Mondelez International, Inc. | End Child Labor in Cocoa Production at Mondelez International, Inc.

Status
AGM passed
AGM date
Previous AGM date
Resolution details
Company ticker
MDLZ
Lead filer
Resolution ask
Adopt or amend a policy
ESG theme
  • Social
ESG sub-theme
  • Decent work
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Staples
Company HQ country
United States
Resolved clause
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, employed after school hours, and percentage of workers paid a living wage.
Whereas clause
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 cocoa supply chains.2
Cocoa farming remains plagued by child labor.2 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.3 Despite Mondelēz’s Cocoa Life program, established to stamp out child labor, and monetary commitments,4 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 “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 74 percent coverage.8 Even if Mondelēz reaches this goal by 2025, that does not guarantee its cocoa will be child labor-free.
Poverty is a root cause of child labor.9 When workers are not paid a living wage, they struggle to afford child care, school, and are often forced to send their children to work in order to make a survivable income.10 Therefore, without a commitment to pay all workers a living wage, Mondelēz cannot effectively eliminate child labor from its supply chain.
Failure to adhere to United Nations Sustainable Development Goal 8.7, calling for the elimination of all child labor by 2025,11 exposes Mondelēz and its investors to significant financial, legal, and reputational risks. This is evidenced by a 2023 lawsuit alleging Mondelēz profits from “brutal conditions” of “child labor on plantations where they source their cocoa.”12
Mondelēz remains absent from Slave Free Chocolate’s list of companies using ethically grown cocoa,13 and “would not guarantee that any of their products were free of child labor” per The Washington Post.14
Mondelēz states, “No amount of child labor in the cocoa supply chain should be acceptable.”15 Shareholders agree, and require the requested report to assure 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.
Supporting statement
1 https://www.norc.org/Research/Projects/Pages/assessing-progress-in-reducing-child-labor-in-cocoa-growing-are as-of-c%C3%B4te-d%E2%80%99ivoire-and-ghana.aspx; https://www.ilo.org/ipec/Campaignandadvocacy/Youthinaction/C182-Youth-orientated/worstforms/lang--en/ind ex.htm
2 https://www.dol.gov/sites/dolgov/files/ILAB/child_labor_reports/tda2021/2022-TVPRA-List-of-Goods-v3.pdf
3 https://www.reuters.com/business/sustainable-business/cadbury-maker-mondelez-invest-600-mln-sustainable-co coa-sourcing-2022-10-25/
4 https://www.reuters.com/business/sustainable-business/cadbury-maker-mondelez-invest-600-mln-sustainable-co coa-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/
9 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3533357/
10 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5966045/ ; https://insights.issgovernance.com/posts/world-day-against-child-labour-2021-focusing-on-decent-wages/#:~:text=Differing%20from%20a%20minimum%20wage,important%20safeguard%20against%20child%20labour
11 https://www.unodc.org/roseap/en/sustainable-development-goals.html
12 https://www.internationalrightsadvocates.org/cases/ghana
13 https://www.slavefreechocolate.org/ethical-chocolate-companies
14 https://www.washingtonpost.com/graphics/2019/business/hershey-nestle-mars-chocolate-child-labor-west-africa/?utm_term-.6cb753bcb6f8
15 https://www.cocoalife.org/the-program/child-labor

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Kutxabank Gestion SGIIC SAU. For
Anima Sgr For The adoption of this proposal would benefit investors by providing them with greater transparency on the management and oversight of associated risks and progress towards eliminating child labor in all its forms from the company's cocoa supply chain by 2025.

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