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New Nestle Plan to Combat Child Labor on Cocoa Farms

Jan. 28, 2022
In a statement, the Swiss chocolate giant said it will counter the problem by paying bonuses intended to improve the living conditions of families on cocoa plantations.

Nestle launched a new plan Thursday aimed at combating the risk of child labor in the cocoa industry, with cash incentives for cocoa-farming households for enrolling children in school.

The Swiss food giant says it plans to increase spending to 1.3 billion Swiss francs ($1.4 billion) by 2030, tripling the current annual investment in a program aimed at encouraging schooling and regenerative agriculture practices.

The chocolate industry has for years faced accusations of not doing enough to root child labor out of supply chains, with the practice remaining common in many poorer cocoa-producing countries.

Numbers appear to have come down in recent years, but nearly 800,000 children were still working in the cocoa industry in 2018-19, according to a study by the NORC research institute at the University of Chicago.

Nestle, which owns the Smarties and KitKat brands, said in a statement it will counter the problem by paying bonuses intended to improve the living conditions of families on cocoa plantations.

- 'Root cause' -

"Nestle's new initiative focuses on the root cause of child labor including the living income gap farmers and their families face," company chief Mark Schneider said during an online conference.

The new incentives come on top of premiums it already pays for certified cocoa, and in addition to support provided by the governments in the Ivory Coast and Ghana.

The west African neighbors are the world's largest cocoa suppliers, accounting for more than 40 and 20% of the global output respectively.

According to the World Bank, more than half of the up to six million people living off of cocoa in Ivory Coast live below the poverty line -- with poverty considered the main driver of child labor.

Ivory Coast Prime Minister Patrick Jerome Achi acknowledged the problem, telling Thursday's conference that cocoa farmer income was a subject of "major importance" for his country.

The price for cocoa, which accounts for around half of the nation's total export revenues, has been slashed in two in the past 40 years, with dire consequences, he said.

"Due to insufficient income or because schools are too far from production sites, children are in the fields," he said. 

- Traceability -

Under Nestle's new scheme, families will be able to earn up to 500 Swiss francs per year for the first two years, rewarding practices that increase crop productivity.

The incentive will then be reduced to 250 Swiss francs "as the program starts delivering tangible results," said Nestle.

The premium does not depend on the volume of cocoa sold.

It divides payments between the farmer and their spouse, "who is typically responsible for household expenses and childcare", in order to help "empower women and improve gender equality", the company said.

The company launched a pilot project in 2020 with 1,000 farmers in Ivory Coast and now plans to extend the program to 10,000 families before launching it in Ghana in 2024.

Nestle said it eventually wants the scheme to reach all cocoa-farming families in its global supply chain by 2030.

Meanwhile the multinational also pledged to transform its global sourcing of cocoa to achieve full traceability from origin to factory.

- 'Forced child labor' case -

The world's chocolate market is estimated to be worth more than $100 billion, concentrated in a few multinational corporations.

In June last year, the US Supreme Court threw out a lawsuit against Nestle USA, and Cargill, that accused the food giants of aiding and abetting slavery by using cocoa harvested from plantations in Ivory Coast that used forced child labor.

It ruled that US courts did not have the jurisdiction to decide the case.

The lawsuit was filed in 2005 by six Malians who say they were trafficked as children then held as slaves on Ivorian farms, where Cargill and the U.S. subsidiary of Nestle have purchased cocoa.

The suit alleged that the two companies knew what was occurring on the farms.

Copyright Agence France-Presse, 2022

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