In 2000, a series of media accounts reported that children were being trafficked and forciblyused in the West African cocoa sector. Shortly thereafter, the House passed H.Amdt.142 to P.L.107-76 , FY2002 Agriculture, Rural Development and Food and Drug Administration (FDA)Appropriations , which would have provided $250,000 to the Food and Drug Administration to beused to develop a label for chocolate products indicating that no child slave labor had been used inthe growing and harvesting of cocoa in a product so labeled. A Senate companion bill was neverintroduced, in part because after House passage of the bill, representatives of the cocoa industry, theInternational Labor Organization (ILO), several private labor rights groups, and Members ofCongress, negotiated "a comprehensive, six-point problem-solving" protocol aimed at ending the"use of abusive child labor in cocoa growing." (1) The protocol, known colloquially as the as the Harkin-EngelProtocol (discussed below) after Senator Tom Harkin and Representative Eliot Engel, outlines sixsteps that the industry formally agreed to undertake in order to end abusive and forced child laboron cocoa farms by July 2005. (2) To date, the first five steps of the Protocol have been completed. There are differences of opinion on whether the final step, the development of a certification system,has been completed. (3) Itis possible that if Senator Harkin and Representative Engel, after consulting with the industrysignatories and witnesses to the Protocol, find that the signatories have not met their commitmentsunder the Protocol, they may initiate renewed legislative efforts to address the problem of child laborin cocoa production. This report provides background on the production of cocoa and discusses the issue of childlabor in the industry, efforts by Congress, including the Harkin-Engel Protocol, and those of othergovernments, international organizations, and non-governmental groups to address the problem. Italso discusses potential policy options that might accomplish that end. Cocoa, used in chocolate products, is obtained from the processed beans of fruit podsproduced by the tropical evergreen cacao tree ( Theobroma cacao ), a plant of New World origins. There are three main varieties of cacao tree: Criollo , Trinitario , and Forastero ; the latterpredominates in West Africa. Each pod contains 20 to 40 large, fat-rich seeds. Cacao trees aregrown in rainy, tropical equatorial zones, within 20 degrees of the Equator, primarily in West Africa,Southeast Asia, and South and Central America. West Africa produced about 72% of the total global supply in 2003/04, a year which yieldeda rapid, nearly 10% production increase, a record harvest, according to the International CocoaOrganization (ICCO). During the last three production years, CÃ´te d'Ivoire and Ghana producedabout 43% and 16% of world output, respectively, and about 62% and 22% of total African cocoaproduction. Other key producers are Indonesia, with about 14% of global production, followed byNigeria, Cameroon, and Brazil, each producing about 5% of world output. Recent global andAfrica-specific production trends are shown in tables 1 and 2. Table 1. World Cocoa Production (1000s of metric tonnes and percentshare of worldproduction) Source: Bill Guyton, "Figure 1: World Production Forecast," Commodities -- Cocoa Review, WorldCocoa Foundation, N.D. and CRS calculations. Table 2. Cocoa Production in West Africa (1000s of tonnes and percent share of Africanproduction) Source: Bill Guyton, "Figure 1: World Production Forecast," Commodities -- Cocoa Review, WorldCocoa Foundation, N.D. and CRS calculations. In general, world cocoa production is expected to gradually increase in the medium term. TheFood and Agricultural Organization (FAO) has projected a growth rate of about 2.2% annuallyduring the present decade, compared to a growth rate of about 1.7% per year during in the 1990s, andexpects production to reach about 3.7 million tonnes by 2010. Opinions are mixed over the extentto which Africa will contribute to this expected growth. In 2003, the ICCO projected that Africawould continue to provide the bulk of cocoa production, and that Africa, along with the Americas,would produce the largest proportional increases in production in the near future. The FAO, bycontrast, projects that Africa's share of world production will drop by about a 1% in the period upto 2010. Despite expectations of generally rising cocoa production trends, a slight drop in productionis forecast for 2004/2005 due to lower harvest levels. (5) Cocoa prices experienced a moderate rise after slumps in the early 1990s and 1999-2001, buthave recently been flat or have slightly declined. Historical price trends are shown in Figure 1. Figure 1. Cocoa Prices, 1960-2004 U.S. Imports. Most U.S. imports of unprocessedcocoa beans come from CÃ´te d'Ivoire, Indonesia, and the Dominican Republic. Ghana, the secondlargest global producer is the fifth largest source of U.S. cocoa beans, but only supplied 4.20% ofsuch imports from 2000-2004. The leading sources of U.S. cocoa bean imports are shown in Table3. CÃ´te d'Ivoire exports more than 75% of its annual cocoa bean production although an increasingproportion of its cocoa is exported in the form of higher value products such as cocoa cake, cocoapaste, cocoa butter, cocoa powder and chocolate. European Union countries are the leading exportdestinations for CÃ´te d'Ivoire cocoa, accounting for about 65% of the country's total exports. AmongEU countries, the Netherlands is the largest importer. The United States gets about 20% of totalIvorian cocoa exports. Other cocoa importing countries, e.g., Canada and a number of Europeancountries, however, are the major suppliers to the United States of products processed from cocoabeans (paste, cake, powder, butter, chocolate, chocolate containing products). Cocoa beans enter theU.S. market duty free, but higher tariffs are applied to processed cocoa products. Table 3. Sources of U.S. Unground Cocoa Bean Imports byValue and Share, 2000-2004 ($ millions and country percentage share by quantity andvalue) Data Source: International Trade Commission Trade DataWeb reports of U.S. annual generalimports of cocoa by volume and value. After harvest, cocoa beans are fermented, which kills the bean and helps develop the distincttaste of cocoa; dried; and then roasted. They are then typically used to produce semi-processed cocoapaste (also known as cocoa liquor or mass), further refined products, such as cocoa butter and cocoacake (paste