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Case 5
Is your Chocolate the Result of Unfair Exploitation of Child Labor?
Mariam Aslam, Hiba Khan, Aman Memon, Manasi Shinde, Amina Syed, Tooba Zaki
Professor Woldu
IMS 3310.002
October 20, 2014
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The cocoa industry is one of the world’s fastest growing industries. 70% of the world’s
cocoa is produced in West Africa and out of this 70%, 43% cocoa is produced in Cote d’Ivoire
(Ivory Coast). All the leading chocolate brands including Hershey’s, Snickers, Nestle and many
more use the cocoa produced in Ivory Coast. But there is a surprising association between
chocolate and child labor in the Cote d'Ivoire that is the growth in chocolate industry is causing a
constant rise in the level of child labor.
Child labor is the use of children in industry or business, especially when illegal or
considered inhumane. In 2002, over 280,000 children worked on cocoa farms. Young boys whose
ages range from 12 to 16 have been sold into slave labor and are forced to work in cocoa farms in
order to harvest the beans, from which chocolate is made, under inhumane conditions and extreme
abuse.1 Sometimes the children are mistreated so badly that this practice is even called child
slavery. In order to address this issue we will be taking into consideration the economic,
sociocultural and political factors in Africa as well as concentrating on ways to resolve this issue.
As the chocolate industry has grown over the years, so has the demand for cheap cocoa.
Cocoa farmers earn less than $2 per day, on average, and therefore resort to the use of child labor
in order to keep their prices competitive.2
The working conditions in Ghana and the Ivory Coast are undoubtedly horrific. The
children are surrounded by intense poverty and some of them end up on cocoa forms because
they need “good” jobs1. Others are kidnapped and have no choice but to work there, and some
are sent by families as a source of income. A couple of children are also sold to the cocoa
industry by slave traders1.
1
http://www1.american.edu/ted/chocolate-slave.htm
http://www.foodispower.org/slavery-chocolate/
2
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Once they have been taken to the cocoa farms, the children may not be able to see their
family for years, if ever. Most of the working children are between the ages of 12 and 16, but
reporters have found children as young as 51. They usually begin working at 6 in the morning
and end in the evening. The children work in unsanitary conditions, and use dangerous tools such
as chainsaws and machetes to clear forests and cut bean pods1. They drag sacks that weigh more
than 100 pounds, and were beaten if they didn't hurry1. They are also exposed to agricultural
chemicals on the cocoa farms, and are made to spay toxins without wearing protective clothing.
These children are also provided with the cheapest food available, such as corn paste and
bananas. In some cases, they even sleep in small windowless buildings on wooden planks with
no access to clean water or sanitary bathrooms1. The effect of being sold into labor has physical
scars that the children receive from constant beatings, the inhumane living conditions, and the
practical starvation that is being imposed on them.3
There is also a cultural variable that is identified with this situation. In Africa, seeing
children work is something that is considered to be common, and is not necessarily negative. In
other situations, families used to send their children away to other families in order to learn skills
as a substitute for expensive education2. Ivory Coast is one of those promised destinations where
children where learn something new. What families fail to realize, however, is that with the
degenerating economic conditions, the society has become really dangerous for their children.
One of the main questions is, why doesn't the media raise more awareness about this
situation? With the exception of a few journalists/ news reporters, majority of them do not
expose the hazardous working conditions of these countries. Even after multiple organizations
and plans to help these children, their working conditions, for the most part, still remain the
3
http://www1.american.edu/ted/chocolate-slave.htm
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same4. The cocoa industry has been increasingly secretive, and is very had for reporters to get
information on the current working environment. In 2004, The Ivorian First Lady's entourage
kidnapped and killed a journalist reporting on the government in the cocoa industry1. In 2010,
three newspaper journalists were detained by government authorities after they publicized article
about the cocoa sector's corrupt government1. With these incidents, no wonder the media is
scared to report about the horrendous cocoa industry. Even with the little awareness that we do
have, the public is getting desensitized to this situation and barely any action is being taken to
prevent what is happening.
With all the issues revolving around Cote d'Ivoire (Ivory Coast), you’d think there was
more effort put into dealing with these issues, but unfortunately, much hasn’t been done in the
past couple of years. Some of the main issues not only involve child labor, but with child
trafficking; this makes promoting children’s right harder to advocate. There have been rights
declared to avoid this issue from happening such as the Declaration of the Rights of the Child
1929 and 1954, but none were legally binding so there were multiple ways to get around these
rights.
