Hershey shareholders sue for child labor records

The lawsuit claims the chocolate maker gets cocoa with help from forced West African workers.

By Jason Notte Nov 1, 2012 4:53PM

Image: Chocolate (image100/Corbis)A child having a little chocolate on the day after Halloween isn't out of the ordinary. That same child eating chocolate made with cocoa other children were forced to pick at gunpoint is just a bit more disconcerting.


The Louisiana Municipal Police Employee's Retirement System, which owns shares in Hershey (HSY), sued the company Thursday to prevent just such a scenario from unfolding. The pension fund's members want to access its corporate records to see if the company knowingly used cocoa harvested through unlawful or forced child labor by suppliers in the West African countries of Ghana and Ivory Coast.


"That one of the world’s leading confectioners -- whose primary market is children -- could exploit child laborers to meet its bottom line is an outrage," said Jay Eisenhofer, attorney for law firm Grant & Eisenhofer, who is representing the shareholders and filed the suit in Delaware Chancery Court. "Rather than open its records to scrutiny, Hershey over the past decade has thrown up multiple roadblocks to reasonable examination of its conduct regarding serious questions about illegal child slave labor and trafficking in its supply chain."


The complaint says that reports about the systemic use of child labor, forced labor and human trafficking on cocoa farms in West Africa caught the eye of the U.S. House of Representatives as early as 2001. The House passed a proposed amendment to the FDA and Related Agencies Appropriations Act that would require "slave-free" labeling for cocoa products.


Before that amendment could go to the Senate for a vote, the lawsuit notes that major cocoa producers -- including Hershey -- promised to solve the problem in-house without pressure from lawmakers. Those companies signed the Harkin-Engel Protocol to eliminate illegal child labor in high cocoa-producing countries in West Africa, but the lawsuit contends there is ample evidence that the companies failed to comply with its terms.


So why single out Hershey? For one, it's America's largest chocolate producer, with more than $6 billion in sales. For another, company founder Milton Hershey built his company's reputation on philanthropy and a commitment to consumers, community and children. Lastly, Hershey may have gotten off lightly if it wasn't for statements made by the company in early October.


Hershey said it planned to use 100% "certified cocoa" in its products by 2020. That certified cocoa is grown under the auspices of independent auditors according to international labor, environmental and farming standards. Though that cocoa currently accounts for less than 5% of the world's supply, Hershey said at the time that increasing it could have a big impact on a region in which 70% of the world's cocoa is grown.


"Consistent with Hershey’s values, we are directly addressing the economic and social issues that impact West Africa’s two million cocoa farmers and families," Hershey chief executive J.P. Bilbrey said in a press release.


The company already began using certified cocoa in its Bliss line of chocolates earlier this year, but not without pressure from an activist collective called Raise The Bar. But shareholders think something about that move stinks, and not with the faint chocolate scent that wafts through the streets of Hershey, Pa. The lawsuit claims that the protocol Hershey signed in 2001 required it and other chocolate makers to put in place industry-wide standards preventing the use of child labor by 2005.


Not only does Hershey's latest announcement move the bar, the complaint claims, but it ignores a 2011 study by completed Tulane University Law School through a grant from the U.S. Department of Labor that found a majority of cocoa farmers and related suppliers in Ghana and the Ivory Coast employing children are placing them in hazardous illegal work conditions. That same year, the complaint says, Hershey's Corporate Social Responsibility Report included Ghana and the Ivory Coast as "major sourcing countries."


"The fact that Hershey cannot commit to using 'certified' cocoa until 2020 -- 19 years after signing the Harkin-Engel Protocol -- is tantamount to an admission that it currently doesn’t use certified' cocoa, and is in violation of the law," Eisenhofer says.


Hershey spokeswoman Leigh Horner didn't immediately return a phone call seeking comment.


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199Comments
Nov 1, 2012 8:35PM
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Milton Hershey would be spinning in his grave!!!!  This is what happens when a private company goes corporate.  Milton Hershey and his wife had no children, no heirs.  Their employees were their family.  They built an entire community for them, sustained them through the depression paying off their mortgages and keeping them from foreclosure.  Every man that returned from WWII had a job,  His community wanted for nothing.  He built a hospital, schools, a college and

orphans homes for boys and girls.

 

This makes me sick.  This is heartbreeaking.  How is it that a bunch a corporate douchebags can

move completely away from the founder's beliefs and business plan?

Nov 1, 2012 8:16PM
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The products we recieve from China is no different,they exploit children also.
Nov 1, 2012 7:46PM
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This would have been a much less biased and more complete article if there had been a listing of ALL cocoa consumers that are responsible for the purchase of cocoa from these "major sourcing companies," or a detail that shows where alternative suppliers are used by other chocolate manufacturers.  The timing (one day after Halloween) is equally interesting.  How about opening up about Nestles, and where they buy product????
Nov 1, 2012 8:43PM
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Speaking as someone who comes from Ghana, I cannot say I am angry with Hershey or any other chocolate producer at all. Have any of these people involved in filing suit against Hershey ever been to a farm in a developing country? Most farms in developing countries are small scale and family owned. Adults in the family pass on the farming skills to the younger generation by involving them in the daily farming activities. Schools are not as readily accessible as in developed countries. I am not making excuses for Hershey but it would be extremely difficult for Hershey to find different sources of cocoa from commercial farms in such high quantities as it takes years for cocoa trees to grow to maturity. As the article said, 70% of all cocoa is grown in Ghana and the Ivory Coast and I am sure it is not that easy to find new sources even from significant producers like Brazil and Indonesia who slash and burn rainforests to cultivate cocoa plantations, which is not good for the environment. Also, small scale cocoa farmers would have to change their practices which will require monitoring and training which would most likely increase the price of cocoa. Are you all willing to pay more for your chocolate, even though most chocolate these days only contains a small amount of actual cocoa? Changing practices for these farmers would also require a change in culture which we all know does not happen overnight especially to illiterate people. If Hershey thinks by 2020 the cocoa it plans to purchase will be certified, I think we should give them a chance to pursue that goal.
Nov 1, 2012 8:28PM
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Just sad how, not just Hershey is doing so, but several other chocolate big brands as well.
Nov 1, 2012 8:57PM
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Hershey exploiting children?

