July 7, 2008

Chocolate, child slavery and the Simultaneous Policy

There is a problem of child slavery in the cocoa supply chain. Most of the world's cocoa comes from Ivory Coast and Ghana. According to the International Labour Rights Forum (ILRF), which has just launched a new report:

The US Department of State has estimated that more than 109,000 children in Cote d’Ivoire’s cocoa industry work under “the worst forms of child labor,” and that some 10,000 or more are victims of human trafficking or enslavement. These child workers labor for long, punishing hours, using dangerous tools and facing frequent exposure to dangerous pesticides as they travel great distances in the grueling heat. Those who labor as slaves must also suffer frequent beatings and other cruel treatment.

Two US Senators introduced a plan to end child slavery in the supply chain within 5 years and called on chocolate companies to sign up to it, which they did. But little happened and the deadline of the so-called Harkin-Engel Protocol was extended. Now the ILRF has analysed what companies are doing in its new briefing, available at:

Instead of abiding by the protocol, the companies, including some of the world's largest transnational food corporations such as Kraft, Cargill, Nestle and Mars, have embarked on their own 'certification' schemes which they have used in public relations campaigns to claim progress is being made. While there may be some merit in the pursuing voluntary action, ILRF points out the shortcomings of operating outside a regulatory framework or independent certification system:

---Extract from ILRF report
In the US consumer market, the public deals with a vast array of certifications ranging from product quality specifications (Grade A eggs or syrup, octane 87 gasoline) to specifications of ethical or environmental standards (organic-certified produce, FSC-certified wood, dolphin-safe tuna). All certification systems have a number of characteristics in common:

• there is a set of standards that must be met in order to achieve the certification (whether it is octane rating or criteria for ‘dolphin-safe’ fishing)

• there is a process for verifying that a product, service, or person has met those standards (often by an independent monitoring organization)

• there is a certification mark logo or seal that identifies the standards and the verification that have been fulfilled

• there is a system for auditing to ensure that the certification mark is being used properly and that the product or service or individual continues to meet the standards over time (often by a completely independent oversight body, such as USDA’s oversight of the National Organics Program).

The industry “certification concept” is missing all these pieces. There is no set of clear standards with related compliance criteria to ensure that these standards are being met, and in the absence of clear standards, naturally no process to verify that producers are meeting those standards.
---extract ends

The report points out that child slavery arises through systematic failings of the cocoa market. Farmers exist on the edge of poverty, prompting exploitation. While processors claim they are helping to increase productivity and profits, ILRF suggests that where this has happened the greater workload of farmers to achieve the yields has not received a proportionate increase in income. In other words, it is the companies that benefit, not the farmer.

The industry has also been seeking to promote production in new countries as prices rise in Ivory Coast. Increased production means lower prices and increased pressure for cutting corners, such as child labour and forced labour.

The ILRF report states:

---extract begins
While ILRF are not experts on the issues of sensible and farmer-friendly commodity policy, we support the recommendations put forth in a paper issued by the Reseau des Organisations Paysannes et de Producteurs de l’Afrique de l’Ouest (ROPPA) and cited in part here:

• Cocoa Supply Management: The low price of cocoa on the global market is a major factor in the use of child labor. The global supply should be subject to a management agreement.

• Establish an International Secretariat: An international arrangement, based in West Africa, to control the global supply is needed and ECOWAS (along with Indonesia, Brazil and Cameroon) would be well-placed to lead supply management efforts as 63% of the world’s cocoa is produced in West Africa.

• Introduce Production Controls: In order to avoid issues like smuggling and overflowing of buffer stocks, a new cocoa agreement should include production controls to ensure a effective management system. Quotas will be determined by the international secretariat and each country will have a five year period to adjust their production levels.

• Raise Farm-Gate Prices: A small raise in farm-gate prices for cocoa would ensure more stability in the market and increase the ability of farmers to invest in sustainable farming methods as well as worker wages. This is an important stop in curbing child labor. The costs would be negligible for buyers.

• Combine with Conservation Programs: With a higher and more stable price, farmers can invest more labor and money in shaded growing systems, forest conservation and replanting and tree crop diversification which are more ecologically sustainable.

• Establish Diversification Zones: Supply premiums and credit to farmers to diversify their crops. This will be an important part of ensuring cocoa-producing countries’ food sovereignty and their ability to respond to domestic food needs.
---extract ends

Commodity agreements are disliked by industry, as much as independent monitoring systems. It is argued they distort markets and create cartels. Yet in highly consolidated industries, such as cocoa (and coffee), the processors wield great power. Trade barriers make it difficult for developing countries to sell processed goods into developed countries as these are subject to higher tariffs. In other words, there is not a free market, there is a market where the rules are fixed to benefit the powerful.

Whether commodity agreements are something to be resurected within the Simultaneous Policy, and if so, how they would work, is something Adopters may well wish to discuss. The fact is that current trading systems are failing those at the start of the supply chain, creating problems which the rest of the world has then to try to resolve. Current efforts, whether by governments, voluntary organisations or business interests, are not having a verifiable effect, despite the claims made to placate critics.

ILRF has recommendations for companies, governments and international agencies. We can also take individual action as consumers, in seeking chocolate that is certified as Fair Trade and on calling for companies to abide by the protocol to which they pledged support in 2001.

As a parallel strategy we can consider whether SP has a role to play. Signing up as an SP Adopter through the Simpol website is the way to have a voice and a vote in the policy development process and to make implementation a reality.

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