Sustainability Discourses in Public-Private Partnerships
Discussing Private Interests within the Case of the IDH Cocoa Program
Master Thesis
University of Amsterdam
Selective Master in International Relations Research Project: Global Politics of Sustainability Research Supervisor: dr. L.W. Fransen
Second Reader: dr. R. J. Pistorius
Lotte Francina Catharina Tange Student Number: 6038174 Kerkstraat 425 II 1017 HX Amsterdam, The Netherlands E-mail: Lotte_Tange58@hotmail.com Phone: +31 (0)6 27507628
Abstract
In this thesis the IDH cocoa program is examined as an example of a public-private partnership in which different societal actors voluntarily cooperate to achieve a ‘common goal’ on which they have to agree, while all relevant dimensions of ‘the problem’ remain disputable. It is with
reference to this particular type of situation that this thesis focuses on sustainability discourses as a particular way to look at the problem at hand. Inspired by a critical review of IOB in 2014, this research dives into the dynamics between various private interests within the IDH cocoa
program, and the implications of the current distribution of interests for future cooperation. Within the IDH cocoa program, it seems that the balance has shifted too much in favor of one specific sustainability discourse, which makes it unattractive for actors with different ideas about sustainability to participate. The micro-level discourse analysis in this research exhibits a link with structural theorizing on development at the macro-level, and that is based upon different social science paradigms. The main argument of this thesis is that in order to take the plurality of sustainability discourses and social science paradigms seriously, IDH should account for more heterogeneous practices within its cocoa program, and the unintended effects of its current development interventions.
Keywords:
Sustainable Development, Corporate Food Regime, Private Transnational Governance, Public-Private Partnerships, Corporate Sustainability, Sustainability Discourse, Meta-Code
Abbreviations
MNC Multinational Corporation
CS Corporate Sustainability
IDH Initiatief Duurzame Handel (Sustainable Trade Initiative) PPP Public-Private Partnership
Table of Content
1. Introduction 6
2. Theoretical Framework 10
2.1 The Corporate Food Regime 10
2.2 New Governance Arrangements in the Chocolate Sector 11 2.2.1 The Convening Role of Public-Private Partnerships 12 2.3 The Business Case for Corporate Sustainability Policies 15 2.3.1 Corporate Sustainability Policies and Sustainability Discourses 16
3. Methodology 19
3.1 Method 19
3.2 Case Selection 19
3.3 Data Gathering 20
3.4 Operationalization of Concepts 21
3.5 Validity and Reliability Threats 24
3.6 Theoretical and Societal Relevance 24
4. Case Description 26
4.1 Problems Facing the Chocolate Industry 26
4.2 The Sustainable Trade Initiative (IDH) 28
4.2.1 The IDH Cocoa Program 30
4.2.2 Dilemmas Regarding Public and Private Interests 30
4.3 IDHs Sustainability Discourse 31
5. Results 35
5.1 Mars Incorporated 35
5.1.1 Mars’ Sustainability Discourse 36
5.1.2 How does Mars relate to IDHs cocoa program? 39
5.2 Ecom AgroIndustrial Ltd. 40
5.2.1 Ecom’s Sustainability Discourse 42
5.3 Archer Daniels Midland 46
5.3.1 ADMs Sustainability Discourse 47
5.3.2 How does ADM relate to IDHs cocoa program? 48
5.4 Ahold 50
5.4.1 Ahold’s Sustainability Discourse 51
5.4.2 How does Ahold relate to IDHs cocoa program? 52
6. Analysis 54
6.1 Recommendations for the next funding phase (2016-2020) 55
7. Discussion 57
8. Conclusion 59
1 Introduction
Recently, a media scare shocked the world’s chocolate market with some experts warning that demand for cocoa is growing to the point that we may run out of affordable supplies within a couple of years.1 The main reason for this possible shortage is the fact that we are running out of productive cocoa farmers due to multiple deep-seated social, environmental and economic problems at the bottom of the supply chain (Cocoa Barometer, 2015). This thesis works from the assumption that the chocolate sector is facing critical problems on environmental, social, and economic levels, and is therefore in need of long-term modifications in sustainable development.
The main actors on which this thesis will focus are large multinational corporations (MNCs), and their contributions to sustainable development in the cocoa supply chain in the form of corporate sustainability (CS).2 In the chocolate sector, six manufacturers control 40 percent of the global cocoa market, two processors produce about 70-80 percent of the global coverture, and eight traders control 60-80 percent of the trade in cocoa beans (Cocoa Barometer, 2015). The presence of such a concentrated and competitive industry raises questions about how the corporate sector could cooperate in new governance arrangements to make sustainable development possible throughout the cocoa supply chain.
Against the background of a globalized world economy, in which governments
increasingly lose grip on the regulation of business, the question of how corporate sustainability policies might influence transnational commodity chains is more relevant than ever. In the past decades, various private endeavours set the context for working towards enhanced sustainability in cocoa production and trade. But, although the number of MNCs encouraging sustainable practices has multiplied over the last couple of years, and scholarly literature on the role of corporate sustainability standards has grown exponentially, very little is known on what the actual impacts of those endeavours are in cocoa growing regions. Despite the success stories presented in private sustainability reports and impact studies, most farmers in West-Africa still live below the poverty line (Cocoa Barometer, 2015).
In order to become more effective in tackling sustainability issues in the chocolate sector, a number of business, civil society, and government representatives in the Netherlands signed an agreement that initiated the Sustainable Trade Initiative (IDH) as an innovative form of public-private partnership. The IDH cocoa program focuses on public-private companies in the chocolate market by creating a “business case” for sustainability. In this process, IDH wants to move away
1 There is debate on what the size of this demand-supply gap actually is and how likely it is that it will pose a serious threat. See www.icco.org and www.fao.nl for accurate production figures & predictions.
from the concept of CS as marketing tool, and work towards “shared value” in the cocoa supply chain by making sustainability “core business”. Despite IDH’s focus on private actors, its method is based on a public-private partnership between the Dutch government, civil society organizations, and multinational corporations to create results-oriented coalitions of stakeholders that work on the Millennium Development Goals 1 (poverty reduction), 7 (safeguarding the environment), and 8 (fair trade) (IDH, 2013b).
IDH’s cocoa program stands in close relationship with individual CS policies, because in recent years private companies have become project applicants for the field projects of IDH’s largest activity – the Cocoa Productivity and Quality Program (CPQP). In this way, MNCs get part of their sustainability program reimbursed by IDH. In 2014, the Policy and Operations Evaluation Department (IOB) of the Ministry of Foreign Affairs conducted a review on the relevance, effectiveness and efficiency of IDH. This review raised concerns regarding the distribution of public and private interests within the IDH cocoa program and the implications for the ‘appropriateness’ of public funding in this situation.
