Many of us are passionate about chocolate. "Divine Chocolate", "Jungle Passion" and the food of the gods capture the essence of chocolate. And the chocolate makers create more confections to tempt us; chocolate with ginger and chilli, chocolate with vanilla, pineapple ..., but everything depends on the cocoa bean.

Cocoa, the challenge for corporate social responsibility

The food of the gods, theobroma cacao, otherwise known as cocoa was grown by the Maya some two thousand years ago. A drink was made from ground the beans, black pepper, vanilla and spices. Cocoa beans were also used as money, a horse was worth ten coffee beans.

Cocoa was brought to Europe in the 16th century, chocolate houses were opened in London where the intellectual elite gathered to drink chocolate, discuss the natural sciences. Later in the 17th, century with increasing political freedom they took to composing scurrilous pamphlets about monarchs and politicians.

The Quaker families of Fry, Rowntree and Cadbury made their fortunes from cocoa and turned to philanthropy. Elizabeth Fry was a prison reformer; Cadbury built Bourneville village for employees and local people and led the field in factory working conditions. Joseph Rowntree was an active anti-poverty campaigner and set up the Joseph Rowntree Foundation. This was nineteenth century corporate social responsibility.

Cocoa grows in warm, moist climates in rich soils in West and Central Africa and Central and South America. African cocoa accounts for 70% of world production, is the most important cash crop and the majority of cocoa farmers are small holders.

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Growing cocoa

When land is cleared for cocoa fruit, medicinal and timber tress are retained as they are important economically and provide shade for the growing cocoa trees. Initially maize, plantain, cassava and other food crops are interplanted with the cocoa and as the cocoa trees grow mango, cola, guava, African plum, avocado mandarin and orange trees may be introduced. As these and the cocoa become mature the plantation becomes a closed canopy, multi-strata system resembling a natural forest.

While cocoa is such an important cash crop there are problems. It is only processed for local use; the majority of the crop is exported, so the added value accrues to companies mainly in the developed world. The producing countries could invest in processing and marketing, but tariff systems penalise producing countries so limit access to developed markets.

Liberalisation in indebted countries combined with falling cocoa prices severely affected the economics of cocoa production for small holders. Previously governments supplied pesticides and fungicides, but with liberalisation farmers had to buy their own. Consequently many have been unable to afford to spray their trees, with a subsequent fall in volumn and quality.

It has been estimated that in West Africa yield loss due to lack of pest and disease control has averaged 30%, with losses running at 50-80% in Cameroon. There are over 1.5 million small holders in West Africa growing cocoa, so the impact on families and the economy is huge. Ghana still provides pest and disease control through Cocobod, but this is not uncontroversial.

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Pesticides and fungicides

Contrary to popular belief, cocoa is usually grown using toxic agricultural pesticides.
March 25, 2006 News Flash! Source: All Africa News (West Africa Business)

Cocoa suffers from a number of pests and fungi with intriguing names like Black Pod, Frosty Pod and Witches’ Broom. The Ghanaian government provides pesticides and fungicides and spraying gangs, but News in Ghana, reported in February 2006 that cocoa farmers were dissatisfied with the gangs who only sprayed once a year not twice, wanted bribes to do so and did not use all the pesticides and DDT.

DDT is banned for use on crops worldwide, but is still used legally in some cocoa growing areas where malaria is endemic. Lindane, a hormone disrupter, is also used on cocoa trees. The USFDA acknowledges that it is common to find traces of Lindane and DDT in chocolate. It permits these residues, because they are considered "unavoidable".(1)

One of the characteristics that make chemicals like Lindane and DDT both extremely effective is their persistence. Both POPs, or Persistent Organic Pollutants - meaning that they are highly toxic, persistent and bio-accumulative.

Pesticide application on cocoa is by knapsack mist-blowers; due to a combination of heat, a lack of resources, and ignorance, the people applying pesticides to cocoa do not wear adequate protective clothing, and are therefore exposed to significant amounts of spray drift. Because cocoa trees are taller than people, the sprayers are frequently drenched with pesticides during application.

There is research into biological controls, the use of fungal bio-pesticides and the conservation and mass production of antagonists to cocoa pathogens. The epidemiology of cocoa diseases requires research too, as does the resistance mechanisms in cocoa and the underlying variation in pathogen populations. But the chemicals currently used are effective and because they are ‘old’ they are cheap.

Aspects of corporate social responsibility (CSR) in the cocoa industry

Fairtrade was the first initiative. To achieve the development objectives of Fairtrade, Fairtrade standards apply to producer organisations rather than to individual farms. These organisations are required to be:

• democratically run and accountable to members.
• capable of ensuring compliance with minimum social and environmental criteria and to manage the process of ongoing improvement.
• able to manage the Fairtrade Investment Premium for the benefit of members (the premium is a percentage of the revenue generated).(2)

An annual premium plan and budget is produced by each elected committee; the premium is invested in social projects such as building schools, clinics and community centres; funding scholarships; installation of electricity; low interest loans to improve housing or to pay school or medical fees.

