Human Rights Due Diligence in the Cocoa Sector: What is the role of retailers?  

The International Cocoa Initiative (ICI), in collaboration with the European sustainable cocoa platforms* recently organised the webinar on the topic of human rights due diligence in the cocoa sector: The role of retailers”. It brought together over 200 participants from a large variety of organisations, including cocoa and chocolate companies, public sector entities, certifiers, NGOs, CSOs, academia, as well as consultants and individual experts.  

Why this webinar? 

In the cocoa sector, where child labour and forced labour are recognised as salient human rights issues, retailers, like any other company, are required to respect human rights within their direct operations and throughout their supply chain, by conducting ongoing, risk-based human rights due diligence (HRDD). These requirements are reinforced by new legislation, such as the European Corporate Sustainability Due Diligence Directive (CS3D) and the EU Forced Labour Regulation. This does not come without practical challenges for retailers, including: 

• An indirect sourcing model: Operating at the end of the supply chain (upstream), retailers feel that they have little influence over their supply chains, and especially over what happens in cocoa origins. 

• Product diversity: Retailers are dealing with a vast range of products and each commodity can have its own set of human rights risks. Yet, they understand the need to prioritise those products for which they have more direct influence, such as their private label chocolate products. 

• Supplier diversity: A wide range of suppliers means varying contexts, coupled with the fact that many are SMEs which may lack resources to properly conduct HRDD. 

While retailers show willingness to take the necessary steps to conduct human rights, and in particular to address child labour and forced labour in their cocoa supply chains, they aren’t always sure how to implement it, as stated by Mark de Waard (IDH).  He also noted that while several initiatives and pilot projects exist, the biggest challenge is to scale up across the full supply chain. Maxime Ghafari (IFCD) echoed this, noting that clarifying the retailers’ role in HRDD is key. 

Sophia Gnych (OECD) reiterated that retailers have a responsibility to carry out due diligence in their own operations, for their products and services as well as in their supply chain, beyond contractual and first tier relationships. In doing so, retailers hold a powerful role in driving the uptake of HRDD among their suppliers. Ruben Bergsma (Chocolate Scorecard) suggested that retailers looking to advance their efforts toward HRDD implement the following: having a sustainability strategy that applies to cocoa, a broad-scope code of conduct for suppliers, use the influence and leverage they hold in their supply chains, set up direct supply chains or work with international partners, and join platforms and multistakeholder initiatives.

What works?  

Risk assessment and supplier Code of Conduct 

For Colruyt and Waitrose, the first step in an HRDD process is to have a dedicated strategy that applies to cocoa (as was also recommended by Ruben) and to make sure that human rights are being upheld by their suppliers.  Waitrose does this by ensuring compliance with their human rights and sourcing policies. Broader human rights risks are then addressed through annual assessments of salient human rights risks and specific human rights impact assessments. Similarly, Colruyt undertakes high-level risks assessments, including commitments related to child labour, also health and safety, working hours and the environment in their supplier code of conduct, while conducing audits in high-risk areas.

Traceability through direct supply chain  

Karen Janssens (Colruyt Group) emphasised the importance of building relationships and collaborating with all actors in the supply chain to ensure effective HRDD.  In a pilot project with one bar of their private label chocolate, they have been able to work together on quality and productivity improvement, diversification, reforestation, and price, which ultimately lead to a 40% increase in farmer income. Colruyt has since established 13 direct supply chains in high-risk commodities. This type of initiative could achieve large scale impact through joint sourcing with smaller retailers (which would require a neutral broker to guide and facilitate for pre-competitive collaboration). At the same time, speakers recognised the need to move beyond only certified cocoa, currently mass balance cocoa is a barrier to full traceability - something that retailers, like any other company, will be forced to achieve in order to comply with emerging EU legislation. Yet, Colruyt argued that traceability is not always 100% segregation, and retailers should advance slowly starting with semi-traceable cocoa. In this way, the company has established direct supply chains on a mass balance system, by identifying 120 farmers through a Child Labour Monitoring and Remediation Systems (CLMRS) and paying premiums directly to the farmers. 

Collective action is key 

The speakers all agreed that no one can do HRDD alone. For Chloé Rotureau and Anam Bashir Ghafoor (Waitrose) this has materialised  through a partnership with Tony’s Open Chain. This partnership gives Waitrose access to a traceable and fully segregated supply chain, moving away from the mass balance approach through the CLMRS in Ghana and Côte d’Ivoire. In doing so, Waitrose becomes a Tony’s Open Chain mission ally, committing to reduce the prevalence of child labour through adhering to their five sourcing principles.  

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