World’s biggest stock owner grapples with a child labor dilemma
In Oslo, where the world’s biggest sovereign wealth fund decides how to allocate $1.4 trillion, a huge contradiction lurks.
The fund is trying to reconcile a sustainable-investing mantra with the billions it owns in companies that source cocoa from regions where children pick beans that feed the world’s craving for chocolate. So far, it has chosen to stay involved rather than sell so it can push for positive change.
“We expect companies to work against child labor, but at the same time we recognize that child labor in supply chains and agriculture has complex underlying causes,” said Line Aaltvedt, a spokeswoman for the fund.
In a global financial world increasingly obsessed with ethical matters, the world’s biggest investors — from BlackRock Inc. to Fidelity Investments — are navigating gray areas and trying to figure out the best way to engage. While the Norwegian fund’s actions are primarily financial, as was the case when it sold $6 billion worth of companies that purely focus on oil exploration and production last year, ethical considerations increasingly play a part.
The stakes aren’t insignificant for Norway’s wealth fund, which according to its most recent filings owns shares valued at more than $16 billion in some of the world’s largest chocolate makers and confectioners, including Nestle SA, Hershey Co. and Barry Callebaut AG. The companies all acknowledge child labor exists in their supply chain, have explicit policies forbidding the practice and programs in place to mitigate the problem.
It’s the International Year for the Elimination of Child Labour, and the United Nations held its World Day Against Child Labor a week ago. Still, the practice remains hard to eradicate in the world’s cocoa farming regions. Just ask Nouffo.
He was rescued as part of a police operation to clamp down on child labor in Soubre, the heart of the Ivory Coast cocoa belt in early May. Nouffo said he was brought to the country from neighboring Burkina Faso by his father when he was 13 years old. He was left to work on his uncle’s plantation, where he was found splitting open cocoa pods with a machete.
“Two Ramadans have passed since I’ve been here,” said Nouffo in his limited French. That makes him 15 now.
Nouffo, who spoke while being held in a center in Soubre, said he worked seven days a week splitting open cocoa pods gathered by adult workers, drying them and then transporting them by motorcycle to buying centers. School was out of the question.
His uncle was among 24 people arrested as part of the two-day police raid in partnership with the National Committee for the Monitoring of Actions to Combat Child Trafficking, Exploitation and Labor, which is led by First Lady Dominique Ouattara.
Five of those arrested were sentenced to 20 years in prison for child trafficking, including Nouffo’s uncle, said Luc Zaka, the police commissioner in charge of the raid. Seventeen others were handed five years behind bars and two were released.
As supply chains in the cocoa market are difficult to track, it could not be established whether any of the world’s large chocolate makers were supplied by the farm Nouffo worked on.
https://www.japantimes.co.jp/news/2021/06/22/business/wealth-funds-child-labor/