Monday, October 15, 2018

Why I support Nestle

Around the world today countless people are being abused in the supply chains of large multinationals: either directly through their working conditions, or indirectly through the destruction of their environment.  If we want this to stop, it is crucial that we either support Nestle, or boycott multinationals altogether.  A selective Nestle-only boycott can do nothing but harm people who are current victims of the misbehaviour of large multinationals companies.

Why would I say such a thing?  After all in the 1970s Nestle actively foisted infant formula onto mums who had no access to clean water to make it up, convincing them it was modern and hence better than breastfeeding.  Tens of thousands of babies per year died from diaorrhea as a result.  There was a widespread boycott of Nestle products as a result.

But have you noticed what happened subsequently?  I've only discovered this relatively recently and have been really surprised by what I've learned.

In response to the boycott, Nestle significantly changed its formula marketing practises.  That led to a lifting of the main boycott in 1984, followed by a lifting of smaller boycotts by organisations such as the Royal College of Midwives  and various church groups in subsequent years.  Today whilst their infant formula marketing still leaves a lot to be desired, it's a lot more responsible than that of any of their major competitors.

Moreover, Nestle hasn't just cleaned up its act in regards to infant formula marketing: they're at or near the top of the charts in human welfare wherever I look.  Not necessarily great, but equal or much better than any comparable company.   When I went to look for fairly traded cocoa products with robust independent certifications, Nestle was the only large multinational trading here whose products fit the bill.  You'll see them all over my list of fairly traded cocoa products available in New Zealand.  When I went to look for fish-containing pet food with a low risk of slavery in its supply chain again, Nestle was one of the few companies taking those issues seriously.

And yet, wherever I look I also see journalists and individuals casually assuming Nestle is still awful, and plenty of people I know still boycott them today.  There is even still a small organised boycott.

I think this is terribly risky.  As far as I can tell, the Nestle boycott worked.  People saw that they were doing something terrible and brought that to global attention, leading to consumers turning away from their products in droves.  In response to that pressure Nestle has not only dramatically changed its infant formula marketing practises, they've also become a global leader in human welfare practises in general.  If such a comprehensive response doesn't lead to an enthusiastic return of their customer base, what message does that send to other companies who are abusing people today?  Surely the last thing we want to do is convince them there's no point changing their ways.



In more detail, here's what's convinced me that Nestle has really changed.

Chocolate
I started to think about this when I discovered that Nestle only uses UTZ certified cocoa for all their products made in Australia and New Zealand.  That means that all their cocoa is made by workers who have freely chosen to work (i.e. no forced labour), are adults, are paid sufficient to live on (so don't need to send their kids out to work to survive), have access to safety equipment (and explanations on how to use it in their own language) etc.  Most importantly, it means Nestle is submitting themselves to a reputable third party's ideas on what are appropriate minimum labour standards, and those standards are independently verified.

Nestle is moving to using such standards internationally (in some places using other certifications, but always independently verified certifications and always ones where a third party determines the certification criteria) although they're 100% there yet.  Since this process started there have been cases of slavery and child labour found on cocoa farms supplying Nestle, but that's kind-of the point.  People are looking so the abuses that are occurring are being found out!  In every case I have come across the numbers of such workers being found are both small and steadily dropping, which is exactly what I would hope such scrutiny would lead to.

At the same time as I became aware that Nestle was opening themselves to such scrutiny, I also removed Cadbury's products from my list of fairly traded cocoa products available in New Zealand.  They had previously had their Dairy Milk bar certified through FairTrade, although none of the rest of their range had ever had independent certification.  At the beginning of this year they moved to an 'in house' certification instead: cocoa life.  Cocoa life is great in that it is being rolled out across Cadbury's entire range, but it'd dicey as its in-house.  They choose the certification criteria and they can change them at any time.  A third party still checks that the standards are being adhered to, but their alterability makes Cadbury's approach much less robust than Nestle's.

My impressions are confirmed by Baptist World Aid Australia: in their Stop the Traffick report in 2017 Nestle came out top in terms of child protection and did very well across all human rights indicators.

Fish
More recently I've been very pleasantly surprised by Nestle's commitment to end human rights abuses in their fish supply chain.

