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Nestle Audit Finds Child Labor Violations in Cocoa Supply


By Dermot Doherty and Stanley James – Jun 29, 2012 9:51 AM ET [from Bloomberg]

Nestle SA (NESN) needs to step up measures to combat child labor in the Ivory Coast cocoa industry, according to a study requested by the Swiss food company that found “numerous” violations of its internal work rules.

The maker of KitKat chocolate bars needs to improve internal monitoring to fight the practice as four-fifths of its cocoa comes from channels for which information on labor is opaque, the Fair Labor Association said in a report. Nestle plans new monitoring programs in two cooperatives this year and in 30 by 2016, with the FLA assessing progress, the Vevey, Switzerland-based company said in a response.

Nestle buys about a 10th of the global cocoa production and more than a third of that comes from the Ivory Coast, the world’s biggest producer. About 20 percent of the cocoa the chocolate maker gets from that country can be traced because it comes from Nestle’s sustainable-farming program, while the rest comes from the “standard” supply chain, which isn’t transparent, according to the report.

“Child labor is a more persistent problem than anybody believed,” FLA President Auret van Heerden said by phone. “What we’re talking about is changing the way companies in the industry do business, and Nestle has taken the first step.”

About 89 percent of Ivory Coast children were involved in growing cocoa, according to a 2008 government survey.

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