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Hot Chocolate: How Cocoa Fueled The Conflict in Côte d'Ivoire

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Since September 2002, fighting in Côte d’Ivoire, once regarded as the economic success story of West Africa, has claimed thousands of civilian lives and displaced hundreds of thousands of people. More than 40% of the Ivorians now live in poverty. Côte d’Ivoire is the world’s biggest producer of cocoa, the main ingredient for chocolate.

Yet few of the billions of consumers of chocolate around the world are aware of the role that the cocoa trade has played in the armed conflict and political crisis in Côte d’Ivoire in recent years. Lack of transparency in Côte d’Ivoire’s natural resource management has contributed to instability within the country and will continue to do so if not addressed. Instability in Côte d’Ivoire threatens the wider peace and security of the Mano River region.

Global Witness’ report ‘Hot Chocolate: how cocoa fuelled the conflict in Côte d'Ivoire’ shows how over US$118 million from the cocoa trade has funded both sides of the recent armed conflict in Côte d'Ivoire. The report highlights how international cocoa-exporting companies have contributed significantly to the finances of both the Ivorian government and the Forces Nouvelles (FN), the rebel group holding on to the northern half of Côte d'Ivoire.

40% of the world's cocoa comes from Côte d'Ivoire, twice as much as the next biggest supplier, Ghana. Cocoa is the main economic resource of the volatile West African state, representing on average 35% of the total value of Ivorian exports, worth around US$1.4 billion per year.

Hot Chocolate documents patterns of mismanagement of revenues, opacity of accounts, corruption and political favouritism in the cocoa sector in Côte d'Ivoire. It presents detailed evidence showing:

• The diversion of more than US$58 million from cocoa levies to the government's war effort.

• A link between two major western companies and diversion of funds from the cocoa trade. Two senior directors of cocoa companies – one from Cocoa SIFCA, the Ivorian subsidiary of US food group Archer Daniels Midland (ADM) , the other from Dafci, then owned by French conglomerate Bolloré – were both representing Côte d'Ivoire's biggest exporters' union on the board of the Ivorian cocoa institution, the Bourse du Café et Cacao, at the time the funds were diverted.

• The strategy used by the Forces Nouvelles rebels to raise approximately US$30 million a year by taxing cocoa transiting through the north and preventing northern-produced cocoa from transiting south into the government-controlled zone. This parallel tax system has not only helped the FN to survive as a movement but has allowed individual FN officials to enrich themselves to the detriment of the population of northern Côte d'Ivoire.

• A pattern of intimidation against those who have investigated or denounced corruption in the cocoa trade - from the disappearance and probable murder of Franco-Canadian journalist Guy-André Kieffer in 2004 to the kidnapping of a French lawyer who was auditing the cocoa sector for the European Union.

With this report, Global Witness called for action by international companies involved in the cocoa trade, asking them to become more transparent through:

• Publicly disclosing details of the origins of the cocoa they buy in Côte d'Ivoire.

• Publicly disclosing what they pay to the national cocoa institutions and the government in the form of levies and taxes on cocoa.

The report also called for the government to install greater transparency and accountability in the cocoa industry and for the Forces Nouvelles to disclose revenues generated by taxes on cocoa and other products throughout the FN zone and publish information on how this money has been used to date.

To access the full report, please visit: http://www.globalwitness.org/