Social life cycle assessment in the chocolate industry: A Colombian case study with Luker Chocolate

The value chain processes involved in the production of the aforementioned product are outlined in Fig. 1. These correspond to a “cradle-to-gate” system boundary perspective, including upstream processes that comprehend the production of raw cocoa, comprising plantation set up, maintenance, and harvest as well as downstream processes covering the industrial processing of the beans to obtain chocolate.

Since the aim of this study is to identify the social hotspots within the chocolate value chain and jointly qualify the potential and actual social performance of the product, a mixture of generic and site-specific data was chosen. An evaluation of generic, organization-, and site-specific data is needed for a comprehensive analysis (Franze and Ciroth 2011). Generic data obtained using the SHDB provide meaningful insights regarding the social risks of the different stakeholders involved in both crops and food product sectors in Colombia, by assessing publicly available information on 132 social impact indicators from various data sources (Benoît-Norris et al. 2019). Site-specific data collected through site visits and interviews, on the other hand, expand and complement the findings derived from the generic analysis with context-specific characteristics influencing the social performance of the product analyzed. The inclusion of primary, site-specific data enabled the assessment of the actual social impacts in addition to the potential social impacts.

The stakeholder selection was done using a combination of two approaches: generic and specific. On the generic level, the SHDB risk mapping tool enabled the identification of key human rights issues in the product supply chain of crops and food product sectors in Colombia, and thus defined the most relevant socio-economic topics and key stakeholders to include in the study (Benoît-Norris et al. 2019). The insights from this step were compared with the latest materiality assessment of the company developed in 2021 (Casa Luker 2021a), yielding a consolidated result of the most relevant stakeholders and social topics for both of these industry sectors and the company.

Colombian law allows the employment of minors (defined as under 18 years old) (ICBF 1997) under strict conditions and subject to specific labor contracts (ICBF 1997). For example, apprenticeship contracts allow minors aged 14 to be employed if they are part of an educational institution (ICBF 2003). The minimum age for admission to regular work is 15 years old, with the authorization of the local territorial entity (ICBF 2006). Both Luker Chocolate and Luker Agrícola have declared in their Human Rights Policy measures of protection against child exploitation (Casa Luker 2022). They express their intention to only hire people of legal age and stress the legal obligations and requirements if minors are hired. Additionally, records of all workers’ names, identification numbers, and birth dates are kept on file. During the site visits in both companies, no child was seen engaging in any type of labor. As part of its sustainability strategy and shared value programs, the company has developed several projects to encourage early childhood education, for example, the improvement of school facilities: “The schools have been supplied with school materials, uniforms, a water collection system as well as toilets, and psychological support for the children is provided by Luker allies” (Teacher [personal interview], 2021).

In Colombia, the legal minimum monthly wage in 2020 (877,802 COP without transport aid, around 200€ at the time (MinTrabajo 2019)) was approximately twice the amount of the poverty line. However, almost 50% of the country’s total workforce earned less than the minimum wage, according to a 2020 Human Rights Report (U.S. Department of State 2021). According to Luker, all of its employees receive at least the monthly minimum wage and all legally required benefits. The interviews as well as the review of randomly picked payrolls of both farm and factory workers confirmed this statement. The interviews with factory packaging operators and farm personnel (the company’s lowest earners), revealed that their wages at the time of the study were not sufficient to cover their personal and family expenses. Factory packaging operators considered it necessary to work overtime (nightshifts and/or Sundays, both better paid), even though the average wage for this role was around 374,076 COP (approx. 80€) above the base salary of packing operators from other companies in Bogotá (Indeed 2023). However, farm workers stressed the increase in living costs in their region, mainly due to rising food prices, triggered by the arrival of the migrant population from Haiti, which spent in dollars and caused food shortages during their temporary stay in the country (Ramírez 2021). Prices remained high even after their departure, and wages were not modified. Many workers thus grow crops at home to earn extra money. Both the field workers at the farm and those at other companies performing the same work earn the legal minimum wage, according to research on labor platforms in the region (Indeed 2023).

Colombian law stipulates a regular workweek of 48 h and a minimum rest period of 8 h between two consecutive work shifts (MinJusticia 1950). Luker plant workers are assigned to three rotating shifts (6 am–2 pm, 2–10 pm, and 10 pm–6 am) of 8 h each, from Monday to Saturday. Schedules have improved, since years ago, and the production shifts summed up to 12 consecutive hours. Nonetheless, during production peaks, workers are required to work overtime, which is either paid or compensated through other means such as additional paid leaves. It was stated by factory and farm employees that the schedules are clearly stipulated by the coordinators and that the hours are tracked and paid at the end of the month.

