Nestle and its unethical practices

Our purpose

Unlocking the power of food to enhance the quality of life for everyone, today and for
generations to come.

At Nestlé Pakistan, the global ideology of Nutrition, Health and Wellness is inspired by the
scientific breakthrough of our founder, Henri Nestlé and ever since it runs in our DNA. Guided
by our values and with nutrition at our core, we unlock the power of food to enhance quality of
life for everyone, today and for generations to come. We are the leading Food & Beverages
Company in Pakistan, reaching out to the remotest areas, offering products and services for all
stages of life, every moment of the day.

Nestlé Pakistan is Public Interest Company (PIC) and headquartered in Lahore, with four
production facilities across the country. Factories in Sheikhupura and Kabirwala are multi-
product, whereas the ones in Islamabad and Karachi are water factories.
The type of business they do:
Unethical practices

With unethical business practices such as taking clean drinking water in areas that sorely need it,
participating in human trafficking and child labor, and exploiting uneducated mothers in third
world countries, Nestle is quite possibly one of the world’s most corrupt corporations.

 Nestle Infant Formula:

One of the Nestlé’s biggest offences occurred in 1977 when they were caught
aggressively marketing breast milk substitutes to mothers in developing countries. There
are few problems with this besides the obvious one. First of all, these ads were claiming
that the formula was same as regular breast feeding. They told the mothers that they
should wean their children off of breast milk earlier and switch them to “nestle foods” or
their child would became anemic because eventually breast milk is not sufficient for fast
growing bodies. In order to even properly use the baby formula clean water is needed and
the area where they were heavily promoting the formula did not have access to clean
water. Plus, a large portion of mothers using the formula were unaware of the sanitation
standards required to clean the water and even if they were, very few had the means to do
so. All of these things led to weakened immune system in children, causing a major
increase in infant deaths. Nestle was administering free formula in hospital and maternity
wards, and because mothers were using this formula too early, it damaged their lactation
abilities, causing them to be ultimately dependent on the formula. So what did the mother
do who couldn’t lactate now and did not want to go through the trouble of boiling water?
They would go and buy bottled water. And guess who has covered you on that front?
NESTLE.

 Nestle Water Controversy:

Few people know it, but Nestle is actually the world’s largest producer of bottled water.
In fact, they’re so keen on their water business (which also involves many of their other
products), that they believe water isn’t a universal right. At the second World Water
Forum in 2000, Nestle pushed for making access to drinking water from a “right” to a
“need,” a defining change. Meanwhile, Nestle drains the aquifers it controls as much as
possible, without any regards to sustainable usage or environmental concerns. A recent
case is the California drought – an issue without precedent in the past 1,200 years. But
Nestle doesn’t care. Even as Starbucks recently announced they would transfer their
Ethos water bottling facility from California to Pennsylvania, Nestle CEO Tim Brown
said: “Absolutely not. In fact, if I could increase [water bottling operations], I would.”
Yes, if he could, he’d increase water bottling operations, even though Nestle has been
working without a permit since 1988. Inhabitant reports that the company has been
sourcing its water from the San Bernardino National Forest without a permit and they’ve
 been recently been bumped to the front of the queue for permit renewal (which will take
around 18 months), and they can keep working in the meantime as long as they pay a
laughable $524 annual fee. Also, California doesn’t know how much water Nestle uses,
because they have no legal grounds for making the company divulge this information,
and Nestle hasn’t published any reports. An independent analysis puts all their water
usage at 1 billion gallons a year.

Arguably, that’s not much when you considering that 500 billion gallons of water that
will be saved under Gov. Brown’s new water restrictions, but there’s something absurd
and immoral about a private company using as much water as they want while the rest of
the state is facing severe restrictions.

But other areas in the world have it even worse than California.

In the small Pakistani community of Bhati Dilwan, a former village councilor says
children are being sickened by filthy water. Who’s to blame? He says its bottled water
maker Nestle, which dug a deep well that is depriving locals of potable water. Indeed,
unsustainable usage of aquifer water can lead to a significant decrease in water levels,
and can even exhaust the aquifer. That’s right, underground water isn’t the inexhaustible
source many people believe it to be. In the case of Bhati Dilwan, people are getting sick
because if the community had fresh water piped in, it would deprive Nestle of its money
source – bottled water under the Pure Life brand. Greedily using natural resources for
profits? Check.

 Human Trafficking And Child Labor:

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 labor. The children are usually
12 to 15 years old, and some are trafficked from nearby countries – and Nestle is no
stranger to this practice. N 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. Nestlé’s excuse can be summed up broadly as ‘everybody does it ‘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.
 Impact and Reaction of Shareholders:

 Infant Formula:
But due to low literacy rates, many mothers were not aware of this, so they mixed the
formula with polluted water which put the children at great risks. UNICEF estimates that
a formula-fed child living in disease-ridden and unhygienic conditions is between 6 and
25 times more likely to die of diarrhea and four times more likely to die of pneumonia
than a breastfed child. Another problem was that mothers tended to use less formula than
but even if the water was boiled, and even if the formula was administered in the right
proportion and in the right quantity, it is lacking in many of the nutrients and antibodies
that breast milk provides. Breast milk contains the required amount of the nutrients
essential for neuronal (brain and nerve) development, and to some extent, protects the
baby from many diseases and potential infections. Needed – to make the jar last longer,
resulting in many infants receiving inadequate amounts.
Today, several countries and organizations are still boycotting Nestle, despite their claims
to be in compliance with WHO regulations. There’s even a committee, the International
Nestlé Boycott Committee that monitors their practices. Several universities and student
organizations have also joined the boycott, especially in the UK.

More recently, the company has also been under head for a study on breast milk
substitutes in India. India’s apex medical research authority asked the company to stop
paying study participants, who included pregnant and breastfeeding mothers.

 Water Controversy:
In the case of Bhati Dilwan, people are getting sick because if the community had fresh
water piped in, it would deprive Nestle of its money source – bottled water under the
Pure Life brand. Greedily using natural resources for profits? Check.

A Chicago-based business has sued the company (again), claiming that the five gallon
jugs of Ice Mountain Water they bought were nothing else than tap water. It may come as
a shock to you, but nearly half of the bottled water in PET plastic bottles is actually from
a tap – though Nestle never advertised this. They know what’s likely going to happen
though, as this is almost a dress rehearsal of a previous scandal. Twelve years ago Nestle
Waters was sued over allegation of false labeling, and ultimately settled for $10 million
in charitable contributions and discounts.

 Human trafficking and child labor:

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.
Nestlé’s excuse can be summed up broadly as ‘everybody does it’.
 Efforts and changes made to control the damage and recover:
 “Nestlé takes reports on non-compliance with the WHO Code very seriously and we have
endeavored to investigate all allegations brought to our attention, despite the fact that in
many cases we are not provided with accurate details substantiating the accusations. This
makes it difficult for us to investigate how, where and when the alleged infringement
could have occurred. Some of the allegations are several years old before they are
brought to public attention, which also could complicate the investigation.”
 “There are two different opinions on the matter [or water]. The one opinion, which I
think is extreme, is represented by the NGOs, who bang on about declaring water a
public right. That means that as a human being you should have a right to water. That’s
an extreme solution.”
 “The use of child labor in our cocoa supply chain goes against everything we stand for,”
says Nestlé’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 labor is a top priority for our company.”