In August 2020 Ethical Consumer sent Nestle a questionnaire requesting information about its supply chain management policies and practices. No response was received and in October 2020 the company’s website www.nestle.com, and the ‘Nestle Responsible Sourcing Standard’ report July 2018 were viewed. The latter stated, "This Standard replaces previous versions of the Nestlé Supplier Code, the Nestlé Responsible Sourcing Guideline and the Nestlé Commitment on the Responsible Use of Materials from Agricultural Origin". The 'Creating Shared Value' report 2019 was also searched for relevant information. On the basis of these documents, Nestle was rated as follows:

Supply chain policy- reasonable
The ‘Nestle Responsible Sourcing Standard’ had an adequate section on Freedom from Forced, Bonded or Prison Labour. Regarding child labour it stated " 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 described in 4 . 2.1".

The Family Farm Work criteria stated the following:
"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 as the following conditions are met: • The minor freely reports their wish to help and learn at the family farm if interviewed outside the farm• Work takes place outside of schooling• Work is supervised at all times by a parent or guardian • Work does not take place at night, does not consist of heavy lifting duties or hazardous work conditions, defined as:• Operating or assisting to technically operate any type of machine, including tractor and power engines• Felling, bucking, skidding, loading, or unloading timber• Working from a ladder or scaffold (painting, repairing, or building structures, pruning trees, picking fruit, etc.) at a height of over 2 metres,• Working in a confined space (example silo or a storage designed to retain an oxygen deficient or toxic atmosphere)• Handling or applying any type of agricultural chemicalsThe above requirements apply as well to agricultural schools – apprentices and students that can be present on farms."

As the Standard contained a clear prohibition of child labour, and explained in detail its Family Farm Work exception, overall the child labour clause was deemed adequate.

The Sourcing Standard upheld freedom of association and non-discrimination. Regarding wages it stated, "cash wages plus in-kind benefits (up to 30%) shall aim to meet basic needs for employees and their entitled official dependents and to provide some discretionary income. Where living wages have been objectively calculated, progress should be made to close any gaps between current wages and living wages."

The section on working hours stated "Regular working hours, excluding overtime, shall be defined by contract and shall not exceed 48 hours per week", and that "All overtime shall be voluntary and shall not exceed 12 hours per week".
However, this standard was said to only apply to "Tier 1 suppliers, defined as having a direct commercial relationship with Nestlé",
Nestlé's supply chain policy was therefore considered reasonable.

Stakeholder engagement-rudimentary
The Shared Value Report discussed its grievance mechanisms: "In 2019, we carried out a major review of the effectiveness of our external (Tell us) and internal (Nestlé Integrity Reporting System) grievance mechanisms". It was not clear whether these were at no cost and in stakeholder's first language.
The report mentioned multi-stakeholder platforms but only for water stewardship advocacy.
There was no mention of engagement with trade unions.

Auditing and reporting- Poor
The Nestle Responsible Sourcing Standard did not mention an audit program but stated that "Upon Nestlé request, suppliers, including intermediaries and farms, shall make visible the internal program they have in place demonstrating continuous improvement or fulfilment against the Standard’s requirements or its equivalent".
The Creating Shared Value report stated, "CARE, our global external audit program, is conducted by three audit companies and verifies that all employees and sites we own or operate comply with local legislation, our Corporate Business Principles and Code of Business Conduct. The audits take place every three years."
The company did not appear to have an audit schedule for suppliers.

Difficult issues- rudimentary
In its Shared Value Report Nestle mentioned work done to tackle child labour, and women's empowerment.

Overall Nestlé received Ethical Consumer's middle rating for its Supply Chain Management and lost half a mark in this category.

Reference:

Nestlé Responsible Sourcing (July 2018)

Ethical Consumer visited the Baby Milk Action website in October 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 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 October 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 November 2020 Ethical Consumer viewed an article on the Reuters website dated July 2020 and titled 'U.S. Supreme Court takes up Nestle, Cargill appeals over human rights claims'.

It stated that "The U.S. Supreme Court will decide whether American corporations can be sued for alleged human rights abuses occurring abroad under a 1789 law, agreeing on Thursday to hear appeals by two companies - Cargill Inc and a Nestle SA subsidiary - accused of knowingly helping perpetuate slavery at Ivory Coast cocoa farms."

