Nestlé – Tackling child labour in cocoa supply chains

News

As millions of people throng to the supermarkets for their end-of-year chocolates and gifts, chocolate manufacturers face fierce criticism for child labour in their supply chains.

In Cote d’Ivoire and Ghana where about 60 percent of the world’s cocoa is grown poverty among cocoa farming households is still a key driver of child labour. KIT is working in Cote d’Ivoire with Nestle, IDH, the Rainforest Alliance, and International Cocoa Initiative (ICI) on the Income Accelerator Programme (IAP), to tackle child labour, decrease poverty, promote diversification, and push for more gender equality in the cocoa supply chains. 

“The world’s largest food producer hopes this innovative $1.4bn plan — involving direct pay-outs to African cocoa farmers — can tackle the poverty that is the root cause of child labour,” wrote the Financial Times in their article on the now well-reported initiative.

Taking a more holistic approach

The initiative is built around four annual conditional cash transfers to stimulate behavioural change. In addition to encouraging school enrolment, the IAP aims to tackle child labour by increasing the income of the cocoa farming households toward the living income benchmark. This is done by promoting the adoption of good agricultural practices and income diversification with activities outside of cocoa, and stimulating agroforestry for increased productivity.

For each of the four conditions met, cocoa farming households will receive around €100. Those who meet all four conditions receive a €100 bonus. That adds up to a total of €500 a year – more than a fifth of the income of an average cocoa farmer in Cote d’Ivoire, who, according to KIT’s research, earns around €2,100 a year. The money will be sent via mobile money accounts, with half going to the husband and half to the wife, allowing women to spend or invest the money as they see fit. 

This is not the first initiative aiming to eliminate child labour from the cocoa value chains. Nestlé and other companies pledged to eradicate child labour almost two decades ago.

But it is the first time a programme is taking a holistic approach to address the multiple causes of child labour that usually fall under the radar. As the Monitoring, Evaluation, Learning and Sharing (MELS) partner on this programme, KIT’s role is critical. As our Advisor Jaap Voeten told the Times, “Twenty years ago a lot of businesses were [into] window dressing. These days companies are much more scrutinised by NGOs and on social media. You cannot get away with a story that doesn’t hold.”

At KIT, the project is being led by Rik Habraken and Oumou Diallo. Rik explains that, “In practice, we identify and communicate insights, best practices and learnings to the implementing parties of the IAP. These are based on the quantitative and qualitative evaluations we’ve conducted since 2021 on the pilot project in Cote d’Ivoire, that included 1,000 households. We then provide practical recommendations to Nestle and the other partners on how to best adapt the programme for optimum impact”. 

To that end, the two advisors recently held a workshop in Abidjan where they gathered all of Nestlé’s suppliers involved in the implementation of the IAP. As one of the key learnings from the pilot has been that knowledge-sharing among partners is crucial to the programme’s success, at the workshop suppliers were encouraged to share their experience with the IAP and join the learning platform set-up by KIT to foster their collaboration. 

Knowledge sharing to lead the way

The workshop also provided the opportunity to clarify the role of certain partners in the implementation and the process to implement certain pillars. For example, “Most of the suppliers were not fully aware that ICI was in charge of verifying the actual school attendance. This is important, as households and schools need to be aware of the documentation they need to have available so they can demonstrate their children’s school enrolment. We have planned more such learning workshops in the next few months, and we will also publish the baseline report and interactive dashboard,” says Oumou.

Despite the well-rounded coverage this project has received in the international media, the general mood of the news media reporting on the project is sceptical. As per the Economist who also wrote about this project, “In most countries where rural folk have dramatically improved their lives, they have done so by moving to cities and finding better-paid jobs there. Encouraging them to remain in the countryside and grow more cocoa than people want to eat is an unlikely path to prosperity.”

The scepticism is understandable, but it seems that the European Union is working on rules that would require companies to prove that all their cocoa beans are free of child labour by 2024. As Europe has the highest demand for cocoa in the world, these laws, once they comes to pass, will have a significant impact. Chocolate manufacturers, not just Nestlé, will need to have the mechanisms in place to tackle the problem and demonstrate their efficacy. And since we’ve been working in this field for years, we look forward to sharing our knowledge and leading the way.