End Child Labor in Cocoa Production

Resolution Text

Resolved: Shareholders request that, within one year, the Board of Directors adopt targets and publicly report quantitative metrics appropriate to assessing whether Mondelēz is on course to eradicate child labor in all forms from the Company’s cocoa supply chain by 2025. In the Board and management’s discretion, such metrics may include: current estimates of the total numbers of children in its supply chain on a regional basis, working in hazardous jobs, working during school hours, and employed after school hours.

Whereas: Hazardous child labor on cocoa farms, which includes using machetes and harmful pesticides, meets the International Labor Organization’s definition of the “worst forms of child labor.”1 International agreements have repeatedly failed to eradicate hazardous child labor from the cocoa supply chain.2

Over twenty years ago, Mondelēz signed the Harkin-Engel Protocol, voluntarily committing to end the worst forms of child labor, including forced labor, in West African cocoa production by 2005.2 Yet, cocoa farming remains plagued by child labor in seven countries according to the Bureau of International Labor Affairs’ 2022 report.3 The Department of Labor estimates that 1.56 million children engage in hazardous work on cocoa farms in Ghana and Côte d’Ivoire, where 60 percent of cocoa is produced.4 Despite Mondelēz’s Cocoa Life program, established a decade ago to stamp out child labor, and its monetary commitments,4 children exposed to child labor on cocoa farms in Ghana rose by 10 percent since 2009, amounting to 55 percent.5 Furthermore, 95 percent of cocoa farming children in West Africa are “involved in hazardous child labor.”6

Mondelēz acknowledges that “cocoa farmers and their communities are still facing big challenges.”7 While Mondelēz states it’s “on track” to achieve its goal of Child Labor Monitoring & Remediation Systems covering 100 percent of Cocoa Life communities in West Africa by 2025, it currently reports only 61 percent coverage.8 Even if Mondelēz reaches this goal by 2025, that does not guarantee that its cocoa will be child labor-free. Failure to adhere to United Nations Sustainable Development Goal 8.7, calling for the elimination of all child labor by 2025,9 exposes Mondelēz and its investors to significant financial, legal, and reputational risks.

Mondelēz is noticeably absent from Slave Free Chocolate’s list of companies that only use ethically grown cocoa,10 and “would not guarantee that any of their products were free of child labor” per The Washington Post.11

Mondelēz states, “No amount of child labor in the cocoa supply chain should be acceptable.”12 Shareholders agree, and considering that the number of exploited children in cocoa production has increased over the past twenty years, shareholders require the requested report to assure that management fulfills its fiduciary duty to protect Mondelēz and its investors from adverse risks associated with continued use of child labor within its cocoa supply chain.

1 https://www.norc.org/Research/Projects/Pages/assessing-progress-in-reducing-child-labor-in-cocoa-growing-areas- of-c%C3%B4te-d%E2%80%99ivoire-and-ghana.aspx; https://www.ilo.org/ipec/Campaignandadvocacy/Youthinaction/C182-Youth-orientated/worstforms/lang– en/index.htm
2 https://www.businessinsider.com/cocoa-companies-child-labor-complicity-lawsuit-2021- 2#:~:text=In%202001%2C%20the%20companies%20signed,2005%2C%20according%20to%20the%20IRAdvocate s
3 https://www.dol.gov/sites/dolgov/files/ILAB/child_labor_reports/tda2021/2022-TVPRA-List-of-Goods-v3.pdf
4 https://www.reuters.com/business/sustainable-business/cadbury-maker-mondelez-invest-600-mln-sustainable- cocoa-sourcing-2022-10-25/
5 https://nypost.com/2022/04/04/investigation-uncovers-horrible-truth-behind-cadburys-creme-egg/
6 Id.
7 https://www.cocoalife.org/progress/next-phase-of-cocoa-life
8 https://www.mondelezinternational.com/Snacking-Made-Right/Reporting-and-Disclosure/Goals-and-Progress
9 https://www.unodc.org/roseap/en/sustainable-development-goals.html
10 https://www.slavefreechocolate.org/ethical-chocolate-companies
11 https://www.washingtonpost.com/graphics/2019/business/hershey-nestle-mars-chocolate-child-labor-west- africa/?utm_term=.6cb753bcb6f8
12 https://www.cocoalife.org/the-program/child-labor