I hadn't initially realised it, but Nestle actually uses a lot of fish in their products.  They are one of the world's largest pet food companies, owning brands like Purina, Beneful, Friskies and Fancy Feast, and many of these products contain fish.  Slavery is a huge issue in the fishing industry (especially at sea), and these issues are especially acute in pet food as the fish used there is often highly processed and very hard to trace.  I have been astonished by Nestle's commitment to rooting out these issues from their supply chain.  I don't believe that their fish-containing pet-food can be considered slave free (after all they still only know the ultimate source of only 57% of their whole fish, and presumably less of their processed fish), but they are making steady progress in this area.  They seem much further along the process than Mars (bizarrely also a major pet food company - they make Whiskas and Iams), who have made similar commitments but seem to have stalled in following through on them.  None of the other major companies (e.g. Kraft Heinz, makers of Champ and Chef) have even made such commitments.

Nestle also markets shrimp for human consumption at least in the UK.  In 2015 it was revealed that their shrimp were being peeled by slave labour in factories in Thailand.  Nestle responded to this very promptly, spearheading the formation of the Shrimp Sustainable Supply Chain Taskforce (now known as the Seafood Task Force), an organisation that exists to improve human welfare and sustainability in the Thai seafood industry.  Since it began this work I have found no evidence of the ongoing use of slave labour in the Nestle shrimp supply chain.  What happened there was terrible and shouldn't have happened, but as soon as it was revealed Nestle acted promptly and thoroughly.

Infant formula
I then looked at Nestle's current infant formula marketing in low income countries.  After all, that's where all this started.

Earlier this year, Save the Children UK did a report on infant formula marketing in low income countries.   After the Nestle scandal came out, the World Health Organisation developed an International Code of Marketing for breast milk substitutes.   Save the Children ranked the six largest infant formula companies on how consistently they adhered to these in low income countries.  None of them came out of it very well, but Nestle came out on top by a considerable margin.  Several other independent parties have also found Nestle to be doing reasonably well in terms of responsible infant formula marketing.  Of companies with a presence in New Zealand, Reckitt Benckiser (makers of strepsils, durex and Mortein fly spray) and Kraft Heinz (makers of Watties, Eta and Oak) ranked lowest in the Save the Children report.

Looking more widely
I then wondered how they fared on human welfare issues more generally.

Oxfam UK produces a 'company scorecard' every two years where they rank ten of the world's largest countries on a range of human welfare indicies.  Companies are awarded a grade out of 10 in each of seven domains: land, women, farmers, workers, climate, transparency and water (see their website for more detail).  Unliver topped the rankings, with 52/70 (74%) but Nestle came second with 48/70 (69%).  There was a sizeable gap down to the next company, Coca cola (40/70) and bottom of the list were Danone and Associated British Foods at 25/70 each.  Nestle scored particularly well on 'land' and 'climate' and didn't get below 5/10 on anything.




Public impressions of Nestle
It seems to me that Nestle is an outstanding multinational company.  It disturbs me that so few people have noticed this.

Nestle recently released two new Nespresso pods in New Zealand which use Fair Trade certified coffee for the first time (their Indonesian and Colombian Master origin ones).  When Fair Trade Australia New Zealand announced that on Facebook, they faced substantial back-lash.  Customers were disgusted that Fair Trade would have anything to do with such a terrible company (as well as being disgusted that they would promote single-use coffee pods).

When the Save the Children infant formula report was released in the UK this year, the Guardian led with the information that, in the Philippines, "NestlĂ© and three other companies were offering doctors, midwives and local health workers free trips to lavish conferences, meals, tickets to shows and the cinema and even gambling chips, earning their loyalty."  They didn't even bother to name the other companies until much further down in the article, even though the other companies were far more deeply implicated in such practises than Nestle.

This August when Nestle submitted on Australia's Modern Slavery Bill (which would require companies operating in Australia to submit annual reports on how they are eliminating slavery from their supply chains), headlines appeared like: "Nestle says slavery reporting requirements could cost customers".  That seemed to suggest Nestle was keen to avoid having to report on slavery issues in its supply chain, and many people I saw took that to imply they had things to hide.  Yet Nestle was simply saying preparing yet another distinct report on slavery in their supply chain would be expensive, and that that expense would be passed on to customers.  They were asking Australia to better align its reporting requirements with those Nestle already complies with in the UK and California to ease this burden.  In addition, they asked Australia to increase the penalties the act imposes on companies that don't meet the requirements - hardly the action of a company trying to shirk its responsibilities.Everywhere I look Nestle is doing reasonably well on human welfare.



Almost everywhere I look Nestle is doing substantially better than its competitors. Yet everywhere I look I also see journalism that confirms the public impression that they're terrible, and everywhere I look I see members of the public boycotting them and encouraging others to do so.

What does this tell other multinationals?  If you ever get caught abusing human welfare, there's no point stopping.  No matter how much you change, no one will ever notice, so you may as well just carry on.

For the sake of people currently suffering at the hands of other multinationals, this needs to stop.

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