with most cocoa butter removed), cocoa powder, and chocolate. Prior to processing, the farm-based work of cultivating and harvesting cocoa islabor-intensive. In West Africa, cocoa farming typically begins with the thinning or partial clearingby hand of primary or mature tropical forest growth, which is used to shelter the cocoa trees. Although some varieties of cacao trees can thrive in sun if sufficient nutrients and water are present,shade also helps to reduce damage by certain types of tree pests and diseases, and helps retainadequate moisture. Such forest areas are also used because they provide a ready-made source ofshade that does not require planting of cover plants, and because forest areas are rich in nutrientsresulting from the decomposition of organic forest detritus. The tropical soils in many areas of WestAfrica where cocoa is grown are thin and easily leached of their nutrients. Mature forest is alsocleared because a widespread local traditional agricultural technique is to open new or long-disusedland to farming, use it until the soil is exhausted, and then leave it in regenerative fallow for lengthyperiods, sometimes many years. Such practices are changing in many areas; the application ofchemical fertilizers and, alternatively, the use of organic growing methods, are becoming morecommon, increasingly allowing more intensive farming to take place. Traditional land use methods,however, remain widespread, and in many areas cocoa farming continues to be undertaken byclearing mature forest areas. Planting of seedlings, which are usually transplanted after propagation and take three to fiveyears to reach productive fertility, also takes place by hand, as does weeding -- which is especiallyintensive in the year or so after forests are cleared for planting -- and the application of fertilizers andpesticides. Harvesting, which is usually on-going during several months of the year, is alsolabor-intensive. Cocoa pods must be cut carefully from the cacao tree branches, known as brooms,so as not to damage the flower "cushion" from which the fruit grows. Pods are then usually split andemptied by hand to remove the seeds and pulp for purposes of fermentation and drying, which aretypically undertaken at the farm level. It is in the harvesting process that child labor has beenreportedly most commonly found. Reports of children being trafficked to work on cocoa farms, and stories of children workingunder abusive conditions began to emerge in 2000. Following these reports, some began calling forboycotts and other punitive actions against the cocoa and chocolate industries. In response, thecocoa and chocolate industries, in conjunction with international labor organizations, othernon-governmental organizations, U.S. government agencies, and affected African governmentsdeveloped a protocol entitled, Protocol for the Growing and Processing of Cocoa Beans and theirDerivative Products in a Manner that Complies with ILO Convention 182 Concerning theProhibition and Immediate Action for the Elimination of the Worst Forms of Child Labor , to endthe use of abusive child labor in cocoa production. (8) The Protocol, widely known as the Harkin-Engel Protocol afterSenator Tom Harkin and Representative Eliot Engel, outlines six steps the industry formally agreedto undertake to end abusive and forced child labor on cocoa farms by July 2005. The Protocol isvoluntary and non-legislative. The Six Steps of the Harkin-Engel Protocol. 1.Issue a public statement of the problem and develop the terms of an actionplan. 2.Form a multi-sectoral advisory group to investigate labor practices in WestAfrica, and develop appropriate remedies for the elimination of the worstforms of child labor in the growing and processing of cocoa. 3.Sign a Joint Statement on the need to end the worst forms of child labor incocoa production, and identify alternatives for children removed from thecocoa sector. 4.Develop a memorandum of cooperation that establishes a joint actionprogram of research, information exchange, and steps to enforce theinternationally-recognized and mutually-agreed upon standards to eliminatethe worst forms of child labor in cocoa production. Establish an independentsystem to monitor and report compliance with standards. 5.Establish a joint international foundation to manage and sustain anti-childlabor efforts, promote field projects, and establish a clearinghouse of bestpractices to eliminate the worst forms of child labor. 6.Develop an industry-wide certification process that ensures that cocoa beansand their derivative products have not been grown and/or processed with anyof the worst forms of child labor. A critical component of the Protocol was to ascertain the extent to which abusive child laborand trafficking occurred in cocoa production, as the numerous reports on the practice were largelyanecdotal. In July 2002, the International Institute of Tropical Agriculture (IITA) completed a studyto determine the extent of child labor in the four major cocoa producing countries of West Africa. The study was carried out with the support of the U.S. Agency for International Development(USAID), the U.S. Department of Labor (DOL), the World Cocoa Foundation, the InternationalLabor Organization (ILO), and the governments of Cameroon, CÃ´te d'Ivoire, Ghana, and Nigeria. The study was conducted under the auspices of the Sustainable Tree Crops Program (STCP) of IITA(discussed below in this report). IITA is one of a number of international agricultural researchcenters funded by a consortium of multilateral and bilateral donors, including the World Bank, theUnited Nations Development Program, the United States and a number of other developed countries. Surveys were carried out in all four countries and included Baseline Producer Surveysconducted in 203 villages in Cameroon, Ghana, and Nigeria. Producer-Worker Surveys (PWS) andCommunity Surveys were conducted in CÃ´te d'Ivoire. The PWS were more detailed surveysconducted in Cote d'Ivoire only. The surveys covered the entire cocoa producing region and 1,500producers were interviewed. USAID, which funded the study, established a Technical AdvisoryCommittee of 16 independent experts drawn from other international research centers, the WorldBank, United Nations agencies, national research organizations, trade unions, and NGOs to overseethe study. The ILO expressed concern that full details of the survey results were never released,although a "synthesis" was made public. Consequently, the organization has questioned the validityof the data, and plans to