in Côte d’Ivoire children skip school too. Cocoa growers often lack the means to send their children to school. According to a study by the French development agency (AfD) and Barry Callebaut^[1] cocoa growers earn an average 0.86 euro per day. The documentary points out that cocoa growers earned three times that much in the 1980s and raises the question: “Why not a simple cocoa price hike to stop children from working in the fields?“ 

The investigation documentary by Paul Moreira and Pedro Brito Da Fonseca is available (in French) on: https://www.francetvinfo.fr/monde/afrique/economie-africaine/video-cacao-les-enfants-pris-au-piege_3134883.html

Meanwhile, most producers earn a pittance whereas big corporations continue to make huge profits. Two examples among others: Cargill reported 9 % net earnings increase year-over-year in 2018. According to the annual report of the company "the increasing earnings in food ingredients and applications in particular was lifted by outstanding performance in cocoa and chocolate"^[2]. Barry Callebaut announced a 31 % rise in net profit for the same period^[3]

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[1] Gaëlle Balineau (AFD), Safia Bernath (Barry Callebaut), Vaihei Pahuatini, Cocoa farmers’ agricultural practices and livelihoods in Côte d’Ivoire, Insights from cocoa farmers and community baseline surveys conducted by Barry Callebaut between 2013 and 2015, Technical notes, AfD.

[2] https://www.cargill.com/doc/1432124831909/2018-annual-report.pdf

[3] https://www.confectionerynews.com/Article/2018/11/07/Barry-Callebaut-announces-31-rise-in-net-profit-2017-18?utm_source=copyright&utm_medium=OnSite&utm_campaign=copyright.

Fairtrade raises its cocoa farmer's minimum price by 20%

Fairtrade International has announced the raising of its guaranteed minimum price for cocoa producers. It goes from $ 2,000 to $ 2,400 per metric ton at the point of export (FOB). The additional Fairtrade Premium is also raised by 20%. It will be $ 240 per metric ton instead of $ 200. Fairtrade organic cocoa will cost $ 300 more than the market price or the minimum fair trade price.

These increases follow the failure identified by the organisation itself: 77% of Fairtrade certified cocoa farmers in Côte d'Ivoire are below the poverty line.* 

The new Fairtrade Minimum Price at FOB level would equate to approximately $1,600 per metric tonne at farm gate level in Côte d’Ivoire and is still below the Fairtrade Living Income Reference Prices of $2,668 per metric tonne of cocoa in Côte d’Ivoire and $2,300 in Ghana. Those LIRF prices are based on what the ISEAL Living Income Community of Practice has calculated to be needed in each country to support the average cocoa farming household’s basic costs for food, housing, clothing, health care, education plus a small provision for emergencies.

As mentioned by Fairtrade International : "The Living Income Reference Price should enable full-time cocoa farmers to earn a living income if implemented as part of a holistic strategy that also includes increased productivity and diversified crops". 

* To find out more about the reasons for this setback and some ways to improve ethics in the sector, read the TDC article: "Fair trade struggles to lift cocoa farmers out of poverty in Ivory Coast"

Fair trade struggles to lift cocoa farmers out of poverty in Ivory Coast

Real concern

In recent years, there have been numerous studies attesting that cocoa producers in Côte d'Ivoire, the main producing country, live in poverty. They earn EUR 0.86, around 1 dollar a day, according to Barry-Callebaut and the French Development Agency[1]. This income keeps them below the poverty line[2] and to make ends meet they have to resort to child labour and rampant deforestation (the productivity of cleared land required less labour in the early years).

Disturbing fact: whether producers are certified fair or sustainable does not change much as regards the income they receive. Fairtrade International and True price say[3] that only 42% of Fairtrade certified producers earn above the extreme poverty line[4] and only 23% above the poverty line.

According to the same survey, raising 80% of farmers above the poverty line requires a cocoa price of $ 4.72/kg.[5] In other words, Fairtrade International must raise its guaranteed minimum price which is currently only $2 a kilo of cocoa, to which a development premium of $ 0.2 kg is added.[6] The authors of the 2018 Cocoa Barometer are also convinced that the "Fairtrade minimum price is probably far too low to ensure that farmers escape poverty"^[7], which raises questions about how this minimum price, in effect for several years, was calculated. Especially as consumers have been led to believe that a fair price can cover the production cost and ensure decent living conditions.

To be fair, it should be noted that the competition between certification systems is fierce in the cocoa market and is not to Fairtrade’s advantage. Large companies prefer UTZ or Rainforest Alliance certifications, which do not set guaranteed minimum prices for producers. In 2017, just under 1.5 million tonnes[8], or 1/3 of the cocoa produced in the world, was UTZ certified. Added problem: 66% of Fairtrade certified cocoa is not sold under fair trade conditions due to a lack of market opportunities. In Belgium, only 1% of the chocolate sold is fair trade.

But this failure (77% of Fairtrade certified producers are below the poverty line) also has other explanations. According to BASIC, which compared the fair trade cocoa sectors in Peru and Côte d'Ivoire, "fair trade cocoa seems to have little significant impact when it is integrated in standardised mass production value chains (this is even more flagrant in the case of sustainable certification.)” ^[9] which is the case in Côte d'Ivoire.