The prime beneficary and stockholder of The Hershey Company is the Milton Hershey School.  Check it out.  It provides a fairytale dream to about 1,800 underprivelged kids.  I consume Hershey products without any guilt whatsoever because because I know it supports a good cause. 

 

The people who are directly responsible for any West African child exploitation are the governments of West African countries and the coccoa growers there.  Not Hershey. 

Nov 1, 2012 8:29PM
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This may not be pertinent, but do any of you realize that Africa is not  the same as the sissy's in the U.S.A.  Those people, when not chopping each others heads and arms off, actually expect their young children to go out and keep the goats from being eaten by lions.  I don't think they worry too much about the Fair Labor Standards Act, and many are happy to dearly receive any kind of sustenance to keep ones bellies full.  Perhaps Hershey's should just pull out and not hire anyone for anything and then we can send aid as people are starving in front of our lenses.  (P.S.-there are 10 year old kids here in the U.S. that get up in the morning and help milk the cows.  Isn't that a travesty and let's hear a collective liberal OMG and let's not eat any cheese ever again from Wisconsin or Michigan or Minnesota)!
Nov 1, 2012 9:19PM
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Damn lawyers just looking to make a big score.  They could give a rats **** for the exploited children.  Why don't they sue China as they exploit their child laborers on an unbelievable level.
Nov 1, 2012 8:14PM
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Pride of workers.  What does that have to do with this article?  I doubt some little kid with a gun to  his head has much pride.   Hershey has to live up to its pledge.   All of us cannot sit around enjoying the good life made off the backs of poor children.  
Nov 1, 2012 7:59PM
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profits profits profits and again loss loss loss on the workers back and the customer always loses, higher price, lower quality product. Not an american company anymore! It's for just the money makers, CEO's, Investors, Not for the men or women who work everyday with pride to make this products, instead the pink slip!! Whats next get rid of the clyde's because they eat to much? Just plain greedy!!!!
Nov 1, 2012 5:24PM
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I love chocolate, but I'll now think twice about buying a hershey product

Nov 1, 2012 8:07PM
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How does health of the chocolate industry laborers compare with those working in the sugar harvesting industry in Central and South American?   

    What happened to the  stories that Hershey would start manufacturing chocolate candies in Mexico?

Nov 1, 2012 8:03PM
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I own Hershey stock but cannot eat any chocoate because it contains the prime kidney stone chemical calcium oxylate.  (The rate of kidney stone cases has about tripled in the last decade, possibly due to the jump in chocolate eating by Americans.)  Milton was a good guy, and that's what made me buy HSY stock.  And, hand chocolate out last night on Halloween.  And I own oil stock, which doesn't stop me from gagging at every BP ad!   I should have put a casket on my front lawn with Milton Hershey rolling over in it!
Nov 1, 2012 7:48PM
Nov 1, 2012 10:35PM
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Personaly I quit buying hershery products when they put the people in hershy Pa out of work when they moved to India
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Another good reason to stop buying Hershey is that it's now made in Mexico, Brazil and China.  Only a small percentage is made in Hershey, PA.
Nov 1, 2012 9:36PM
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I just read the book; "The Corporation; The Pathological Pursuit of Power and Profits" by Richard Bakan. This not only exactly conforms  to what he's written about, that corporations, now people because of Citizens United and a corrupted, politicized Supreme Court, are psychotic people. Economist Milton Friedman would applaud the use of slave labor because in his opinion, the corporation has one objective and that's to increase profits and it's immoral for them to consider morality in their actions, a betrayal of the shareholders. This is not just the state of the world today but throughout time; read the books of 100 years ago by the muckrakers. This is the world of Mitt Romney and the plutocrats whose railing against "big government" is a ruse to eliminate all policing of corporations and the methods they use to increase the bottom line including slave labor, cruel and inhuman employment practices, ruining the health of the young, destructionof the environment, and social responsibility of any kind except for PR purposes. If you are a working person and vote Republican, you are voting against your own human interests and those of the helpless and poverty stricken around the world. Try squaring that circle of your professed Christian beliefs. That the stockholders are filing this suit is an interesting and hopeful development. To give up some of your dividends so as to compel the corporation to do right is the most hopeful sign possible, far more so than government regulations.
Nov 1, 2012 8:20PM
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Money versus children.  Hershey will phase out of the child-slavery business by 2020?  How forward thinking of them.

If you are a Hershey exec, and if this thing is true, end it now and charge 50 cents more for a candy bar.  Put a label on the bar that it was produced without child slavery.  I'll buy THAT candy bar every time. Unless you lie about that too.

 

I don't believe posts, the news, Twitter, Facebook, the New York Post or Fox News or MSNBC.  I beieve in actions.

Nov 1, 2012 8:04PM
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Child labor? If so, shut them down ASAP. I will not buy another Hersh3ey product until I know they no longer exploit and abuse children. My opinion only.
Nov 2, 2012 12:09AM
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Nearly every major brand you buy today who exports jobs overseas is guilty of child labor... and yet those multi-millionaires who do so are making billions from the use of children making pennies a day in their sweat shops overseas! 
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