I. Introduction: The Hidden Cost of Cocoa
At the heart of the $100 billion global chocolate industry is a paradox: A product loved by many is produced under conditions that are harsh and exploitative. Ghana and Côte d’Ivoire in West Africa produce roughly 70% of the cocoa used to create chocolate, yet an estimated 2 million children in these countries work on small plots and plantations, and many of them under slave-like conditions (Bhutada, 2020). Children work all day, brandish machetes, and cut cocoa boxes to get a corn paste or the cassava and bananas that grow in the surrounding forest (Moreira, 2019).
Large multinational corporations such as Nestlé, Hershey, Mars, and Barry Callebaut control most of the global supply chain, which makes modern slavery not only a problem for one region but also a responsibility for global business. Therefore, the effectiveness of international human rights law in preventing modern slavery is brought into question. Over the past ten years, a variety of international conventions have been concluded to prevent child and forced labor, including the UN Guiding Principles on Business and Human Rights (UNGPs) and ILO Conventions No. 29 and No. 182. However, cocoa production and continued exploitation in the industry have brought to the surface the limitations of these mechanisms. This situation raises concerns about how well international human rights law works to combat modern slavery.
In addition, such exploitation in the cocoa supply chain creates interrelated risks for companies: regulatory, reputational, and operational. In this way, the sustainability of supplies is undermined through farmer poverty, farm degradation, and climate shocks. All this turns the issue of human rights from a moral issue into a strategic business risk.
This paper explores how business practices and international human rights law intersect to combat modern slavery in the cocoa supply chain and what solutions can provide a long-term, innovative strategy to put an end to exploitation. The limitations of current international legal tools and the socioeconomic factors that contribute to child labor are first discussed, followed by the analysis of corporate social responsibility (CSR) and creating shared value (CSV) programs in different companies, and finally, the application of CSV and solutions are proposed for the cocoa industry that can link business profitability with the protection of human rights.
II. Challenges of Enforcement and Corporate Accountability
Participants in international procedures for the preservation of human rights include states, corporations, civil society, non-governmental organizations (NGOs), and international organizations (IOs). One of the key issues they face is the fragmentation of international law. Various treaties and conventions operate in isolation, creating gaps in the application of norms. For instance, the UN Human Rights Council adopted the UNGPs in 2011 as a global standard for stopping violations of human rights in business, but it is still less effective because of its voluntary nature. Companies can claim to comply with the principles, but the lack of universal enforcement mechanisms reduces the transparency of their actions.
Despite being adopted, international treaties are difficult to implement in nations like Ghana and Côte d’Ivoire. Corruption and a lack of institutional and financial structure for oversight make it difficult to follow the rules. As an example, rigorous legal compliance may be hindered by the commercial interests of powerful market participants (Griek et al., 2010). National inspections in cocoa-producing regions are rarely conducted and often symbolic. This is because local authorities are heavily dependent on income from large cocoa buyers (Orombelli, 2023). It creates economic dependence, or a “compliance gap,” between international commitments and local realities.
Another major obstacle is the limited impact of traditional corporate social responsibility (CSR) programs. Porter and Kramer (2011) argue that CSR initiatives focus more on company reputation management rather than structural change. In the cocoa industry, companies publish glossy sustainability reports, while continuing to supply cocoa through opaque intermediaries. This approach only perpetuates forced and child labor. For example, reports from Mondelez International (owner of the Cadbury brand) declare sustainability goals, but independent research shows that the company does not ensure full transparency of its supply chain as a company (Whoriskey & Siegel, 2019).
