Olam Food Ingredients reaches targets for 100% child labor and deforestation monitoring

14 Apr 2021 --- Cocoa beans and ingredients supplier Olam Food Ingredients (OFI) has reached its target of 100 percent child labor monitoring across its managed cocoa sustainability programs and 100 percent deforestation monitoring across its direct global cocoa supply chain.

In its first impact report, published today, the company confirms that it has hit its remaining 2020 milestones in collaboration, along with its 100 percent direct supply chain traceability target reached last year.

OFI also shares progress toward its 2024 and 2030 goals, including targets on living incomes, child labor and natural capital.

The established child labor monitoring across Olam’’s managed sustainability programs covers 183,000 households in nine countries, and 100 percent deforestation monitoring across its direct global supply chain, covering almost 12,000 suppliers.

Both achievements are part of Cocoa Compass, OFI’s sustainability ambition for the future of cocoa.

The COVID-19 pandemic has propelled child labor risk within the cocoa supply chain as children haven’t been attending school.

Taking action against child labor
The cocoa business has developed the Child Labour Monitoring and Remediation System (CLMRS) in collaboration with the Fair Labor Association (FLA).

It covers 100 percent of its managed sustainability programs and is describes by OFI as a “ground-breaking new tool” for monitoring child labor in Cameroon, Uganda, Brazil and Indonesia.

This is a critical step toward Cocoa Compass’s goal of eradicating child labor from the cocoa supply chain by 2030.

With training and armed with a smartphone, community leads and field officers now collect detailed social data on individual farming households, identifying children at risk and taking faster, more effective action.

This data paints a clearer picture of child labor in the supply chain and the interventions needed.

For example, in Côte d’Ivoire, which has a reported high prevalence of child labor, 79 percent of school-aged children attend school and 75 percent of children identified in a situation of child labor combine school and work.

In 97 percent of child labor cases, children were working for a parent or a relative.

These findings are in line with last October’s study from the University of Chicago, which showed that school attendance had increased significantly in Côte d’Ivoire in the past ten years, indicating that actions like establishing birth certificates, building classrooms, providing school equipment and setting up Village Savings and Loans Associations are contributing to improving access to education.

COVID-19 exacerbates child labor
Gerard Manley, CEO of OFI’s Cocoa Business, explains how the pandemic has propelled child labor risk.

“Child labor anywhere in the cocoa supply chain is unacceptable, but the risk has increased over the past year as schools have closed due to the pandemic. By introducing this level of monitoring across all our cocoa sourcing countries, we want to make sure that cases are identified and dealt with as quickly as possible,” he says.

“Our data shows that there is still a long way to go to eradicate child labor from the cocoa supply chain, but this insight is helping us to tailor our interventions to the situation on the ground and focus on how we can make the biggest impact.”

The cocoa business is also sharing progress toward cutting its natural capital costs for the first time, reporting a 13 percent reduction in its processing operations and a 4 percent reduction in its agriculture operations in 2019/20 compared to the previous year.

Tapping into big data
By 2030, OFI aims to reduce natural capital costs by 30 percent across its global cocoa supply chain. The company is one step closer to achieving that goal after introducing satellite technology to map tree cover across its entire direct cocoa supplier network.

Combining this data with historical deforestation rates, existing forest cover and national park boundaries can identify deforestation risk hotspots and target action.

“Through the hard work of our teams and the support of our customers and partners, we have now achieved 100 percent traceability and 100 percent deforestation monitoring in our direct supply chain, and 100 percent child labor monitoring in all our managed sustainability programs,” Manley continues.

“This is just the beginning. The unprecedented level of data and insight at our fingertips will help us identify how and where to act to achieve our longer-term ambition of a professionalized and quality-focused cocoa supply chain, one where farmers are earning a living income, child labor is eliminated, and the natural world is protected.”

Identifying income gaps
The Cocoa Compass report also sets out OFI’s work with Sustainable Food Lab, Global Living Wage Coalition (GLWC), the Anker Research Network and the Living Income Community of Practice to publish the first-ever living income reference values for Cameroon, Nigeria, and Papua New Guinea, as well as an updated Côte d’Ivoire level.

These benchmarks will allow the cocoa business to determine the existing living income gaps in its direct cocoa supply chain and work toward its target for 150,000 farmers to be earning a living income by 2030.

All cocoa data collected by OFI, including child labor and deforestation data, will feed directly into AtSource, the company’s sustainability insights platform, giving customers unprecedented visibility of their cocoa's social and environmental impact, including full traceability for all of OFI’s directly sourced cocoa.

Edited by Gaynor Selby

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