The Dark Side of Chocolate
As the year draws to a close, supermarket shelves are once again groaning with the weight of chocolates that will be sold and gifted in vast quantities globally. With December 9 being Anti- Corruption Day, however, now is the perfect time to ask, “Are the goodies we add to our shopping carts hiding a sinister side in their supply chains?”
The Role of Consumers
Like coffee and flowers, the cocoa fields are notorious for using slave labour to fill all of those daily cravings and holiday orders. Sadly, the cocoa business is one of the main portals for child slave labour, as their small hands and bodies enable them to get into those hard to reach places and work fast. Many not for profit organisations such as Stop the Traffik have made it their role to inform the consumer of the unethical practices in the cocoa industry and the use of child labour.
Would chocolate really be the gift of choice if consumers knew that an estimated 1.8 million children work in the Cocoa sector in Ivory Coast and Ghana? No. In fact, a global survey of consumers found that 66 percent expressed a willingness to spend more for ethically-sourced products. The impact of an informed consumer and the changes to their spending pattern cannot be underestimated. In Australia and New Zealand sales of fair trade certified chocolate grew from US $4.5 million in 2009 to US $79 million in 2010. In the same year, chocolate replaced coffee as Australia’s biggest selling fair trade product.
The Role of Supply Chain Managers
As a crop, Cocoa is a subject to price fluctuation based on natural supply and demand cycles as well as geopolitical risk. The Cocoa Barometer 2012 states that: While the major companies are able to protect themselves against price fluctuations through long-term supply contracts, and by hedging transactions at the cocoa stock exchange, farmers have no such protection against falling prices at all. Not only are the prices low, daily cocoa prices vary wildly, further exacerbating the situation of farmers. This can create an economic risk for large supermarket suppliers and distributors or chocolate.
In addition, Companies worldwide are under pressure to act following a commitment by world leaders at the G20 summit in Hamburg in July to take “immediate and effective measures” to eliminate child labour by 2025. Asset managers are also under pressure to address the issue of child labour as corporate governance stewards and long-term investors in listed companies.
The importance of due diligence and ongoing risk monitoring to support more transparent supply chains should be a top priority for supply chain professionals. Risks can surface at any supplier level and have negative consequences for the dominant brand. However, by fosteringmore transparent relationships with its suppliers the dominant brand has the opportunity to embed best practice and standards throughout the supply chain.
The Role of Chocolate Companies
In October this year, up-and-coming young leaders from across the globe gathered together in Bogotá, Colombia for the One Young World Summit 2017. As in former years, the latest Summit was a forum for debate on and sharing of innovative ideas for addressing serious global issues, including corruption and human rights.
Speaking at the conference, Antoine de Saint-Affrique, CEO of Barry Callebaut (the firm is one of the world’s largest manufacturers of chocolate) said:
“Business cannot prosper if the society in which the business is, does not prosper. The fate of one is linked to the other. I am convinced that our company can and should contribute to fighting poverty in a way that has nothing to do with charity but in a way that makes good business sense, because when things make good business sense they tend to happen faster and they tend to be sustainable over time.
The cocoa farmers from which we buy, for the large part, live in poverty. The kids are made to work in the field and this has threatened their health and prevented a number of them from going to school. You cannot simply turn a blind eye to this for obvious moral reasons, but if you don’t believe in moral reasons you cannot either for very practical reasons.
If farmers do not earn a living, they will keep clearing tropical forest for new farmland. There will be no forest left, there will be no rain for the crop. If farmers cannot earn a living, they will simply not replant cocoa trees and eventually there will be no cocoa trees and therefore no chocolate.
So that’s why a year ago we decided as a company to launch a movement to make sustainable chocolate the norm by 2025, we call it forever chocolate. We want to eradicate child labour from our supply chain by 2025.
We cannot do it alone. There are plenty of things we do by ourself— last year we trained 150,000 farmers and 10,000 women farmers. But if you want to have scale you need to get everyone involved— governments who build the schools and ensure everyone has access to education, our competitor companies, NGOs and the farmers.” He urged young people: “Join companies that are a force for good and help them to get better, challenge them, contribute and make your mark."
During this holiday season, recognizing the potential dark side of the gifts we give—from gourmet chocolates to the latest electronics—and choosing brands committed to ethical sourcing will help reduce the exploitation of people and the environment. And that’s a gift that keeps on giving.
3 ways to apply this information:
- Take an in-depth look at challenges in the electronics supply chain in our eBook, “Ethical Sourcing and Everyday Electronics.”
- See how technology like Lexis Diligence® and LexisNexis® Entity Insight can help you achieve greater transparency in your supply chain.
- Share this blog post with your colleagues on LinkedIn.