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Q&A on Labour with Chris Brett, Global Head of CR&S

1. Do you see mechanisation helping or hindering emerging market communities?

It’s very difficult to hold back technology, especially when everyone is striving for efficiencies and to remain competitive. In our Côte d’Ivoire Bouaké cashew processing plant we introduced new machines, and while we still employ over 2,000 people, we had to make 147 people redundant. But given the new efficiencies, we anticipate this will encourage other processors and entrepreneurs to set up processing in the country, which will help it to reach its ambitious target of 100% processing of the cashew crop and create many more jobs.

For smallholders, it’s a case of thinking through the long-term maintenance. Does he or she need their own tractor or are they better off renting for example? In India we have been working with a company called New Holland to supply harvest machinery to sugar farmers in an area where labour deficits needed to be overcome. Fifteen machines have been provided which the farmers can rent – 1 machine can harvest 110 – 130 tonnes a day (the average farmer has 2.5 hectares). By hiring the machine, the farmer is not burdened with the capital expenditure of a machine he only uses once a crop season, nor does he risk losing the crop quality due to his inability to source or pay for labour.

2. What are the factors contributing to child labour aside from lack of schools in emerging markets?

As highlighted in our Goals and the section on child labour in this report, Olam is constantly tackling the risk of child labour. Certainly a lack of schools in the area is a key indicator – if there is no school then the family will invariably bring the child to the farm, where they may be given key tasks such as weeding or collecting the crop.

It’s also important to note that in most of our countries of operation, primary school is free whilst secondary school isn’t. So even if there is a secondary school in the region, most of our farmers are struggling to meet tuition costs. Defining economically viable mechanisms to pay school fees at the community level is an approach currently being considered through a remediation project in partnership with the Fair Labor Association.

By helping farmers to increase their yields and incomes they can afford the school fees. Another problem encountered is the lack of birth certificates making it hard to identify the age of a child and keep operations in compliance with ILO convention No. 138 on the Minimum Age for Admission to Employment and Work. Not being registered at birth can also deprive children the possibility of ever accessing their local school system. This represents a major legal barrier local governments need to urgently address. If child labourers are identified, our policy is to immediately remove the child off the farm, and meet the parents to reinforce the No Child Labour policy. We explain that their actions are breaking the law and we must take remedial action.

We know now that child labour risk increases when schools are more than 4 km away from the farms. So one of the most impactful ways to tackle child labour is to prioritise education. By applying our Olam Farmer Information System (OFIS) programme we are able obtain information on social infrastructures and measure the distance between our suppliers’ farms and the nearest schools. That way, we identify priority areas and can advise
governments on the communities where investment is needed.

This is not a fast process, as we need to ensure that the school has the ongoing resources to flourish. During 2015, in Côte d’Ivoire, with the support of our commercial partners and the Government, Olam Cocoa has developed
a viable 3 year education model, where we lead on the development of the school, and for the first 3 years, the funding for the teachers. After this, it is transferred to the national education budget.

In March 2015, the First Lady of Côte d’Ivoire, Madame Dominique Ouattara, officially opened a primary school complex close to Olam Cocoa Processing in San Pedro. Jointly financed by Olam Cocoa and customer partner The Blommer Chocolate Co., the Dominique Ouattara School Complex provides the community with a much-needed education facility. It has the potential to teach 300 children and has a canteen, nurses’ station and library.

Olam Cocoa is also working at a precompetitive level to better align sustainability strategies and therefore improve impact. Olam Cocoa is a founding member of CocoaAction which by 2020 intends to support 300,000 cocoa farmers and empower communities.

In addition, Olam Cocoa is helping to develop best practices in child labour reduction strategies through its involvement as a board member in the International Cocoa Initiative (ICI).

One final point that I would add is that distinctions also have to be made between activity on the farm that helps the family business and passes on knowledge as they might do with parents in the USA or UK, versus activity on a farm that deprives the child education or is harmful to a child, such as applying pesticides or carrying heavy sacks. These are the distinctions we make in our farmer training programmes and the Olam Supplier Code.

3. What are your specific focus areas for 2016 – 2020?

Labour remains a key material area to our operations and we, like others, across all industries face many challenges ahead.

In 2016 we will continue to directly collaborate with our global workforce and with all of our agricultural suppliers, continuing the partnerships we have initiated in improving labour management, monitoring and reporting progress. In our direct workforce, having a Zero-Harm workplace is critical. However, we have also introduced a new objective for 2016-2020: to ensure that 100% of businesses with more than 100 employees have a documented and reported diversity strategy.

In our indirect supply chain, the focus continues to be labour standards. Continuing the roll-out of the Olam Supplier Code, and then then ensuring the systems are in place on monitor its compliance is a priority across the Business Units and Geographies. To strengthen this further, we have formalised our ongoing actions to tackle child labour by including a clear objective of elimination so that by 2020 there are no reported breaches in compliance or observed in audits.

By working collaboratively with our suppliers, industry bodies, and partners we will continue to make advances in this complex area.

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