Olam reaches milestone of 100% child labour cocoa supply chain monitoring

Cocoa specialist Olam Food Ingredients (OFI), has delivered a major milestone of establishing child labour monitoring across its entire network of sustainability programmes operating in nine countries, writes Neill Barston.

The company, which has its broader group headquarters in Singapore, confirm that its schemes reach a total of 183,000 households, with its actions also including 100% deforestation monitoring, covering nearly 12,000 suppliers.

Its achievements follow in the wake of its recently release annual report for 2020, which noted considerable progress against the wider Olam group’s goals. The ingredients division’s latest accomplishment forms part of its Cocoa Compass initiative, which outlines its ambitions for the future of the sector that provides support across the value chain of the industry.

In its latest report, the business confirmed that along with its 100% direct supply chain traceability target reached last year, it has hit its remaining 2020 milestones in collaboration with customers and partners and shares progress towards its 2024 and 2030 goals, which include targets on living incomes, child labour and natural capital.

The Child Labour Monitoring and Remediation System (CLMRS) developed by the cocoa business, in collaboration with the Fair Labor Association (FLA), covers 100% of its managed sustainability programmes and is a ground-breaking new tool for monitoring child labour in Cameroon, Uganda, Brazil and Indonesia.

As the business noted, this remains a critical step towards Cocoa Compass’s goal of eradicating child labour from the cocoa supply chain by 2030. With training and the help of a smartphone, community leads and field officers now collect detailed social data on individual farming households, helping to identify children at risk and take faster, more effective action.

This data paints a clearer picture of child labour in the supply chain and the interventions needed. For example, in Côte d’Ivoire, which has a reported high prevalence of child labour, 79% of school-aged children attend school and 75% of children identified in a situation of child labour combine school and work.

Notably, in 97% of child labour cases, children were working for a parent or a relative. These findings are in line with the recent NORC study from the University of Chicago which showed that school attendance has increased significantly in Ghana and Ivory Coast in the past ten years. This indicated that actions like establishing birth certificates, building classrooms, providing school equipment and setting up Village Savings and Loans Associations are contributing to improving access to education.

As the wider industry has acknowledge in the light of the latest NORC report, such progress, while encouraging, requires significant scaling up in terms of reaching an even greater number of communities within West Africa.

Sector challenges

According to the NORC report, a total of 1.56 million children are still subject to child labour across Ghana and Ivory Coast (with the majority of that figure categorised as hazardous duties), and its findings indicated that this figure represented an actual increase during the past five years, with supply chains being put under further pressure amid the pandemic.

As previously covered, a key support mechanism for farmers in the region was introduced last October (the Living Income Differential), based on a $400 a tonne cocoa premium paid by industry in a bid to support farmers, many of whom remain below UN defined poverty levels.

However, this month, it emerged that the governments of Ghana and Ivory Coast have reduced the farm gate price of cocoa by 25%, amid major concerns surrounding surplus supplies – which effectively wipes out the financial gains for farming communities made through the LID scheme.

Gerard A. Manley, CEO of OFI’s Cocoa Business, said: “Child labour anywhere in the cocoa supply chain is unacceptable, but the risk has increased over the past year as schools have closed due to the pandemic.

“By introducing this level of monitoring across all our cocoa sourcing countries, we want to make sure that cases are identified and dealt with as quickly as possible. Our data shows that there is still a long way to go to eradicate child labour from the cocoa supply chain, but this insight is helping us to tailor our interventions to the situation on the ground and focus on how we can make the biggest impact.”

The cocoa business is also sharing progress towards cutting its natural capital costs for the first time today, reporting a 13% reduction in its processing operations and a 4% reduction in its agriculture operations in the year 2019/20 compared to the previous year.

As Olam noted, by 2030, it aims to reduce natural capital costs by 30% across its global cocoa supply chain. The company is one step closer to achieving that goal after introducing satellite technology to map tree cover across its entire direct cocoa supplier network. Combining this data with historic deforestation rates, existing forest cover and national park boundaries, it can identify deforestation risk hotspots and take targeted action.

Manley added: “Through the hard work of our teams and the support of our customers and partners, we have now achieved 100% traceability and 100% deforestation monitoring in our direct supply chain, and 100% child labour monitoring in all our managed sustainability programmes.

“This is just the beginning. The unprecedented level of data and insight at our fingertips will help us identify how and where to act to achieve our longer-term ambition of a professionalised and quality-focused cocoa supply chain, one where farmers are earning a living income, child labour is eliminated, and the natural world is protected.”

The Cocoa Compass report also sets out OFI’s work with Sustainable Food Lab, Global Living Wage Coalition (GLWC), the Anker Research Network and the Living Income Community of Practice to publish the first-ever living income reference values for Cameroon, Nigeria, and Papua New Guinea, as well as an updated Côte d’Ivoire level. These benchmarks will allow the cocoa business to determine the existing living income gaps in its direct cocoa supply chain and work towards its target for 150,000 farmers to be earning a living income by 2030.

All cocoa data collected by OFI, including child labour and deforestation data, will feed directly into AtSource, the company’s sustainability insights platform, giving customers unprecedented visibility of the social and environmental impact of their cocoa, including full traceability for all of OFI’s directly sourced cocoa.


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