Cocoa is used in a wide variety of products, ranging from cocoa powder to cacao nibs to beauty products to chocolate. However, Nestle, one of the biggest companies that sell such products, does not use Fair Trade Certified cocoa. Instead, they use Rainforest Alliance-certified cocoa, which can be harvested from farms that utilize child labor andor slavery. Although they promised to discontinue their use of cocoa sourced from such farms, they failed to keep this promise. Additionally, the farmers that harvest cocoa often does not earn enough to support their own basic needs, which is exacerbated when terms of trade do not work out in their favor. As a result, these farmers are stuck in poverty and may resort to using child or slave labor in order to make ends meet. To ensure that cocoa farmers are paid a fair wage, reduce illegal activities within cocoa production, and improve the company’s reputation, Nestle should educate the public on why buying Fair Trade cocoa products is good and prioritize sourcing cocoa from Fair Trade farms.
Cocoa farmers typically struggle to earn enough to support their own needs. On average, cocoa farmers only earn roughly 6% of the final value of a chocolate bar. This is hardly enough to support their own needs, even if multiple family members work on a farm. As a result, these farmers are often stuck in poverty. Although the Rainforest Alliance does offer additional cash payments for certified crops, they do not offer a minimum price. It is possible for them to earn more than a Fair Trade cocoa farmer, but the lack of a guaranteed minimum price means that their earnings may not be very consistent and the risk of being paid little is still present.
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Non-Fair Trade cocoa farms frequently utilize child andor slave labor. Sourcing cocoa from these farms indicates to consumers that Nestle does not care much for human rights, thus damaging the company’s reputation. Salaam-Blyther, a foreign affairs analyst, found that “Approximately 284,000 children were found to be working under hazardous conditions, the large majority in Cote d’Ivoire (200,000).” While the number of children working under hazardous conditions may be different today, some children are still forced to work on these farms. Willingly buying cocoa from such farms, regardless of whether or not Nestle knows the farm uses child slave labor, implies that Nestle values cheap products over human rights. The Rainforest Alliance requires that all certified products meet their standards for ecosystem protection, safeguarding local communities, and improving productivity. However, they only require that a 30% minimum of a certified product meets those standards. Although they require that producers eventually have 100% of their products meet those standards, the risk of cocoa products potentially being produced by child slave labor is still present in Rainforest Alliance-certified cocoa. Sourcing cocoa from farms that use child slave labor clearly tarnishes Nestle’s reputation, but that is not the only issue that damages the company’s reputation.
Nestle’s reputation is currently quite poor due to a wide variety of factors which includes its sourcing of cocoa from farms that use child andor slave labor. In October of 2020, Nestle announced that they would source Rainforest Alliance-certified cocoa for their KitKat brand. Although Rainforest Alliance cocoa does help cocoa farmers to some extent, the organization’s enforcement of ensuring that products meet their standards is rather weak. Investigations led by the Thomas Reuters group found that workers at some Rainforest Alliance-certified tea estates were “taking home as little as 26 Sri Lankan rupees (14 U.S. cents) a day after fees and deductions were levied without consent.” Moreover, after Rainforest Alliance merged with Utz (another auditing organization), Utz officials found that monitoring did not lead to “sanctions of any farmers or co-ops, and no approvals for any batch of cocoa were rescinded.” Another investigation by the Thomas Reuters group found that a number of Rainforest Alliance-certified coffee farms in Minas Gerais, Brazil had committed labor violations, but the actual amount of certified farms committing these violations is unknown. These shortcomings are indicative that Rainforest Alliance is not exactly ideal for ethically produced cocoa products, and ethically produced product is something that Nestle has struggled with for a long time. Nestle’s track record is exceptionally poor and includes child slave labor, unethical promotion, price fixing, mislabeling, pollution, and even manipulating uneducated mothers. It is only natural that the public generally despises Nestle and chooses to not purchase its products. The solution to these problems comes in two different steps.