For multinational corporations, strict compliance with human rights standards can lead to higher costs, while lax enforcement reduces costs through cheaper labor. In turn, the governments of producing countries are afraid of losing foreign investment if they decide to introduce stricter rules. As a result, it is beneficial for both sides to adhere to the “mutual tolerance” system when violations continue without being held accountable. On the ground, this is reflected by the fact that corporations are forced to maintain low costs to remain competitive in the cocoa industry. This subsequently leads to concessions that restrain the rights of farmers and workers. Businesses are forced to reduce labor expenses, which increases the likelihood of child and forced labor. According to Bhutada (2020), a cocoa harvester in Côte d’Ivoire makes around $0.78 per day, which is much less than the $1.90 daily World Bank poverty level. Workers receive low pay, lack access to education, and essential medical care. Such a situation with low income among adult workers forces households to rely on children’s labor to meet basic needs. As a result, it leads to children missing school and their subsequent complete cessation of education.
Large corporations such as Nestlé or Hershey have programs that, according to their statements, are related to the protection of human rights. However, they often remain superficial and do not solve problems at the farm level. For example, the Harkin-Engel Protocol was approved in 2001 by key players in the chocolate industry and human rights groups to eliminate the use of child labor on cocoa farms. The Protocol was a response to the high-profile accusations of child and forced labor in West African countries, which aimed to develop standards for industrial certification, eliminate the worst forms of child labor by 2005, and create transparency and monitoring systems. Nevertheless, the set goals were not achieved, and in 2008, the eradication of forced labor did not even reach 50%, which indicates one more time the voluntary nature of the agreement (Griek et al., 2010).
These systemic disparities demonstrate that the connection between exploitation and poverty is not coincidental, but rather the outcome of a global system that prioritizes cost reduction. To change the situation and overcome law enforcement barriers, it is necessary to rethink the relationship between the global system, business, and their socio-economic goals.
III. From Corporate Social Responsibility (CSR) to Creating Shared Value (CSV)
In response to external pressure, the Corporate Social Responsibility (CSR) program was created, which mainly focuses on the reputation and necessary expenses of the company. According to Porter and Kramer (2011), CSR was often limited to charitable initiatives or image improvement, without affecting the main business processes. With such a system, the government has the ability to regulate relations between companies and shareholders, which makes it difficult to achieve common values. Each side assumes that the other is an obstacle to achieving its goals. Under CSR, profit was a priority for shareholders, while social goals were secondary and often short-term.
People began to think about how to integrate social issues into business models. This is how the idea of Creating Shared Value (CSV) emerged, which recognizes that social needs, not just ordinary economic needs, determine markets (Ghasemi et al., 2014). CSV illustrates that social damage, or weaknesses, often lead to internal costs for firms, and eliminating them does not always lead to raised costs; on the contrary, it can lead to innovation, increased productivity, and market expansion (Ghasemi et al., 2014; Porter & Kramer, 2011). In CSV, social problems are part of the business model, and the company earns money precisely because it solves these social problems. Porter and Kramer (2011) identify three key types to implement CSV: (1) reconceiving products and markets, (2) redefining productivity in the value chain, and (3) enabling local cluster development.
1) Reconceiving Products and Markets
Companies can create value by solving social problems through innovative products. This approach is not just considered “environmental marketing” – it is a business model where sustainability becomes a source of growth.
In 2001, Unilever launched its Shakti project in India with the goal of assisting less wealthy rural women to start their own businesses and gain profit by selling goods made by Hindustan Unilever Limited (HUL), such as tea, toothpaste, shampoo, and soap. By December 2021, it had expanded to about 165,000 Shakti Entrepreneurs (SEs) and their families across 18 states, from its initial 17 women in two states. The program is aimed at the so-called bottom-of-the-pyramid market, low-income households that previously had no access through traditional distribution channels. More than 80% of the participants reported an increase in status in their family and village (they are contributing to family income for the first time). As an outcome, HUL increased its presence in small towns by up to 40%, bolstering its brand in rural areas and opening up a new sales channel (Kantar Republic, 2024). In contrast to just creating a charity, Unilever integrated a social goal into its economic model.
2) Redefining Productivity in the Value Chain
Instead of exploiting the people and resources that the company depends on, supply chains should be made more efficient by investing in them.