conduct its own survey of Cote d'Ivoire and the cocoa-producing sector. (9) Nonetheless, the surveyprovides the most comprehensive data to date on the use of children in the West African cocoasector. Findings of the Study. Cocoa productionoccurred most often on small family farms, typically smaller than 6 hectares (about 15 acres) in size. The average cocoa farm sizes were 4.9, 5.7, 6.3, and 4.7 hectares in CÃ´te d'Ivoire, Cameroon, Ghana,and Nigeria, respectively. Average annual quantities produced per household ranged between 900kg (1,980 lbs) and 1700 kg (3,740 lbs). Approximately 284,000 children were found to be workingunder hazardous conditions, the large majority in Cote d'Ivoire (200,000). The survey only indicatedthe number of children found to be working under hazardous conditions, not how many childrenwere found on the farms overall. The survey also did not provide extensive information on non-paidworking children. Detailed information was provided, however, on salaried child workers. Farmers hiring salaried child workers had produced nearly twice as much cocoa as those whodid not. Larger farms were also found to use significantly more children from within farm families. An estimated 4,630 farmers were employing some 5,120 children as full-time permanent workersin CÃ´te d'Ivoire (versus 61,600 adults). In Ondo State, Nigeria, 1,220 children (versus 11,800) adultswere full-time workers. All of the salaried child workers in CÃ´te d'Ivoire originated outside of thecocoa-producing zone. Sixty-two percent (756) of the salaried child workers expected to be paidpersonally, while 32% (390) reported that their earnings were received by their family members, and6% indicated that payment was made to the intermediary who had brought the child to the work site. The latter situation may, in some cases, be an indicator of the use of indentured labor. Child Labor in Cocoa Farming. The study also foundthat: In West Africa, children in rural areas have traditionally worked in agricultureas part of the family unit. Family labor is the only type of labor employed on 31% of the cocoa farmsin CÃ´te d'Ivoire, 23% of Cameroonian farms, 17% of Ghanaian farms, and 10% of Nigerianfarms. Family labor is the most used labor type, e.g., in CÃ´te d'Ivoire 87% ofpermanent labor in cocoa farming came from the family, with family children accounting for 24%of household labor. These children are the most likely to be unpaid. Some children working on cocoa farms have no family ties to the farmers --some 4% (12,000 children) in CÃ´te d'Ivoire. The ILO speculates that these children were most likelytrafficked. (10) Children are engaged in almost all tasks/activities involved in cocoafarming. Boys are more likely to work in cocoa farming. Fifty-nine percent of childrenin cocoa farming are boys. More than 60% of children working in cocoa farming are below the age of14. Children in Potentially Hazardous/ExploitativeSituations. Other findings included that: Children work in a variety of tasks, which depending on conditions, may ormay not be detrimental to the child's well-being. Children with no family ties and those recruited through intermediaries aremore likely to be at risk for exploitation. An intermediary was involved in the recruitment processfor an estimated 41% (2,100) of the 5,120 salaried child workers in CÃ´te d'Ivoire. In Nigeria, anestimated 29% of the 1,220 salaried child workers were recruited through intermediaries. Anintermediary could be a known family friend or trafficker. The survey does not make adetermination. Estimates of Working Children at High Risk by SelectedActivities and Characteristics in Study Areas of West Africa Source: STCP Surveys Child Labor and Education. In relation to education,the study found that: In CÃ´te d'Ivoire, one-third of school-age children (6 to 17 years) living oncocoa farms have never attended school. In CÃ´te d'Ivoire, children working in all cocoa farming tasks were less likelyto be enrolled in school (34% enrollment rate) compared to those children who did not work (64%enrollment rate). In CÃ´te d'Ivoire, children of immigrant cocoa farmers also are less likely to beenrolled in school. In all four countries, girls have lower enrollment rates thanboys. Farmers' Income and Child Labor. Compensationtrends were also covered in the study, which found that: In West Africa, cocoa production is labor-intensive. Most production is by small-scale farmers with few resources who often usethe entire family to contribute to cocoa farming. Average annual cocoa revenues ranged from $30 to $205 per householdmember. However, wages varied significantly. In CÃ´te d'Ivoire, child workers reported a meanannual payment of $80, while adult workers reportedly received $135 per year. In Nigeria, childrenreportedly earned $115 annually, while adult workers were paid an annual average salary of $205. Cocoa accounts for a large share of total household income among cocoafarmers -- 50% in Cameroon, 55% in Ghana, 66% in CÃ´te d'Ivoire, and 68% inNigeria. Even though cocoa farming is the main source of income, the quantity of cocoaproduction is relatively low, making it difficult for families to have sufficient income to meet theirneeds. The practice of trafficking of children to work in West African cocoa production is widelyacknowledged, but information about its extent is not widely available. Much of the information isanecdotal and focused on CÃ´te d'Ivoire, the largest cocoa producing country. (11) For example, in 2000, theBBC broadcast a documentary that portrayed children being trafficked from Mali into CÃ´te d'Ivoireand made to work on cocoa farms where almost all children involved in cocoa production andharvesting are often exposed to hazardous conditions (as revealed in the IITA child labor surveyabove). (12) In July 2001,Knight Ridder published a series of reports on young boys who had been tricked, sold or traffickedto Ivoirian cocoa farmers. Among other things, these reports of child trafficking gave impetus to theHarkin-Engel Protocol discussed in this report. The extent to which West African cocoa producers employ child labor is, in part, a functionof economic factors. (13) The extent of child trafficking is likewise affected by such factors, these include low cocoa prices,low incomes of family farmers, and large numbers of small holder farmers who cannot afford toengage hired labor. Lack of adequate school facilities in cocoa producing areas also plays a role. Cultural factors are involved too. Sociologists point out that not only is there a tradition