This concern touches upon a very fundamental issue, because various actors in the cocoa supply chain face different problems, complex influences, shifting commitments, and moral complexity in their daily effort to act on sustainable development goals (Hajer & Laws, 2006). What are the ‘public’, and the ‘private’ interests within the IDH cocoa program? Can they even be considered a homogeneous entity, that is, applicable to all public, or private actors? This thesis argues that this is not the case, at least for private actors, for in many occasions they are not able to agree on what the problem actually entails.
Within the constraints of this research, it was only possible to empirically investigate the private interests within the IDH cocoa program. Based on the results of the analysis, a tentative proposition is formulated concerning public interests. Private interests are examined by means of a discourse analysis of the CS policies of four MNCs that are participating in the IDH cocoa program. Governance is seen as a matter of ‘defining the situation’ in a particular way, and translating this reality into specific policies to address the problem that is thus agreed upon (Hajer & Laws, 2006). Individual interests are approached from rational choice theory, and thus linked to so-called rationalities, or different ways of looking at the world.
In the first place, this thesis critically assesses the concerns raised by the IOB review (2014) by diving deeper into the world of ideas behind sustainability in the cocoa sector. Exploring the discursive dynamics between varying private interests within IDH’s cocoa program could add an interesting new perspective to the earlier findings of IOB (2014). Moreover, this micro-level discourse analysis exhibits a link with structural theorizing on
development at the macro-level. This thesis should not be read as an evaluation of the IDH cocoa program, or a commentary on ‘best practice’. Rather, the concern of this research is with the relationship between various sustainability discourses within IDH’s cocoa program. This research is a first attempt to close the gap between individual CS policies – and the sustainability discourses that underlie them – within public-private partnerships. The question is not whether, but how sustainable development could work in public-private partnerships.
The main question that guided this research is: What are the dynamics between varying private interests within the IDH cocoa program and how do they relate to the broader academic debate on development? In order to answer this research question, this thesis first has to grasp what ‘public’ or ‘private’ interests exactly entail, how they can be translated into different sustainability discourses, and how they can be convened within a public-private partnership aimed at sustainable development. Following up on this theoretical framework, several sub-research questions will guide the empiric section of this research:
1. What are the key problems facing the chocolate industry and which problems are tackled in the IDH cocoa program?
2. How can we translate IDH’s ambitions and method into a specific sustainability discourse?
3. How do participating MNCs translate their view on sustainability in their individual CS policies and how can we connect their discourses to IDH’s sustainability discourse? 4. How do MNCs see themselves relate to the IDH cocoa program?
5. What are the implications of the answers to question 3 and 4 for the progress of IDH’s cocoa program in the next funding phase (2016-2020)?
6. How can we connect this micro-level discourse analysis to structural theorizing on development at the macro-level?
The first question sheds light on the chocolate sector, the main focus of the IDH cocoa program, and also uncovers the motives behind certain CS policies of MNCs. The second question translates IDH’s goals and ambitions to a specific sustainability discourse, which also serves as a reference point for the analysis of the individual CS policies of a selected group of MNCs. The third research question looks at how the individual CS policies of the selected MNCs – and the sustainability discourses that underlie them – relate to the sustainability discourse of IDH. Because there exist different levels of participation within the IDH cocoa program – from reticence, passive freeriding, to active participation on the ground – the fourth research question looks at the IDH cocoa program from an ‘emic’ point of view and examines how the selected MNCs view the IDH cocoa program and see themselves relate to it in the light
of their specific sustainability discourse. On the basis of this analysis, some recommendations can be formulated for the progress of the IDH cocoa program in the next funding phase of 2015-2020. Finally, the findings of the empiric section will be discussed against the background of a broader academic debate on development in general.
The next chapter places the emergence of public-private partnerships against the background of wider theoretical debates on the emerging realm of private transnational governance. It also touches upon the meaning of public and private interests within public-private partnerships, and explains the role of language in this bigger picture. The subsequent chapter describes the methods used for gathering empirical data and analysing results. The fourth chapter provides a background picture of the sustainability problems in the chocolate industry, and places the IDH cocoa program within this framework. Following this, chapter five and six present the results of the research, which will be connected to a broader academic debate on development in chapter 7. In the final chapter a conclusion is drawn and limits of the research and opportunities for future research are discussed.
2 Theoretical Framework
This chapter introduces the theoretical basis for this research: Food Regime Theory, the emergence of Private Transnational Governance, scholarly debates on Corporate Sustainability, and its relation to Sustainability Discourses. These theories represent a wide range of academic approaches that describe different levels of analysis. Moreover, they summarize the body of knowledge political scientists have gathered on both public and private interests regarding sustainable development, while showing how the discursive dynamics between those interests within public-private
partnerships (like the IDH cocoa program) receive relatively little attention in scholarly literature. In the following sections, food regime theory will be discussed as a means to analyze the political economy of food at the global level. This general food regime will be linked to the cocoa commodity chain more specifically through governance literature and corporate sustainability literature. Against the background of the rise of private transnational governance, IDH will be interpreted as a Public-Private Partnership that brings different actors within the cocoa supply chain to the table. Zooming in on MNCs in the chocolate sector, the variety of variables present in CS policies will be outlined, and explained to be embedded in so-called sustainability discourses. 2.1 The Corporate Food Regime
This section explains how the economic, environmental, and social problems of the chocolate sector can be seen as a product of our current food system, or regime. Stephen Krasner (1982) described regimes as “sets of implicit or explicit principles, norms, rules, and decision-making procedures around which actors’ expectations converge in a given area of international relations” (Krasner, 1982: p. 186). Harriet Friedmann (1987) first introduced the concept of food regime theory, which is a historical approach to analyse changes in the global food system, thereby defining state-market relations in a capitalist world. Following Friedmann (1993), McMichael (2013) defines a food regime as “a rule-governed structure of production and consumption of food on a world scale” (McMichael, 2013: p. 9).
The so-called ‘Corporate Food Regime’ evolved during the 1980s, and was
institutionalized through the World Trade Organization (WTO). Reflecting the neo-liberal ethos of “free trade”, the corporate food regime shifted regulation and governance away from the state, and towards the globalized world market. In the current system, national regulations to protect agriculture, the environment, society, and health are regarded as negative restrictions to this free trade ethos (Plahe, e.a., 2013). National regulations have therefore been replaced by a combination of global trade liberalization and global trading rules supervised by the WTO. This liberalization trend abolished structures that protected the agricultural base of developing
countries in the South (Plahe, e.a., 2013) – for example price guarantees for cocoa farmers in Côte d’Ivoire (Agritrade, 2012).
The distinctiveness of former food regimes – also known as the ‘Colonial-Settler Food Regime’ and the ‘Post-War Food Regime’ (Plahe, e.a., 2013) – largely consisted in the
instrumental role of food in securing global hegemony: Pax Britannica versus Pax Americana. Food regimes can be seen as power structures that express forms of geo-political ordering, but they are mainly meant to shed light on broader relations in the political history of capital (McMichael, 2005). The corporate food regime expresses a new moment in this political history of capital, because it is institutionalized by transnational organizations, multinational corporations and large philanthropies (Plahe, e.a., 2013) and supported by international finance and multilateral
organizations (McMichael, 2005) – not nation-states.