For farmers growing coffee, Nestlé developed the Nespresso model, a program that incorporates an agroforestry strategy. Due to soil erosion, climate change, and farmer poverty, the corporation had supply volatility for coffee. The purpose of the Nespresso model was to ensure the long-term sustainability of coffee farms, improve grain quality, and farmers’ income in order to protect both business and the environment. Technical assistance (training), coffee quality awards, and access to the Nespresso brand market were created for participating farmers. The environmental results were improved soil, regulation of water supply, planting of thousands of trees, and reduction of the carbon footprint (Nestlé Nespresso, 2013). From an economic point of view, Nestlé has been able to achieve increased productivity, quality of raw materials, stable supplies for the company, and improved conditions for farmers.
3) Enabling Local Cluster Development
CSV is not limited to products – it is also being built through investments in local infrastructure and communities.
In the 2000s, Yara faced a serious problem – low demand for fertilizers in Africa, caused by poor infrastructure, lack of market access for farmers, and chronic rural poverty. The company realized that it was impossible to develop a business if farmers did not have access to roads, warehouses, and ports to sell their crops. Therefore, in order to improve logistics, increase yields, and at the same time strengthen the local economy, Yara decided to invest in the development of rural clusters. For instance, the corporation has invested $60 million in the creation of Agricultural Growth Corridors in Mozambique and Tanzania. Moreover, Yara decided to create Public-Private Partnerships (PPP) with the participation of governments, NGOs, and private investors. This is how the largest example of a PPP project from Yara appeared – the Southern Agricultural Growth Corridor of Tanzania (SAGCOT). One of the results was the creation of about 350,000 jobs and the support of more than 200,000 smallholder farmers (Yara International, 2015). Furthermore, Yara has not just sold more fertilizers – it has built a system where social progress and the development of agriculture directly strengthen the company’s business competencies.
IV. Applying CSV to the Cocoa Industry
As many international companies have already started to apply CSV in their industries, the cocoa supply industry can implement these practices in the same way. Instead of using only cocoa beans, farmers and companies can process the entire cacao pod: pulp, peel, husk/endocarp, and by-product fractions. All these parts of the cocoa fruit can be used to make functional food ingredients, cocoa water, granola, biomass, pectin, and animal feed (Ombelet et al., 2024). An example of a company using the whole cacao pod was Blue Stripes. It analyzed that the traditional chocolate industry uses only about 30% of the cocoa pod, and the remaining 70% of the pod often goes to waste. Blue Stripes saw this not only as an environmental problem but also as a business opportunity (Savage, 2025). Upcycling the whole cacao pod, the company began to produce granola bars and drinks in the form of cocoa water. This has created a zero-waste model and new sources of income for farmers. This approach corresponds to the CSV reconceiving products and markets mechanism – the company sees a new market, farmers benefit, and the supply chain becomes more stable.
In addition, many chocolate companies can reduce cases of slavery by organizing a set of measures. Tony’s Chocolonely was founded with the goal of making the chocolate industry “100% free from slavery,” recognizing that poverty and opaque supply chains are the main causes of child and forced labor. The company pays farmers 54-61% higher than the official farmgate price, thereby providing them with a “living income.” To ensure transparency and tracking of raw materials, Tony’s has implemented GPS traceable beans to identify and eliminate cases of child labor; it uses Child Labor Monitoring and Remediation Systems (CLMRS). Orombelli (2023) claims that these initiatives dropped the amount of child labor by almost 30% in just four years and raised farmers’ incomes dramatically. This shows how human rights protection and corporate prosperity can support one another rather than conflict.