of childrenparticipating in household and farm work from an early age (the IITA study), but there is a strongtradition in West Africa of child migration both within countries and across borders. Such migratorypatterns make it difficult to monitor and control child trafficking. (14) A study of Malian childrenpoints out that children are often sent to live outside the family, village or country for work, familysolidarity, or education and concludes that migration is a rite of passage, and a financial necessityfor many. (15) Acknowledging that reliable and verifiable data on child trafficking in West African cocoaproduction are very scarce, one non-governmental organization -- Save the Children -- proposes thatanti-trafficking efforts should be undertaken along two tracks: prevention and protection. (16) Preventive measureswould include such actions as developing and implementing national action plans to combattrafficking, including legal and legislative frameworks to make child trafficking a crime. It wouldbe up to national governments to provide care for intercepted and repatriated children, most likelyin cooperation with local and international NGOs working in regions where children are at risk. Congress has consistently expressed interest in and supported efforts to abolish and counterchild labor, particularly the worst forms of child labor. Congress has funded programs to combatchild labor, expand the United States' role in the global fight against child labor, and include clausesthat require eliminating child labor in trade agreements. In 1997, Congress prohibited theimportation of goods made with forced or indentured child labor. (18) Later in 2000, Congressamended Section 307 of the Tariff Act of 1930 -- which prohibited the importation of goods madewith forced or indentured labor -- to ensure that the statute applied to goods made with forced orindentured child labor. (19) Congress also added child labor stipulations to foreign aidlegislation through the Export-Import Bank Re-authorization Act of 1997. (20) This law integrates childlabor into the list of criteria for denying credit by the Export-Import Bank. Another law relating tochild labor abuses is the Victims of Trafficking and Violence Protection Act of 2000. (21) The law providespunishment for traffickers, as well as assistance and protection to trafficking victims, with a specialemphasis on women and children, both in the U.S. and abroad. Congress has used various international trade agreements to fight child labor. TheGeneralized System of Preferences (GSP) is a program that extends duty-free entry to a wide rangeof products from more than 140 countries and territories. The Trade and Development Act of 2000expanded the GSP ineligibility criteria to include the Worst Forms of Child Labor. (22) The act prohibits anycountry from GSP consideration if "[s]uch country has not implemented its commitments toeliminate the worst forms of child labor." (23) The Office of the United States Trade Representative (USTR)is required to conduct a yearly review of countries receiving these benefits to determine, among otherthings, whether they are implementing their commitments under International Labor Organization(ILO) Convention 182 to eliminate the worst forms of child labor. The Trade Act of 2002 amendedthe Andean Trade Preference Act (ATPA) to add child labor criteria. (24) The North AmericanAgreement on Labor Cooperation (NAALC), the labor supplement to the North American Free TradeAgreement (NAFTA), also has a child labor component. The agreement seeks to promotefundamental labor standards, including those addressing child labor, compliance with labor laws,and the enforcement of those laws in each country. The Office of the U.S. Trade Representativestates that the NAALC has enhanced transparency and public debate on labor law and enforcementissues. (25) In 1993, Congress directed the U.S. Department of Labor (USDOL) International Child LaborProgram (ICLP) to investigate and report on child labor around the world. Since then, Congress hascontinued to fund the USDOL-ICLP research and reporting efforts. It has expanded the ICLP'smandate to include administering grants to organizations engaged in efforts to eliminate child laborand to improve access to quality basic education; and raising public awareness and understandingof child labor issues. Congress appropriated $79 million in FY2005 to ICLP for the elimination ofinternational child labor. Congress has also enhanced U.S. efforts to fight child labor by addingchild labor responsibilities to a host of U.S. agencies including, USAID, U.S. Department of State,and U.S. Customs Service. In 2001, a number of news reports were released that described children being trafficked andforcibly used in the West African cocoa sector. In the wake of these reports, and the increasingpublicity about the use of child labor in the cocoa sector, a range of policy initiatives and efforts tocombat the practice were initiated by a mix of non-governmental development and human rightsorganizations, firms in the cocoa industry, and governments. In the United States, congressionalefforts to create a public-private response to the use of abusive child labor in cocoa production wereamong the most prominent attempts to achieve this goal. On June 28, 2001, the House passedH.Amdt.142, which provided $250,000 to the Food and Drug Administration. The funds wereintended to develop a label for chocolate products indicating that no child slave labor was used inthe growing and harvesting of cocoa. A Senate companion bill to H.Amdt. 142 was never introduced, in part, because followingpassage of the House bill, policy advocates affiliated with the cocoa industry, the International LaborOrganization (ILO), several private labor rights groups, together with three Members of Congress,negotiated "a comprehensive, six-point problem-solving" protocol aimed at ending the "use ofabusive child labor in cocoa growing," known as the Harkins-Engel Protocol. At this date there is consensus that the first five steps have been completed. There aredifferences of opinion on whether the final step, the development of a certification system, has beencompleted. (26) Afterrepresentatives of the chocolate industry informed Senator Harkin that they will not meet the Julydeadline, (27) the Senatorreportedly warned that Congress might again take legislative action related to the issue. (28) Some speculate that theSenator might reintroduce a bill analogous to S.1551, the Child Labor Deterrence Act (Harkin, 106thCongress). It