The result of this development has been the rise of private governance systems in which private actors are engaging in decision-making processes that were previously designated to the state. Traditionally, the regulation of negative externalities in food commodity chains was seen as a responsibility of public governments. However, with the evolution of the corporate food regime came a major structural transformation in the governance of the global food system. Specifically in the past decades, MNCs have become key players in the governance of global commodity chains. In the context of globalization and the proliferation of neoliberal norms and values, political capacity and functions have thus shifted from state to non-state actors (Fuchs e.a. 2011). As a result, corporations are now in a position to structure and direct the behavior of actors within their supply chains without significant interference by public authorities.
In this way, food regime theory provides us with useful insights on the global food system by showing power mechanisms underlying global food production and consumption. This thesis implicitly reflects on those power mechanisms while analysing the cocoa supply chain. Special attention will be paid to the role of large MNCs, which are stated to co-institutionalize the corporate food regime.
2.2 New Governance Arrangements in the Chocolate Sector
In the past decades, there has been an increase in sector-wide approaches to sustainability, ranging from private standard setting (Fuchs e.a. 2011), certification schemes (Auld, 2010), sustainability roundtables (Ponte, 2014), and intersectoral partnerships (Bitzer, 2012). Current development thinking increasingly acknowledges that all relevant spheres of society need to be involved in the decision making process (Van Tulder & Pfisterer, 2013). Collaborations between actors from state, market, and civil society are studied in the literature under terms as diverse as
cross-sector partnerships, multi-stakeholder alliances, public-private partnerships, global public policy networks, or global action networks (Bitzer, 2012). For reasons of clarity, this thesis uses the term of partnerships as “self-organizing alliances in which actors from two or three societal domains strive for common goals and synergies by sharing their domain-specific resources (including expertise and skills) as well as risks in non-hierarchical, network-like interactions” (Steurer, 2013: p. 398).
Against the background of the Corporate Food Regime, scholarly literature on global governance tries to explain the emergence and implications of partnerships as new institutional arrangements in global commodity chains, and focuses on the changing relationships between state, market and civil society (Bitzer, 2012). As we have seen in the previous section, the current food regime is characterized by an unprecedented market power of MNCs. Even the global food and financial crises of 2008-2009 did not invoke serious government proposals for corporate, financial or supply regulation within the food system, which shows that the neoliberal focus on globalized markets remains firmly rooted in our food system (Holt Giménez & Shattuck, 2011).
New governance arrangements that include both public and private actors emerge to counteract the ‘governance gap’ that is associated with the decreasing capacity of states to solve sustainability problems in global commodity chains (Bitzer, 2012). This leads to fundamental changes in state-market-society relations. In the chocolate sector, MNCs are generally involved in multiple partnerships simultaneously, and also have prominent roles within those partnerships in terms of initiation, funding, and implementation. This has contributed to a mainstreaming of partnerships, which positively helps sustainability values to enter the agenda of big business. At the same time, however, the prominent role of MNCs could create a resource imbalance compared to other partnership actors, which reproduces existing imbalances within the cocoa commodity chain (Bitzer, 2012).
From a governance perspective, sustainable development increasingly represents a ‘balancing act’ between public and private interests, and profit and non-profit orientations (Van Tulder & Pfisterer, 2013). Therefore, public-private partnerships (PPPs) are considered a
necessary institutional innovation to address complex global sustainability problems (Van Tulder & Pfisterer, 2013). The following section introduces the convening role of PPPs and elaborates on public and private interests within PPPs.
2.2.1 The Convening Role of Public-Private Partnerships
Van Tulderen & Pfisterer (2013) developed a taxonomy that classifies roles, the resulting relationships and the degree of organizational fit needed to make PPPs meaningful for
sustainable development. PPPs are problematic in the sense that participating actors assume roles and responsibilities that may be incompatible with their core logics: “NGOs are bound by their identification with and loyalty to civic values; the market mechanism forces businesses to act in their own economic interest; governments are responsible for the public good and need to consider implementation gaps in their policies” (Van Tulderen & Pfisterer, 2013 referring to Glasbergen, 2011). Therefore, discussing partnerships is about the difference between public and private responsibilities, profit and non-profit interests, their relationship and how to configure actors most effectively to make sustainable development work (Van Tulder & Pfisterer, 2013). Table 1 – Diverging Societal Roles within Public-Private Partnerships (based on Van Tulder & Pfisterer, 2013)
Government Business Civil Society
Primacy of … Politics Economics Society
Goods and values
‘produced’ Public Private Community
Core responsibilities
Enforcement of national standards and norms
Production of goods
and services Mobilization of society
Financed by… Taxes Profits Donations
Agency Voters / political parties Owners / supervisory
boards Society / members
Parameters Coercion, codification Competition Cooperation
Orientation Public / Non-profit Private / For-profit Private / Non-profit
Coordination and
control Hierarchy-based Market-based Network-based
As depicted in Table 1, sustainable development comprises a combination of various societal roles and interests within PPPs. The extent to which these societal roles complement of compete with each other defines the nature – and probably also the effectiveness – of the partnership in question. When one wants to achieve results for sustainable development, it is a challenge for different societal actors to partner appropriately within PPPs. The diverging roles of different societal actors illustrate how important it is to check for the motivations of actors and their role adoption within a certain PPP. Rational choice theory 3 would maintain that a specific
governance constellation is picked up because certain actors calculate it fits their situation and
3 Rational choice theory is usually viewed as “a methodological approach that explains both individual and collective (social) outcomes in terms of individual goal-seeking under constraints” (Snidal, 2013).
their interests best. This estimate results from various rational considerations about efficiency, practicability, profitability and legitimacy (Behrends, e.a., 2014). Rational choice theory gives insight in what motivates people to cooperate and to pick up new ideas. In PPPs the challenge is to translate between different and often contradicting rationalities (or interests).
Sustainable development programs often take shape in single planned interventions in specific cocoa growing countries, but are at the same time embedded in global discussions between different societal actors that generate various forms of ‘globalized knowledge’. The actors participating in the IDH cocoa program come from different professional backgrounds, yet you could say they belong to a global community of professionals with a highly specialized corpus of expert knowledge. Rottenburg (2012) even speaks of an epistemic community.4 According to Rottenburg (2012) actors in sustainable development programs normally develop a specific form of meta-knowledge that enables them to move back and forth between two different forms of knowing, which he labels culturally specific knowledge and globalized knowledge.
