ISEAL Alliance

Jeff Morgan is the Director of Global Programs for Mars, Incorporated, he is joining us for the ISEAL Conference on 22 June to discuss the future of standard systems in 2020.  Coincidentally, 2020 is the year that Mars has stated that all of its cocoa will be certified as being produced in a sustainable manner. Currently Mars uses two ISEAL members – UTZ and Rainforest Alliance – to do this. Here he talks about the challenges of certification and how ISEAL can play its part. 

Earlier this year Mars made a very big commitment to use only certified cocoa by 2020. How did this commitment come about?

Mars has had an interest in the farm level of cocoa production for literally decades. We were doing research in the 1970s just on trying to understand how cocoa grows how the farmer actually brings the crop in and how the farmer makes a living from cocoa.

Our first significant foray was in the early 1980s when we established a research farm in Brazil to understand the relationship between what happens in the field and what happens on the market. We got very concerned in the late 1980s when the Bahia region was ruined by Witches Broom. This is a fungal disease which devastated the cocoa crop and production fell by over 75 per cent in about five years.

That led us as a business to ask ourselves some pretty hard questions. “Sustainability” was not a term that we typically used in the late 1980s/early 1990s but we talked about the long term outlook for cocoa production. So we spent a good three years looking at how cocoa was grown in Asia, Latin America and Africa as well as looking closely at what happened in Brazil and why cocoa, which was primarily grown in Latin America in the late 1800s, early 1900s had mostly shifted to Africa? That was an in-depth evaluation that led us to the conclusion that long term production of cocoa was really at risk – a risk for our business but also a risk for the whole industry.

The mid 1990s we started talking to researchers, outside groups and convened a number of sessions where we spoke with industry and other stake holders. When I look back at the efforts at that time, the terminology around multi-stakeholders and sustainability were just not part of the lexicon – but we were doing these things anyway. The effort led us to a number of partnerships – most notably the Sustainable Tree Crops Program in West Africa, with USAID, the IITA and industry partners.

That was our first major partnership directed at trying to help farmers earn more and to become more sustainable.  I would say over the last 10 years we've consistently been frustrated by the inability to get programmes established at the sector wide level in the major West African producing countries, and there are a number of reasons for that which go beyond this conversation.

About three years ago we started to get interested in the UTZ programme. We had looked at some other certification programmes and we were very involved with organic, but we just didn’t feel that these were fully applicable to the production challenges that the West African cocoa farmers were facing. We started talking to UTZ, they were getting interested in cocoa, and we started the conversation with trying to determine whether certification might be a tool that could be used to enhance farmers’ productivity and income as part of their overall sustainability, and we were intrigued by the code of conduct of UTZ, in which, in our view, they had started to address economic, environmental and social issues – the core elements of sustainability.

We have come to the conclusion internally, that certification is a tool that can help farmers achieve sustainability, but we also believe that the standards that are currently in place need to be “strengthened”, so that we do not find ourselves in a situation, as we progress towards our goal, of certifying farmers who aren’t sustainable. Our biggest concern is that many of the farmers are still operating with very low yields, and it’s our belief that these low yields are the major problem in terms of their income.

We have had battles over the years with people saying that the industry should raise the price of cocoa and then farmers would be better off.  The industry is now operating in a period where prices are actually quite good and this focuses again on the issue of very low yields on these farms, the lack of farmer input, the lack of farmer training and a number of other improvements that certification can help us pursue.

We view certification as the tool – and we are getting started on it. We have agreements that we will look at how to strengthen the standards, the code of conduct, so that they really help the farmers achieve greater productivity whilst being environmentally responsible – as well as being socially responsible in labour practices.

Mars has entered into this as a long term effort. The goal by 2020 is something we have set, because it really helped us focus our efforts. That commitment serves as our North Star – it will guide the work that we do, but it isn't just about getting more and more farmers certified, it’s got to be a combination of getting farmers certified that raises the bar on what farmers are expected to do before they are in fact certified. So that by 2020 we can look at farmers who are operating in a certified manner, and really say that those farmers who have achieved the certification are operating in a manner that is sustainable. One last comment, we know we must work on a definition of sustainability at the cocoa farm level that is credible and has agreement amongst various stakeholders, and we know that we’re not there yet.