On the farm, workers have a fixed schedule from 6 am to 3 pm, with required extra hours in certain positions, which are previously arranged between worker and supervisor, and remunerated. Nevertheless, some workers highlighted the non-follow-up of extra hours, and thus, no remuneration for them.

Regarding paid leave, the law establishes that the employee is entitled to 15 working days (not counting weekends or bank holidays) of continuous paid leave annually (MinJusticia 1950). In the company, paid leave is recorded and followed up by the HR team. Nonetheless, some contract workers stated that the contracting firm asked them to quit if they wanted to have holidays and assured them that they would be called back when they wished to return to work rather than taking paid leave.

At Casa Luker’s manufacturing plant and cocoa plantation, an OSH management system is in place and employees and visitors are required to use personal protective equipment (PPE). During 2021, a total of 27 labor-related accidents were reported in Luker Chocolate, which corresponds to 0.15% of the total 18,113 accidents in the Colombian food manufacturing sector (Fasecolda 2021). Most workers attributed these accidents to the mere lack of attention of the operators while using the machines; however, some of them pointed out that during high production months, more importance is given to meeting production targets than to complying with the protocols.

From Luker Agrícola, no accident rates were received, even though the company measures them. Interviews with the OSH coordinator and employees indicated a generally low rate of serious accidents, although they did note that minor accidents are not uncommon in agricultural duties. The workers claimed to be aware of the protocols in case an accident occurs during field work. Additionally, OSH trainings are provided to both employees and contract workers on-site and virtually during the year.

A total of 35% of Luker Chocolate’s employees are women (data from 2019), while the rate of women in the manufacturing sector in Colombia in 2019 was only 12.8% (DANE 2020). However, none of the board directors are women or belong to an underrepresented group (Casa Luker 2021b). Given this context, the company has developed different mechanisms to promote gender equality and women’s empowerment in the workplace. For instance, the Human Rights Policy states that the selection of human talent should be based on the competences and merits of the person (Casa Luker 2022). Additionally, the company adopted the Women’s Empowerment Principles (WEPs), which are a set of principles to foster business practices that empower women, such as equal pay for work and zero tolerance against sexual harassment in the workplace (UNGC and United Nations Women 2022). Despite these efforts, vacancies continue to be filled predominantly by men. Of the 56 new employees in 2019, 70% of them were men (Luker Chocolate 2020).

Luker Agrícola also has a no-discrimination policy; however, there is a general perception towards an accepted separation of tasks by gender in the field duties. While high physically-demanding tasks were viewed as men’s tasks, administrative, general service, or cocoa sanitation positions were seen as more suitable for women. A total of 21% of the 67 direct Luker Agrícola’s employees and 17% of the 103 contract workers identify themselves as women (review of employee’s reports), while the rate of women in the Colombian agricultural sector overall was about 6.7% in 2019 (DANE 2020). Although 2021 data was not available, it was assumed that Luker Agrícola’s rate is still above the sector’s average, because the COVID-19 crisis increased the unemployment rate of women on a national level from 12.7% in 2019 to 17.2% in 2021 (DANE 2021).

No gender wage gap could be determined in any of the companies since this indicator is not measured and the comparison of a limited number of wage records of female and male employees in the same position could not deliver meaningful and representative insights. However, out of the interviews with the workers of both companies, it could be identified that wages do vary depending on the job position and seniority level, but not because of gender.

Aside from the basic benefits a company has to provide its employees by law (MinJusticia 1950), complementary services offered in Luker Chocolate include subsidized meals, access to credits, eyeglasses subsidy, school aids, child birth aid, funeral aid, and vacation bonus. During the pandemic, employees were additionally provided with a bus service, to avoid infections during public transportation.

At Luker Agrícola, administrative employees are supported with 50% of the tuition fees for studying English, and field workers are offered a school leveling program, for those who want to finish elementary and high school. Classes are given at the farm facilities. The target was the enrollment of 50 workers; however, only 35 attended.

The company provides its employees the 15 paid days-off required by law (MinJusticia 1950).

At Luker Chocolate, a copy of the contract, which defines the relationship between the employer and employees was provided to every interviewed employee. It was also stated that with new responsibilities, new clauses are added to the contract and a copy with the new arrangements is provided. Every year, all the employees must take an online course where the company’s new rules and worker-aids are presented.

At Luker Agrícola, each position has its own occupational chart, specifying that if the plantation requires support in another sector, field operators would change tasks (with prior authorization from the coordinator, and an introduction to new machinery, if required). Any position change is reflected in a new contract.

Additional measures were implemented in the past to foster better relationships between the organization and its employees, such as feedback rounds to inquire employees about their workload perception. According to the interviewees, however, these activities have been stopped for some time now.