Chocolate companies can invest in local clusters and refineries in their country of origin to obtain a more reliable and sustainable supply chain. As is customary in the cocoa industry, large buyers such as Nestlé, Mars, and Barry Callebaut conclude short-term contracts with farmers or intermediaries, usually for one harvest. This creates instability because farmers do not know who will buy their products next year and at what price. To survive, they are forced to reduce costs, including resorting to child labor. Tony’s Chocolonely does the opposite and signs multi-year contracts – for 5 years – with farmers’ cooperatives in Ghana and Côte d’Ivoire (Domstrand, 2024). In addition, in the usual model, each company buys cocoa separately and competes for the lowest purchase price. This is a ‘race to the bottom’ where farmers lose. To eliminate farmers’ dependence on intermediaries, who often dictate prices and conceal the origin of cocoa, Tony’s together with one of the global retailers, ALDI, decided to buy cocoa from the same cooperatives and under the same conditions – the same fair prices, the same labor standards, and CLMRS monitoring (Orombelli, 2023). Such a collective sourcing system prevents price reductions and ensures that compliance with ethical standards becomes the industry norm, not the exception to the rule.
Tony’s Chocolonely is not considered the cheapest choice of chocolate on the market, all due to its initiatives and principles in the production chain. This demonstrates that consumers are willing to pay more for products that match their values when that compliance is genuine and transparent. However, together with ALDI, they created an affordable alternative of chocolate line that is still part of the Tony’s Open Chain approach – the Choceur CHOCO CHANGER. Tony’s Open Chain platform achieves a scale of influence that goes beyond its own production facilities. It creates and opens the ‘code’ of its solution to other companies, including direct competitors. This approach recognizes that solving systemic problems requires industry-wide change, not just the success of a single company.
V. Conclusion: From Compliance to Collaboration
The policy level is no less necessary and even enhances the CSV approach. For example, the UNGPs provide a basic framework for Human Rights due Diligence (HRDD), which may become a mandatory requirement for all multinational corporations (Smit et al., 2021). More countries are starting to introduce mandatory HRDD standards based on UNGPs. For instance, France’s the Duty of Vigilance Law, obliges large companies to conduct due diligence on human rights and the environment; in 2024, the EU adopted the Corporate Sustainability Due Diligence Directive (CSDDD), which gradually makes HRDD mandatory for all large companies operating in the EU market (European Coalition of Corporate Justice, 2016; European Commission, 2024). In addition, fines or economic sanctions should be applied to companies found to be using forced or child labor. Given that their absence lowers businesses’ drive to enhance their supply chains, this can be a powerful incentive to adhere to standards. Another tactic may be investments in basic infrastructure and access to education in rural areas, which is one of the most important elements in reducing household dependence on manual labor. Lastly, the respect for human rights in cocoa supply chains can be significantly impacted by consumers. It is consumer demand that increases the pressure on companies. Information campaigns and clearer certifications increase the willingness to buy verifiable products. (Smit et al., 2021).
Modern slavery in cocoa supply chains requires a comprehensive approach that incorporates international policy, commercial innovation, and consumer activism. Combining politics, business innovation (CSV), and consumer market pressure creates a coherent mechanism for combating modern slavery in the worldwide cocoa industry. This makes fair pricing and traceability the industry standard, not the exception. It increases accountability and prevents ‘symbolic’ initiatives.
In conclusion, despite international efforts, modern slavery in the cocoa supply chain – including forced and underage labor – remains a significant worldwide issue. The fragmentation of international law, the inadequacy of voluntary methods, and the opaqueness of global supply chains are the primary issues in the field of human rights protection. The suggested alternatives, which include the implementation of mandated international standards, assistance for farmers via CSV, infrastructure expenditures, technology use, and raised consumer awareness, demonstrate that systemic changes are required to address this issue. The concept of creating shared value (CSV) proposed by Porter and Kramer (2011) proves that a sustainable solution is possible only if business innovation becomes an integral part of a global human rights strategy. In contrast to standard corporate social responsibility (CSR), the CSV strategy incorporates ethical and social goals into the company model itself. CSV transforms them from an expensive commitment into a source of long-term growth and competitive advantage. Refusing to purchase chocolate won’t fix this issue; instead, it will make matters worse and make the already impoverished cocoa growers even poorer. Global measures are needed in the form of political, social, and economic pressure on the largest producers. Their direct responsibility is to carry out inspections and adjust the movement of chocolate from the cocoa tree to the chocolate bar in the store.