would have prohibited the importation into the United States of manufactured andmined goods that are produced by abusive child labor. (29) Companies violating the prohibition against importing theseproducts would have been subject to stiff penalties. The legislation was referred to the SenateFinance Committee but did not receive further action. According to representatives of the cocoa/chocolate industry, anti-child labor programs inCÃ´te d'Ivoire and Ghana have made significant progress toward fulfilling the terms of theHarkin-Engel Protocol. (30) The President of the World Cocoa Foundation points out thatthe Ivorian Government has funded a child labor monitoring pilot program in the OumÃ© District andfield staff have been trained using International Labor Organization (ILO) question guides. Thecocoa/chocolate industry is reportedly spending $5 million annually to support the development ofa region-wide certification process, and for programs to improve the economic well-being of thecocoa farming families in West Africa. (31) Data is now being collected and compiled into a certificationreport which will be reviewed by the National Steering Committee. In Ghana, a similar process hasalso been undertaken in five districts. Finally, the surveys used to monitor the use of child labor willbe carried out on an on-going basis, during the harvest periods. Ultimately the industries and theGovernments hope to refine and scale up the monitoring efforts to include a statistical representationof cocoa communities across the countries. The non-governmental organization, Global Exchange, released a progress report onimplementation of the Protocol. Instead of reporting success, that organization asserted that theindustry had failed to fully implement the Protocol. (32) Key areas of concern cited by Global Exchange, include: Substitution of pilot certification efforts for the an industry-wide certificationsystem; Failure to address the root cause of abusive child labor --poverty; The use of pre-existing anti-child labor programs (Combating Trafficking inChildren for Labor Exploitation in West and Central Africa and Sustainable Tree Crops Program,described below) that have had minimal success; and Lack of enforcement and compliance mechanism after fullimplementation. On July 1, 2005, Senator Tom Harkin, Representative Eliot Engel, and the Chocolate/CocoaIndustry released a joint statement on efforts to address the worst forms of child labor in cocoagrowing. In the statement, the industry highlighted the positive steps taken since signing theProtocol, and committed to ensuring that 50% of cocoa growing areas would be under a certificationsystem within three years. Senator Harkin and Representative Engel also expressed theirdisappointment that the Protocol was not implemented in full, but stated their willingness to workwith the industry to ensure full implementation. (33) The first three programs described herein are complementary initiatives that work togetherto combat the use of child labor in cocoa production. They are all implemented through the ILO withU.S. and international support. The Sustainable Tree Crops Program (STCP) is a public-private partnership that seeks toraise the income and quality of life in cocoa-producing communities. The cocoa/chocolate industryaddresses abusive child labor through its efforts to improve agricultural marketing and production,and support farmers' organizations. The U.S. Agency for International Development (USAID), alongwith the World Cocoa Foundation (WCF), the International Labor Organization (ILO), theGovernments of Cameroon, CÃ´te d'Ivoire, Ghana, Guinea, and Nigeria, and local agribusiness firms,share in the management and implementation of the program. In Cote d'Ivoire, the governmentreportedly funds the trainers in the Farmer Field Schools discussed below. Recognizing that abusive forms of child labor are often a symptom of poverty, STCP aimsto increase access to environmentally friendly technology that raises profitability, productivity andefficiency of smallholder tree crop systems. According to STCP representatives, farmers who haveparticipated in pilot programs in CÃ´te d'Ivoire and Ghana have experienced boosted crop yields ofbetween 20% and 50%. (34) As a result, STCP staff report that some farmers have been ableto afford school fees for their children. Additionally, STCP staff report that more than 4,000 farmershave been sensitized in CÃ´te d'Ivoire and Ghana on the dangers of abusive child labor. Key activitiesof the program include: Farmer Field Schools - where farmers work together to solve crop disease andpest problems; Spraying minimization; Crop rotation techniques; Agribusiness skills training; Child labor sensitization; and HIV/AIDS awareness. (35) The U.S. Department of Labor's International Child Labor Program (ICLP) implements aregional anti-trafficking program in West Africa through the ILO to stop child trafficking within theaffected countries and across the borders. The program received $225,525 in FY1999, $7.3 millionin FY2001, and $2 million in FY2004. Upon completion in 2007, the initiative will have beenimplemented in Benin, Burkina Faso, CÃ´te d'Ivoire, Gabon, Mali, and Togo. Key activities of theproject include: Rescue and rehabilitate trafficked children (rehabilitation includes placingrescued children in educational and/or vocational programs); Establish awareness-raising campaigns among at-risk groups; Develop sub-regional and bilateral coordination mechanisms for the preventionof child trafficking, withdrawal from exploitative labor, and reintegration; Facilitate the development of a national legal environment that wouldimplement actions against child traffickers; Train border authorities to detect and intercept child trafficking;and Provide non-formal education, referral to local schools, or occupational skillstraining. (36) ICLP also implements through the ILO a complementary West African regional program toprevent and eliminate the use of child labor in the cocoa sector. The West Africa Cocoa/CommercialAgriculture Program (WACAP) received $5 million from DOL in FY2002. Upon completion inJanuary 2006, the program would have been implemented in Cameroon, Ghana, Guinea, and Nigeria. To date WACAP has reportedly reached more than 25,000 people through its awareness raising andcapacity building activities. Also, according to Ivorian and Ghanaian STCP officials, more than3,000 of the targeted 9,000 children below age 13 involved in child labor have been identified,counseled, withdrawn from work, and placed