According to Richard Rottenburg (2009) cooperation in PPPs is dependent on a
particular form of ‘code-switching’ between a ‘cultural code’ (which is how a situation appears to people from different backgrounds) and a ‘meta-code’ (which is how people provisionally and temporarily agree that things are). The existence of a meta-code is indispensable for any attempt of cooperative action within PPPs; it is the “institutionalized version of reality that is enabled by actors’ experiences of the world as it is” (Behrends e.a., 2014: p. 18). Rottenburg’s ‘meta-code’ refers to the reality construction that is necessary among actors with diverging worldviews to agree on the use and superiority of this rather than another sustainability intervention.
In this way, the meta-code renders actors from very different epistemic backgrounds capable of agreeing on situation-specific terms of interaction or cooperation (Behrends e.a., 2014). For the IDH cocoa program, this means that all participating actors should communicate in a reflexive way, balancing between competing rationalities and social-world understandings. This thesis uses the concept of PPPs to draw attention to IDH as an example of a collaborative effort aimed at achieving structural changes in the global cocoa commodity chain. Chapter 4 will provide more information on IDH and its cocoa program. The next section elaborates on private interests specifically. Those interests – or rationalities – are accessed on the basis of individual corporate sustainability policies and placed within a structural framework by means of discourse analysis.
4 Following Peter Haas, an epistemic community is seen as “a network of professionals with recognized expertise and competence in a particular domain and an authoritative claim to policy relevant knowledge within that domain
2.3 The Business Case for Corporate Sustainability Policies
According to Holt Giménez & Shattuck (2011), today’s food movements – responding to the environmental, social, and economic problems unleashed by the corporate food regime – are important forces for social change. In the chocolate sector, the increased business participation in partnerships is related to the growing pressure of civil society organizations on MNCs to take responsibility for problematic conditions at the production level (Bitzer, 2012). Public allegations of human rights abuses and poverty on cocoa plantations pose a serious threat to corporate reputation and sales, especially when global demand is changing towards higher quality and more ethical chocolate products (Bitzer, 2012).
Because of the squeezed supply chain in the chocolate sector, large MNCs play an important role in the attainment of global cocoa sustainability. As early as the Brundtland report (1987) – the first document that introduced the concept of sustainable development – political scientists understood that companies have a crucial role in managing the impacts of human societies in ecosystems and rural communities (WCED, 1987). Yet, although companies often do accept their responsibility for environmental and social issues, their interpretation of the link between business and sustainable development is based on different conceptions than civil society organizations, public authorities, and even competing companies within the same sector.
One reason for this is the lack of a common definition of corporate sustainability. Marshall & Toffel (2005) identify four different sustainability frameworks: the Triple Bottom Line, the Natural Step, the Ecological Footprint, and Graedel & Klee’s (2002) Sustainability and Resource Usage. Montiel (2008) compares the converging concepts of corporate sustainability (CS) and corporate social responsibility (CSR). To navigate this “sustainability jungle” (Montiel & Delgado-Caballos, 2014), this thesis adopts the definition of corporate sustainability as a
tridimensional construct that encompasses economic, social, and environmental dimensions (also known as the Triple Bottom Line) because the problems facing the chocolate industry are also three-folded: environmental, social and economic.
Next to the lack of clarity regarding the definition of sustainability, variations in the interpretation of the link between business and sustainable development are also for a large part related to strategic (or rational) considerations of MNCs themselves. Through history, the self-regulation of MNCs encompasses an ever-growing number of voluntary practices of Triple Bottom Line management (Young & Tilley, 2006). In practice, however, different MNCs seem to pay more or less attention to different pillars in the Triple Bottom Line model of
the three pillars – in other words, their rationalities or interests. These diverging rationalities take shape in different discourses concerning sustainable development.
2.3.1 Corporate Sustainability Policies and Sustainability Discourses
The emergence of global markets in the Corporate Food Regime has allowed for the formation of global oligopolies in the food industries, where a couple of MNCs share a strong
concentration of market power. Since global trade in the agro-food sector has become more oligopolistic, MNCs started to compete on qualities of their products instead of price
(Dengerink, 2014). As a consequence, MNCs started to use CS policies strategically to distinguish themselves from other companies and to protect their reputation, as is reflected in the following quote from Mars:
“We at Mars share special values about our company and the way it should be run. These values […] set us apart from others, requiring that we think and act differently towards our associates, our brands and our business. These principles have always been demanding and are an essential part of our heritage. We believe they are the real reason for our success.”
(Mars, 1983; 1993; 2003: p. 3) 5
As with many concepts in social sciences, corporate sustainability is no value-free concept. MNCs have different conceptions of sustainable development than for example civil society organizations or public authorities. And chocolate manufacturers might define sustainability in a different way than cocoa traders. Moreover, many MNCs base their CS policies on existing certification schemes,6 such as Fairtrade, Rainforest Alliance and UTZ Certified. However, each of those certification schemes has a different approach towards economic, environmental, and social conditions in cocoa producing countries (Dengerink, 2014).
This thesis focuses on the policies of MNCs as they take shape in public sustainability reports and codes of conduct. Existing literature reveals a diverse range of impact areas within the economic, social, and environmental dimensions of various private CS policies (as depicted in Table 2). The presence of some impact areas over others varies per MNC, per certification scheme, and per project.
5 Source:
http://www.mars.com/global/assets/documents/433657mars_the_five_principles_of_mars_without_signatures_V 2.pdf (Accessed: 12-06-2015).
Table 2 - Producer Impact Areas (Alvarez & Von Hagen, 2011)
Producer Profitability
Business
Opportunity Livelihood Community Environment
Price Differential
Market Access / Relationship with
Buyers
Wealth Organization Soil
Yield
Access to Credit, Aid, Technical
Support
Food
Consumption Shared Benefits
Resource Conservation Quality Farming and Management Capabilities Education /
Health Gender Balance Biodiversity
Net Income Credibility Vulnerability Water
Labor Conditions
From the various impact areas in Table 2, it becomes clear that the world of ideas and
rationalities is an important determinant in the composition of CS policies. It is this dynamic of different sustainability approaches or discourses within PPPs that forms the core of this thesis. PPPs could not only change the sustainability of production practices in producing countries, they can also reshape the minds of participating MNCs about what sustainability entails. This thesis looks at the role discourses might play in determining private CS policies and how they are shaped and reshaped within PPPs.
The concept of discourse can be used in a number of ways in social sciences and has no agreed-upon definition. Therefore it is often difficult to understand what people mean by a ‘discourse’ (Alvesson & Karreman, 2000). In this thesis, discourses are studied as “general and prevalent systems for the formation and articulation of ideas in a particular period of time” (Alvesson & Karreman, 2000: p. 1126). In more simplistic terms, discourse analysis is the study of everyday language. Using discourse analysis to study the dynamics between different private interests (as visible in individual CS policies) within PPPs can give more insight in the role of meta-codes in sustainability politics.