"The case concerns the 18th century U.S. law called the Alien Tort Statute that lets non-U.S. citizens seek damages in American courts in certain instances. The business community has long sought to limit corporate liability under the Alien Tort Statute."

The case had previously been dismissed, but: "The San Francisco-based 9th U.S. Circuit Court of Appeals in 2018 revived the claims, citing the allegations that the companies provided “personal spending money” to local farmers to guarantee the cheapest source of cocoa. The 9th Circuit found that the payments were akin to kickbacks and that the low price of cocoa was dependant on the child slave labor.

The U.S. Chamber of Commerce, the Coca-Cola Company and Chevron Corp all filed briefs asking the court to hear the Nestle and Cargill appeals."

All companies mentioned in this story lost half a mark under Human Rights.

Reference:

U.S. Supreme Court takes up Nestle, Cargill appeals (July 2020)

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

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."

Further to the above, a report in the New York Times on 27th July 2015 had 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:

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

In December 2020 Ethical Consumer searched Nestle's website and Nestle's 2019 "Cocoa Plan Progress report", for information on the company's cocoa sourcing policies.

In 2018 183K tonnes of cocoa was sourced through the Nestlé Cocoa Plan which was 44% of total Nestlé cocoa. Ethical Consumer normally looked for an independent certification, however Nestlé's plan had previously been praised by campaign Stop the Traffik.

It sourced cocoa from Côte d'Ivoire, Cameroon, Ghana, Indonesia, Brazil, Ecuador, Mexico and Venezuela.

Ethical Consumer expected companies to have certified 100% of their chocolate products or to only source from outside of West Africa where the issues of child labour are widely reported.

Due to the fact that the company was still sourcing some uncertified cocoa, and the issue of child and slave labour in cocoa supply chains had been known since before 2000, it lost half a mark in the Workers' Rights category.

Reference:

www.nestle.co.uk/ (11 November 2020)

In November 2020 Ethical Consumer viewed a story on the Business and Human Rights website. It linked to a report by the ALF-CIO, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), titled The Double Standard at Work: European Corporate Investment and Workers' Rights in the American South, and published in October 2019.

This report stated that, "Nestlé officials and IUF leaders have been meeting in the United States since 2017 to discuss a protocol relating to freedom of association and collective bargaining in North America. ...
At these meetings, the American unions protested Nestlé USA management’s continuing interference with workers’ organizing rights, and asked for “action points” to halt the company’s anti-union campaigning when employees attempt to form and join trade unions. Nestlé rejected the unions’ proposals for neutrality. The company insisted that its interpretation of neutrality allows continued use of anti-union campaign tactics permitted by U.S. labor law."

It went on to allege that: "When 100 workers at the company’s distribution center in McDonough, Georgia, tried to form a union with the Retail, Wholesale and Department Store Union (RWDSU-UFCW) in 2016, Nestlé management unleashed a fierce campaign to thwart their efforts."

"Instead of honoring employees’ move to gain dignity and respect on the job, Nestlé management responded to their organizing effort with a massive campaign to suppress it. In weeks and days before a union representation election in April 2017, the company brought in teams of Human Resources managers from around the United States to break workers’ organizing will."
"“They said if the union got in they couldn’t be lenient with us anymore because of union rules,” Murray said. “They kept hinting that they would close the place if we voted union. They didn’t come right out and say it, but they kept saying ‘you never know, somewhere down the line, we don’t need the problems a union brings, it’s just a distribution center, we could put it anywhere,’ things like that to make us think twice about the union. Another thing they kept saying was they could go third-party, get rid of the employees and use people from a labor supply agency instead.”
"In spite of Nestlé management’s anti-union offensive, workers voted 49–46 in favor of union representation in an NLRB election in April 2017."

"As this report is completed, Nestlé USA and four unions representing company employees have met several times with a goal of reaching an agreement on ground rules for union organizing in the United States. They have not achieved it. According to union participants, the company continues to insist that management can hold captive-audience meetings to give employees “factual information.”
"As long as Nestlé insists on using these fear-mongering, intimidating tactics and arguments in Georgia and other Southern states, the company betrays its purported commitment to workers’ freedom of association and collective bargaining rights."

Nestle responded to the report, stating: "The report ... contains numerous false allegations and misrepresentations about Nestlé and a 2017 union campaign at one of our facilities".

The company lost half a mark under Workers' Rights for secondary crticism.

Reference:

The Double Standard at Work (October 2019)