English

Assessment of Nestlé's Standard Cocoa Supply Chain in Côte D'Ivoire

Publication date: 
Friday, September 2, 2016

Since 2012, the FLA has assessed working conditions at farms in Côte d’Ivoire producing cocoa for Nestlé under the company’s “Nestlé Cocoa Plan.” This sustainability initiative focuses on the 20 percent of the company’s cocoa supply chain in which Nestlé works collaboratively with its tier-1 suppliers to maintain visibility into labor standards at the suppliers’ farms and enact its commitment to the FLA Workplace Code of Conduct.

For the great majority of Nestlé’s cocoa procurement, the company maintains no direct relationships with farmers, and relies on a network of intermediaries to secure access to the cocoa used in the company’s products. For this assessment of Nestlé’s “standard supply chain,” the FLA worked with one of the company’s tier-1 suppliers to identify an appropriate tier-2 supplier (also known as a “traitant”) for an assessment of working conditions at farms outside of the “Nestlé Cocoa Plan.”  Assessors visited farms in four communities, interviewing a total of 110 farmers and 322 farm workers, along with staff at both the tier-1 and tier-2 suppliers, and a number of additional intermediaries, such as truck drivers, warehouse workers, and others. The body of this report describes the structure of the supply chain they encountered, and the working conditions at the farms at the end of the supply chain.

Labor Standards Outside the “Nestlé Cocoa Plan”
When FLA assessors visit farms producing cocoa for the “Nestlé Cocoa Plan,” they assess working conditions against nine broad categories outlined by the FLA Workplace Code of Conduct, which has been adopted by Nestlé. This Code of Conduct forbids child labor and forced labor, articulates a number of health and safety standards, and requires reasonable hours of work and fair compensation, among other provisions. While Nestlé’s adoption of this Code of Conduct obligates its implementation throughout the company’s supply chain, FLA assessors found little awareness of this code and its provisions among the farmers and farm workers of the “standard supply chain.”

Assessors did find that some of the farms supplying to the tier-2 supplier had achieved a third-party sustainability certification for their cocoa from either Utz or the Rainforest Alliance. To achieve these certifications, farmers must be trained on the certifying body’s Code of Conduct (which is similar, but not identical, to the Nestlé Code of Conduct), and implement the certifying body’s sustainability requirements at the farm level. Assessors found sustainability training and some sustainability monitoring among the 30 percent of farms that both produce for the tier-2 supplier and have also achieved certification. The tier-2 supplier maintains staff responsible for training these producers on the labor and environmental standards they must meet to earn certification, and for monitoring their compliance in preparation for assessment by the certification body.

For the 70 percent of farms outside of any certification program, however, FLA assessors found no evidence of any training on the labor standards articulated by Nestlé’s Code of Conduct, or any monitoring to ensure that working conditions meet Nestlé’s standards. The assessment team reports that in addition to the lack of monitoring and remediation systems, they found labor-rights issues that mirror those sometimes found on Nestlé Cocoa Plan farms (which do have monitoring and remediation in place), such as child labor, health and safety issues, a lack of effective grievance procedures, and forced labor risks.

Supply Chain Traceability and Internal Management Improvements
Despite the many actors involved in the “standard supply chain,” FLA assessors found that the systems and information necessary to fully trace this part of the supply chain do exist. Because of the need to track the cocoa coming from farms involved in certification programs, and to provide training at these farms, assessors found that the tier-2 supplier maintains traceability mechanisms that could be leveraged for non-certified farms as well.

Assessors also found that while the tier-2 supplier does not maintain documentation on the non-certified farms in the supply chain, that this information could be obtained. The tier-2 supplier works with a number of intermediaries known as “pisteurs” (“trackers” in English) who maintain records on the farms where they collect cocoa beans. The assessors note that while many pisteurs are reluctant to share their information, if supply chain stakeholders could work together to combine the pisteurs’ records with the tier-2 traceability system, it would be a first step toward organizing and better implementing labor standards across this part of the “standard supply chain.”

The FLA recommends that Nestlé work with its tier-1 and tier-2 suppliers to introduce an electronic registration system of all supplier farms, based on the data currently maintained by the pisteurs. With this infrastructure in place, then, the FLA recommends that Nestlé and its suppliers develop a five-year plan to bring both internal labor monitoring and remediation of violations to the 70 percent of the supply chain not currently covered by a certification standard. This work would require support from Nestlé to distribute its illustrated Code of Conduct to the standard supply chain, expand the labor-standards training and monitoring functions performed by the tier-2 supplier, and strengthen farmers’ contractual relationships to incorporate labor standards.

Farm and Community Level Improvements
Finally, the FLA recommends that Nestle and its tier-1 and tier-2 suppliers work together to make needed improvements at supplier farms and communities that will improve the quality of life for farmers and workers and improve working conditions at the farms. For example, FLA assessors identified that many farmers could increase their yields and therefore their incomes with some simple inputs such as new cocoa seedlings, fertilizers and plant nutrients, and training on best agricultural practices. Because low incomes are one driver of child labor at the farms, any inputs that help lift farmers’ economic standing may help remediate this persistent labor-rights issue in cocoa supply chains.

The full assessment report includes further recommendations for improvements at the farm and community level (including further improvements intended to reduce child labor), and further recommendations for enhancing the internal management system of the standard supply chain. Implementing such recommendations would begin to bring Nestlé’s full supply chain under the requirements of its established Workplace Code of Conduct. 

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