Fairtrade is best known for working with co-operatives or associations of small farmers as ‘these producers are typically the most disadvantaged in world markets’, but there is concern for landless labourers too, so Fairtrade works with larger estates to improve the conditions of workers. The benefits of Fairtrade are specifically focused on the workers and the Fairtrade premium is managed by a committee, elected by the workers, who work with management representatives.

Fairtrade recognises that producers main concern is to make a living, even though the farmers want to improve the environmental impact of their product. Fairtrade sets realistic targets and the premium helps their progress towards sustainable improvements.

“Environmental protection and sustainability must be included in producer organisations’ management policies. They must comply with national and international legislation on protection of the environment (natural waters, virgin forest and other ecosystems of high ecological value), erosion, waste management and the use and handling of hazardous chemicals. Banned pesticides include those in the following lists: WHO class 1 a+b; Pesticide action Network’s ‘dirty dozen’; FAO/UNEP’s Prior Informed Consent Procedure list.”

Fairtrade notes that farmers feel there double standards are applied by consumers and business in developed countries that want better environmental practice, but aren’t prepared to pay for them.

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The success of Fairtrade chocolate

Retail value of Fairtrade products has increased by nearly 40% per annum in recent years and chocolate and cocoa is now worth £21.9m in the UK. Undoubtedly Fairtrade products in supermarkets have boosted sales and made the ‘brand’ recognisable and valued.

Fairtrade has been criticised for being ‘charitable’, rather seeking to challenge the relationship between labour and capital. Fairtrade’s response is:

“Although Fairtrade is primarily about improving the position of producers in the developing world, it only does this by mobilising the purchasing power of consumers who are interested in supporting this vision. Critics of Fairtrade fail to acknowledge that it operates through market mechanisms. It offers consumers the chance to make a difference to global poverty and sustainable development through the choices they make while shopping.”

In the words of Nelson Mandela, “Overcoming poverty is not a gesture of charity. It is an act of justice.”

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The International Cocoa Initiative -ICI

The International Cocoa Initiative (ICI) was founded in 2002 and is collaboration between civil society and companies in the Southern and Northern hemispheres. Their aim is to eliminate child labour and forced labour.

ICI brings mainstream companies into a unique alliance with the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations (IUF), the International Confederation of Free Trade Unions and non governmental organisations (NGOs) including Free the Slaves, Global March and the Consumer’s League.

Working with local non governmental organisations (NGOs), local and national government and internationally with International Labour Organisation (ILO), Unicef and the German Technical Co-operation Organisation, these partners with members in the cocoa industry in Ghana and the Ivory Coast have ‘created an environment for change.’ (3)

ICI is taking a long term view to create structural change; it takes as its starting point that the worst forms of child labour and forced labour are ‘simply not acceptable.’ Rather than just saying these practices are unacceptable, ICI looks at the causes of child labour, what is being done, its effectiveness and who can best deliver change.

At the local level ICI has established a pilot programme with 30 communities where cocoa is the main product. The aim is community owned plans to address child labour. Peter McAllister, executive director of ICI, says that “people change only when they decide to and can see the real benefit set against the risks that change often entails. Sustainable change must therefore be in the hands of local people.”

‘In the pilot communities the following changes have taken place:

• the worst forms of child labour were identified in all the pilot villages and measures have been taken to eliminate hazardous practices.
• fifty one teachers have been appointed and six classroom blocks built with the major part of the resources coming from the communities.
• More than 1,500 children have been enrolled in school.
• Support is being provided to centres that rehabilitate victims of trafficking (i.e. forced labour.)
• Practices have changed, children still help on family farms, but attention is paid to health and safety. For instance children must not work when pesticides are being sprayed.

ICI has changed the debate in the industry from problem management to effective engagement. Two years ago, companies did not understand that they could have a role in developing the capacity of countries such as Ghana and the Ivory Coast to address child labour. They now understand that the role they can play is not just philanthropic, but good business sense.’

‘McAllister has a message for companies’, “Take action before the media get hold of the social problems inherent in complex supply chains, but do it thoughtfully. If you wait until the issue is in the political arena, it will be more expensive and much more difficult to create the partnerships needed for real change.”2

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Alternatives to Slash–and-Burn (ASB) (4)

Based on ASB science, the Sustainable Tree Crops Programme (STCP) in Africa is a collaborative project funded mainly by USAID, the UK and Danish Departments for International Development and with $4 million from the private sector through the World Cocoa Foundation, Mars and the National Cocoa Fund of the Ivory Coast.

The programme aims to

• Promote the production and marketing of high quality cocoa.
• Improve market access and income for small scale cocoa farmers.
• Create production systems which are environmentally friendly, socially responsible and economically sustainable.

