Baseline Assessment: Mapping Working Conditions and Labor Risks in Olam’s Cocoa Supply Chain in Nigeria

Olam Food and Ingredients (ofi) — formerly Olam International Ltd — joined the Fair Labor Association (FLA) in 2012. It is committed to expanding its accountability framework within all cocoa-sourcing countries’ supply chains. The Cocoa Compass launched in 2019 set ambitious goals to tackle critical issues in the cocoa supply chain and support sustainability in cocoa production by 2030. ofi committed to sourcing 100% traceable and sustainable cocoa from its direct supply chain.

FLA conducted a baseline assessment of ofi’s cocoa supply chain in Nigeria as part of its 2020-2021 labor standards due diligence cycle. The assessment sought to examine the supply chain, the stakeholders and workers involved, the status of the company’s internal supply chain and labor management systems, and the associated labor risks.

FLA collected qualitative and quantitative data in line with its seven-step assessment approach. The assessor team collected primary data through in-depth individual interviews and focus group discussions (FGDs) during July and August 2021.

ofi Nigeria has an internal monitoring system (IMS) in place for its suppliers. Certified farmers participate in ofi’s sustainability programs and have written contracts with the company, which communicates labor standards requirements to them and continually monitors implementation. Therefore, this aspect of ofi’s supply chain is fully traced.

Non-certified farmers, also known as conventional suppliers, are not traced and do not participate in the company’s sustainability program. The assessors found a high risk of non-compliance for the following code elements:

  1. Employment Relationship: None of the producers has a formal employment written contract with the workers. Recruitment is verbal and informal; no age verification documentation is presented. The workers agree on a daily rate of pay before being engaged for a specific task.
  2. Child Labor: The field assessment was completed during the school term and assessors did not observe any children working. However, three of the households visited reported that they engage children between 6 and 14 years in farm tasks. At least seven children from these households were engaged in harvesting, transporting, packing, and extracting cocoa, according to their parents.
  3. Health, Safety and Environment (HSE): While farmers wore adequate personal protective equipment (PPE) during pruning and agrochemical application, they did not wear adequate PPE (especially for their heads) during harvesting. None of the conventional farmers or their workers were trained on agrochemical use, nor did they undergo any medical examinations.

Assessors found that there was a limited risk of non-compliance for Hours of Work, Non-Discrimination, Harassment and Abuse, Forced Labor, and Compensation. Freedom of Association and Collective Bargaining are difficult to evaluate since no workers’ associations exist in any of the five communities visited, but no farmers or workers raised any concerns about freedom of association.