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Corporate and Social Responsibility Report 2006

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Sustainable cocoa

About cocoa

Most of the world’s cocoa is grown in a narrow belt 10 degrees either side of the equator. Here the trees grow well in humid tropical climates with regular rains and a short dry season. West Africa produces 75% of the world's cocoa in Ghana, Côte D’Ivoire, Nigeria and Cameroon. South America and Asia produce the remaining 25% in Brazil, Ecuador, Malaysia, India and Indonesia. Cocoa is grown almost entirely on smallholding farms where the whole family may work together at certain times of the year such as harvest. Cocoa farming is generally a small, unmechanised business. The fruiting patterns of cocoa trees and their location in the forest make mechanisation impracticable.

Where our cocoa comes from

In the early 1900s, William Cadbury made the decision to source cocoa, a vital ingredient for our chocolate brands, from Ghana, then known as the Gold Coast. He left São Tomé where forced labour was being used to harvest cocoa.

We still source most of our cocoa from Ghana today, with some being sourced from Côte D 'Ivoire, India, Indonesia and Nigeria. In the United Kingdom, all of our cocoa beans come from Ghana, although our cocoa butter and cocoa liquor may come from commodity suppliers spread more widely. Ghana has over half a million cocoa farmers working on smallholdings within communities that grow a mix of food for themselves and cash crops for onward sale.

Cadbury Schweppes in Ghana

Our Company has played an important role in developing the cocoa industry in Ghana, working with Ghanaians to establish high standards of cocoa farming and to play a positive role in cocoa growing communities. In fact, Ghana's cocoa is recognised as being of the highest quality and we are still working today to ensure this continues.

There are many environmental and social challenges faced by the cocoa industry. We have a responsibility to ensure that farmers and their families have a decent livelihood and that the cocoa and other crops the farmers grow yield a sufficient income to support families and villages. We are keen to make sure there is enough investment for future supply and that the highest international labour standards are observed. Our ethical sourcing strategy helps ensure this happens.

Tackling labour issues in cocoa growing - the International Cocoa Initiative (ICI)

Concerns about the role of children in cocoa production in West Africa led to the US-led Harkin-Engel protocol in 2001, signed in Geneva by politicians, government officials, NGOs and representatives from the cocoa industry. Signatories recognised "the urgent need to identify and eliminate child labour in violation of International Labour Organization (ILO) Convention 182 with respect to the growing and processing of cocoa beans and their derivative products". The protocol included a commitment to establish the International Cocoa Initiative (ICI) in 2002.

The initiative is made up of many stakeholders with members including chocolate companies, confectionery trade associations, NGOs, and trade unions.

The ICI works with the governments of cocoa producing countries to bring about positive change and improvement. The aim is to eliminate abusive labour practices and support community-based initiatives. This is a long-term process that contributes to the sustainability of the industry and to cocoa growing communities.

In July 2005 a public certification process for cocoa labour standards was introduced. This was a first for the industry and the largest agriculture programme of its kind. The next milestone is to introduce the certification process in at least 50% of cocoa farms in West Africa by July 2008.

Cadbury Schweppes is represented on the International Cocoa Initiative board. Our first priority is to help raise standards but there are also other benefits of our participation, including the opportunity to share what we have learned with our cocoa sources more broadly in West Africa, in Indonesia, Nigeria and India. In India, for example, we are introducing processes to improve the sustainability of the crop. We are also active in developing on-the-ground programmes that aim to bring positive impacts to local farmers.

Examples of ICI community-based initiatives

Hope for Humanity is working with the people of Adansi, South Ghana to improve farming methods, helping the community build upgraded facilities such as schools, and to engage with local government. Support for the Community Mobilization Programme carries out similar work in the major cocoa growing area of Daboase.

Participatory Development Associates, based in Kumasi, provide technical guidance and support to four local NGOs. It also helps government understand what improved farming activities can do to help avoid poor labour standards.

Cadbury Schweppes is a member of the Sustainable Tree Crops programme (STCP). This is an international initiative that aims "to improve the economic and social well being of smallholders and the environmental sustainability of tree crop farms". It is hosted by the International Institute of Tropical Agriculture that operates throughout West Africa's cocoa growing countries, including Ghana. Farmer Field Schools are run by the STCP. It supports cocoa farmers and helps them gain the knowledge and skills to maintain high quality cocoa, and builds their understanding of working within the cocoa trading systems. It also helps address poor labour practices.

Water wells in Ghana

Clean water, so essential to life, is not always easily accessible to communities in Ghana. In some communities women and children have to spend up to 8 hours a day collecting water from far-away, and possibly contaminated sources. A community with a water well not only benefits from easy access to clean potable water and a reduction in water borne disease, it also frees up time for people, usually women, to have the opportunity to generate income and for children's education.

Our fresh-water well building programme, which has now been established for five years, provides cocoa growing communities with clean potable water. Supported by company financial support and employee fundraising, our partners in the programme are the Kuapa Kokoo Social Development Fund (a farmers’ co-operative) and the international charity, WaterAid.

By the end of January 2006 there were 375 water wells in place, with each providing enough water for 150 people, and around 50,000 people now have access to clean water. We continue to build more wells.

Fair Trade

Cadbury Schweppes shares with the fair trade movement a commitment to improve the livelihoods of cocoa farmers and their families. Fair trade works best with farmers working in co-operatives where they have shared resources such as communications and warehouses, for example. However, only relatively few farms globally are able to do this. Most cocoa farmers are small, family-owned operations in remote areas that do not have access to this level of infrastructure. Our focus has been to help improve standards of living by developing sustainable high quality crops that generate a long term and higher return for all farmers.

Organic cocoa

Our Green & Black's business depends upon organic cocoa for its product range. Our colleagues from Green & Black's are therefore working closely with our experienced cocoa teams in other parts of the Cadbury Schweppes business to see, for example, how more organic farms can be developed.

We believe it is right to examine how to grow cocoa in a way that reduces reliance on conventional methods of controlling pest and crop disease. The lessons learned from organic production can also help inform our wider approach of integrated crop management and sustainable agriculture. However, we need to be wary of the risk of the rapid spread of pest and plant disease in tropical climates. This can decimate crops and therefore the livelihoods of farmers who depend on them.

Future considerations for cocoa

In order to continue securing top-quality cocoa, we need to become even more closely engaged with others. To this end we are working with a number of different stakeholder organisations towards long term solutions. In our work with Earthwatch, an international scientific environmental NGO, and the Cocoa Research Institute of Ghana, we are trying to get a better understanding of the biodiversity and environmental impacts within cocoa farming areas. This will help identify more sustainable and ecologically sound farming practices, and at the same time maintain and enhance the high quality of Ghana's cocoa.

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