Harvard Case - Big Chocolate: Child Slavery in the Cocoa Industry
"Big Chocolate: Child Slavery in the Cocoa Industry" Harvard business case study is written by David Bishop, Jamie Chan. It deals with the challenges in the field of Business & Government Relations. The case study is 24 page(s) long and it was first published on : Sep 28, 2021
At Fern Fort University, we recommend a multi-pronged approach to address the issue of child labor in the cocoa industry. This approach involves collaborative efforts between governments, multinational corporations, and civil society organizations to create a sustainable and ethical cocoa supply chain.
2. Background
This case study focuses on the complex issue of child labor within the cocoa industry, specifically in West Africa. The case highlights the challenges faced by chocolate companies in ensuring ethical sourcing of cocoa beans, while grappling with the realities of poverty, lack of education, and weak governance in cocoa-producing countries. The main protagonists are the chocolate companies, the cocoa farmers, and the children who are exploited for labor.
3. Analysis of the Case Study
This case study can be analyzed using a combination of frameworks:
- Porter's Five Forces: The cocoa industry exhibits high bargaining power of buyers (chocolate companies) due to the commodity nature of cocoa beans. High threat of new entrants exists due to the low barriers to entry in cocoa farming. However, low threat of substitutes exists due to the unique flavor and properties of cocoa. Low bargaining power of suppliers exists due to the large number of cocoa farmers. High rivalry among existing competitors exists due to the price-sensitive nature of the market.
- Corporate Social Responsibility (CSR) Framework: This framework highlights the ethical and social responsibilities of corporations, including their impact on human rights, environmental sustainability, and community development. The case study demonstrates the ethical dilemma faced by chocolate companies in balancing profit maximization with their social responsibility to ensure ethical sourcing of cocoa.
- International Business Framework: This framework emphasizes the complexities of operating in a globalized environment, including cultural differences, political risks, and legal regulations. The case study showcases the challenges of implementing ethical sourcing practices across diverse and complex international supply chains.
4. Recommendations
- Government Policy and Regulation:
- Strengthen Labor Laws: Governments in cocoa-producing countries should strengthen labor laws and enforcement mechanisms to effectively prohibit child labor and protect vulnerable workers.
- Promote Education and Social Programs: Investing in education and social programs for children in cocoa-producing communities can reduce poverty and provide alternatives to child labor.
- Develop Sustainable Farming Practices: Governments should support the development of sustainable farming practices that increase cocoa yields and improve farmer livelihoods, reducing the need for child labor.
- Corporate Social Responsibility:
- Implement Ethical Sourcing Policies: Chocolate companies should adopt strict ethical sourcing policies, including third-party verification and traceability systems to ensure that cocoa beans are not sourced from farms using child labor.
- Invest in Community Development: Companies should invest in community development programs that provide education, healthcare, and economic opportunities for cocoa-producing communities, empowering them to break the cycle of poverty and child labor.
- Transparency and Accountability: Companies should be transparent about their sourcing practices and hold themselves accountable for ensuring ethical and sustainable cocoa production.
- Collaboration and Partnerships:
- Public-Private Partnerships: Governments and chocolate companies should collaborate on initiatives to combat child labor, such as joint funding of education and social programs, and the development of sustainable farming practices.
- Civil Society Engagement: Engaging with civil society organizations, including NGOs and labor rights groups, can provide valuable insights and support in developing and implementing effective solutions to child labor.
- International Cooperation: Governments and international organizations should work together to address the root causes of child labor in cocoa-producing countries, including poverty, lack of education, and weak governance.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: The recommendations align with the core competencies of governments, corporations, and civil society organizations, leveraging their strengths and resources to address the issue of child labor.
- External customers and internal clients: These recommendations consider the needs of consumers who demand ethical and sustainable products, as well as the interests of chocolate companies in maintaining their reputation and ensuring long-term sustainability.
- Competitors: The recommendations encourage a collaborative approach, recognizing that the issue of child labor requires collective action from all stakeholders in the cocoa industry.
- Attractiveness: The recommendations are attractive due to their potential to create a more ethical and sustainable cocoa supply chain, benefiting consumers, farmers, and the industry as a whole.
6. Conclusion
Addressing child labor in the cocoa industry requires a multi-faceted approach that involves governments, corporations, and civil society organizations working together. By implementing the recommended strategies, stakeholders can create a more ethical and sustainable cocoa supply chain, protecting children's rights and ensuring a brighter future for cocoa-producing communities.
7. Discussion
- Alternative Solutions: While the recommended approach focuses on collaboration and collective action, alternative solutions could include stricter regulations, boycotts, or legal action against companies that fail to address child labor.
- Risks and Key Assumptions: The success of these recommendations depends on the commitment and cooperation of all stakeholders. Key assumptions include the willingness of governments to enforce labor laws, the commitment of chocolate companies to ethical sourcing practices, and the effectiveness of community development programs.
- Options Grid: An options grid could be used to analyze the feasibility, effectiveness, and cost of different solutions, including government regulations, corporate initiatives, and partnerships with civil society organizations.
8. Next Steps
- Develop a roadmap: Create a detailed roadmap outlining the implementation timeline, key milestones, and responsible parties for each recommendation.
- Establish monitoring mechanisms: Implement monitoring mechanisms to track progress and ensure accountability for all stakeholders involved in addressing child labor in the cocoa industry.
- Continuous evaluation: Regularly evaluate the effectiveness of the implemented strategies and make adjustments as needed to ensure ongoing progress towards a child-labor-free cocoa supply chain.
This case study solution provides a comprehensive framework for addressing the complex issue of child labor in the cocoa industry. By implementing these recommendations, stakeholders can work together to create a more ethical and sustainable future for the cocoa industry, ensuring the well-being of children and the long-term prosperity of cocoa-producing communities.
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Case Description
Dick Marty was a Swiss Parliamentarian and former state prosecutor. In 2015, Marty led the Swiss Coalition for Corporate Justice (SCCJ), an alliance of Switzerland-based NGOs, in launching the Responsible Business Initiative (RBI) campaign. The proposed initiative aimed to introduce legal requirements for companies to undertake human rights and environmental due diligence under the Federal Constitution. If passed, corporations based in Switzerland could face legal risks for violations committed abroad. Numerous large corporations adamantly opposed the RBI, including Swiss cocoa giant Nestlé. The company had been at the center of multiple lawsuits and investigations, accused of aiding and abetting the enslavement of child laborers on cocoa plantations in West African countries since the 1990s. Yet, despite multiple efforts to reform Nestlé's supply chain, the child slavery problem persisted. In November 2020, the RBI was narrowly rejected in a national referendum. Marty and the SCCJ pondered how they could strive for corporate accountability in Switzerland. This case delves into concepts of business ethics, business law, corporate accountability, supply chain management, and modern slavery risks in global business environments. Students will explore the complex and pervasive issue of child labour in the global cocoa supply chain, discussing how and why the problem remains, despite broad public pressure, national and international laws, and even companies' own commitments to eradicating child labour. This case will encourage students to contemplate the problem of child slavery and accountability of multinational cocoa giants from diverse stakeholder perspectives.
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