Most people love chocolate, but few know the dirty deals behind chocolate production. The 2010 documentary The Dark Side of Chocolate brought attention to purchases of cocoa beans from Ivorian plantations that use child slave labour. The children are usually 12 to 15 years old, and some are trafficked from nearby countries – and Nestle is no stranger to this practice.
Children labor was found in Nestle’s supply chain. Image via Crossing Guard Consulting.
In 2005, the cocoa industry was, for the first time, under the spotlight. The International Labor Rights Fund filed a lawsuit against Nestle (among others) on behalf of three Malian children. The suit alleged the children were trafficked to Côte d’Ivoire, forced into slavery, and experienced frequent beatings on a cocoa plantation. In 2010, the US District Court for the Central District of California determined corporations cannot be held liable for violations of international law and dismissed the suit – a controversial decision which has since been appealed. But even if Nestle wasn’t legally liable for these abuses, they are, at least morally. But that wasn’t the only case of this kind.
A report by an independent auditor, the Fair Labor Association (FLA), says it found “multiple serious violations” of the company’s own supplier code. It was reported that Nestle hadn’t carried out checks against child labor and abuse. Additionally, many injuries caused by machetes, which are used to harvest cocoa pods, have been reported. Nestle’s excuse can be summed up broadly as ‘everybody does it’:
“The use of child labour in our cocoa supply chain goes against everything we stand for,” says Nestle’s Executive Vice-President for Operations Jose Lopez. “No company sourcing cocoa from the Ivory Coast can guarantee that it doesn’t happen, but we can say that tackling child labour is a top priority for our company.”
The FLA reported that Nestle was fully aware of where their cocoa was coming from and under what conditions, but did little to improve conditions. Child slavery and abuse? Check.
In July 2009, the Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC) warned consumers to avoid eating any varieties of prepackaged Nestle Toll House refrigerated cookie dough due to risk of contamination with E. coli O157:H7 (a foodborne bacterium that causes illness). In the US, it caused sickness in more than 50 people in 30 states, half of whom required hospitalization. In particular, one woman had a fatal infection before the batch was reclaimed.
“The fact that our product was implicated in Linda Rivera’s 2009 illness and tragic passing was obviously of grave concern to all of us at Nestle,” the company said in a statement. “Since then, we have implemented more stringent testing and inspection of raw materials and finished product to ensure the product meets our high quality standards,” which sort of makes you wonder – why weren’t stringent testing and inspections implemented in the first place?
But this is just a minor incident compared to the 2008 Chinese Milk Scandal. Six infants were killed and 860 were hospitalized with kidney problems after Nestle products were contaminated with melamine, a substance sometimes illegally added to food products to increase their apparent protein content.
In October 2008, Taiwan Health ministry announced that six types of milk powders produced in China by Nestlé contained low-level traces of melamine and were removed from the shelves.
The scandal quickly escalated, with China reporting over 300,000 victims, raising concerns about the security of major food companies operating in China. Two people were executed and several life prison sentences were issued, with the World Health Organization (WHO) referring to the incident as one of the largest food safety events it has had to deal with in recent years.
Nestle denied implication and claimed that all its products are clean, but the Taiwan government linked their products to toxic melamine. As a response, Nestle says it has sent 20 specialists from Switzerland to five of its Chinese plants to strengthen chemical testing.
Nestle’s CEO, Peter Brabeck.
As with any “respectable” large company, Nestle has been involved in several incidents regarding pollution. A 1997 report found that in the UK, over a 12 month period, water pollution limits were breached 2,152 times in 830 locations by companies that included Cabdury and Nestle. But again, the situation in China was much worse.
While people in the US and Europe are slowly becoming more environmentally concerned and some are opting for more sustainable sources of water, Nestle has moved to another market – Asia. Alongside companies such as Kraft or Shell, Nestle made several environmental violations.
Nestle Sources Shanghai Ltd’s bottled water manufacturing plant also made the list for starting operation before its wastewater treatment facilities had passed an environmental impact assessment.
“These are only some of the water pollution violations committed by multinational companies in China, since our website has yet to cover information about air and solid waste pollution,” said Ma Jun, director of the Institute of Public & Environmental Affairs. “The parent companies in their home countries are models for environmental protection. But they have slackened their efforts in China.”
Another article claims that Nestle capitalizes on China’s already-polluted waters to make a good profit, while Corporate Watch highlights the fact that Nestle continues to extract water illegally from Brazil for their Perrier brand. Although Nestlé lost the legal action, pumping continues as it gets through the appeal procedures, something which can take ten years or more.