As these issues are currently attempting to get solved, there’s another huge issue
involving companies who produce chocolate and child labor: lobbying. With the issue of
lobbying, it is the act of attempting to influence decisions made by officials in the government,
most often legislators or members of regulatory agencies. This is usually done by companies in
an attempt to ignore whatever issues are involved with their products in hopes they still continue
to gain more income. Some companies choose to lobby for a positive cause yet some choose to
4
http://www.dol.gov/ilab/reports/child-labor/cote_divoire.htm
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do so for a negative cause. In regards to lobbying for a positive cause, “Nestle USA Inc. is
focusing on an agreement to reduce child labor in the cocoa industry”5 (Ramonas 2014).
Nestle USA Inc. is working towards achieving a 13-year pact made between different
chocolate companies to help decrease child labor in the various cocoa farms in the Ivory Coast.
This was all brought upon when the Fair Labor Association found that Nestle’s chocolate was a
result of child labor despite Nestle’s attempt to avoid this from happening. To ensure this
wouldn’t happen again, Nestle works towards creating a plan to prevent this issue from
occurring. The overall plan “calls on the different chocolate companies to help provide
sustainable jobs for households of children and to work to ensure that their employees do their
best to avoid buying cocoa from locations that use child labor to produce cocoa”6. Nestle
proceeded to spend $350,000 to lobby this issue along with a variety of other issues including
child labor matters. For these efforts, Nestle used their staffers and lobbyists to get the point
achieved to the public. Nestlé said they would do their best to “take steps that include "robust
monitoring" of labor conditions in west Africa and working more closely with suppliers to ensure
that they understand the problem with child labor”7.
However, despite some companies working towards abolishing this issue, some dealt
with lawsuits regarding advocating the issue like Hershey’s. In 2013, Hershey’s was hit with a
lawsuit by Louisiana Municipal Police Employees’ Retirement System (LAMPERS) who
claimed they “used cocoa produced through unlawful child labor in the Ivory Coast and Ghana”8.
LAMPERS claimed there is sufficient evidence that Hershey’s company has records of abuse of
5
http://www.nationallawjournal.com/legaltimes/id=1202651710098/Nestl-USA-Lobby-Effort-toFocus-on-Child-Labor?slreturn=20140917113632
6http://www.nationallawjournal.com/legaltimes/id=1202651710098/Nestl-USA-Lobby-Effort-to-Focuson-Child-Labor?slreturn=20140917113632
7
http://www.nestlecocoaplan.com/nestle-sets-out-actions-to-address-child-labour/
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http://www.confectionerynews.com/Regulation-Safety/Hershey-child-labor-lawsuit-faces-meltdown
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their workers including forced labor and human trafficking. This is a serious allegation because
if these allegations are true, Hershey’s could easily have gone bankrupt from these allegations.
Hershey’s company normally “spends about $245,000”9 on lobbying and most of it must have
gone to this allegation during the year (Advocacy). However, it appeared there wasn’t sufficient
evidence to prove these allegations were correct and the case was then canned for the time being.
There is a high correlation between the number of children in the workforce and the
country’s GDP. Almost all child workers are from developing countries, with 61% of the world’s
250 million child laborers working in Asia, 32% in Africa and 7% in Latin America.10 According
to the World Bank, “Increases in per capita incomes explain nearly all of the reductions in
worldwide child labor since 1950.”11 Countries with high GDP’s, such as the US, Australia and
many European countries, have a virtually 0% rate of children in the workforce. The success of
these countries lies mainly in the fact that they have strict rules against child labor that are
implemented and enforced. So why don’t developing nations follow the example of the US and
others and implement rigid laws against child labor?
Looking at the problem from an economic standpoint, there are many consequences that
can result from the sudden ban of child labor in developing countries. The first and most obvious
aftereffect is that the economy of the developing nation and the family of the child will lose the
income generated by the child. Many developing countries rely on the factories of big
corporations to generate revenue, and those big companies choose to work in developing nations
because of their cheap labor. By taking away the number one source of cheap labor, child
9
http://www.thehersheycompany.com/investors/advocacy-expenditures-rpt.aspx
Bachman, S. (2000). The Political Economy of Child Labor and Its Impacts on International
Business. Business Economics, 30-39.
11
Tabatabai, Hamid. 2006. Eliminating Child Labor: The Promise of Conditional Cash Transfers.
Switzerland: International Labour Organization.
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workers, the country will be harming itself because big corporations will find another country
where child laborers are allowed and will no longer help the economy of the developing nation.
Families of the children who work will also be negatively affected because there will be one less
source of income.