Discourse analysis can be placed in the interpretative or social constructivist perspective within social sciences. From this perspective, reality is seen as a social construct, which means that there is no such thing as ‘one single truth’. Instead, there are many different realities based on the way people give meaning to certain phenomena. For discourse analysis in sustainable development, this means that it is not the economic, environmental, or social problem itself that is important, but the way in which society makes sense of this phenomenon through language use (Guba & Lincoln, 1994).
Within the context of this research, this constructivist approach is appealing because it appreciates the complexity of problem definitions in the cocoa value chain. As mentioned before, concepts such as sustainable development and corporate sustainability are impossible to capture in just one way, because their meaning, interpretation and implementation are contested. As IDH (2009) puts it: “Sustainability has many meanings for different people in different contexts. For some, sustainability means managing specific issues in production, for others it represents a broad vision of sustainable agriculture” (IDH, 2009: p. 9). MNCs use the ambiguity of sustainability in order to position themselves vis-à-vis competing MNCs by emphasizing particular aspects of the concept (even when their CS policies might in fact be pretty similar). This touches upon fundamental debates between different sustainability discourses within social science, which will be addressed in more detail in Chapter 3.
In their ‘convening’ role, IDH creates sustainability platforms that might stimulate MNCs to adopt industry-level codes of conduct and increasingly use a common sustainability vocabulary. Chapter 4 will dive deeper into this role, for it is this process of converging sustainability discourses – or the establishment of a meta-code – that is central to this thesis.
3 Methodology
3.1 MethodThe aim of this research is to examine the IDH cocoa program as a particular PPP that may alter the playing field for sustainability in the chocolate sector. In this context, a qualitative
methodology is chosen, since socially embedded commodity chains are difficult to quantify. Moreover, a qualitative approach is expected to do more justice to the multi-faceted nature of sustainable development. The analytical argument is developed based on a case study of
dynamics between various private interests within IDH’s cocoa program, using literature study, discourse analysis, third party evaluations and semi-structured interviews.
Specifically, this research will look at the interests that are visible in individual CS policies of MNCs that joined the IDH cocoa program. This thesis builds on an earlier IOB review (2014), which raised concerns regarding the distribution of public and private interests within the IDH cocoa program. Therefore, this research is deductive in the sense that it will reflect on this concern by means of a discourse analysis towards the private interests within the IDH cocoa program. By placing different interests of participating MNCs within a discourse framework, the concern raised by IOB can be refined and recommendations can be formulated on the basis of the foregoing theoretical framework. Thereafter, the findings regarding IDH’s cocoa program will be inductively coupled to a wider debate within development theorizing.
3.2 Case Selection
In studying the dynamics between various private interests within IDH, this thesis focuses on the chocolate sector specifically. The cocoa supply chain presents us with an interesting case for multiple reasons. At production level, the sector has been criticized repeatedly for its poor economic, environmental, and social conditions (Cocoa Barometer, 2015). Chapter 4 will provide an extensive overview of the global chocolate sector and the problems it is currently facing. As a result of the recurrent attention for sustainability issues in the chocolate sector, businesses, governments, and civil society organizations have joined forces in various PPPs, and have supported the adoption of multiple certification schemes.
What makes the chocolate sector exceptional is the speed at which the amount of
certified chocolate is expanding. In the coffee sector, the certification process started earlier with the share of certified coffee growing from 1 % in 2002, to 16 % in 2012. The chocolate sector, however, quickly catches up this backlog, with a growth rate of 1 % in 2008 to 13 % in 2012 (Dengerink, 2014). This rapid responsiveness of the cocoa market could signify an interesting
case within this research design, because the choice for a particular certification scheme might be related to the sustainability discourse of a particular MNC.
The IDH cocoa program was chosen for in-depth study, because (though funded by the Dutch government) it functions as an autonomous organization, and its regulatory system is transnational in nature and reach. Although the choice of just one PPP as unit of analysis does not capture the full diversity of different multi-actor partnerships worldwide, IDH is an interesting case attempting to significantly transform the corporate standards setting system in and beyond the chocolate sector. According to Just Dengerink, Senior Manager Learning & Innovation at IDH, “the Netherlands, and certainly IDH, is a pioneer in private sector
development thinking, in which the government invests quite a lot of money in the private sector with the aim to contribute to development”.
The population of this research consists of four MNCs that are participating in the IDH cocoa program: one manufacturer (Mars), two processors/traders (Ecom and ADM), and one retailer (Ahold). This variety of MNCs was chosen deliberately, both to be able to measure dynamics between IDH’s sustainability discourse and private CS policies throughout the whole value chain; and to translate the various roles and interests of those MNCs into different ways to look at sustainability. The population contains two processors because IDH representatives have notified that the IDH cocoa program focuses mainly on global trading companies. Compared to the highly visible chocolate brands and retailers, commodity traders and processors are largely invisible to consumers. However, these traders are actually closest to the cocoa farmers in the supply chain and often have first-hand experience in the environmental and social impacts of trade and agriculture. Therefore, the groundwork in sustainability is often carried out, or facilitated by global trading companies (IDH, 2009).
3.3 Data Gathering
A combination of methods will be used to gather data and analyze results (triangulation). First, this research will draw a picture of IDH on the basis of the information available in the public domain. The great majority of this material will come from IDH itself in the form of documents prepared for the specific purpose of communicating to external audiences (website, annual reports, impact studies etc.), but also from an independent third party evaluation conducted by the Policy and Operations Evaluation Department (IOB) of the Ministry of Foreign Affairs in 2014. Moreover, open and semi-structured interviews are conducted with individuals directly involved in the IDH cocoa program. A provisional list of questions will be prepared before the interviews based on an examination of all the internal and external materials gathered.
Afterwards, the interviewees will receive a draft of the case study as to give them an opportunity to provide feedback on factual inaccuracies, misinterpretations etc.
The next step is to provide an inventory of the MNCs involved in the IDH cocoa program. Through discourse analysis of their individual sustainability reports and secondary literature, the individual priorities of these actors regarding sustainable cocoa will be retrieved, and their individual CS policies will be outlined. With the help of the ‘Way Back Machine’, a digital archive that saves versions of web pages over time, possible changes in their CS policies and definitions are also set out. The subsequent data gathering utilizes a number of in-depth interviews with representatives of the MNCs involved in the IDH cocoa program (see interview process above). As the interviews were mainly in Dutch, citations have been translated into English by the author.
3.4 Operationalization of Concepts
This thesis revolves around the dynamics between varying sustainability discourses within PPPs. To be able to map this dynamic relationship, it is important to clearly define and operationalize the concept of sustainability discourses. In this section, the concept of sustainability discourses will be covered for the chocolate sector specifically.
Core to this thesis is the idea that the way in which sustainability is understood within individual CS policies might have an impact on PPPs in the chocolate sector, as actors with competing rationalities and social-world understandings have to cooperate in single planned interventions in specific cocoa growing countries. Therefore, the concept of discourses is used as “a particular way of talking about and understanding the world” (Jorgensen & Philips, 2002). Looking at the dynamics between IDH’s sustainability discourse and CS policies of participating MNCs may say something about the role that meta-codes play in sustainable development politics and policy-making.