Ethiopia was going through a nation-wide famine. Image via Wikipedia.
In 2002, Nestle made what turned out to be a colossal error: demanding that Ethiopia pay them back a debt of US$6 million. There’s nothing wrong with that per se… if Ethiopia wasn’t facing extreme famine at the time. For a company that has 29 brands that make over $1 billion a year, asking a famine-stricken country to pay you back 6 million seems questionable, to say the least.
Nestle’s claim dates back to the 1970s when the military regime in Addis Ababa seized the assets of foreign companies.
The public roar came almost overnight; with the company receiving 40,000 letters from outraged people, in one of the most famous cases of public opinion beat corporate greed. In the end, Nestle took a U-turn, settling for a partial debt which was also invested in the country’s bouncing back from famine. For Nestle, who initially insisted that the compensation issue was “a matter of principle” and that it was in the best interest of Addis Ababa to settle the demand to repair its record with foreign investors, it was a huge moral defeat. For analysts, it was an exciting case which showed that even giants can falter in the face of public opinion.
“This is a welcome result because it shows that Nestle is not immune to public pressure,” said Phil Bloomer, a senior policy analyst.
A Deal With Mugabe
Striking dubious partnerships to make a profit seems to be a recurring theme. The Swiss multinational made a deal with the wife of the infamous dictator from Zimbabwe Robert Mugabe, buying 1 million liters of milk a year from a farm seized from its rightful owners by Grace Mugabe
Grace has taken over at least six of Zimbabwe’s most valuable white-owned farms since 2002, building a farming empire from illegally confiscated farms, which led to an international boycott, as well as EU and US sanctions. She is known for her ridiculously lavish lifestyle, which includes overseeing the construction of two luxuriant castles. In 2014, she was given a doctorate diploma only three months after signing up for the program. Nestle went forward with the deal though, even as the country’s agriculture-based economy was collapsing and inflation was reaching unheard of levels.
The price fixing was arranged for Kit Kat and other chocolates. Image via Wikipedia.
In Canada, the Competition Bureau raided the offices of Nestlé Canada (along with those of Hershey Canada Inc. and Mars Canada Inc) in an investigation on price fixing. Nestlé and the other companies were subject to class-action lawsuits and ultimately settled for $9 million, without actually admitting liability. Furthermore, former president and chief executive officer of Nestle Canada is facing criminal charges.
In the US, another, larger trial was rejected, because even though it was plausible that the same thing happened in the US, there was no clear evidence of any foul play. The suspicion remained however and still lingers with the company.
Promoting Unhealthy Food and Mislabeling
That Nestle is promoting unhealthy food should come as no surprise, but the level at which they operate it is simply staggering. A recent report by the UK Consumers Association claims that 7 out of the 15 breakfast cereals with the highest levels of sugar, fat, and salt were Nestle products.
“Nestlé claims to be ‘the world’s leading nutrition, health, and wellness company’, but when it comes to food marketing to kids, Nestlé is a laggard, not a leader,” said CSPI nutrition policy director Margo G. Wootan.
Nestle dismissed all responsibility in promoting healthy food. To pour even more salt in the
foods wound, mister Brabeck came out with a dismissive interview in the Telegraph, claiming that he is not obese yet ‘every morning I have a tablet of dark chocolate as my breakfast’ and that it is the perfect balance and contains everything he needs for the day. Hey, after all, who would actually think that Nestle’s cereals are healthy, right?
Image via Vevivos.
But while Nestle’s labels aren’t simply misleading, they have also been downright false. In November 2002, police ordered Nestle Colombia to decommission 200 tons of imported powdered milk, because they were falsely relabeled, not only as a different, local brand, but also with a different production date. A month later another 120 tons suffered the same fate, causing uproar among the Colombian population.
Nestle bringing old powdered milk from a different country and labeling as local and new is not only unethical and illegal, but it poses health hazards for consumers.
Drawing the Line
All major companies have incidents, accidents and scandals. When you have so many people working for you, it’s virtually impossible to maintain a clean sheet. Someone will eventually screw up, someone will eventually do something they should. As I was preparing to write this article, a friend actually asked me if other companies don’t have a similar record, and advised me to look at Mars, for example. What I found was that Mars and other big companies have indeed had their share of scandals (sometimes the same ones as Nestle), but not nearly on the same scale. Nestle has shown, time and time again, that they have few ethics and little interest in a real social responsibility. From promoting their formula to uneducated African mothers to lying about production dates, to using water without a permit to dealing with ruthless dictators, they have often gone the extra mile to make an extra profit – even when the extra mile meant hurting people, directly or indirectly.