Unit Title: Communications in Business 100

Assessment: Critical Essay

Company: Cadbury
Essay Title: Corporate Social Responsibility:
An examination of the performance of
Cadbury
Student ame: !"#" Smarty
Student umber: 1$%&'()*
Student E+mail: 1$%&'()*,student"curtin"edu"au
Semester: $ $010
Campus: Bentley
Tutor-s ame: o.ita !/asari
Tutorial 0ay and Time:
Corporate Social Responsibility: An examination of the performance of Cadbury
In today's business climate, corporations have an impact on society that extends further
than economic power and into social responsibility, a fact which the average consumer is
aware of and reactive to. For international companies such as Cadbury, the world's
second largest confectionary company, (Factbox: British confectioner Cadbury 2!",
their potential to negatively affect society is magnified due to the power and influence
they wield created by their dominant mar#et share. $his paper examines the
performance of Cadbury in regards to its social responsibility. $hrough analysing
Cadbury's association with child labour and the 'Cadbury Community' programme this
paper aims to show a balanced argument into the positive and negative impacts this
corporation has on today's society.
The case a1ainst Cadbury
%rought to the forefront of public agenda in 2!, credited to the broadcast of award
winning documentary '&lavery' ('dwards ( %lewett, 2!" on the %%C, child labour
within cocoa production is Cadbury's most scrutinised social performance. $he roots of
child labour can be boiled down to the low prices paid for cacao beans resulting in
farmers recruiting cheap labour to #eep production costs to a minimum (Cocoa
Campaign n.d.". )owever not all sta#eholders were effected negatively by the low cocoa
prices. Cadbury has been able to employ over *+, people worldwide, (Factbox:
British confectioner Cadbury", and #eep it's chocolate prices relatively low for
consumers. ,ltimately this benefit was short lived as Cadbury was boycotted by
consumers when it came to light that some of the world-s most loved chocolate bars may
have been produced at the expense of child slavery ('gan. 2.". &ociety had dictated
to Cadbury that the negative externalities were not worth the low chocolate prices.
$he cocoa farmers of Cote d'Ivoire and /hana have diminutive power against the much
larger cocoa importers, which allowed Cadbury to pay roc#0bottom prices for their
produce. $o highlight how little the farmers were getting paid, 'gan (2." claims that
the price paid to farmers for a #ilo of cocoa beans is less then what an 1ustralian
consumer pays for a &nic#ers bar. $his une2ual trading by Cadbury is not in line with the
policies shown under their corporate governance guidelines in the Cadbury's code of
conduct, (Our Business Principles. 23.". $he document states that it is their corporate
and social responsibility to ensure ethical business practices including employment
practices, human rights and ethical trading. $he unfair price paid by Cadbury can not be
seen as ethical trading and has had a dire impact on the 4est 1frican community. $his
can still be seen through the direct lin# in child labourers used to #eep production costs
to a bear minimum on cocoa farms.
$he children are the sta#eholders most affected by Cadbury as they are forced from
their homes to wor# for long hours without pay and are often beaten and deprived of
food (Cocoa Campaign. n.d.". %y 25, the world-s largest cocoa producing nation (The
World Factbook: Cote d!"oire. 2!" harvested approximately 6!7, child labourers
(wor#ing" in ha8ardous conditions on cocoa farms described as the worst form of child
labour', (Country #eports on $uman #ights and Practices. 25". 9f these !7,
children .: are estimated to be wor#ing with their parents on family owned farms and
about !, children are a combination of traffic#ed and domestic slaves. $he children
wor#ing on these farms are denied any education, enhancing the dependence on cocoa
farming for the community and creating a vicious cycle.
1lthough Cadbury aim at sourcing their cocoa from /hana rather then Cote d-Ivoire and
have bro#en no international laws, their steps into rectifying the problem they helped
create have been 2uestionable. In 2! the Chocolate ;anufacturers 1ssociation (C;1"
made a voluntary commitment to the Cocoa Industry <rotocol (CI<" and certified their
cocoa would be child labour free by =uly 2> (Protocol for %ro&ing and Processing of
Cocoa Beans and Their 'eri"ati"e Products. 2!.". $he association includes many of
the ma?or players of the confectionary industry including ;(; @ ;ars Inc., however
Cadbury are not members and did not sign the CI<. 1s the deadline passed it became
apparent that none of the ma?or confectionary companies signed to the CI< were able to
fulfil the promises made and the deadline was extended to 23 and reduced to >: of
cocoa farms free from child labour. 1fter . years the C;1 and Cadbury still continued to
reap the profits from child labour, raising thoughts that the CI< was agreed to in order to
reduce the ris# of government regulations (Campbell and 1threya. 2+". In this instance
Cadbury can be seen as ta#ing a passive approach towards the child labour campaign
as the CI< suited Cadbury without themselves having to agree to any of the CI< terms.
;ore recently some of Cadbury's products have been labelled as 'Fair $rade Certified'
which 'guarantee's a better deal for third world producers' ((bout Fairtrade n.d.". $he
Fair $rade system sets a minimum price or price floor to be paid to producers in order to
increase wor#ing conditions and in turn reduce poverty and the need for child labour.
$his has been much publicised by Cadbury itself and has received positive public praise
()pread the *oy n.d., <almer. 27" however further investigation shows how little
farmers can benefit from this. $he general perception of Fair $rade certified products is
that farmers directly reap the benefits of the premiums and no child labour is used in any
stage of the production. $his is not the case. Instead farmer cooperatives receive the
Fair $rade premiums and 'deduct operating costs, administrative expenses, business
reinvestments, and the cost of social and other programs before determining profits' sent
to farmers (Fairtrade Certified: Fre+uently (sked ,uestions - (d"anced n.d.". 1s stated
by /ordon (2!", even if a company, such as Cadbury owned brand /reen and %lac#
(Cadbury gobbles up organic ri"al 2>.", pay the maximum premium for cocoa the
resulting benefit for the average individual farmer can be as little as ,&A+ annually.
1lthough this system does have benefits for the community, Fairtrade certifying is only a
stepping stone in eliminating poverty and child labour among cocoa farmers and it is not
the solution to the problem Cadbury has made it out to be. $his closer examination of
the Fair $rade system shows how Cadbury has used public relations to sway public
opinion.
The case for Cadbury
In contrast to their delayed response to the cocoa farming issues, Cadbury can be
praised for their wor# in local communities around the globe. 1s told by $odd &tit8er,
once C'9 of Cadbury, 6corporate responsibility is what ma#es Cadbury special. It has
been integral to our business for nearly 2 years since the Cadbury family first sought
to be a force for good in troubled times (.etter From our C/O n.d". $hrough their
consistent community and charity wor# Cadbury can be said to be upholding this
statement.
In 2!, Cadbury 1ustralia aim to donate !: of all their pre0tax profits bac# into the
community (Working Together to 0ake a 'ifference in the Community n.d.". $his is done
through the Cadbury Community which focuses on three main area-s being education
and enterprise, health and welfare and environmental sustainability. 1n example of how
Cadbury in 1ustralia has had a social impact is through it-s partnership with the Clown
Boctors since 2* (Clo&n 'octors n.d". $hese 6doctors- help ill children get through
their tough hospital stays by using humour to #eep them entertained. Cadbury show
their support through the annual -;iles for &miles- fundraising event which involves
Cadbury employees wal#ing 5*#m between two Cadbury factories. $o date they have
raised over A!*, which has been cash matched by the business. 1lthough this can
be seen as a public relations ploy Cadbury have contributed in other selfless ways which
suggest otherwise.

