Hershey's Fair Trade
In October the Hershey Company announced it will source 100 percent certified cocoa for its global chocolate product lines by 2020 and accelerate its programs to help eliminate child labor in the cocoa regions of West Africa. Earlier this year the company reported it currently uses 100 percent Rainforest Alliance Certified cocoa for its organic Dagoba, its Bliss line would be 100 percent certified by the alliance by yearend, and its Scharffen Berger brand would be 100 percent certified by the end of 2013.
This is welcome news to United Methodist Women, which for many years has urged the company to address child labor in its supply chain.
Approximately 70 percent of the world’s cocoa is grown in the West African countries of Cote d’Ivoire and Ghana, where child labor is a well-documented concern. The number of children affected is difficult to determine, but most estimates fall between one and two million. The United Methodist Church speaks out against child labor in Resolution 3083, “Eradicating Abusive Child Labor,” which declares “the protection of childhood [is] among our most sacred human responsibilities” and calls upon United Methodists to protect the human rights of children. In the cocoa industry, children may work long hours in unsafe conditions using machetes, carrying heavy loads and being exposed to pesticides.
Another United Methodist organization, Wespath Investment Management, has been encouraging Hershey to respond to the challenge of child labor.
Wespath is a division of the General Board of Pension and Health Benefits, one of the 13 United Methodist Church general agencies. As a socially responsible investor, Wespath seeks to administer its investment program in alignment with the Social Principles of the Church.
Wespath collaborates with other United Methodists to engage corporations in dialogue on issues that are important to the Church, such as environmental stewardship, human rights and corporate governance issues. “Child labor within the cocoa industry has long been an important focus area for Wespath’s shareholder advocacy program,” said Vidette Bullock Mixon, director of corporate relations. “As investors, our voice complements that of United Methodist Women, who are leaders in advocating for justice on issues important to women and children.”
Wespath joined with other concerned investors associated with the Interfaith Center on Corporate Responsibility (ICCR) to meet with Hershey on several occasions. ICCR is a coalition of approximately 275 faith-based and socially responsible institutional investors that seek to promote a more just and sustainable world by integrating social values into investor actions.
During these meetings, Wespath learned about Hershey’s corporate social responsibility programs and its efforts to combat child labor. Investors encouraged Hershey to continue working on this issue and proposed that one of its major chocolate bars be manufactured using certified fair-trade cocoa.
Throughout Wespath’s conversations with Hershey, the company consistently said, “We’re listening.” In response to their stakeholders, the company announced that by the end of 2012, Hershey’s Bliss chocolates would be manufactured with fair-trade cocoa.
Role of fair trade
Fair trade certification systems work to ensure small farmers in developing nations are compensated with a fair and true living wage. The farmers are provided education and training on economic, social and environmental management issues and are periodically audited to monitor compliance with the certification standards. In return, the farmers are afforded access to broader markets or are guaranteed a price above the market price.
Fair trade is supported by the Church, as described in Resolution 4022 “United Methodist Church Use of Fair Trade Coffee and Other Fair Trade Products,” which calls upon United Methodists to use fair trade products in their corporate and personal use.
Hershey has chosen to work with Rainforest Alliance, an organization that certifies fair trade products, primarily in the farm, forestry and tourism industries. As an independent certifier, Rainforest Alliance provides training and audit services to ensure farms meet a range of sustainability criteria.
Wespath spoke to representatives from Rainforest Alliance to learn about the organization’s certification system. The Rainforest Alliance standard encompasses a set of principles for cocoa farm sustainability that are balanced between social and environmental factors. The standards also encourage children to attend school and support the use of farm practices that do not endanger or exploit children. For example, on certified farms, children may be permitted to work but not during school hours.
West Africa challenges
Cote d’Ivoire and Ghana present different challenges to sustainable cocoa production. Self-governed farmer coops are common in Cote d’Ivoire, but in Ghana the cocoa industry is managed by the government. Therefore, programs designed to be successful in one country do not easily transfer to the other.
In both countries, however, the beans are often commingled early in the supply chain, which makes it difficult to determine the source. In addition, increasing demand for cocoa may soon exceed the supply. Candy maker Mars estimates that under current conditions, there will be a cocoa shortage of one million metric tons by 2020. This shortage is complicated by other industry pressures: a decrease in the number of new farmers entering the field — the average age of a cocoa farmer is currently 52 and increasing — limited access to training and information, aging trees and depleted soil.
Hershey’s overarching strategy to address child labor is to assist farmers by increasing the productivity of their farms. They believe that if farmers are able to produce enough cocoa to support their families, their children are more likely to be enrolled in school.
One part of that strategy is “CocoaLink,” a program that sends voice and text messages to farmers about such things as market prices, pests, weather conditions and labor practices — including child labor. CocoaLink was developed in partnership with the World Cocoa Foundation and the Ghana Cocoa Board.
This year Hershey announced it is committing an additional $10 million over five years to expand the CocoaLink program. By 2014, CocoaLink is expected to reach 100,000 farmers in Ghana and will also be available in Cote d’Ivoire. By 2017, the company hopes to impact 750,000 of the area’s 2 million farmers.
Wespath is committed to advocating for human rights and will closely monitor Hershey’s strategy to address child labor on cocoa farms. “It is rewarding to witness United Methodists working together across the connection,” Ms. Mixon said. “Wespath looks forward to continued collaboration with United Methodist Women on issues affecting women and children.”
Anita Green is manager of socially responsible investing for Wespath Investment Management, a division of the United Methodist General Board of Pension and Health Benefits.