Hajer (2003) explores the dynamics of policy-making and politics in the changing world order, and argues that because of the current ‘governance gap’ in the Corporate Food Regime, policy-making is more than ever dependent on the outcome of discursive interactions. “Policy initiatives now form the basis of a truly political debate in which people reflect on their identities, exchange views with others and can indeed come to some sort of collective will formation, often across the boundaries of territorially defined jurisdictions” (Hajer, 2003: p. 190).
This statement by Hajer (2003) touches upon an ancient philosophical debate, which is confronting us with the choice between language as representation of the plain unvarnished truth, or language that has transgressed the limits of representation and actually constitutes
reality. In the latter case, language is seen as epistemic. According to Fish (1989), there are three basic oppositions underlying this quarrel:
1. The opposition between a truth that exists independently of all perspectives and points of view (Plato); and the many truths that emerge when a particular perspective or point of view has been established and is in force;
2. The opposition between true knowledge as it exists apart from any and all systems of belief (Plato); and incomplete and partial (biased) knowledge that flows from some or other system of belief;
3. The opposition between a consciousness that is turned outward in an effort to apprehend and attach itself to truth and true knowledge; and a consciousness that is turned inward in the direction of its own prejudices.
Each of these oppositions is attached in turn to an opposition between two kinds of language: (1) language that faithfully reflects or reports on matters of fact uncolored by any personal or partisan agenda or desire; and (2) language that is infected by partisan agendas and desires, and therefore colors and distorts the facts which it purports to reflect (Fish, 1989). This latter kind of language implies that human beings are reasoning creatures. Our language and symbol systems create reality, which puts language at the source of human meaning, expression, and motivation. Foucault even linked language to the structures of our existence, such as our power relations and ways of thinking. Language is thus the very means by which we create a perception about
ourselves and the world in which we live.
This insight into the significance of language has contributed to a general interest in discourses within social sciences (Alvesson & Karreman, 2000). This research aims to proceed from a study of ‘social text’ (written text) towards a determination of social reality in the form of sustainability discourses. Methodologically speaking, the question of how to move beyond the empirical material – in this case written documents – is important. How to address discourses with a capital D? In order to be able to make this step ‘beyond the text’, the discourse analysis in this thesis is based on an earlier framework for diverging sustainability discourses in the cocoa sector by Dengerink (2014). For generating this framework, Dengerink (2014) made use of four archetypical worldviews, placed in a grid of four quadrants with the vertical axis ranging from local / individual to global / collective, and the horizontal axis from market / material to solidarity / immaterial. The resulting framework is displayed in Figure 1 and will structure the discourse analysis of both IDH’s ambitions, and the private CS policies of participating MNCs.
Figure 1 - Diverging Discourses in the Cocoa Sector (Dengerink, 2014)
Within this framework, four different sustainability discourses can be delineated. The first sustainability discourse is ‘Modernism’, which is globally oriented and market focused. This discourse stresses the need for free markets, competition and innovation to reach the ideal of more economic growth (Dengerink, 2014). The second sustainability discourse is ‘Absolute Idealism’, which is globally oriented and solidarity focused. This discourse stresses the need of regulated markets, cooperation of actors, and sustainable resource use (Dengerink, 2014). The third sustainability discourse is that of ‘Subjective Idealism’, which is locally oriented and solidarity focused. This discourse stresses the need for community-based solutions, listening to local needs and improving local livelihood opportunities (Dengerink, 2014). The fourth
sustainability discourse is that of ‘Post-Modernism’, which is locally oriented, but with a market focus. In this discourse, challenges are resolved through regional trade, consumerism, and protectionism (Dengerink, 2014).
This research will first focus on where IDH can be placed on this spectrum of
sustainability discourses. When this picture of IDH’s main sustainability discourse is clear, the discourse analysis will turn to the private CS policies of participating MNCs. How does their sustainability discourse relate to the IDH cocoa program? Measuring such a broad concept as CS policies can be done in various ways. This thesis will look at the formulation of CS policies in public documentation, such as websites and annual sustainability reports.
In this thesis policies are considered to be a discursive activity, or “proposals about how we ought to proceed from here” (Bacchi, 2010: p. 45). After all, they can be defined to certain purposes, and redefined to other purposes. The point here is to recognize the way in which ‘problems’ get framed within CS policies, and how those frames affect possibilities for action (Bacchi, 2010). There is a huge preoccupation among different actors in the chocolate sector with getting policy right; with exerting influence over policy, linking research to policy, and of course with implementing policy in the field (Mosse, 2004). Whether we can speak of a common ground – or meta-code – in policy formulation, however, is questionable.
3.5 Validity and Reliability Threats
The methods employed in this research pose several challenges in terms of validity and reliability. The case study as presented above has one essential drawback: the evidence is only valid for the chocolate sector, and for the selected MNCs specifically. Hence, the applicability for other commodity sectors is limited. This has to do with the complexity of the research area, which results from the variety of economic, environmental and social issues that affect different commodity chains in different countries (Salzmann e.a., 2005).
The method of discourse analysis also implies challenges in terms of reliability, because it is hard to reproduce this research in an exact same manner. This research therefore inhibits the development of clearly defined, replicable steps that ensure that future research will come to similar conclusions. For reliability purposes, this research made use of an already existing framework for sustainability discourses in the cocoa sector by Dengerink (2014) to structure the way in which the analysis of the different discourses has been done.
Moreover, with interviews there is always the danger of social desirability bias. Business representatives may only give answers that put their CS policies in positive daylight, and the outcomes of their CS practices more significant than they really are. Although there is no definite solution to this bias, efforts have been made in the design of this research to circumvent this problem by means of triangulation and a crosscheck with IDH representatives. Open questions were used to increase validity, and care was taken to distinguish accounts from legitimations. 3.6 Theoretical and Societal Relevance
The outcomes of this research are relevant in a number of ways. Theoretically, this thesis will provide more insight into the influence of sustainability discourses within PPPs. It is a first step into answering the question of how the interactions between governments, civil society
chocolate sector. This will advance the literature on PPPs by portraying the complex dynamics between varying private interests in the current food system.
In merely focusing on IDH as representative PPP in the cocoa commodity chain, this research arguably only describes and explains the tip of the iceberg in terms of the role of public-private partnerships in sustainable development. Linking the findings to a broader debate on development, however, may serve as a proposition for future research, focusing on other PPPs within the chocolate sector, and in other commodity sectors. Moreover, this research may guide any other study on the role of sustainability discourses in new governance arrangements.
Next to an academic contribution, this thesis may also be of societal interest for policy makers. Patterns of business improvement in CS policies due to participation in partnerships such as IDH, are relevant for the broader question of the potential of partnerships as effective tools for sustainable development. More understanding about the dynamics between varying interests within PPPs might lead to more effective partnerships, and thus more effective outcomes, in the long run.
