Ethical Chocolate

The Ethics of Chocolate

As it is the key ingredient in chocolate, most of this guide focuses on the cocoa industry.

It originally came from South America, where it was consumed as a bitter drink for thousands of years. European invaders added sugar to it, and it was first made into a solid in Britain at the end of the nineteenth century.

Cocoa will only grow in tropical countries and it is grown almost exclusively by small farmers. Two-thirds of the world’s supply comes from West Africa, where it is the source of livelihood for millions of people. The biggest exporters are Ivory Coast and Ghana; it is Ivory Coast’s largest export, and Ghana’s third largest.

For several decades, the industry has been beset by serious issues around poverty, child labour and environmental destruction. The good news is that some attempts are being made to tackle them. The bad news is that they aren’t nearly good enough. 

Child labour and chocolate

A major report on child labour in cocoa farming was released in 2020. It was funded by the U.S. government and produced by NORC at the University of Chicago.

It estimates that around two million children are engaged in ‘hazardous’ child labour in Ivory Coast and Ghana – using machetes and toxic chemicals and carrying excessive loads.

This amounts to 43% of all children living in cocoa producing areas, and means that in terms of absolute numbers, there has been no progress at all since companies signed the Harkin-Engel Protocol, which promised to tackle child labour, nearly 20 years ago. In fact, the report estimated that child labour in cocoa has increased by 14% in the last decade.

However, it also points out that cocoa production itself has grown by more than that – by 62% – in the two countries over the period. And it is pretty positive about anti-child-labour interventions, finding that when actions to improve livelihoods are coupled with awareness raising and community monitoring, they reduce child labour significantly.

In other words, it is possible to tackle child labour, but it is not being done on any serious scale.This report didn’t look at forced labour. But the Global Slavery Index estimates that around 1% of the child labourers are being forced to work, by someone other than their parents, and that around 13,000 adults were also forced to work on cocoa farms between 2013 and 2017.

Forced labour involving violent restraint is rare. But much more common are things like threats or promising payment which doesn’t ever materialise.

Child labour in cocoa is tied up with poverty. Cocoa farmers resort to using their children because they can’t afford to employ adult labourers. And the poverty is linked to the prices paid by the multinational buyers who supply our chocolate bars.

Update: In April 2022 a Channel 4 documentary investigated child labour in Cadbury's chocolate supply line in Ghana. 

Cocoa sourcing rating

Due to the child labour issue, all companies who were deemed to have insufficient policies on cocoa sourcing lost half a mark in our ethical scores under Workers’ Rights. Companies were rated as follows:

Sufficient cocoa sourcing policies:

Cocoa Loco, Lindt, Traidcraft, Equal Exchange, iChoc, Vivani, Ritter Sport, Plamil, Lidl, Divine, Tony’s Chocolonely, Fairafric, Vego, Beyond Good, Chocolate Madagascar, Pacari, Co-op, Moo Free, Willies, Ombar, Mia and Seed and Bean.

Insufficient cocoa sourcing policies:

Ferrero, Mondelez (Cadbury, Green & Blacks), Mars, Biona, Tesco, Marks & Spencer, Waitrose, Nestlé, Aldi, Hershey’s, ASDA, Morrisons, Sainsbury’s, Hotel Chocolat, Guylian, Godiva, Booja Booja, Montezuma.

Cocoa production and the environment

Deforestation is still a major issue in West African cocoa production. About 40% of Ivorian cocoa is estimated to have come from inside protected forest areas, technically making it illegal.

The primary reason for this is that farmers move into the forest to get a short-term yield boost after poor farming practices have exhausted the soil. This, again, is linked to poverty.

Some action is happening. In November 2017, the Governments of Ivory Coast and Ghana and many of the major cocoa and chocolate companies signed the Cocoa & Forests Initiative agreement. As part of this, they have all committed to establish a unified traceability system to map supply chains back to producer farms and have created action plans to do so.

Signatories include Ferrero, Godiva, Hershey, Kuapa Kokoo (Divine), Lindt & Sprüngli, Marks & Spencer, Mars, Mondelēz, Nestlé, Sainsbury’s, Tesco, and Unilever.

Less promisingly, the US campaigning organisation Mighty Earth reported at the end of 2019 that, since the agreement, deforestation in the two countries has actually increased.

Agroforestry

Cocoa trees evolved to grow in the shade under a rainforest canopy, intermingled with other trees. Cocoa was first farmed in a somewhat similar manner, until pressure for short-term yields led farmers to switch to full-sun monocultures.