in educational or vocational training facilities. (37) Ultimately, the projectseeks to: Develop a National Plan of Action for prevention and elimination of hazardousand exploitative child labor in the cocoa/agriculture sector; Prepare and launch awareness raising campaigns to combat and prevent childlabor in the cocoa/agriculture; Inform local communities and local administrative authorities about nationalchild labor legislation; Educate approximately 9,700 children who have been withdrawn from workunder the program; Provide skills to at least 500 adult family members to enhance theirincome-earning potential; Train children 12 years and older in marketable skills; Monitor the use of child labor in the cocoa sector; Prevent/protect about 70,000 children between 13 and 18 years from engagingin hazardous work; Rehabilitate children removed from hazardous work through education andvocational training provisions; Establish an independent child labor monitoring/verification system inparticipating countries; and Integrate labor inspection programs with child labor monitoring/verificationsystem. (38) Since launching WACAP, Cote d'Ivoire has ratified the ILO Minimum Age Convention 138and the ILO Worst Forms of Child Labor Convention 182, has established a national steeringmechanism for a country-wide anti-child labor program, set up a national Cocoa Task Force, and hasintegrated Convention 182 into its national laws. Nigeria and Ghana have also initiated nationalanti-child labor programs. In an effort to combat the use of child labor in cocoa production, Fair Trade LabelOrganizations International (FLO) encourages the formation of farmer cooperatives. Participatingfarmers are guaranteed a minimum price per pound through direct sales to Fair Trade buyers underlong-term contracts. Specifically, farmers who sell to Fair Trade buyers receive a minimum of$1,750 per metric ton ($1,950 per metric ton organic). If the world price rises above $1,600 permetric ton, the Fair Trade price meets the world price and adds a $150 premium per metric ton ($200premium per metric ton for organic). In exchange for receiving above market price sales, farmersmust not use forced or child labor. This process is certified by the Fair Trade Label OrganizationsInternational (FLO). Additionally, farmers are required to reserve a portion of their revenues forsocial projects, such as community development and technical training. To date, 42,000 cocoafarmers and their families participate in eight Fair Trade cooperatives in Ghana, Cameroon, Bolivia,Costa Rica, Nicaragua, Dominican Republic, and Ecuador (39) . Additional key elementsof the cooperatives include: Promotion of environmentally sustainable practices, such as shade cultivation,composting, and minimization of chemical inputs; Encouragement of crop diversification; Regular farm inspection to ensure compliance of laborstandards; Access to credit for labor and production costs; and Training in marketing and record keeping. (40) Some economists point to fair trade schemes or to labeling schemes as effective ways to raiselabor standards, including discouraging child labor, while providing producers with increased returnsand compensation for increased costs (from not using children). (41) A difficulty with FairTrade approaches, however, is that their scope may be limited by the numbers of producers involvedand by the number of consumers willing to pay a higher price for a "fairly traded" product. The Trade and Development Act of 2000 (PL. 106-200) expanded the Generalized Systemof Preferences (GSP) eligibility criteria to include barring the worst forms of child labor. (42) The act prohibits anycountry from GSP consideration if "[s]uch country has not implemented its commitments toeliminate the worst forms of child labor." Some trade analysts advocate the recision of trade benefits for countries that continue to usechild labor in cocoa production. The Africa Growth and Opportunity Act (AGOA), seeks to offersub-Saharan African countries greater access to the U.S. market. Although CÃ´te d'Ivoire gainedGSP/AGOA status in 2002, (43) according to the USTR, on January 1, 2005, CÃ´te d'Ivoire'sAGOA beneficiary status was "terminated for reasons related to lack of progress on key economicreforms and the Ivorian government's decision to unilaterally violate the U.N. monitored cease-firein November 2004." CÃ´te d'Ivoire is also subject to U.S. sanctions under Section 508 of the ForeignAssistance Act of 1961, as amended, that bar bilateral U.S. assistance, with some exceptions. Thesesanctions are in place due to a change of government by military coup in 1999, and because thesubsequent election won by President Laurence Gbagbo in 2000 was administered by thegovernment formed as a result of the 1999 coup. The election was not seen as free and fair by theUnited States. Consequently, there may be a relative paucity of options to impose further assistanceor trade-based sanctions on CÃ´te d'Ivoire (the largest producer of cocoa) for its use of abusive childlabor. Furthermore, as cocoa beans enter the U.S. market on a duty free basis, they are not includedin GSP/AGOA preferential schemes. Nonetheless, advocates of a trade-based solution underscorethat the child labor provision should be considered for the other cocoa-producing countries, and forCÃ´te d'Ivoire if and when CÃ´te d'Ivoire's GSP/AGOA status is restored. Furthermore, it has beenpointed out that a number of cocoa containing products do enter the United States under thesepreferential schemes. One option may be to withdraw preferences for cocoa containing products onthe basis that the exporting countries are not abiding by their child labor commitments. The Harkin-Engel Protocol calls for the establishment of a certification system incocoa-producing countries by July 1, 2005. Critics maintain that the Protocol should be augmentedto include enforcement mechanisms. Since the Protocol is a voluntary, self-regulatory agreement,advocates of tougher measures argue that the Protocol may have a minimal impact on the use ofabusive child labor. Furthermore, observers note that national governments may not have thecapacity nor the will to ensure that the worst forms of child labor are not used in cocoa production. Some advocates are calling for an outline stipulating how a certification process could work, anddetailing who might fund such an effort. Industry proponents say that it is premature to consider alternatives to the industrycertification plan that was slated to begin on July 1, 2005. It appears that the