Sustainability and transparency reports aim at documenting the company’s impact on its stakeholders, and at tracking the progress of the different social, economic, and environmental programs. The company pledged to publish each of these reports every second year, alternating between the sustainability report and the transparency report, both structured according to the Global Reporting Initiative (GRI) framework (GRI 2023).

The company has further initiated its path to become certified as a B Corporation, meaning not only relatively high standards of verified social and environmental performance but also specific requirements on public transparency and legal accountability (B Lab 2023). As part of the certification process, Luker Chocolate is scored according to its performance across different indicators, while countermeasures have to be defined and monitored yearly.

To ensure that the promises and objectives set are being fulfilled, the management keeps track of a three-layer performance dashboard, which previously was composed of only one layer: the company’s financial performance. Casa Luker’s CEO stressed how challenging it has been to measure the impact of their social and environmental performance, as it is something very new for both the company and the industry.

The armed conflict in the region of the Antioquian Urabá, the province where the farm is located, has been a constant from the mid-twentieth century until today (Negrete Padilla 2020). 

A historically weak government presence in the region has made it easier for some armed structures to settle and exercise dominion over rural villages and suburbs, which to this day play the role of the state, as mentioned by Negrete Padilla (2020) and confirmed by community members in the interviews. In other words, they establish order in the community, improve infrastructure (e.g., roads), and in many cases benefit some people economically by planting coca, hiding weapons, or alerting illegal groups of governmental presence. Sometimes, these activities represent the only income source for many families.

Luker Chocolate’s role in this conflict is not to directly encourage farmers to uproot their coca crops or eliminate their connections with criminal gangs. As Camilo Restrepo, Casa Luker’s CEO, mentioned in his interview, that is not the role of a company, but of the state. The company, however, aims to work in those areas highly influenced by violence and encourage the cultivation of cocoa as a legal crop. Luker Chocolate’s contribution thus is to promote legality in the territories and influence people to join a different lifestyle, by showing them the benefits of legality, although financially it might be less profitable. As evidenced in the interviews, more and more families are being influenced by this model proposed by Luker Chocolate.

The Corruption Perception Index (CPI), which scores countries by their perceived level of public sector corruption according to experts and businesspeople, gave Colombia a score of 39 in 2020, with 100 being “very clean” and 0 “highly corrupt” (Transparency International 2021). Contributing to this perception, the 2020 Human Rights Report published by the U.S. Department of State (2021) announced 40 ongoing investigations into public officials, including ministers, governors, and mayors, for corruption related to the administration of contracts for COVID-19 emergency support.

Considering this corruption at the national level, Luker Chocolate and Luker Agrícola are committed to preventing corruption in the organization, as stated in their Anti-fraud and Anti-corruption Policy (Casa Luker 2021c), framed under the internationally recognized principles against corruption from the UNGC (2015). This policy is extended to Casa Luker’s suppliers by ensuring compliance with social, environmental, and economic regulations. Audits are carried out to verify compliance, and contracts are double-checked, especially in the procurement and sales areas. In addition, annual trainings on the anti-corruption system are provided and an anonymous mechanism for reporting suspicions is in operation. Although internal control takes place, there is no individual or departmental oversight, and the company does not engage in collective action with governments, community organizations, NGOs, and other companies to fight corruption.

One of the five pillars of the company’s sustainability strategy, as mentioned in the sustainability report, is creating shared value in cocoa-producing territories, which are heavily influenced by the armed conflict, and thus suffer dire conditions of poverty (Luker Chocolate 2020). In 2020, multidimensional poverty, which evaluates the deprivation of households in 5 dimensions (education, work, children and youth, housing, and health), reached a national incidence of 18.1%, with 12.5% in major cities and 37.1% in rural areas (DANE 2021).

During interviews, community members explained how the community looked before Luker Chocolate’s arrival. For instance, there was no aqueduct system and the few schools available were in very penurious conditions, as told by one of the teachers of the school in the village of Buenos Aires: “The first day I set foot here in the school I started crying, because how could they send me to a school that has no doors, no book, no whiteboard, nothing. I had worked in places farther away than this one, but never in these conditions.”

The Chocolate Dream, the collaborative plan of Luker Chocolate which strives to transform the cocoa value chain from its origin has been the driving force of change in this region, as mentioned not only by employees but also by local community members (Luker Chocolate 2023). Some of the finished projects under this plan included the provision of new school facilities (240 children impacted), an entrepreneurship program, which sought to diversify the household’s income (48 entrepreneurs were supported with trainings and tutors), and an aqueduct system for the village of Caribia in Necoclí, which was built in collaborative action with other entities (Luker Chocolate 2020).