The labor supply would also decrease dramatically, and this decrease in labor would
cause an increase in wages due to the fact that there are fewer workers. But companies will not
pay higher wages for the same amount of workers. Instead, they will fire workers and higher
only a few efficient workers for higher pay. Unskilled and low skilled workers will have a harder
time finding work since no one would be willing to hire them anymore.
However, the benefits of children leaving the workplace on the world economy are
greater than the consequences suffered by individual countries. The world economy would
experience large gains, some countries more than others, due to the fact that child labor is
economically inefficient.12 Children are inefficient workers and are unskilled compared to adults.
Therefore, if they are taken out of the workforce, companies would be forced to hire more skilled
and experienced adult workers, which would in turn increase the company’s efficiency which
would then increase revenue.13
Not only would the banning of children from the workforce lead to economic gains, It is
very likely for a child free workforce to reach a Pareto efficient equilibrium. This is due to the
fact that labor markets usually have multiple equilibriums. Whereas one equilibrium might be at
12
International Programme on the Elimination of Child Labor (IPEC). 2003. Investing in Every Child: An
Economic Study of the Costs and Benefits of Eliminating Child Labour. International Labour Office,
Geneva.
13
Marshall, Ray. 1990. Trade-Linked Labor Standards. Proceedings of the Academy of Political Science
37 (4): 67-78.
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low wages and children in the workforce, another can be achieved at high wages and no children
in the workforce.14 So economically, eliminating children from the workforce is very viable.
Child labor has been a problem for several years and will continue to be a major problem
until it is solved. After analyzing the economic, social, cultural and political factors in Africa
which play a role in child labor, we have seen the world take drastic measures to try and solve
the problem but every attempt has failed. Some attempts have been complete failures and some
attempts have had lawsuits as a result. Children are growing chocolate in Africa without getting
paid enough and sometimes not getting paid at all. These children have never even tasted
chocolate. One solution that could work is for the chocolate industry to thoroughly address the
accusations made against it. Big chocolate companies such as Hershey’s need to stop ignoring
the problem with child labor. They need to address it and take action against it. Another minor
solution to end child labor is to spread awareness. Spreading awareness is the first step to making
a change. Many people do not even know that child labor in Africa is a huge problem. Some
people believe that child labor is over and was a part of history. Many people do not know that
the chocolate they are eating is because of children across the world who are working long hours.
We have created a Facebook page which will spread awareness about the making of the
chocolate we are eating. At least by knowing where our chocolate is coming from we will have
an internal reflection. Hopefully one day, child labor will become part of history and not part of
the present or future.
14
Basu, Kaushik and Pham Hoang Van. 1998. The Economics of Child Labor. The American Economic
Review 88 (3): 412-427.
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Works Cited
"Advocacy Expenditures Report." Hershey's. The Hershey Company Mar 2014. Web. 9 Oct. 2014.
Bachman, S. (2000). The Political Economy of Child Labor and Its Impacts on International
Business. Business Economics, 30-39.
Basu, Kaushik and Pham Hoang Van. 1998. The Economics of Child Labor. The American
Economic Review 88 (3): 412-427.
Chanthavong, Samlanchith. "Chocolate and Slavery: Child Labor in Cote D'Ivoire." American. 1
Jan. 2002. Web. 17 Oct. 2014.
"Child Labor and Slavery in the Chocolate Industry." Food Empowerment Project. Web. 16 Oct.
2014.
"I. Identification." Chocolate and Slavery. Web. 16 Oct. 2014.
“International Programme on the Elimination of Child Labor (IPEC).” 2003. Investing in Every
Child: An Economic Study of the Costs and Benefits of Eliminating Child Labour.
International Labour Office, Geneva.
Marshall, Ray. 1990. Trade-Linked Labor Standards. Proceedings of the Academy of Political
Science 37 (4): 67-78.
"Nestlé Sets out Actions to Address Child Labour." Nestlé Cocoa Plan. Nestle. Web. 10 Oct. 2014.
Nieburg, Oliver. "Hershey Child Labor Lawsuit Faces Meltdown." ConfectioneryNews.com.
William Reed Business Media SAS, 2 Sept. 2013. Web. 10 Oct. 2014.
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Ramonas, Andrew. "Nestlé USA Lobby Effort to Focus on Child Labor." LegalTimes. ALM
Media Properties, LLC, 18 Apr. 2014. Web. 9 Oct. 2014.
Tabatabai, Hamid. 2006. Eliminating Child Labor: The Promise of Conditional Cash Transfers.
Switzerland: International Labour Organization.