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.

Stakeholder engagement-rudimentary
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.

Reference:

Nestlé Responsible Sourcing (July 2018)

Ethical Consumer visited the Baby Milk Action website in February 2020 and found its long standing boycott of Nestlé over its irresponsible marketing of breast milk substitutes was ongoing.
Boycotters have long accused Nestlé of harming children through the unethical promotion of infant formula. Nestlé is one of the most boycotted brands in the UK as a result of its activities. Baby Milk Action is one of the organisations which calls for such a boycott. According to Baby Milk Action, which describes itself as a non-profit organisation which aims to save lives and to end the avoidable suffering caused by inappropriate infant feeding, Nestlé was targeted with the boycott because monitoring conducted by the International Baby Food Action Network (IBFAN) found it to be responsible for more violations of the World Health Organisation's marketing requirements for baby foods than any other company.

It quoted UNICEF "Marketing practices that undermine breastfeeding are potentially hazardous wherever they are pursued: in the developing world, WHO estimates that some 1.5 million children die each year because they are not adequately breastfed."

It stated that the boycott would continue until Nestlé accepted and complied with its four-point plan for saving infant lives and ultimately ending the boycott.

Nestlé therefore lost a whole mark under Irresponsible Marketing and a whole mark under Boycott Call.

Reference:

babymilkaction.org (2020)

In May 2018, Ethical Consumer viewed a report on the Business Reports website, titled 'Nestle, Kellogg’s sued in anti-obesity drive' and dated to November 2016. The article stated that the Chilean authorities were suing Nestle and Kellogg’s for putting children's cartoon characters on packets of fattening food in breach of an anti-obesity law. The authorities said that the two companies, along with Masterfoods, distributor of M&Ms, had broken the law by “using children's characters on packets of various products classed as 'high in’ certain unhealthy ingredients”. The authority was demanding a $110 000 fine for each company. Nestle therefore lost half a mark under Irresponsible Marketing.

Reference:

Nestle, Kellogg’s sued in anti-obesity drive (November 2016)

In February 2020, Ethical Consumer viewed Nescafé's websites; www.dolce-gusto.co.uk and www.nescafe-go.co.uk which both supplied and sold coffee machines which contained components likely to include the minerals tantalum, tin, tungsten and gold, collectively referred to as “conflict minerals”. However no conflict mineral sourcing policy could be found.

Particular concern had been raised over the sourcing of these minerals from the Democratic Republic of Congo (DRC) and its surrounding countries due to the renowned human rights abuses in the extractive industries in this area with profits being used to fund armed groups. The trade was also said to have dire environmental consequences generating a massive amount of waste containing toxic and radioactive substances, polluting the environment, water supplies and affecting the local communities.

Under the US Dodd-Frank Act any company that "manufactures or contracts to manufacture products containing any 3TG that is necessary to the functionality or production of such products, to conduct a “country of origin” inquiry reasonably designed to determine whether the 3TG in such 3TG Products originated from the Democratic Republic of the Congo or adjoining countries."

While Nestle was not required by US law to report on conflict minerals campaign group Enough stated that all companies "should have been taking proactive action to trace, audit, and certify their supply chains to ensure that the effects of the above problems were limited."

Due to the fact the company had no policy it received Ethical Consumer's worst rating for its policy on conflict minerals and lost a whole mark under the Habitats and Resources and Human Rights categories.

Reference:

nestle.com (2020)

In February 2020, Ethical Consumer viewed the website for the not-for-profit organisation The Council of Canadians. The organisation was calling for a boycott of Nestlé.

It stated that Nestle had purchased a well in Ontario despite the local municipality's attempt to also purchase it to safeguard the water supply.

The website also stated: "Downstream from Nestlé’s operations, many people from Six Nations of the Grand River do not have clean, running water. Under the UN Declaration on the Rights of Indigenous Peoples, governments are required to obtain free, prior and informed consent from Indigenous peoples for water projects like this [...] Nestlé's permit to draw water in Aberfoyle, ON, expired on July 31, 2016. Since then, they've taken over 1.5 BILLION litres! Boycott Nestlé!"

The company therefore lost a mark under Boycott Call and Human Rights for failing to respect Indingenous right to free, prior and informed consent.

Reference:

Nestlé Boycott Pledge (25 January 2019)

In April 2018, Ethical Consumer viewed an article on the Business & Human Rights Resource Centre website titled 'Forcibly Displaced Cambodians File Historic Lawsuit against Asia’s Largest Sugar Producer' and dated to April 2018.

The article stated that displaced farmers from Cambodia had filed a class-action lawsuit against the Thai sugar producer Mitr Phol. 'The legal complaint was filed in a Thai civil court by two plaintiffs representing a class of approximately 3000 people who were violently displaced and dispossessed of their land and livelihoods in five remote villages in northwestern Cambodia to clear the way for a Mitr Pohl sugarcane plantation between 2008 and 2009.' Mitr Pohl was said to be the fourth largest sugar supplier in the world, and sold sugar to global brands including Coca-Cola, Pepsi, Nestle and Mars.

'The suit alleges that Mitr Phol’s operation in Cambodia’s Oddar Meanchey province resulted in violent forced evictions, burning of homes, looting of crops and livestock and the seizure of land that was legally held by local farmers. Forests inside the company’s land concessions that local communities relied upon for their livelihoods were illegally logged. Those who resisted were threatened, arrested and imprisoned...[T]he National Human Rights Commission of Thailand found Mitr Phol directly responsible for human rights violations committed in conjunction with its operations in Cambodia...Mitr Phol told the commission that it would compensate affected people in accordance with international standards but has failed to do so.'

Nestlé therefore lost half a mark under Human Rights.

