Louisiana Municipal Police Employees' Retirement System, Baton Rouge, Thursday sued Hershey Co., accusing the company of using cocoa that comes from farms in Ghana and the Ivory Coast that unlawfully use child labor.
The $1.4 billion pension fund seeks to inspect Hershey's books and records “to determine whether it is appropriate to commence” legal action on behalf of the company and its shareholders.
In the suit filed in the Court of the Chancery of Delaware, Wilmington. LAMPERS contended there is reasonable basis to investigate whether Hershey's officers and board of directors have acted in breach of their fiduciary duties to the company and its shareholders.
“There are substantial grounds to believe that the (board) has caused or permitted the company to support the use of unlawful child labor, in fact integrating this illegal conduct into its business model,” the suit states.
On Oct. 4, LAMPERS sent a letter to Hershey asking under its right as a shareholder to seek board meeting minutes and other material, according to the complaint. Hershey sent a reply Oct. 12, refusing the request.
“Rather than open its records to scrutiny, Hershey over the past decade has thrown up multiple roadblocks to reasonable examination of its conduct regarding serious questions about illegal child slave labor and trafficking in its supply chain,” said Jay Eisenhofer, co-managing director of Grant & Eisenhofer law firm, who is representing LAMPERS in the case.
Kathy Bourque, LAMPERS director, referred calls to R. Randall Roche, LAMPERS general counsel, who couldn't be reached for comment
According to a statement from Leigh Emick Horner, vice president, corporate communications, Hershey “takes its commitment to responsible sourcing very seriously and has been supporting cocoa-growing communities for more than 50 years. We have been involved in on-the-ground programs, working with public and private partners, to help eliminate inappropriate labor practices in cocoa communities. As part of these efforts, Hershey is engaged with the U.S. Department of Labor and the United Nations' International Labor Organization in programs to address these labor issues.
“In January, we announced a $10 million commitment to cocoa sustainability programs in West Africa. In addition, last month we announced our commitment to source 100% third-party certified cocoa by 2020 which, combined with our substantial on-the-ground programs, puts Hershey at the forefront of global chocolate companies in addressing the social and economic issues in cocoa-growing communities.”