At Terraxis, we believe we should aspire to move beyond compliance when it comes to child labor, forced labor, casual labor wage abuse, and sexual exploitation across plantations and processing sites associated with the cacao, Tea, and Coffee supply chain.

We placed human rights due diligence at the center of our sourcing strategy and in our digital tools, choosing a holistic approach rather than developing a siloed tool just for EUDR. But beyond digitalization, which remains crucial to our effort to confront these grave human rights violations in our supply chain, we also want our roasters and chocolate retailers to confront with us critical compounding factors: the broader rural development gaps and labor dynamics surrounding smallholder farmers.

Development actors, including governments and institutions such as the Food and Agriculture Organization (FAO), International Fund for Agricultural Development (IFAD), and the World Bank, rightly recognize smallholders as vulnerable producers facing limited access to credit, climate shocks, and weak infrastructure. Direct traders also understand this, as many engage with these realities on the ground. However, as an integral part of global supply chains, smallholders frequently also act as casual employers during peak harvest and operate beyond their own vulnerabilities. Viewing smallholders strictly as vulnerable producers creates a significant HRDD blind spot. Add rural realities, and HRDD risks become far more complex, often overlapping and compounding.

These compounded and overlapping issues may include, to mention a few:

• Informal piece-rate pay can create an economic incentive for households to involve additional family labor, including children, to increase harvest volumes. Smallholder farmers also do not always rely solely on household labor. During peak periods, they may hire casual workers, and payment is often structured by output—such as quantity picked or harvested—rather than as a daily wage.
• Upstream price pressure and limited farm margins can constrain farmers’ ability to hire adequate adult labor, increasing reliance on cheaper casual or family labor, often children. Most direct traders who pay above the C market are already mitigating this, even if they do not yet realize it.
• Structural root causes, including rural poverty, limited access to schooling, labor shortages, and weak social protection, can increase the risk of children entering harmful or hazardous work – many acting as primary breadwinners.
• Trafficking and forced labor risks arise where poverty, recruitment practices, labor shortages, migration (labor supply and demand), and weak worker protections can combine to create conditions in which exploitation becomes easier to conceal. This is more common in cacao than in coffee, but vigilance is still necessary.
• Overlapping vulnerabilities: seasonal workers may move between smallholder coffee or cacao farms, nearby tea plantations, and processing sites, facing different risks at each workplace. A worker helping on a smallholder plot may simultaneously face “sex for work” conditions at a nearby tea plantation, entirely invisible downstream. This consideration pushes us beyond the smallholder household, but gauging the labor they use helps us further mitigate; in the end, the cup carries any violation committed by the smallholder.

These origin realities far exceed what annual, paper-based spot checks can capture. Nor can they be adequately understood through ESG reports reconstructed months later in Amsterdam or Brussels. Certification schemes and periodic audits can provide useful evidence, but they do not substitute for continuous human rights due diligence. Certification schemes themselves acknowledge limitations around traceability models such as mass balance, where certified and non-certified products may be mixed while volumes are administratively accounted for. In our case, we found a combination of paper-based systems that leave little monitoring capability behind, reliance on an army of auditors, weak incentives where compliant products do not necessarily fetch better prices, and unequal access, whereby neighboring cooperatives may be unable to afford certification—all of which compound these traceability and assurance gaps.

For a roaster, the challenge is often the distance between the cup and the origin, with much of the heavy lifting left to the importer. For a chocolate retailer, that distance can extend three or more layers further: a manufacturer supplying the finished brand may source from an importer, which sources from a large exporter, which in turn relies on multiple suppliers and aggregators. These are some of the practical challenges of conducting HRDD across agricultural supply chains.

Yet we are not helpless. If you are a roaster, requiring greater transparency on pricing, labor practices, and, in the EU, EUDR compliance is one way of exercising leverage through your commercial relationship with an importer. If you are a chocolate retailer, you too can ask where your cocoa comes from, what risks have been identified further upstream, and what your immediate supplier is doing about them. Each actor has some leverage through its commercial relationships, even when it does not purchase directly from producers. This principle sits at the heart of risk-based due diligence under the OECD framework.

At Terraxis, we provide holistic risk analysis, following your euro back to the source to map where exposures sit, what types of risks exist, and where you can use your commercial leverage. Where necessary, this may mean working with your importer or directly with the main supplier at origin. These are not ESG-reporting advisory services; many actors across Europe already do that well. Our role is to draw on decades of experience in human-rights protection to identify supply-chain risks and help determine where practical intervention is possible.

Where we source cocoa or coffee for you, we work directly with the actors closest to these dynamics: cooperatives and producer organizations aggregating the product. This reduces the distance between buyer and source. Cooperatives are particularly important because they often already hold producer records, provide inputs and agronomic support, process products, organize aggregation, and engage in collective marketing. Their staff, including cooperative officers, agronomists, and factory managers, also provide an institutional pathway for more participatory and community-based approaches to HRDD.

Our approach builds on that existing workforce and embeds HRDD into everyday operations. This workforce needs capacity building first and foremost, not only the supplier sitting in Abidjan or Nairobi. The objective is not simply to teach cooperative staff which questions to ask, but to help them understand why those questions matter and how to interpret what they are seeing. That means being able to distinguish between a child helping a family as part of intergenerational knowledge transfer—learning when a coffee cherry is ripe or how to sort before delivery to the wet mill—and a child whose parents rely on their English skills and therefore expose them to chemical hazards because the parent is illiterate.

When the cooperative owns that process, it can also connect buyer leverage and premiums to community-based intervention. Where indicators of forced labor emerge, including in cocoa-producing communities, member groups and cooperative staff can be among the first to recognize the risk, document it, escalate it where necessary, and engage the appropriate authorities or support services.

Ultimately, the same agronomist visiting a farm to provide technical support can also observe indicators of child labor or other human-rights risks, explore underlying causes, and record those observations through a digital system that goes beyond EUDR. Repeated observation and follow-up are consistent with established child-labor monitoring approaches. This creates clearer intervention pathways, allowing buyers to support targeted remediation, services, or premiums linked to identified needs rather than relying solely on generic add-ons whose impact at farm level may be difficult to verify.

Labor practices, by definition, cannot be adequately gauged through a spot check or a one-time labor screening, as each harvest season brings new labor pressures. That living data is therefore essential not only for continuous monitoring, but also for identifying issues experienced across the producer group rather than treating each case as isolated to a single farming household. Some root causes can be addressed through commercial alignment—for example, supporting cooperatives to provide PPE for farmers handling chemical sprays, or organizing community labor pools during critical harvest periods so households facing labor shortages can exchange support. Other issues may require the cooperative to engage development actors or government, such as where schools are too distant from producing communities.

The goal is not to place the burden of rural development gaps entirely on the coffee roaster or chocolate retailer. Rather, collective action can put buyers, cooperatives, producers, development actors, and public institutions in a better position to respond. The tools and capacity we provide to cooperatives can help identify where commercial leverage is useful, where community-based solutions are possible, and where broader institutional intervention is needed, unlocking catalytic solutions that go well beyond compliance alone.

See our Human Rights Due Diligence Advisory or find our HRDD cooperative workstation, expanding our plot-level EUDR for HRDD at origin.