Last month five organisations representing some of Europe’s biggest cocoa, coffee, palm oil and soy traders, issued a statement challenging key elements of the European Commission’s regulatory proposal on deforestation-free supply chains.
Specifically, they claimed that the Commission’s proposal risks damaging the lives of smallholders, who they say “will be negatively affected if the provisions [in the proposed regulation] are not sufficiently adapted to encourage their participation in deforestation-free supply chains”.
The dispute has escalated with 35 smallholder organisations representing more than 34,000 Ivorian cocoa smallholders writing an open letter to European policymakers stating that these industry representatives do not speak on their behalf.
One of the signatories of the smallholders’ letter, Bakary Traoré, Executive Director of the NGO IDEF and Lead of the CSO Working Group on Transparency in the Cocoa Sector in Côte d'Ivoire, said that the industry letter was more about “safeguarding major companies’ stranglehold on the sector, than improving the lives of smallholders’ lives who are toiling and trying to survive while the companies make billions in profits per year."
The [industry] letter assumes to speak on behalf of smallholders, but it does nothing of the sort ... -- the smallholder groups
The industry letter was written by the European lobby groups representing major traders in agricultural commodities, including the European Cocoa Association (ECA), which represents large multi-national cocoa traders.
They expressed specific concerns about “requirements along the supply chain, in particular, the element of connecting geo-localisation data from farm plot-level to the placing on the EU market”.
The smallholder groups dismiss this claim, and said in their letter: "The industry players who are trying to prevent a traceability system involving the geolocation of plots and the identification of each producer, are in reality campaigning for nothing to change.”
“The [industry] letter assumes to speak on behalf of smallholders, but it does nothing of the sort,” said the smallholder groups. No one can claim to defend our interests and work for our happiness better than we can.”
We strongly oppose the claim that we are against traceability systems and geo-mapping. On the contrary, we support any effort to strengthen existing systems as this is an essential condition for achieving a sustainable and modernised cocoa sector -- ECA statement
In response, the ECA told ConfectioneryNews: “We strongly oppose the claim that we are against traceability systems and geo-mapping. On the contrary, we support any effort to strengthen existing systems as this is an essential condition for achieving a sustainable and modernised cocoa sector.”
The ECA also pointed out that the letter does not refer specifically to the cocoa sector and does not call for the removal of traceability.
“On the contrary, it calls for the strengthening of national traceability systems and for practical solutions. In particular, it states that the signatory associations commit themselves to increasing transparency and traceability along the supply chain.
“We call for sector-specific requirements and guidance to take into account the ‘important differences that exist between the different commodities listed in the EU Regulation in terms of chains of custody methods as well as the complex dynamics of each targeted commodities’ supply chain’ – and not to adopt a one-size-fits-all approach as considered in the current legislative proposal.”
Many cocoa farmers in Côte d’Ivoire, and Ghana live beneath the poverty line, defined as $1.90 by the UN, and a 2015 NGO-led Cocoa Barometer study estimated that cocoa growers in Côte d’Ivoire earn approximately 50 US cents a day and those in Ghana approximately 84 cents a day.
Given their precarious position, many are fearful of putting their livelihoods at risk by speaking out publicly, and have signed the letter anonymously.
In the letter, published online, the cocoa farmers say: “Our members, especially the small producer organisations, are often afraid to speak out on these issues. Indeed, they are dependent on selling their products to the large traders of the European Cocoa Association, who have become powerful because of the way the sector is structured.”
The cocoa farmers’ argument regarding geo-location requirements is strengthened by consumer-facing companies in the chocolate industry including Mars Wrigley and Ferrero are carrying out such mapping in their own supply chains.
In response to this article, international chocolate companies reiterated their position on sustainability and traceability in their cocoa supply chain.
Francesco Tramontin VP Group Public Policy Center at Ferrero said: “We are able to trace all our relevant raw materials back to origin and palm oil and cocoa are mostly traceable back to plantation/farmer. Traceability is an essential building block of a fair and sustainable supply chain.
“Farmer mapping is a tool for improving traceability of raw materials like cocoa. Knowing the location and size of each farm makes it possible to trace raw materials to the farm gate level. This allows us to know where, how and by whom our raw materials were grown so that we can target interventions and prevent risks such as deforestation which is in line with what stated by the proposed EU Rules
Mark Taylor, Senior Director, Strategic Sourcing, Hershey Trading, told ConfectioneryNews: “The Hershey Company applauds efforts made by the governments of Côte d’Ivoire and Ghana, as well as a number of our suppliers, to establish systems that aim to improve the traceability of cocoa along the supply chain. We encourage an accelerated timeline for full implementation of credible traceability systems that include the polygon mapping of cocoa farms as a critical element in reinforcing commitments by governments and industry to achieve a more transparent, accountable, and sustainable cocoa sector.”
Louisa Cox, Senior Director, Mars Wrigley Global Public Affairs, said: “Transparency and traceability are key to achieve a deforestation free and sustainable cocoa supply chain. We welcome the European Commission ’s proposal to require the geo-localisation coordinates as part of the due diligence process, provided that it is possible to mix products that have geo-localisation coordinates attached. To support companies in fulfilling their due diligence obligations, commodity-specific guidance that outlines additional information on what is needed to address the specific risk of each commodity’s supply chain would help companies comply with the legislation. We believe that to minimize deforestation risk for cocoa, geo-coordinates are not sufficient and polygon mapping is required.
“GPS polygons allow tracing of the entire boundary of each farm to help verify the cocoa bought is grown within those boundaries and not in any nearby protected forests. It is more accurate than the traditional geo-coordinates and in turn helps protect forests and refine yield estimates
“In addition to an EU framework for due diligence to address deforestation, we believe that it will be essential for the EU to pursue the establishment of long-term partnership agreements with the governments of cocoa-producing countries, ensuring that all relevant stakeholders are involved, including local community representatives, farmers, industry, and civil society.
The ECA also made it clear that it welcomes the proposed EU Regulation on deforestation-free products, “which has the potential to contribute to a deforestation-free cocoa supply chain when supported by an effective enabling environment in cocoa-producing countries.
"We also express our support for the traceability requirement and geo-localisation while underlining that the EU Regulation must be implementable and workable for all stakeholders across the supply chain, and in compliance with local rules and regulations'”.