In 2020, Colombia was the second country worldwide in terms of internally displaced people (5.8 million) due to conflict and violence, according to the International Organization for Migration (IOM) in the World Migration Report 2020 (McAuliffe and Khadria 2020). Indeed, many of the interviewed employees of both Luker Chocolate and Luker Agrícola are not originally from the regions or cities where the farm and manufacturing plant are located. Particularly, farm workers told how they had to move with their families to the farm surroundings some years ago because of violence and better job opportunities. On top of this internal displacement crisis, Colombia has become a host of more than 1.7 million Venezuelans, from the estimated 5.4 million that fled their country since 2014 (Reid 2022). Of the 1,630,903 Venezuelan nationals living in the country in 2019, more than half did not have work permission, thus leaving informal employment as their only source of income (Ministry of Foreign Affairs of Colombia 2020).

From the interviews with the HR personnel and employees in both companies, it was found that no migrants work in any of the companies and that there are no policies or direct organizational procedures for integrating migrant workers into the labor force and communities. Nonetheless, HR managers emphasized that the diffusion of vacancies is broad, and if a foreign person applies, meets the profile, and has the required documents, there will not be hesitation in hiring them. Additionally, they also mentioned that nobody had applied so far, possibly due to a lack of work permits. Nonetheless, a community member also pointed out how closed rural communities are to outsiders, thus making it easier for immigrants to settle and integrate in big cities than in the countryside.

The Spanish colonizing waves, beginning in the nineteenth century, severely impacted the cultural composition of the region. Afro-descendants from the Caribbean and Pacific coast and Sinuans, coming from what today is the Department of Cordoba, arrived and settled in Urabá along with the indigenous Cuna and Embera tribes that already inhabited the region (Negrete Padilla 2020).

In contrast, the communities surrounding the farm have a more homogeneous heritage (Hoyos, C. [personal interview], 2021); 95 families from the village of Caribia are part of a cabildo (Indigenous Council) of the indigenous Sinú or Zenú tribe, originally from the lower Sinú. Nevertheless, as Carlos Hoyos comments, this process of self-recognition has not been easy. Historical events such as colonization and the agrarian conflicts caused the expropriation, evangelization, and in some cases even the extermination of many tribes (Negrete Padilla 2020). Thus, the survivors no longer wanted to identify as indigenous, and many aspects of their cultures and customs were lost.

The Cocoa Festival is a local celebration of Caribia that goes around the main source of employment in the region, cocoa. The objective of the festival is to rescue the cultural practices of the first inhabitants of Caribia. The celebration brings together groups of folkloric dancers and musicians and brings back temporarily former members of the community who left many years ago (Ramírez 2020).

Luker Chocolate has a major role in this activity, not only because the company is the main source of employment, but also because it subsidizes and organizes many of the cultural activities of the celebration. However, the interpretation given by Luker Chocolate’s organizers was that the cultural practices of Caribia were the same as those of Necoclí. As in Necoclí, they dance Bullerengue (Afro-Colombian music genre and dance), and it was assumed that in Caribia too. Yet, the typical dance of the community, connected to their Sinuan heritage, is the Porro (a subgenre of the cumbia rhythm, originally a folkloric expression from the Sinú River). Although the communities are grateful for the company’s support, they feel that such details are a setback to the advances that are being made to recover their culture.

On top of the already mentioned infrastructure-related projects developed by Luker Chocolate for local communities, such as the new school facilities or the aqueduct system, a Center for Social Innovation was inaugurated in 2018 in the chocolate plantation. This center aims to provide accommodation and a space of exchange for innovators, entrepreneurs, or anybody who wants to donate their time and knowledge to improve the quality of life of Colombian farmers (Luker Chocolate 2020). During the site visits, a marketing and sales session was given by one member of the international sales team to the participants of the youth entrepreneurship program. Additionally, the organization’s environmental management system under ISO14001 has been certified (ISO 2015).

A materiality assessment, which seeks to identify those stakeholder groups that have a great impact on the organization, and jointly assess and prioritize the key issues (environmental, social, and economic) that are relevant for both parties, is conducted on an annual basis and serves as the foundation for project development and decision-making for a win–win outcome. Based on the 2021 materiality assessment, the company’s key stakeholder groups include clients, managing directors, consumers, collaborators (employees), local communities, suppliers, allies (including shareholders), and cocoa-producing organizations (Casa Luker 2021a). To understand their specific needs, expectations, and priorities with respect to the company’s relevant topics, several meetings and surveys were conducted according to Luker Chocolate.

In regard to the organization’s support for community initiatives, Casa Luker has a portfolio of projects that the company develops together with different stakeholders (academia, clients, private institutions, etc.) that impact both Luker Chocolate and Luker Agrícola, in the areas of governance, environment, social, and economic development. From the total number of 39 projects to date, 64% impact Necoclí, i.e., the environmental surroundings of the farm, the local communities, and their workers.