But many scientific studies have now found that moderate shade can bring just as good yields, while sequestering more carbon, improving biodiversity, and preventing the spread of disease and the degradation of the soil.

This is called ‘cocoa agroforestry’ and companies have agreed to promote it as part of the Cocoa & Forests Initiative. Company reports are now full of Agroforestry Action Plans and numbers of seedlings distributed.

Unfortunately, things may not be so simple. The VOICE network is a global consortium of NGOs including Oxfam and Solidaridad, which publishes regular research into the cocoa industry. It is pretty caustic about companies’ efforts on agroforestry, suggesting that many companies are simply throwing some trees at farmers, when the problems run much deeper; "Few farmers – most of whom are on the edge of food insecurity and earn less than $1 per day – can afford the initial investments to transition to agroforestry."

It points out that Ivory Coast has seen many tree distribution campaigns, and less than 2% of the trees survived even in the short term.

Palm oil in chocolate

Chocolate itself does not generally contain palm oil. However, fillings such as biscuit commonly do, so we rated all of the companies on their palm oil policies.

They received the following rating for their palm policies, but some had added criticisms which knocked them down a rung (Hershey’s, Ferrero, Mondelez, Mars and Nestle).

Palm oil free chocolate

Divine, Beyond Good, Chocolat Madagascar, Pacari, Moo Free, Booja-Booja, Seed and Bean, Montezuma, Tony’s Chocolonely, Fairafric, Vego, Willies, Ombar, Mia.

Best rating for palm oil sourcing

Plamil, Ferrero, Mondelēz, Mars, Cocoa Loco, Equal Exchange, Biona, Tesco, Marks & Spencer, Waitrose, Hershey’s.

Middle rating for palm oil sourcing

Vivani, Ritter Sport, Lindt, Nestlé, iChoc, Tesco, Morrisons, Waitrose, Co-op, Sainsbury’s.

Worst rating for palm oil sourcing

Hotel Chocolat, Guylian, Godiva, Lidl UK, Aldi.

Read our feature on palm oil free chocolate for more detail on this.

Cocoa Prices and Poverty

Nearly all of the problems in cocoa are linked to poverty. Most West African cocoa farmers are desperately poor.

Since the 1980s, the average (inflation adjusted) cocoa price has halved. And the really big cocoa news is that governments of Ivory Coast and Ghana are finally starting to take more drastic action on prices.

Cocoa is a partially regulated industry. In Ghana, the national cocoa marketing board Cocobod buys all the cocoa in the country, which it then sells on, paying a fixed price.

In the Ivory Coast the system was liberalised at the behest of the IMF at the end of 1990s, and the system works through private traders. But the Government there started re-regulating in 2011, and it now also controls farm prices.

Both countries have now agreed a minimum export price of $2,600/tonne, with a ‘Living Income Differential’ of $400/tonne to be used to guarantee a farmgate price to farmers of about $1800/tonne.

That is about the same as farmers received before the 2016 price crash, and about 40% more than they received last year.

To try to prevent oversupply, Ivory Coast plans to ‘cap’ its cocoa production at two million tonnes.

This has generated a lot of excitement, although it is worth bearing in mind that, even before the 2016 price crash, cocoa farmers’ average incomes were less than half of the $2.40 per day deemed the cut off for ‘extreme poverty’ in Ivory Coast.

However, it may be the start of governments working together to control cocoa prices more decisively. Commodity agreements to control prices were common in the 1970s, prior to the current era of extreme neoliberalism.

Nearly all chocolate companies have issued statements in favour of the price support. Nestlé and Pladis (Godiva) initially did not, and a SumOfUs petition asking them to garnered over 150,000 signatures, but Nestlé has now put a note of support on its website saying “we support efforts from the governments of Côte d'Ivoire and Ghana to improve living standards.”

It is difficult to see how it could make a huge difference to companies’ bottom lines given that the money that goes to cocoa farmers is only about 3-7% of the final value of a bar of chocolate.

Certification schemes and fair trade chocolate

Finding ethically sourced chocolate

One of the main things that the publicity around child labour has done is led to a huge increase in certification, and between a quarter and a third of all global cocoa production is now grown under a certification label – the most popular being Rainforest Alliance, and then Fair trade.

As these schemes have failed to solve a lot of the problems in the industry, enthusiasm for them has been waning somewhat.“Certification does not seem to significantly increase farmer income, or protect against environmental harms or labour grievances” says the VOICE network.