4 Case Description
In this stage of the research, it is important to understand the problems that the chocolate industry is currently facing, as to give more insight into both the IDH cocoa program, and the composition of various CS policies. Therefore, this chapter introduces the cocoa supply chain and answers the first sub-research question: What are the key problems facing the chocolate industry and which problems are tackled in the IDH cocoa program? Thereafter, it will give an answer to the second sub-research question: How can we translate IDH’s ambitions and method into a specific sustainability discourse? It is important to answer these questions, since one would think that IDH’s
sustainability discourse should count as common ground – or a meta-code – for the participating MNCs in order to make the partnership meaningful and effective.
4.1 Problems Facing the Chocolate Industry
Cocoa is a tropical tree crop that is cultivated in Africa, Asia, and Latin America. One of the most remarkable features of the cocoa supply chain is its typical hourglass shape. At the base are millions of smallholder farmers which sell their fermented and dried beans to a very limited amount of oligopolistic trading companies (i.e. Cargill and Ecom). Some of these trading companies process the cocoa themselves; others sell it to a selected group of processors (i.e. ADM and Barry Callebaut). These processors sell the processed cocoa products (cocoa powder, liquor and butter) to a small group of chocolate manufacturers, such as Mars and Nestlé. The resulting chocolate brands are sold to large retailers, for example Ahold, who finally sell their products to a large consumer market, mainly in Western countries.
Cocoa is thus an important export product for producing countries, and a key import product for consuming countries, that typically do not have suitable climates for cocoa production. In this way, cocoa travels along a global and complex supply chain that includes traders, shipping organizations, processors, manufacturers, and distributers (World Cocoa Foundation, 2014): a supply chain that is still very much characterized by colonial North-South relationships. And, the problems that the chocolate sector is facing as a whole all seem to come at the expense of the cocoa farmers. These problems can be divided into economic, social, and environmental phenomena, and can all be traced back to the poverty in which most cocoa farmers live.
In economic terms, low and fluctuating cocoa prices, lack of farmer organization and market power, uncertainty of land tenure, low productivity, lack of infrastructure, and limited access to market information are all reasons for this poverty (Cocoa Barometer, 2015). Most cocoa is grown on small, family-run farms that rely on outdated farming practices, and lack
organizational leverage (World Cocoa Foundation, 2014). Moreover, the global cocoa supply chain is undergoing an increasing market concentration. Six companies control 40 percent of the global cocoa market. Two processors produce about 70-80 percent of the global coverture. And only eight traders and grinders control approximately 75 percent of the trade in cocoa beans. This huge market asymmetry favors buyers and traders, but seriously weakens the position of the small cocoa farmer (Cocoa Barometer, 2015).
In social terms, cocoa farmer poverty is driving related problems such as human rights violations in the form of poor working conditions, child labor and trafficking, limited access to social security, illiteracy, malnutrition, gender inequality, and political instability (Cocoa
Barometer, 2015). The chocolate industry has been criticized internationally over the use of child labor, resulting in the Harkin Engel Protocol (September, 2001). The objective was to eradicate child labor on cocoa plantations by 2005. However, the agreement remained voluntary and non-binding, allowing child labor to remain a reality in 2014. In addition, the sector is facing an ageing farmer population. The average age of cocoa farmers in West-Africa is said to be 51 years old.7 This means that the current population of cocoa farmers will soon shrink. Since younger generations are no longer attracted to growing cocoa because of the hard work and limited profits, a shortage of cocoa farmers to meet the global demand is not unlikely in the future.
In environmental terms, deforestation, decreasing biodiversity, soil degradation, and the negative impact of use and sourcing of fertilizers and pesticides are serious challenges (Cocoa Barometer, 2015). Cocoa can only be grown in a small tropical belt, on trees that are very
susceptible to changing weather patterns, diseases, and insects (World Cocoa Foundation, 2014). Cocoa farmers lack knowledge on climate change and the consequences for cocoa. Moreover, lacking enough income, cocoa farmers invest less in their land and tree stock, resulting in ageing and diseased cocoa trees. In the current reality, cocoa farmers turn towards new land once their cocoa trees are exhausted, often to the detriment of rainforest (Cocoa Barometer, 2015).
As a response to the increased attention of consumers and civil society organizations for sustainability issues in the chocolate sector, most of the major market players launched individual CS policies and programs to address these problems. Each sustainability initiative addresses different, and sometimes overlapping sustainability issues. Yet, there seems to be little coherence or coordination between these different initiatives, and the scale at which they operate seems insufficient in order to really address the problems facing the chocolate sector.
7 Source: http://www.forbes.com/sites/ashoka/2014/10/10/the-chocolate-revolution-central-american-start-up-seeks-to-grow-sustainable-cocoa-production/
4.2 The Sustainable Trade Initiative (IDH)
The Sustainable Trade Initiative (IDH), aims to make several international commodity chains more sustainable by creating results-oriented coalitions of MNCs, civil society organizations, governments and other stakeholders, and is the product of an agreement signed in 2008 by the Dutch government, civil society organizations and business representatives. IDH’s main focus lies on the improvement of smallholder farming systems by promoting good agricultural practices and farmer training, and on the enhancement of sustainable sourcing from developing countries through certification. The Dutch government has granted IDH € 125 million for the period 2011-2015 in order to match-fund private investments in sustainable market
transformation in 18 commodity sectors (among which chocolate).8 In short, IDHs function unfolds in the following roles:
1. Convening.
“IDH builds coalitions and designs its impact investment program. IDH operates as an unbiased, catalytic platform for public and private partners to work and invest together. IDH brings the key players around the table, demands serious commitments, and drives collaborative working in a results-focused manner. The convening by IDH enables competitors, supply chain partners and non-profit partners to collaborate effectively at scale. This process currently involves more than 250 companies, 60 civil society organizations, and multiple government authorities and bilateral donors” (IDH, 2013b: p. 20).
2. Co-funding.
“IDH accelerates private sector investments into supply chain sustainability by leveraging public funds. IDH has organized a €600 million investment portfolio across 18 commodity sectors, by leveraging a €125 million grant from the former Dutch Ministry for Development Cooperation, a CHF 30 million (approximately €25 million) grant from SECO (The Swiss State Secretariat for Economic Affairs), and additional funding from others including Danida, GIZ, Rabobank Foundation, ICCO, Bill & Melinda Gates Foundation, Cordaid, WWF and others” (IDH, 2013b: p. 20).
3. Learning.
“IDH drives the performance and impact of the coalitions by organizing field evidence, data and metrics. These are used to stimulate strategic reflection with program partners and to prototype innovative solutions for critical obstacles to market transformation. Business cases are core to the investment strategies deployed by the sector coalitions. IDH contributes to wider knowledge
generation and dissemination through publications, thematic studies, best practice documents, communication and learning events” (IDH, 2013b: p. 20).