Cocoa producers in Côte d'Ivoire ©  TDC

How to strengthen equity

To be truly beneficial to producers, to be a real force for change, fair chains must tackle various projects, concurrently:

• Prioritise the structure of supply chains that are alternatives to those of large groups by enhancing quality through a differentiated price of farm gate prices depending on the varieties (criollo, mercedes, forastero) and grades (1 or 2) [10] of cocoa. In Côte d’Ivoire it is quite possible to get out of the "commodification" that keeps prices low, and to develop specialty cocoas of origin. An example is the SCEB cooperative which produces high quality organic cocoa, sold to Ethiquable[11] to make a certified "small producers' label" chocolate.[12]The Südwind research institute noted that the quality of Côte d'Ivoire's cocoa has increased in recent years, which seems to have pushed some German manufacturers to buy more cocoa in Nigeria, where quality is not as good and prices can be maintained at current low levels.
• Support the structuring of cooperative unions to make producers' voices heard and try to rebalance the balance of power with buyers.

• Strengthen co-operatives, particularly in governance, member services, marketing and financial management so that they can acquire sufficient working capital, which in turn will help keep their members.
• Promote a minimum income for the various stakeholders in the sector, chief among which are cocoa farmers. Fairtrade International and True Price have just estimated this income at $ 2.51[13] per person a day in Côte d'Ivoire. To get closer to this minimum income, Belvas, a Belgian chocolate maker known for its organic chocolate and Fairtrade, launched a new range of Côte d'Ivoire chocolate in October 2018.[14] $ 2.4 (including $ 1.2 in premium) per kilo goes to the producers' cooperative. Unaffordable for the consumer? The premium only represents 10 cents a tablet of 180g.
• Increase low yields (435 kg/ha) ^[15] and promote crop diversification
• Fight against deforestation (Côte d'Ivoire has lost 13 million hectares, or 80% of its forest cover since 1960) to preserve biodiversity, limit its effects on rainfall, yields and therefore, in the long term, its downward impact on revenues. Fair trade chocolate should only be produced with cocoa grown according to the principles of agroforestry.
• It has to be said: increase the size of farms which are sometimes too small to be profitable. In Côte d’Ivoire they should at least be 2 to 3 hectares, with yields of 750 kg/sec/ ha.[16]
• To increase the value added in the country of origin, fair trade could also encourage the local processing of cocoa. In this respect, even if the scale remains very limited, the initiatives of local entrepreneurs who have just launched their chocolate brands in Côte d'Ivoire and Ghana, but also in other African countries, are to be welcomed[17].

Drying of cocoa ©  TDC

National platforms that bring together public authorities, cocoa and chocolate manufacturers, retailers, NGOs and research institutes are also good operational tools to contribute to a more sustainable cocoa / chocolate sector, to better traceability and better income for producers. There are some in Germany, Switzerland and the Netherlands.

However, complex dynamics and the importance of the issues mean that to make the value chains genuinely more sustainable, voluntary initiatives such as fair trade are not enough. In the countries of origin, they must be backed by legislation designed to guarantee remunerative prices for producers, to enforce the conventions of the International Labour Organisation and to stop deforestation. In consumer countries, as has been done in France, legislation which holds companies liable for the impact of their activities all along the production and supply chain is necessary.[18]


Samuel Poos

This note is the sole responsibility of the author. It does not necessarily represent the opinion of Enabel (the Belgian Development Agency) or that of the Belgian Development Cooperation.

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[1] Gaëlle Balineau (AFD) Safia Bernath (Barry Callebaut), Vaihei Pahuatini, Cocoa farmers’ agricultural practices and livelihoods in Côte d’Ivoire, Insights from cocoa farmers and community baseline surveys conducted by Barry Callebaut between 2013 and 2015, Technical notes, AfD.

[2] 1.27 USD (World Bank)

[3] Fairtrade International and Ture Price, Cocoa Farmer Income. The household income of cocoa farmers in Côte d’Ivoire and strategies for improvement, April 2018. The study is based on two surveys conducted in 2016, covering 3,235 farmers and 23 co-operatives.

[4] 0.78 USD (World Bank)

[5] Fairtrade International and Ture Price, Op., Cit.

[6] Fairtrade International is expected to announce a revaluation of the minimum price paid to producers by the end of 2018.

[7] Antonie Fountain, Friedel Huetz-Adams, Cocoa Barometer 2018, Voice.

[8] https://utz.org/wp-content/uploads/2018/06/UTZ_Cocoa-Statistics-Report-2017.pdf

[9] BASIC (Bureau for the Appraisal of Societal Impacts and Costs), The dark side of chocolate, An analysis of the conventional, sustainable and fair trade cocoa chains, for the French Fair trade Platform,

[10] Cocoa is classified into three commercial types: Grade 1, Grade 2 and Sub grade. Cocoa grades 1 and 2 are exported under the trade name "Good fermented: GF". The grading is based on the percentage of defective beans (*Conseil Café-Cacao de Côte d’Ivoire).

[11] More information: SCEB – Commerce équitable en Côte d’Ivoire

[12] More info: Le label des petits producteurs

[13] Fairtrade International and True Price, Op., Cit.

[14] More info: Belvas, la chocolaterie belge qui s’attaque au travail des enfants.

[15] Gaëlle Balineau (AFD) Safia Bernath (Barry Callebaut), Vaihei Pahuatini, OP. Cit.

[16] Johan Declercq, Cocoa and sustainable chains expert. He has worked for 12 years at Max Havelaar Belgique (now Fairtrade Belgium).

[17] Hadassah Egbedi, 8 Female Entrepreneurs Promoting Bean to Bar Chocolate Production in Africa, Ventures Africa, August 20, 2018. Un artisan chocolatier ivoirien lance le premier chocolat de pâtisserie fabriqué en Côte d’Ivoire, Jeune Afrique, August 30, 2017

[18] Loi n° 2017-399 du 27 mars 2017 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d'ordre

Growing our cocoa, raising our voices: a film made by women cocoa producers in Côte d'Ivoire