You must have examined many vehicles of how to improve social and environmental practices so how did it just come down to certification?

It hasn’t just come down to certification. Mars continues to have a portfolio of activities that we pursue against our overall corporate objectives. And our overall corporate objective is that cocoa is being produced in a manner that is sustainable for the farmers in the industry.

In terms of West Africa, globally in fact, we are engaged in a range of efforts all the way from very fundamental research, to a breeding programme that we support through the US Department of Agriculture to sequencing the cocoa genome with the help of the USDA, IBM and a number of other partners. We continue to be supportive of programmes through the World Cocoa Foundation, through the Sustainable Tree Crops Programme and also through the Bill & Melinda Gates Foundation, just to name a few. We have other programmes both in Latin America and in Asia. We continue to support all of those programmes that, in time, will ensure farmers produce cocoa in a better way. We believe as well that those farmers would see an additional  benefit if they go a step further and become certified.

Mars has talked about “productivity plus”, can you explain that concept?

As we continue to invest in farmer training that may or may not lead to certification, we want those farmers to achieve what we internally call “productivity plus”, which is higher yield based on using better germ plasm and having the availability of fertilizers so that soil can be replenished. If those farmers achieve that then we’d like to be operating in an environment where they also have the opportunity to decide if they want to be certified. Again, this is a very dynamic process. We are looking at all of our programmes and saying, one objective is to get farmers into a “productivity plus” type of environment, while the other is then to take farmers towards what we call the “certification plus”.

...so what is “certification plus”?

This is in development but, in our view, it’s where farmers who are certified have the opportunity to use modern germ plasm instead of depending on 30-40 year old trees that have never been improved. They would also have the opportunity to newly plant or replace old trees using better germ plasm, and they would be working to replenish the soils by way of a fertilizer or composting.  When we talk about “certification plus” we want to move the yields of these farmers from where they are now, which is often 300 kilos per hectare or less, into a minimum of perhaps 1.2 tons per hectare.

If we get the farmers at that level of production we think we can honestly say that, not only are they sustainable, but they should be able to lift themselves economically out of poverty. We don’t want to find ourselves in a situation down the road where we are certifying farmers into poverty, or just certifying farmers who are in poverty. We just do not want to be doing that.

You also use more than one type of certification scheme.

We’re open to any responsible organisation that wants to help implement a certification scheme that addresses the sustainability of the cocoa farms. So part of our agreement with both UTZ and Rainforest Alliance is that we will work together to strengthen the standards.

How problematic is communicating these commitments and intentions over time? 

Well, I would say there’s a gap right now. We still have to address how we communicate the work that is involved in achieving this objective – the commitment to 2020 – and where we are in this journey, because it will be a journey!

One of the challenges will be to address the question:  “what do you mean by sustainable production?”  We will have need to define more clearly what we mean in that regard. That starts to get into the question that so many people ask, “will this be a guarantee that every farmer who is certified is following those practices?”

This question of a guarantee is a critical component that anybody who’s using certified materials is becoming faced with – the public are looking for guarantees.

You are probably aware of this, but I think that certification systems and their related industries and supply chains have really struggled with comments over the last seven to ten years, made by many organisations that basically called out very publicly, saying that certain types of certification are a guarantee of particular practices – especially labour practices – in the production of cocoa.

Many in the industry felt all along that this continued commentary that particular certification insignias represented a guarantee was false.

This is the real essence of the communication challenge because the question now becomes: “if certification is not a guarantee, then what is it?” ’And I think that’s going to be a challenge whether someone is asking you that question about labour, the environment or about productivity.

This is a challenge that will hit any kind of a certification, whether its cocoa, coffee or cotton. Any kind of agricultural commodity that is seeking a certification mark is going to have to do a better job communicating to the consumer exactly what that mark means. Unfortunately many consumers are developing an expectation and stating, “I want a guarantee, I want to know exactly what happens at every single point of production!”

This will be a real struggle in terms of communication because, in my experience in agriculture, it’s very difficult to say for almost any of these certification criteria, the specific code of conduct will apply to every farmer every day of the year, in a manner that you could guarantee it. This is especially true when you're working with hundreds of thousands of farmers. How can you ever guarantee any particular practice for every one of those farms on a daily basis?

Is this about educating the consumer about the practicalities of certification? That certification is as much of a guarantee as you’re going to get?

