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ADM International Sarl Cocoa Division Michiel Hendriksz Director of Sustainability

From Niche to Norm : A future need for s ustainability c ertification in commodities ? . ADM International Sarl Cocoa Division Michiel Hendriksz Director of Sustainability. Perspective from C ocoa Trade and Chocolate Industry. What are the expectations of cocoa certification?

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ADM International Sarl Cocoa Division Michiel Hendriksz Director of Sustainability

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  1. From Niche to Norm: A future need for sustainability certification in commodities? ADM International Sarl Cocoa Division Michiel Hendriksz Director of Sustainability

  2. Perspective from Cocoa Trade and Chocolate Industry • What are the expectations of cocoa certification? • What is the perception of its progress so far? • What are the challenges and opportunities? • How can the industry work with other relevant stakeholders to achieve success?

  3. As a sector we know a lot and do a lot • We know the situation • We know the relevance and the importance • We know the urgency • Do we know enough about the small holders decision making process? • Does the farmer really come first?

  4. From Niche to Norm: • Sustainability certification of exchange traded commodities • Mainstreaming of Sustainability • For what reason, what are the objectives and HOW to achieve? • MDG 1, 7 and 8…. Holistic enough • Won’t get even to MDG 1 without 3 so 2, 5, 4 and 6 have to be dealt with • Contradicting objectives

  5. From Niche to Norm: • Boost production, reduce the hypothetical demand gap. Balance future supply and demand • Maximize cash revenue, increase living wages, striving for improved livelihoods and striving rural communities • Eradiate socially/culturally unacceptable practices • Undisputable sound arguments • Now the HOW

  6. Consumer concern: - Demand pullA complex socio-political / environmental topic

  7. Industry concern: - Supply pushA complex agricultural & supply topic Disease, pest, soil & climate sensitive tree Extensively grown perennial small holder crop Lack of agri / business expertise and inputs Health, social and demographic concerns Less and less suitable soil or land available

  8. Run out of fertile virgin forest soil Cote d’Ivoire 1955 Cote d’Ivoire 1993

  9. Alternative crops

  10. Large scale alternative crops

  11. Growth rubber with smallholders

  12. Do we need to get used to this? We need to get used to this!

  13. Diffusion of an Innovation in a Population (Rogers, 1962) < 20% are organised farmers What about the > 80% independent farmers ?

  14. Source: Pablo Ramirez - Starbucks - Seattle

  15. Source: Pablo Ramirez - Starbucks - Seattle

  16. Multiple-Program Development Complexity and Audit Costs

  17. A decade Cocoa Sustainability: What next? First phase 2003 – 2008 • 3rd party verification sustainable cocoa platform SERAP / CP in CI. • Standard representatives and auditors had to learn about cocoa. Standards had no infrastructure. • Certification of platform easy, not much difference for the farmer + coop apart from extra audit pressure and admin work. • Not much competition on the ground or between standards

  18. Second phase 2008 - 2013 • New coops / groups directly prepared for certification, then make it sustainable • Standards evolve to meet demand and meet operational expectations • (Domestic) trade becomes interested, increased competition • Compounded adoption limits, impact, audit complexities and traceability issues

  19. What does ADM Cocoa SERAP offer? • A model for a Global Sustainability Platform with 3rd party verification • Tailor-made sustainability initiativesunder SERAP program umbrella • Coops and independent Producer Groups • Certification on request

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