3.1.2: The dark side of Chocolate: Child Labour in cocoa

Supply of cocoa

The amount of cocoa available in the market.

Global Value Chain Approach

Linking the activities of firms involved in bringing a product from conception to consumption.

State Marketing Boards

buying from producer and then selling said product to buyers

Private Governance

Rules and standards enforced by non-state actors, typically companies.

Third Party Certification

Voluntary standards checked by an independent third party.

• Inspectors come and see if your claim are true

  • If you don’t meet the standards, you cant put the third party certification logo on your product

• Labels that guarantee certain minimum production conditions

• Example of Third Party Certification: Fair Trade (Company)

  • pay the producer a minimum price

    • Must be above the market price

  • Guarantee a long term relationship with the producer

  • Producers will always be small-scale that are bought from

Mandatory State Monitored Labelling

Providing production conditions on product labels to inform consumers.

• Will reduce Commodity Fetishism - exposes production conditions

Cartel

a group of independent market participants who collude with each other in order to improve their profits and dominate the market.

Voluntary Industry Self Regulation

Companies self-regulating their practices, often for public relations purposes.

Problems with Cartels

• Tend to fall apart

• Agree to shrink production to drive the price up

• creates opportunities for people outside the cartel

Cocoa Protocol

• Companies took this up when there was a risk of “this product used child labour” on their products

• Came up with the Cocoa Protocol

  • eliminated “worst forms” of child labour in the sector

• lead to questioning of its authenticity

  • Companies cannot be trusted to self-regulate as it conflicts with their interest of profit

Problems with Voluntary Industry self Regulation

1. Doesn’t do very much

   • PR with consumers, more this than improve the well being of producers

2. Aimed at the state

   • More of a defensive move by companies

3. There is problem of Transparency

   • who is conducting inspections?

   • are promises being lived up to?

4. Continued supply from producers

   • Producers will continue to leave the industry

   • what might be the current best interest of the firm may not be in the best interest of the cocoa industry in the long term

Problems with Third Party Certification

• Standards might be super low

• Race to the bottom (Standard wise)

• Relying on consumer demand means kind people pay while selfish do not

  • some people may simply not care

  • Falls just on people who are nice

Producers of Chocolate Live in Poverty

Small-scale farmers producing cocoa and workers in the chocolate industry live in poverty.

Cheap Child Labour

The use of child labor on cocoa farms due to low wages paid to farmers.

State Marketing Boards

Buying from producers and selling the product to buyers.