In an assessment of the progress, results and potential of IDH, the Policy and Operations Evaluation Department (IOB) of the Ministry of Foreign Affairs stated that “IDHs combination of funding and convening activities have given a strong boost to certification of primary
producers on mainstream sustainability standards” (IOB, 2014: p. 14). In 2007, UTZ Certified, Solidaridad, Mars and Cargill had started planning the Cocoa Improvement Program (CIP), which included the development of a new UTZ standard for cocoa.9 In 2008, IDH joined the initiative and became the main public funder for CIP between 2008 and 2012 (IOB, 2014).
In this way, IDH had a facilitating role in the establishment of the new UTZ cocoa standard as affirmed by Brigitte Campfens, Head of Market Development Europe at UTZ: “IDH had an important role in the initiation of the program. There is a lot of money involved in this starting phase. Because IDH had donor money available, the program could be started in cooperation with the industry.” As a consequence of this cooperation, all actors participating in the IDH cocoa program are currently affiliated with the UTZ label. However, evidence from wider literature and field studies suggests that certification currently lacks the substance to have a major impact on farmers’ income, communities, and the environment (KPMG, 2013).
Cocoa farmers in West-Africa were found to receive a 5% price increase because of an UTZ premium, and witnessed their yields to increase by 6%. While being a positive
development, the resulting 10% net farm income increase is still not enough to lift the average cocoa farmer out of poverty (IOB, 2014). Moreover, the benefits of staying certified may be relatively small, because recurrent costs of certification are often borne by the farmers, while premiums slowly disappear when certified production becomes more abundant (IOB, 2014). Therefore, IDH’s ambition of structural market transformation is unlikely to succeed only as a result of certification through collaboration with UTZ Certified.
IDH currently responds to this shortcoming by switching to activities ‘beyond
certification’. The IDH cocoa program has developed a strong focus on improving productivity by supporting a range of new projects with MNCs such as Mars and Ecom. This new focus on traders and manufacturers seems like a logical step towards ‘business-driven development’. However, IOB (2014) foresees dilemmas regarding competitiveness, the appropriateness of public funding, and the balance of public and private interests within IDH’s cocoa program.
9 There was a desire from the industry for a standard that better reflected their productivity concerns than the environmental concerns covered in the Rainforest Alliance standard (IOB, 2014).
4.2.1 The IDH Cocoa Program
In their convening role, IDH tries to bring more coherence and impact to sustainability
initiatives in the chocolate sector: “We aim high. IDH does not engage in isolated ‘classical’ CSR-type projects but takes sector-wide impactful approaches. We aim for – what we call – market transformation that creates commercial solutions for public goods” (IDH, 2011: p. 1). IDH’s cocoa program consists of three separate programs (of which two are still ongoing). From 2008-2011, IDH worked closely together with UTZ Certified in the Cocoa Improvement Program. The main goal of the program was to improve farmer production by training farmers in Good Agricultural Practices and linking them to the sustainable cocoa market by means of certification: “Certification provides an excellent means to achieve [farmer] integration in the supply chain, while at the same time providing transparency and credibility to help protect brand reputation” (IDH, 2013b: p. 30).
Since 2012, IDH shifted its ambitions ‘beyond certification’ by means of the Cocoa Productivity and Quality Program (CPQP) and the Cocoa Fertilizer Initiative. The aim of CPQP is to help transform cocoa farming into a viable and sustainable business through a market driven approach that increases productivity, improves quality, and professionalizes farmers and their organizations. At the core of the program lies the idea of the ‘productivity package’ consisting of Good Agricultural Practices, improved planting material, fertilizer and financing. The Cocoa Fertilizer Initiative aims to return soil fertility to cocoa farms by developing the agro-input markets in West-Africa and give farmers access to fertilizer and other farm agro-inputs in an economically, socially and environmentally sustainable way.10
In short, the main focus points of the IDH cocoa programs are: quality (standards), extension, financing, inputs, productivity, professionalization of farmers (organizations), farmer aggregation, coordination & alignment, and market connectivity. No attention is paid to farmer education, sustainable land use, local infrastructure, labor conditions, diversification, transport, or land tenure.11
4.2.2 Dilemmas Regarding Public and Private Interests within IDH’s Cocoa Program
In recent years, IDH has moved its projects from the pre-competitive arena – in which IDH brought competing companies to the table to develop common sustainability criteria – towards the competitive arena – in which IDH works with one company at a time. Originally, specialized development organizations (like Solidaridad) led the implementation of the cocoa programs in the field on behalf of the coalition. Currently, the project applicants are individual MNCs that
have been selected in calls for proposals. In cocoa, this means that project applicants are often cocoa traders and chocolate manufacturers, such as Ecom and Mars, which raises questions about the appropriateness of public support for IDH’s cocoa program (IOB, 2014). IDH sees the emergence of MNCs as project applicants as a logical step towards ‘business-driven
development’, because this would make it easier for them to ‘embed’ sustainability standards in their daily business activities (IOB, 2014).
While this may be important, IOB (2014) notes that this development also leads to several dilemmas. By making a trader the implementer of a cocoa productivity improvement project, IDH facilitates (with public funds) that this trader builds a more or less exclusive relationship with certain cocoa farmers. Despite the fact that this relationship may help farmers bypass local middlemen and give them more secure market access, it also reduces their
competitive environment, limits their bargaining power and makes them more dependent on one single market player (IOB, 2014).
By supporting a single corporate sustainability project within IDH’s cocoa program, public funding unintentionally intervenes in the cocoa market structure by restricting competition. Next to the question whether public funds should be used to support a single company’s commercial investments (in which sustainable development goals are ‘embedded’), relevant questions are raised concerning the balance of public and private interests within IDH. Is the strong focus on increasing farm productivity in IDH’s cocoa program sufficiently
addressing the wider goals of poverty reduction and environmental sustainability in the cocoa sector (IOB, 2014)? In the end, the Dutch government invests money in IDH to effectively contribute to the Millennium Development Goals.
4.3 IDH’s Sustainability Discourse
As discussed in Chapter 3, Dengerink (2014) distinguished four main sustainability discourses as a framework for mapping different sustainability discourses in the chocolate sector: (1) the market-focused globally oriented Modernism discourse; (2) the safety-oriented and comfort-based Post-Modernism discourse; (3) the cooperation-comfort-based and governance-oriented Absolute Idealism discourse; and (4) the community-oriented and local needs-based Subjective Idealism discourse. This section will look at IDH’s specific sustainability discourse, in order to be able to assess how varying interests are distributed within the IDH cocoa program.
According to IOB (2014), there has been a gradual shift in emphasis within the IDH cocoa program from a wider framework including deforestation, soil degradation, productivity, farmer income, and labor conditions (IDH, 2010), to a narrow focus on the ‘productivity
