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Olam Cocoa commits to living incomes for farmers, a child labour free supply chain

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LONDON, UK – Olam Cocoa announces its sustainability ambition for the future of the cocoa sector. Cocoa Compass aims to support the creation of an environmentally positive, professionalised and quality focused cocoa supply chain comprising farmers earning a living income and whose children have access to education.

The company is tackling the most pressing challenges currently facing the cocoa industry, and today outlines its plans to address these issues. Cocoa Compass targets areas for action that will have the greatest positive impact under the three pillars of Focused on Farmers, Empowered to Grow and Investing in Nature.

Aligned with the United Nation’s Sustainable Development Goals (SDGs)[1] and with milestones for action in 2020 and 2024, Cocoa Compass sets concrete goals for 2030 across the company’sglobal, direct cocoa supply chain. These goals address living incomes for farmers, child labour, education, deforestation, and the environment to help achieve Olam Cocoa’s vision for the future of the cocoa sector:

  • Improve cocoa farmer livelihoods and enable 150,000 cocoa farmers to achieve a defined living income[2] level, not just lift them out of poverty (the extreme poverty line for an average cocoa growing family in Côte d’Ivoire is USD$2,300 per year and the living income line is USD$7,300 per year)[3]
  • Eliminate child labour
  • Ensure all children of cocoa farmers have access to education
  • Protect forests through a net increase in tree carbon stock[4]
  • Mitigate environmental impact through a 30% reduction in Natural Capital costs[5]

Gerard A. Manley, CEO of Olam Cocoa, comments:

“For over a decade with our customers and partners, we have been present on the ground, supporting cocoa communities around the world to improve their livelihoods and protect forests, while also providing a stable route to market for farmers through in-country cocoa processing. With our living income goal, we are focusing our efforts on supporting the farmers we believe can be the backbone of a sustainable cocoa supply chain, while continuing to provide holistic support to all cocoa farmers in our sustainability programmes. We know there is still more to do which is why we are challenging ourselves, and the industry, to have an even greater positive impact on the future of cocoa.”

Cocoa Compass builds on Olam Cocoa’s 15 years of sustainability progress, achieved in partnership with its customers, governments, NGOs and farming communities, and in line with Olam International’s purpose to re-imagine global agriculture and food systems. The company has already achieved 100% traceability of its sustainable supply chain in Côte d’Ivoire and Ghana under its 2020 traceability commitment[6] and its pledge to combat deforestation as part of its Cocoa & Forests Initiative action plans. Other highlights include paying USD$136 million in sustainability premiums to farmers and farming cooperatives in partnership with customers, issuing over 64,000 tailored Farm Development Plans to increase farmers’ productivity and incomes through the Olam and Farmers Information System, and establishing Child Labour Monitoring and Remediation Systems[7] which cover 95,000 cocoa farmers in Côte d’Ivoire and Ghana.

Andrew Brooks, Head of Cocoa Sustainability, concludes:

“Transparency and traceability are core to Cocoa Compass. We remain focused on leveraging social and environmental insights to refine our sustainability programmes to meet the needs of farmers and their communities. AtSourcewill be the platform through which we deliver these programmes in cocoa growing regions and through which we are able to better understand and report the improvements required to reach our goals. It is tailored towards achieving the objectives of both the Cocoa Compass strategy and our customer’s own sustainability goals.”

The company will publish an annual Cocoa Compass Impact Report to share data collection methodology and update on progress against its goals.

[1] SDGs addressed in Cocoa Compass: 1. No poverty, 2. Zero Hunger, 3. Good Health & Wellbeing, 4. Quality Education, 5. Gender Equality, 8. Decent Work, 10. Reduced Inequalities, 12. Responsible Consumption and Production, 13. Climate Action, 15. Life on Land and 17. Partnerships for the Goals.

[2] The Global Living Wage Coalition definition is an income that covers basic needs of food, water, housing, education, healthcare, transport and clothing, as well as allowing for unexpected costs.

[3] Fairtrade International Cocoa Farmer Income Report, 2018

[4] Tree carbon stock takes into account the amount of land being used for cocoa farming versus the amount of forest in a supply chain and the quality of the trees.

  • 1 ha of cocoa trees = 40 tonnes of carbon (Somarriba et al 2013)
  • 1 ha of forest trees = 155 tonnes of carbon
  • 1 ha of agroforestry cocoa = 130 tonnes of carbon

[5] Natural Capital assesses land use change, water usage, greenhouse gas emissions and fertiliser levels, amongst other things, to produce a total impact metric which Olam Cocoa will use to evaluate and focus its sustainability efforts.

[6] Olam Cocoa has committed to be 100% traceable in its global, direct source cocoa supply chain by 2020.

[7] This involves a combination of educating cocoa growing communities, household and farm visits to collect data and track instances of child labour, followed by educating cocoa growing communities about the need to protect children and remediating to withdraw children from hazardous situations.