The solution’s first step is to educate the public on why buying Fair Trade-certified cocoa is better than buying non-Fair Trade-certified cocoa. Orla Ryan, a journalist hired by Reuters to cover the West African cocoa industry, wrote that “Chocolate companies had a lot to lose from the media’s interest in child labor...They also feared the impact of these stories on consumer sales. ‘They live in fear of the headline which could lead to the boycott’, one industry lobbyist told me.” Considering that chocolate companies fear how the public would respond to them sourcing cocoa from farms using child labor, educating them on why buying Fair Trade cocoa is good could convince a sizeable portion of them to buy Fair Trade cocoa products andor reduce consumption of non-Fair Trade products. Of course, educating the public about the benefits of Fair Trade-certified cocoa is not enough, nor is it the only step in supporting cocoa farmers and improving the company’s reputation.
The solution’s second step is to source more cocoa from Fair Trade farms and sell more Fair Trade-certified products. Salaam-Blyther notes that “farmers who sell to Fair Trade buyers receive a minimum of $1,750 per metric ton ($1,950 per metric ton organic). If the world price rises above $1,600 per metric ton, the Fair Trade price meets the world price and adds a $150 premium per metric ton ($200 premium per metric ton for organic). In exchange for receiving above market price sales, farmers must not use forced or child labor.” Fair Trade cocoa discourages the use of child slave labor and provides increased returns and compensation for any increased costs. The farmers can support themselves and their families better with this additional money, as Salaam-Blyther also noted that farmers are required to reserve a portion of their revenues for social projects, such as community development and technical training.” Fair Trade cocoa also helps develop the farmers’ communities by providing the funds to build and improve schools and gain access to clean water. Ryan proves this, as her coverage of the West African cocoa industry found that Kuapa Kokoo farmers used the money they received from Fairtrade “to build schools, hand-dug wells, and water pumps, to pay for a doctor to travel to farmers in remote rural areas, and to make small loans to producers.” The benefits of Fair Trade cocoa may already be quite apparent, but these are not the only benefits that can arise from this solution.
Educating the public on Fair Trade cocoa will hopefully convince them to buy more Fair Trade cocoa products andor reduce consumption of non-Fair Trade cocoa products. Fair Trade cocoa products have a guaranteed minimum price, fixed premium for community projects, additional premiums for organic farming, and more. Spreading crucial information on what Fair Trade is, what Fair Trade does, and how it supports farmers will make consumers more likely to buy Fair Trade products. “All the tea, coffee, sugar, hot chocolate, and bananas at high street giants Greggs are Fairtrade...With more supermarkets and mainstream brands than ever selling Fairtrade, the sums don’t add up for those saying it’s more expensive.” Selling Fair Trade cocoa products can be even more profitable for Nestle than selling non-Fair Trade cocoa products. In order to ensure that these Fair Trade products can be certified as such, cocoa will need to be sourced from Fair Trade farms.
Sourcing more cocoa from Fair Trade farms will ensure that cocoa farmers are paid a fair wage (which reduces the need for child slave labor) and improve the company’s reputation. “If the price of a Hershey bar went up two cents, or Mars two cents, and that money was just devoted to the eradication of child labor, they would have more than enough.” (Ryan, Chocolate Nations: Living and Dying for Cocoa in West Africa, pg. 44) By increasing how much a cocoa farmer earns, they won’t need to utilize child labor as frequently, since some child labor is just children learning how to grow cacao or helping out on the farm. Transparency in cocoa sourcing is also incredibly important for boosting the company's reputation. The Hershey Company has a Sustainability section on its website, where any individual can access corporate documents on their cocoa sourcing, supplier code of conduct, slavery and human trafficking statement, sustainability reports, CSR reports, and more. These corporate documents are very clear on the subjects they concern and provide detailed information about them. For example, the Hershey Company’s Supplier Code of Conduct clearly defines its standards for the prohibition of child labor as “No individuals are hired under 15 years of age, or 14 years of age where local law allows, and the such exception is consistent with ILO Convention No. 138
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