Yes, but more importantly I think the communication has to be targeted not just to the consumers, but at policy makers as well. First off we need to move away from the word “guarantee.” I think that during the last decade, not only was this word “guarantee” being articulated by advocates, it was being believed by many policy makers. I'm involved in a number of conversations right now with policy makers in the US at the State Department, at the Department of Labor, and I continually come up against this issue. Many will often say, “ah, this is great, Mars has agreed to purchase certified cocoa but you told us before that you couldn’t guarantee this cocoa” and we will say that’s right. So they will respond, “but now you're buying certified cocoa, so isn't that a guarantee?” No, it’s not.

Kit Kat suffered earlier in the year. They made a commitment to Fairtrade, and then they got lambasted over the use of palm oil. Considering that every organisation that engages with certification is in a transition of sorts, how do you deal with that level of negative criticism?

I don’t think there's any one easy answer for that. As a popular brand we will be under more scrutiny but we are trying to be much more open and communicative with people who ask questions about what are we doing.  We would also say that we can't solve every one of these problems. We know for big issues we can't solve any of these problems by ourselves, that we have to work in conjunction and in collaboration with key stakeholders. So part of what we will say is, we are looking to collaborate with responsible groups, and I think we have a track record of doing that, and so we just have to try and be open and above board about what we are able to do and what we are not able to do, but we are willing to work with people who want to be constructive.

ISEAL wants to encourage and engage with business. How can we help?

I think that even as close as we are at Mars to the issue of certification, we find it to be a very complex and challenging area. If you look at just the simple logistics of getting 100,000 tons of certified cocoa out of the Ivory Coast, it will be a great challenge and we know that. The complexities of establishing the standard, having trainers and auditors available in the field and working with the immense number of farmers who need to be trained will challenge every organization that is involved.

Within our business, as we look at our commitment, we have people say, “we should get engaged with ISEAL” and as soon as we have pursued this we find ourselves asking: “so what does ISEAL actually do in this whole realm of certification activities and  how can they help?”

To be frank, I think that ISEAL can do better at explaining to interested parties what their role is relative to certification, standards and standards setting. With that, I think there is a significant opportunity to assist in answering the questions that we were talking about in terms of communication, because I'm sure you know there's always this tension between policy makers and industry.

For example, if a policy maker comes to Mars and says, “tell me about this certification process that you're putting together”, and we say that it’s not a guarantee – we are immediately back in the circle: “well then what is it?”  We, and here I mean those who are interested in certification, really need the assistance of very credible third parties to explain what is meant by certification – what it is and more importantly, what it is not. I think this would be a role, one of perhaps several that ISEAL could play. ISEAL should clarify what they really do and the unique value that they provide. People say of ISEAL “they are the certifier of certifiers” and I say, “tell me what that means?”

So the definition of “certified” is naturally going to affect supply?

Exactly, one of the concerns that we have - because we’ve made this big commitment to more tons of certified cocoa than ever before – is supply. If you think of the numbers right now, I think there is around 20,000 to 30,000 – perhaps as much as 50,000  tons of certified cocoa available. In any case we need to multiply that number by at least 10, possibly 20 over the next 10 to 15 years and that’s not going to be easy. It means that there is a lot of opportunity for a race to the bottom in certification. If you have to certify let's say 200,000 farmers in the next 10 years, there's going to be pressure to make the certification requirements very simple and very straight forward and that could lead to certifying farmers into poverty, which is not what we want. So I do think that ISEAL can have a very important role in making sure that this doesn’t turn into a race to the bottom with people saying “certification doesn’t mean anything”. That is a real risk for everybody.

You’re joining us at the conference in a few weeks to discuss the landscape of standards in 2020. Can you give a sneak preview of what you think?

I think the requirements and benefits of certification at the farm level need to be much more clearly defined and better articulated. Recently, I have heard significant scepticism that certification doesn’t really benefit farmers. I would say that such an important question is not just a cocoa issue; it’s an issue that can impact the certification of farmers and related industries across agriculture.  Everyone involved in certification needs to be able to answer that question and show that there is a clear benefit to the farmer.  To be successful certification needs to be seen as credible and operating with integrity – and those who display certification labels need to ensure that everyone is being open and honest about what that particular certification signifies.