industry certificationplan will begin as a series of pilot projects in CÃ´te d'Ivoire and Ghana with a focus on farm levelconditions, rather than on the other supply chain components including sorting, transport, and storagenetworks. (44) Industryspokespersons say that given the size of the sector -- there are 1.5 million cocoa farms in the twocountries -- it will not be possible to certify that all cocoa beans have been produced and harvestedwithout child labor. (45) However, according to a July 1, 2005, press release issued by Senator Harkin, Representative Engel,and the cocoa/chocolate industry, 50% of all cocoa producing areas will be certified by 2008. Child rights advocates claim that legislation already exists to prevent the use of abusive childlabor in cocoa production. Proponents argue that the U.S. Customs Service should prohibit theimportation of cocoa derivative products from some sources, citing the Tariff Act of 1930, asamended. In 2000, Congress amended the Tariff Act to explicitly state that the statute applied togoods made with forced or indentured child labor. (46) Supporters assert that the U.S. Customs Service is failing toenforce this anti-child labor law. Non-governmental organizations, Global Exchange, theInternational Labor Rights Fund (ILRF), and the Fair Trade Federation have reportedly filed alawsuit against the U.S. Customs Service to force the Service to act under the Tariff Act. (47) Using Section 307 of the Tariff Act of 1930, as amended, to ban imports of cocoa from CÃ´ted'Ivoire or other producing countries raises a number of potential law implementation concerns. Trade analysts differ as to whether such a ban to enforce child labor standards could withstand achallenge in a World Trade Organization (WTO) dispute settlement. (48) Some maintain that WTOagreements do not include labor standards and that violation of labor standards, with one exception,is not covered under WTO rules. The only specific mention of a labor standard is in Article XX(e)of GATT 1994 which permits exceptions to GATT obligations in cases where prison labor has beenused to produce a product. Conversely, others argue that U.S. imposition of an import ban, becauseof the use of abusive child labor in production could withstand WTO challenges because of moregeneral language in article XX(b) which permits exceptions to GATT rules in order to protect humanhealth. This position is based on the notion that abusive child labor is injurious to health, and thatchildren have been reportedly found to be using pesticides without adequate protection. Proponentsof banning cocoa imports because they are produced using abusive child labor practices also arguethat recent WTO dispute panel decisions validate a broad approach to enforcement of a membercountry's laws when health considerations are involved. Some contend that an import ban on cocoa produced using abusive child labor mightcontribute little to improving the lot of children in rural CÃ´te d'Ivoire or other cocoa producingcountries. Critics do not argue that abusive or unsafe child labor practices should be ignored, butrather that the underlying cause of child labor is rural poverty which should be the focus of effortsto improve the lot of children. Questions of targeting and fairness are also at issue. As trade dataabove show, while the United States imports about 1/4 of its cocoa beans from CÃ´te d'Ivoire, about65% of Ivorian cocoa goes to Europe, from which the United States imports cocoa products. Towhat extent would an import ban cover imports of products from Europe manufactured from cocoabeans produced under conditions of abusive child labor, as well as to the bean-producing countries? The Harkin-Engel Protocol is an agreement by which two cocoa/chocolate industry groupscommitted themselves and their members to the goals outlined in the protocol. Their pledge waswitnessed by the government of CÃ´te d'Ivoire, Members of Congress, the International LaborOrganization (ILO), and several private labor rights groups. Were the Protocol to experience implementation challenges, or if broader participation werefound to be useful, based on Protocol implementation experience, the creation of other cooperativeaction plans or framework agreements could conceivably be pursued. One possible model for suchan effort is the Kimberley Process Certification Scheme (KPCS), an international voluntaryagreement that seeks to regulate the trade in rough diamonds through the creation of a closed systemof trade between "legitimate" traders of rough diamonds, as defined under the KPCS. (49) The system is based uponthe use of certificates issued by state participants, which accompany and vouch for the legitimacyof diamonds that they import or export. The aim of the KPCS is to prevent trade in "conflictdiamonds" (diamonds sold by rebel groups to fund armed insurgencies, mostly in Africa) whilehelping to protect the legitimate rough diamond trade. The KPCS is comprised of states and regionaleconomic integration organizations that are eligible to trade in rough diamonds under the KPCS. Thediamond industry and civil society groups act as observers to the KPCS, and actively take part inmonitoring and improving the scheme. The KPCS, which could be viewed as a restraint on tradeunder World Trade Organization (WTO) rules, has a temporary WTO waiver that expires in 2006.Observers expect a further WTO waiver to be sought to continue the Process. (50) While the KPCS has what some observers see as drawbacks, (51) it is undergoing continuedreview by Participants and Observers. Some may argue, however, that creating a similar processaimed at ending abusive labor processes in the cocoa industry could delay implementation of effortsto achieve that goal, since the time that would likely be involved in negotiating such an agreementcould be lengthy. In addition, such an effort could lead to the adoption of "lowest commondenominator" labor standards, since implementation of such a framework would likely be arrivedat by voluntary consensus by participating governments, some of which may lack the capacity orlegal mechanisms to ensure adherence to strict labor standards. In addition, some non-participatingcountries might object to such a scheme as a restraint on trade under WTO rules, and challenge itin the WTO. While a waiver similar to that under the KPCS could potentially be sought, someobservers believe that WTO rule exceptions related to public health and morals might not beapplicable to such a cocoa trade regime; from this perspective, such a regime might not