Reference:

Forcibly Displaced Cambodians File Historic Lawsuit against Asia’s Largest Sugar Producer (April 201

On 30th November 2016 Amnesty International released a report called “The Great Palm Oil Scandal: Labour Abuses Behind Big Brands Names.” The report investigated labour exploitation on plantations in Indonesia that provide palm oil to Wilmar, one of the world’s largest processors and merchandisers of palm and lauric (palm kernel) oils, which controls over 43% of the global palm oil trade. The report also traced the palm oil produced in Indonesia for Wilmar to a range of consumer goods
companies that use palm oil in their products.
Amnesty International found serious human rights abuses on the plantations of Wilmar and its suppliers. These included forced labour and child labour, gender discrimination, as well as exploitative and dangerous working practices that put the health of workers at risk. The abuses identified were not isolated incidents but due to systemic business practices by Wilmar’s subsidiaries and suppliers, in particular the low level of wages, the use of targets and ‘piece rates’ (where workers are paid based on tasks completed rather than hours worked), and the use of a complex system of financial and other penalties. Workers, especially women, were employed under casual work arrangements, which made them vulnerable to abuses.
Amnesty stated “All of these are obvious and predictable areas of concern and risk. However, none of the companies that buy palm oil from Wilmar could demonstrate to Amnesty International that they had identified and addressed the actual abuses documented by Amnesty International.”
Nestlé said “…we confirm that we source, indirectly, palm oil from all refineries mentioned in
your letter, with the exception of PT Wilmar Nabati Indonesia in Bagendang, which we do not source from at all.”
Nestlé told Amnesty International that it had been monitoring Wilmar for human rights related reasons since 2010. Despite this claim, Nestlé did not appear to have identified the severe labour abuses investigated by Amnesty International on Wilmar’s and its suppliers’ plantations. Nestlé said that it had suspended a portion of trade with Wilmar from 2010 to 2012 for reasons related to environmental practices. In a letter to Amnesty International, the company said that: “…origins of a
proportion of palm oil provided [by Wilmar] were not in alignment with RSG [Responsible Sourcing Guidelines]. However, following extensive engagement we received assurances that it would change its practices, and our full commercial relationship restarted.”
Nestlé said that between the years of 2010 and 2013 the company was “…also gathering information on human rights issues during this period.” In relation to Wilmar, it said that “56.06% (25,587 tonnes) [of palm oil] is being monitored through our Responsible Sourcing Action Plan”. It stated: “Wilmar does not currently comply with all Nestlé’s RSG requirements yet”, but that Wilmar “…has made a policy commitment, with a time bound Aggregator Refinery Transformation (ART) plan.” Amnesty said that the ART plan was extremely limited in scope. While Nestlé states that Wilmar was non-compliant with parts of its own RSG policy, it did not disclose whether this non-compliance relates to labour standards.
In response to Amnesty International’s findings, Nestlé stated that: “We believe that our due diligence system, based upon the various steps noted above (risk assessment, supply chain transparency, on the ground assessments and action plans with suppliers, backed by suspending suppliers who are unwilling to improve) is a strong one.” However, despite its detailed response, Nestlé failed to demonstrate that it had, through its internal processes, identified labour risks or abuses linked to Wilmar’s Indonesian palm oil supply prior to being contacted by Amnesty International.
Nestlé therefore lost half a mark under Palm Oil and a whole mark under Workers' Rights.

Reference:

The Great Palm Oil Scandal: Labour Abuses Behind Big Brands Names (30 November 2016)

According to an article on the Guardian website dated 1st February 2016 and viewed by Ethical Consumer in February 2016, Nestle had admitted to finding slavery in its Thai seafood supply chain.
Andrew Wallis, chief executive of Unseen UK, argued that Nestlé’s self-reporting could also be seen as a tactic to head off or deflate other pending civil litigation suits. “It’s easy to own up to something that has already been uncovered,” he said. “By the time Nestlé owned up to slavery in the Thai seafood industry it was accepted knowledge."
Nestlé therefore lost a whole mark under Workers' Rights.

Reference:

Nestlé admits slavery in Thailand while fighting child labour lawsuit in Ivory Coast (22 February 2

A report in the New York Times on 27th July 2015 exposed the use of forced labour in the South China Sea. The article outlined how migrants were often sold onto fishing boats where they were held captive and forced to work, sometimes for years.
The article focused on a Cambodian man, Lang Long, who was sold by traffickers to a Thai fishing boat, where he was often shackled by the neck, during his two years of captivity. Mr. Long did not know where the fish he caught ended up. He did learn, however, that most of the forage fish on the final boat where he was held in bondage was destined for a cannery called the Songkla Canning Public Company, which is a subsidiary of Thai Union Frozen Products, the country’s largest seafood company. In the past year, Thai Union has shipped more than 28 million pounds of seafood-based cat and dog food for some of the top brands sold in America including Iams (owned by Mars), Meow Mix and Fancy Feast (owned by Nestle), according to United States Customs documents.
Lisa K. Gibby, vice president of corporate communications for Nestlé, which makes pet food brands including Fancy Feast and Purina, said that the company is working hard to ensure that forced labor is not used to produce its pet food. “This is neither an easy nor a quick endeavor,” she added, because the fish it purchases comes from multiple ports and fishing vessels operating in international waters.
Following the report, in September 2015 a group of consumers filed a class-action lawsuit in California against Nestle over the use of this forced labour in its pet food supply chain. The lawsuit accused Nestle of violating consumer protection laws, including false advertising and unfair competition, by failing to disclose the use of forced labour.
Nestlé therefore lost a whole mark under Workers' Rights.

Reference:

‘Sea Slaves’: The Human Misery That Feeds Pets and Livestock (27 July 2015)