In and around Cadbury-s production facilities in India Cadbury have developed
programmes, donated money and volunteered in order to better the lives of the small
communities surrounding each of it-s factories. In ;umbai, Cadbury sponsor ! under
privileged children by paying for their school fees and re2uirements such as text boo#s
so they can one day become contributing members of society (Cadbury spreads smiles
at 1atsalya n.d". 1fter an initial emergency relief donation, Cadbury committed to a five
year partnership with local charities to redevelop two villages in <ondicherry devastated
by the 2* tsunami ()ar"an n.d.". $han#s to the %addi factory team, local migrant
wor#ers have access to education in a non0formal school set up by Cadbury to create a
-prosperous, inclusive and healthy community- (2on-formal school set up by Cadbury for
children of migrant &orkers in Baddi n.d.". $hese are only a few of the many ways
Cadbury has endeavoured to help impoverished families in India. %y voluntarily
contributing the way Cadbury has it is evident the company feels it is their responsibility
to contribute positively to society.
Conclusion Remar/s
Cadbury's performance in regards to it's corporate social responsibility is varied to say
the least. 9n the positive side Cadbury have supported local communities globally by
donating time, money and resources bac# into society. 4hen loo#ing at immediate
business practices in and around their factories, Cadbury have ta#en it upon themselves
to perform with a high moral integrity which in turn has had a profound impact on
immediate sta#eholders.
9n the whole, society expect Cadbury to do no harm to any persons involved with it's
businesses practices, thus forming an implicit social contract. $o withhold it's reputation
and moral integrity Cadbury must follow these ethical guidelines laid out by society.
$hrough it's delayed and 2uestionable actions when dealing with the issue of child
labour, Cadbury's performance with relation to it's corporate social responsibility can be
seen as below par. It has breached it's implicit social contract by distancing itself from
the issue at hand and denying any responsibility. $his shows a lac# of empathy towards
society's ethics and overshadows any of the positive achievements Cadbury has
contributed through the 'Cadbury Community'. %efore Cadbury can be seen as ma#ing a
constructive contribution to society they need to ade2uately address the controversy
surrounding the chocolate it ma#es.

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