WILMINGTON, Del. (CN) - The Hershey Co. refuses to release records that could show whether it complied with its promise to stop using child labor and forced labor to harvest chocolate in Africa, a shareholder claims in court.
Louisiana Municipal Police Employees' Retirement System, which owns 1,800 Hershey shares, sued The Hershey Co. in Chancery Court.
It claims Hershey refuses to disclose the names of its cocoa suppliers, most of which are based in West African countries that use unlawful child labor and forced labor.
"For more than a decade, Hershey has acknowledged the systemic evils of child and forced labor in the cocoa industries of Ghana and the Ivory Coast and pledged action to eliminate it," the complaint states. "Notwithstanding this public pledge, Hershey, which by its own account controls 42 percent of the market for chocolate products in the United States, has knowingly failed to fulfill its promises. Instead, Hershey has continued to produce and sell chocolate that is the fruit of child and forced labor. If the company has knowingly supported or exploited the use of child or forced labor in Ghana or the Ivory Coast, Hershey itself has acted unlawfully or aided and abetted unlawful conduct. But moreover, Hershey has placed its brand and reputation at risk. Accordingly, there is a reasonable basis to investigate whether the board has permitted Hershey to act in an ultra vires manner in breach of the board's fiduciary duties to the company and its shareholders.
"In 1894, the famed philanthropist Milton Hershey founded the candy company and infused his personal values and vision into the culture of the company. On a hill overlooking his chocolate factory in what is now Hershey, Pennsylvania, Milton Hershey founded the Hershey Industrial School for Orphans in 1909. With its proximity to the chocolate factory, this school serves as a reminder of the company's ideals and its commitment to the children who consume its candy in large quantities. Today, the company touts Milton Hershey's legacy as evidence that it strives to champion the rights of underprivileged children. ...
"Unfortunately, Hershey's purported commitment to children does not extend beyond the borders of the United States. For well over a decade, Hershey has turned a blind eye to the abusive child labor practices in the West African countries that supply Hershey with the majority of its cocoa and cocoa-derived products, which Hershey describes as its 'most important commodity.' ... By producing chocolate at its Pennsylvania factory that is the product of child and forced labor in West Africa, Hershey has flouted domestic and foreign law and placed at risk its century old brand and reputation.
"While Hershey refuses to divulge the names of its cocoa suppliers, the evidence is overwhelming that the company's cocoa comes from farms in Ghana and the Ivory Coast that are unlawfully using child labor. Hershey has admitted that its 'major sourcing countries' for cocoa include the Ivory Coast and Ghana, as well as other West African nations. ... Hershey also has acknowledged the existence of rampant abusive child labor practices in these countries, which violate foreign and domestic law. There are substantial grounds to believe, therefore, that Hershey's chocolate empire is built on a foundation of a West African child labor force."
Hershey, the largest producer of chocolate in North America, sells chocolate in 70 countries and reported more than $6.8 billion in sales this year, according to the complaint.
