In March 2019 Ethical Consumer sent Nestle a questionnaire requesting information about its supply chain management policies and practices. No response was received and so the company’s website www.nestle.com, ‘Nestle Responsible Sourcing Standard’ report July 2018, 'Nestle in Society' report 2017 and Nestle's Supplier Code 2013 were searched for relevant information.
On the basis of these documents, Nestle was rated as follows:
Supply chain policy- reasonable
Nestle's Supplier Code, dated August 2013, was said to apply to the whole supply chain 'including [its] parent, subsidiary or affiliate entities, as well as all others with whom [it] does business including all employees (including permanent, temporary, contract agency and migrant workers), upstream suppliers and other third-parties.'
Pillar one of the Supplier Code addressed human rights issues. It contained clauses on freedom of association and collective bargaining; the prohibition of discrimination and the use of forced/child labour. The ‘Nestle Responsible Sourcing Standard’ also addressed these issues. However, it also added “In accordance with international labour standards, no person shall be employed under the age of 15 or under the age for completion of compulsory education, whichever is higher, except in the strict frame of the Family Farm Work” (In accordance with international labour standards, a minor, between the age of 12 and 15 may work, in parallel with studying, on a farm owned or operated by that parent or person standing in place of their parents [a guardian] as long certain conditions (detailed in the report) are met.
The section on working hours stated that employees should work hours in compliance with all applicable laws and mandatory industry standards. It stated 'In absence of law, the Supplier shall not require a regular work week over 60 hours, employees shall be allowed at least one day off after six consecutive days of work, and any overtime worked shall be voluntary and compensated at premium rate'. In the Nestle Society report the company stated that 'We aim to limit working time to a maximum of 60 hours per week across our operations. By the end of 2016, 98% of our markets had implemented and are tracking against this working time limit'.
The section on compensation stated that employees must be provided with wages and benefits that comply with applicable laws and binding collective agreements, including those pertaining to overtime work and other premium pay arrangements. It stated that wages should be enough to meet the 'basic needs for employees, and their entitled official dependents, and to provide some discretionary income.
In the Nestle in Society report 2016 the company stated that 'We completed our global exercise to validate that all our employees are paid a living wage and, working in partnership with Business for Social Responsibility (BSR), have identified and addressed cases where legal minimum wages do not fulfil employees’ basic needs, with any remaining gaps to be closed in early 2017.'
Given that Nestlé's clause on working hours lacked stipulations that working hours be limited to 48 hours per week plus a maximum of 12 hours overtime, but it had robust clauses on freedom of association, non-discrimination, forced labour, child labour and living wages, Nestlé's supply chain policy was therefore considered reasonable.
There was some engagement with multi-stakeholder initiatives such as the International Cocoa Initiative which tackled child labour in the industry. The Nestle in Society report 2017 stated: "We participate in the Consumer Goods Forum’s Business Actions Against Forced Labour...We also joined the Responsible Labor Initiative, which promotes the rights of workers vulnerable to forced labour" The company listed many other organisations that it was involved with, including the Danish Institute for Human Rights, ILO, "local NGOs", TFT and Verité.
In addition, Nestle said "The Nestlé Integrity Reporting System (IRS) offers anonymous phone and online channels for employees to report anonymously any non-compliant or illegal behaviour." The company also had a "Tell us" system, about which is said: ‘Tell us’ is our communication channel for external stakeholders to report possible compliance and non-compliance issues against our Corporate Business Principles, applicable laws and all issues relating to our business operations"
There was no mention of engagement with trade unions.
Auditing and reporting- Poor
Nestle's monitoring and reporting applied to its facilities, Tier 1 suppliers and upstream suppliers. The Nestle in Society report stated: "In 2017, we carried out 146 CARE audits, which identified 135 gaps requiring action. Of these, 15 have been remedied; the remainder are being addressed." This was a signficant reduction from 2016, in which the company carried out 235 CARE audits. The company listed the types of infringement it had identified, and whether or not the matter was considered closed. However, no information regarding full disclosure of audit results, an audit schedule, costs, or further detail regarding the remediation strategy was found.
Nestle had published a "Tackling Child Labour" report in 2017, which contained an assessment of how well its programs were tackling child labour in its supply chain.
Difficult issues- rudimentary
Nestle mentioned some attempts to deal with difficult issues. It stated that in Thailand it had a "new training vessel for boat owners, workers and others. In Turkey, where migrant labour forms a large part of the workforce in our hazelnut supply chain, we have been working with the Fair Labor Association (FLA) since 2011 to improve transparency in the hazelnut supply chain." Nestle's "Tackling Child Labour" report discussed a quite complex system of dealing with difficult cases of child labour, finding out what was behind them and tackling the identified root causes.
Overall Nestlé received Ethical Consumer's middle rating for its Supply Chain Management.
Nestlé Responsible Sourcing (July 2018)