November 2011

“Cooperative enterprises help build a better world.” That’s the slogan for the UN International Year of Cooperatives 2012, which was launched just a few weeks ago, and it’s a salient reminder that there are alternative ways to ‘do business’ in a world ravaged by economic crisis, climate change and undemocratic leadership.

Cooperatives are business enterprises owned and controlled by the very members they serve, able to balance the pursuit of profit and shareholder value with the needs and interests of their members and their communities. In assigning 2012 as International Year of Cooperatives, the UN has recognised the impact that cooperatives are having in poverty reduction, employment generation, sustainable development and social integration.

SEUK_postit_sq_SEday.jpgThe slogan above could just as well apply to social enterprises. Today is Social Enterprise Day. A day of celebration and profile-raising for organisations that are harnessing the power of business to create a fairer world.

The UK is recognised as a world leader in social enterprises with 62,000 UK based-social enterprises contributing over £24 billion to the economy and employing 800,000 people, while simultaneously addressing the real needs of communities.

The BBC ran a story last week returning to the issue of child labour on cocoa farms in Côte d'Ivoire.

Humphrey Hawksley in Côte d'Ivoire

Humphrey Hawksley opens the short news video by observing: “Deep in the cocoa belt of the Ivory Coast, it’s not hard to find children at work.” He then goes on to interview a farmer, some children, and a chocolate industry PR representative.

The first stories of child slavery in the Ivory Coast hit the news over a decade ago. Then in 2001, the major players in the global chocolate industry signed the Harkin-Engel Protocol, a voluntary code of self-regulation drawn up by industry to avert proposed “slave free” labelling legislation in the US.

The Harkin-Engel Protocol provided for the creation of a foundation - the International Cocoa Initiative (ICI) - to tackle child labour, and pledged to develop a certification system that would ensure chocolate was free from the worst forms of child labour.

The impact of these efforts have since been assessed through the authoritative Tulane University studies. Their final report was released earlier this year and concluded that while there has been action from the chocolate industry and “significant evidence of impact”, the funding has simply not been sufficient to achieve their stated goals.

Less than 5% of children and their caregivers surveyed in Ghana and Ivory Coast have reported exposure to industry programmes to tackle child labour. That gives an idea of the scale of what still needs to be done. At Trading Visions, we've estimated that the big industry players commit no more than 0.1% or 0.2% of their chocolate sales turnover to "social investment" in cocoa farmers' livelihoods.

Guest article from Neil Howard, a PhD student writing his thesis on anti-trafficking discourse and policy at the University of Oxford.

In 2003, Benin and a small group of cotton-producing African nations took a complaint to the World Trade Organization (WTO) citing massive economic evidence that US cotton subsidies reduced national and household incomes. Noting that US subsidies to 25,000 cotton conglomerates totaled three times the entire USAID budget for Africa’s 500 million people, the plaintiffs demanded the immediate cessation of subsidies and compensation for their lost national incomes.

Though in a separate case the WTO ruled that US subsidies did indeed affect global prices, US negotiators refuted any correlation between reduced prices and lost national or household income in countries such as Benin, and placed pressure on friends and foes alike to ensure that the African initiative was ultimately dropped.

In this article, I will present evidence from my research that challenges the US position. In fact:

  1. US claims of non-causality are false – it is demonstrably true that the effect of subsidy-reduced cotton prices is felt at the level of the farming household,
  2. US subsidies have thus impoverished many vulnerable rural households and this in turn has led to an increase in the labor migration of the young, including into work that has been classified as trafficking, and is often experienced by the young themselves as exploitative.