Farmer Field Schools teach farmers about shade management, tree husbandry and post harvest handling and will introduce crop diversification, natural fertilisation and other best practices. Trained farmers teach other farmers and so some 39,000 farmers have been trained in three years. Research institutions in Cameroon, Nigeria, Ghana and the Ivory Coast have provided staff for curriculum development and developing training courses.

STCP claims that on farms of trained farmers, cocoa yields have risen by 15-40% and pesticide use has dropped by 10-20%. In Cameroon 255 plant species of food, medicinal or service products have been identified. STCP estimates that these species generate income for women which provides about 20% of the revenue from cocoa farming.

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Cocoa doesn’t need shade

Traditionally cocoa has been grown with other species, initially for shade, but the tropical biologist Allen Young discovered that when the cocoa tree was "brought out of the forest and into the sun it grew to heights rarely seen in the dark undergrowth of the South American rain forest. And its fruits, the pods that produce cacao beans, swelled and ripened to magnificent melon-sized orbs".(5)

In business securing a high yield and quality is paramount, assuming that there is not over supply. If growing cocoa in mono plantations increases yield and quality this poses a duel threat particularly to small scale cocoa farmers. They may be forced out of production because of over production and/or they may lose the co-species which provide an income, food variety and security.

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The value of cocoa agroforests

Alternative to Slash-and-Burn have evaluated environmental parameters of various land use systems in Cameroon. It found that above ground plant bio-diversity and below ground micro fauna in cocoa agroforests was second to that of primary forests. In total biomass it was third behind primary forest and long term fallow (where the land is left to recover fertility). Cocoa agroforests contain 62% of carbon stock found in primary forests.

ASB notes that cocoa agroforests have to be economically attractive to small farmers and this requires “ a significant improvement in management, policy and economic spheres as it affects the system”, which ASB is addressing.

There has been considerable progress in developing the indigenous species grown with cocoa for food, medicinal and timber products. This has been done using local knowledge and by examining the tree to tree variation in fruit and nut traits to identify the potential for highly productive and qualitatively superior cultivars. However there is a need to work with the food and pharmaceutical researchers to identify the nutritional value and the medicinal component of species and cultivars.

Improving these co-species can improve food security, dietary quality and provide essential micronutrients.

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Can the cocoa industry live up to its CSR responsibilities?

The challenge is to reduce and eliminate the use of persistent toxic pesticides and fungicides, preserve the value of cocoa agroforests and help to identify the nutritional and medicinal value of the species. While at the same time improving the social and economic status of the smallholder and landless labourers in cocoa producing countries, and maintaining a fair price for cocoa beans.

The cocoa industry has not been at the forefront of CSR – the mining industry has been working with local, regional and national governments and NGOs for over a decade to stimulate and underpin economic development and to provide infrastructure. The Executive Director of the International Cocoa Initiative had to tell cocoa companies to take action before the media got hold of it and the issues got into the political arena.

The industry’s record until recently has not been good; perhaps it has been the success of Fairtrade which has brought about this change.

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Future challenges for corporate social responsibility

Many people shamelessly confess to being chocoholics and while the low cocoa, high sugar content of most UK chocolate is an anathema to purists, Fairtrade chocolates on sale in supermarkets have raised our expectations and sales have rocketed. Green & Blacks chocolate, a Fairtrade organic brand, was recently bought by Cadbury’s and now only has a few Fairtrade lines, although the others are still organic.

While the industry is working with the small scale farmers in West Africa, it controls the price of cocoa and ultimately hold the livelihood of the farmers in their hands. The annual chocolate market is worth US$60 billion worldwide and £3.9b in the UK.

Fairtrade only accounts for £21.9million and the average UK family spends as much on chocolate in a year as a small cocoa farmer earns in a year. At the beginning of the cocoa supply chain in Africa are 1.5 million small holders, so the dozen or so large cocoa companies carry a lot of responsibility.

If you would like a T shirt which declares Divine chocolate makes the world go round, visit the Day Chocolate website www.divinechocolate.com and go to Online shopping. Divine is a Fairtrade chocolate and the T shirts are Fairtrade cotton.

Montezumas hand made chocolates: www.montezumas.co.uk

Jungle Passion chocolates: www.junglepassion.co.uk/products.html

Green & Blacks: www.greenandblacks.com/uk/index.php

References

(1) Shively, C.A., U.S. Requirements for Importing Cocoa Beans and Products, undated, Hershey Foods Corporation.
http://www.worldcocoafoundation.org/Library/Documents/importingregs.pdf

(2) Fairtrade - www.fairtrade.org.uk

(3) ICI – www.cocoainitiative.org

(4) Alternatives to Slash-and-Burn – www.asb.cgiar.org

(5) News in Ghana, Cocoa farmers complained about spraying gangs, 13 Feb 2006
www.newsinghana.com/general.php?story=1250

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