That doesn’t mean, however, that certification does nothing. It also states:

“There are several ways in which certification plays an important role to make value chains more transparent; it is one of the few ways by which higher prices and premiums can potentially be delivered to the farm gate, and certification plays an important role in supporting farmer organisation.”

Thus, we still think that certification is worth supporting. Both Rainforest Alliance chocolate bars and Fair trade chocolate bars are likely to make a difference, even if it is a small one.

How do Fair Trade and Rainforest Alliance approach deforestation?

Both Fairtrade cocoa and Rainforest Alliance cocoa involve auditing to ensure that farmers are keeping to their standards.

Fairtrade was previously a bit lax on deforestation, but tightened its standards in 2019. Its new standard demands that certified farmers “do not destroy vegetation in carbon storage ecosystems”.

Rainforest Alliance forbids deforestation, and it has developed a special ‘Cocoa Assurance Plan’ after it found 84 certified groups in April 2019 that contained farms in protected areas. It has now paused all new certifications in Ghana and Ivory Coast, while it gets GPS location data on all farms.
 

Fair pricing

As poverty underlies all of the issues in cocoa, pricing is central.It is part of the general Fairtrade model to have a minimum price, which must be paid when the market price falls below it.

In cocoa, however, it is currently lower than the governments’, and won’t be doing anything. Rainforest Alliance has no minimum price.Fairtrade also has a price premium, which goes to the farmers co-op to spend on community projects. Its cocoa premium is $240/tonne, so about 13% of the farmgate price.

Rainforest Alliance has introduced a ‘minimum standard differential’ (basically a premium) of $70 per tonne, although it states that companies ought to pay more.

The average paid in 2019 was around $100 per tonne.This isn’t nothing. But Fairtrade readily admits that its prices are still below the living income level. It calculated a ‘Living Income Reference Price’ – the farmgate price that it believes that farmers need to live on – of $2200 per tonne in Cote d’Ivoire and $2100 in Ghana (equal to an export price of about $3000), plus the premium.

The VOICE network is not impressed, saying “..knowing how much you should pay, while not paying it, cannot be considered sustainable.”

But although the price supports may not be strong enough, as Fairtrade’s premium will be making a difference, we give a full additional mark in our Ethiscore system for Fairtrade-certified produce. As Rainforest Alliance’s premium is less than half the size of Fairtrade’s, it only gets a half.

'Big chocolate' corporate sustainability schemes

Most of the big chocolate companies now have their own sustainability schemes: Mondelēz (Cadbury)’s ‘Cocoa Life’, Nestlé’s ‘Cocoa Plan’, Hotel Chocolat’s ‘Engaged Ethics’, Mars’ ‘Cocoa for Generations’, and the Lindt & Sprüngli ‘Farming Program’.

These are largely focused on farmer training schemes to boost productivity, the execution of Cocoa & Forests Initiative plans, and some roll out of Child Labour Monitoring and Remediation Systems (CLMRS).

CLMRS schemes empower local representatives to tackle child labour, and have been found to have some success. And as Nick Weatherill, Executive Director of the International Cocoa Initiative (an organisation funded by the chocolate companies to tackle child labour), told us, “currently only about 10-20% of farmers in West Africa are covered by them.”

Company efforts to ramp them up are thus to be encouraged. However, overall these company schemes tend to be quite vague about what they actually contain and shouldn’t be seen as equivalent to Rainforest Alliance or Fairtrade.

Lindt, Mondelez, and Nestlé’s schemes do contain an auditing process, but the other schemes do not mention one. Many of them talk in vague terms about paying decent prices, but figures are lacking.

It is also pretty confusing for each company to have a scheme with its own special name, as if it is an external certification scheme, when these schemes are basically the companies’ own corporate responsibility programmes. A cynic might think that that is part of the point.

Campaigning for cocoa farmers

The Co-operative Party is running a campaign to try to protect Ghanaian farmers, including cocoa farmers, from high post-Brexit tariffs.

It points out that without a Brexit deal, when the transition period ends and the UK leaves the EU on 1 January, exorbitant tariffs will be slapped on Ghanaian farmers’ exports, potentially doing severe damage to their ability to sell cocoa to the UK on decent terms. To sign their petition, go to their website.

Key to letters in score table after brand name e.g. Pacari [F,O,S,Vg]

• F = fair trade
• O = Organic
• S = Sustainable (see Product Sustainability story in Positive Scores column)
• Vg = Vegan