conflict withWTO rules. Researchers note that cocoa-producing countries could use findings about cocoa agriculturallabor patterns for their benefit. The use of child labor in cocoa production, for instance, could beseen as an indicator of poverty. Consequently, countries could potentially incorporateeducation-based anti-child labor initiatives into their country Poverty Reduction Strategies (PRS). According to STCP officials, Ghana and CÃ´te d'Ivoire have already programmed some of theirrevenues gained through the Highly Indebted Poor Countries (HIPC) Initiative to bolster theireducation infrastructure, and thereby address one of the basic goals of anti-child labor efforts. (52) Ivorian officials maintain that their country is committed to ending the use of abusive childlabor in cocoa production, and that they are working vigorously to combat the problem and expandanti-child labor efforts, but face significant challenges in doing so. They note that large parts of keycocoa-growing areas in western CÃ´te d'Ivoire are the site of instability and armed conflict related tothe larger civil conflict that afflicts the country. (53) The government of CÃ´te d'Ivoire has reportedly spent more than$1 million on countering abusive child labor in cocoa production -- largely through STCP. (54) Analysts point out that even in instances when children can be removed from the worst formsof child labor, there may not be educational institutions available to them. Many farms in WestAfrica are in rural areas where educational infrastructure is limited, and transport to schools overlong distances is limited or virtually non-existent. Furthermore, many farmers are unable to affordschool fees, uniforms, and/or books. Although in Ghana primary education is free and compulsory,the government reportedly does not enforce the law because it knows that there are not enoughschools to service all children. Many of the teachers in the country are obtained through thecompulsory national service, a limited service program. Interviews conducted during the IITA survey revealed that greater employment of familylabor was a common response to the drop in cocoa prices during the 1990s, and the resulting declinein cocoa incomes. In addition to the substitution of family labor for paid labor, farmers have alsoreduced the use of purchased inputs, such as fertilizers. The net effect of both of these factors hasled to lower productivity and incomes, and to reduced household investments in children's education. Some analysts argue that the fall of world cocoa prices led to an increase in the use of childlabor. (55) Labor rightsadvocates argue that if farmers could gain greater profits from their crops, then they would be lesslikely to use children in cocoa production. (For prices trends, see Figure 1, above.) Child labor , as derived from ILO Convention 138, is any economic activityperformed by a person under the age of 15. Not all work is considered harmful to or exploitative ofchildren. Child labor is work that prevents children from attending and participating effectively inschool or is performed by children under hazardous conditions that place their healthy physical,intellectual, or moral development at risk. The worst forms of child labor , as defined in ILO Convention 182, is the useof any individual under the age of 18 for the purposes of debt bondage, armed conflict, commercialsexual exploitation, drug trafficking, and other types of work identified as hazardous to children byratifying members. Working children are those who carried out at least one task/activity on thecocoa farm, i.e., clearing ground; weeding; maintaining cocoa trees; applying pesticides; spreadingfertilizer; harvesting; piling/gathering up; pod breaking; fermenting; transporting; drying; and otheractivities.

Summary: Stories of children being trafficked to work under horrific conditions in West African cocoafields emerged in 2000. Shortly thereafter, in 2001, Congress passed H.Amdt. 142 to P.L. 107-76 , FY2002 Agriculture, Rural Development and Food and Drug Administration (FDA)Appropriations , which would have provided $250,000 to the Food and Drug Administration, to beused to develop a label for chocolate products indicating that no child slave labor had been used inthe growing and harvesting of cocoa in a product so labeled. A Senate companion bill was neverintroduced, in part because after House passage of the bill, representatives of the cocoa industry, theInternational Labor Organization (ILO), several private labor rights groups, and Members ofCongress, negotiated "a comprehensive, six-point problem-solving" protocol aimed at ending the"use of abusive child labor in cocoa growing." Signatories to the protocol committed to developinga certification process that would ensure that no abusive child labor would be used in cocoaproduction. It is currently being debated whether the protocol has been implemented in full by itsJuly 1, 2005 deadline. Critics contend that the cocoa/chocolate industry fell short of itscommitments, as it has only developed a pilot certification scheme in Ghana and Cote d'Ivoire --which does not encapsulate the entire West African cocoa producing region. The industry countersthat significant progress has been made, the affected governments have contributed significantresources towards this endeavor, and that this is a work in progress. According to a joint statementreleased by Senator Tom Harkin, Representative Eliot Engel, and the cocoa/chocolate industry onJuly 1, 2005, the cocoa/chocolate industry has committed to expanding its pilot certification system to cover 50% of the cocoa growing areas of Cote d'Ivoire and Ghana within three years. There has been a wide range of suggestions in countering the use of abusive child labor incocoa production. Some advocate revoking trade preferences. Others point to the root cause of childlabor: poverty. Those analysts suggest boosting investments in education, and boosting world cocoaprices. Still some observers assert that conflict and political instability will hinder any effort tocounter abusive child labor. This report outlines how and where cocoa is produced, discusses the use of abusive childlabor in the industry, efforts by Congress to counter abusive child labor -- including theHarkin-Engel Protocol, and initiatives by affected governments and international organizations toaddress the problem. This report also provides possible policy options that might undertaken to stopthe use of child labor in cocoa production. This report will be periodically updated.