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How ethical is Nestlé?

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on 28 November 2013

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Transcript of How ethical is Nestlé?

- Acted in their companies interests
- Benefited in the short and long term
- Sales and demands increase

Detail 3
Infant Formula Controversy
To what extent is Nestlé ethical?
What is Ethics?
"Ethics has to do with what my feelings tell me is right or wrong."
"Ethics has to do with my religious beliefs."
"Being ethical is doing what the law requires."
"Ethics consists of the standards of behavior our society accepts."
"I don't know what the word means."

To what extent is Nestlé ethical?
Cocoa Extraction Example

Recent scandal is Child labour in cocoa industry

Consumers and justice advocates questioned the ways Nestle acquired cocoa from West Africa

The global industry of chocolate is worth more than $90bn a year

Around 1.8 million children in West Africa are at risk of abuse through dangerous child labour conditions

Nestle imports most of its cocoa from West Africa (Doherty, D & Stanley, J 2012)
Nestlé's reponse
Individualist Theory
Utilitarianism Theory
Ethical Relativism
The use of child labour is in favor of children in West Africa
More incomes for families
Beneficial in the short term for children and families

- Not the only ones importing from West Africa

- ‘’
No company sourcing cocoa from Cote d’Ivoire can guarantee that it does not happen, … child who cannot work in the farm that provides cocoa for Nestle will work in the next farms
” (Neslte 2012)

Moral Obligation
Gilbert Kone Kafana, Ivory Coast's minister for labour and social affairs, stated

“There was a "moral obligation" on chocolate companies to help rebuild the country ravaged by years of civil war.”

Duty and Moral Obligation to build schools, raising awareness of the dangers and ultimately improving working conditions.

Human Rights
‘ Convention of the Rights of the Child, the OAU Charter (and UN) on the rights of the child’
Responsibility taken
Fair Trade Agreement

Nestlé's response
Nestles action towards preventing child labour were not successful
ILO’s figures show that number of working children in the cocoa industry is still very high
Increasing demand for cocoa
Monitor all participants from farmers to distributes in its supply chain by setting stronger labour standards
Collaborate with local authorities and various local and international organizations against use of child labour

José Lopez, Nestlé’s Executive Vice President for Operations stated that: “
The use of child labour in our cocoa supply chain goes against everything we stand for. The FLA report makes clear, no company sourcing cocoa from Côte d’Ivoire can guarantee that it doesn’t happen, but what we can say is that tackling child labour is a top priority for our company
” (Nestle, 2012)
Nestle expressed concerns and immediately took action to terminate the scandal
Action Plan to address child labour issues
Nestlé's reactions
"WHO estimates that some 1,5 million children die each year because they are not adequately breastfed" (Baby Milk Action)
Nestlé has been directly or indirectly involved in the deaths of those children mainly because of their aggressive marketing techniques.
This incident has led Nestlé to be the longest boycott of the history as it started in 1970's and is still on nowadays.
Moral Principles
Companies have at least two general ethical duties (Shawn, 1999)
Promoting Infant Formula doesn't violate any established principles as laid out in the religion, philosophy or tradition.
However, the way Nestlé has promoted its Infant Formula violates some principles or philosophy regarding the duty of a company towards its customers.
The lack of adapted information has harmed the customers.
Their marketing techniques have misled the customers to believe that Infant Formula could be more beneficial for the baby than Breastfeeding.
Nestlé undoubtedly acted in the best interest of the corporation.
By doing that, they have benefited the community as :
- offered an alternative to breastfeeding which consequently gives more independence for the mothers
- offered an alternative for mother infected by an infection such as HIV.

Ethical Relativism
American Home Products, Borden's, Bristol-Meyers and Abbott Laboratories have also come under fire for their marketing of breast milk substitutes.
Nestlé was considered as the "unwilling representative of the entire formula industry"
Nestlé was a part of the system
Nestlé's reponse
Nestlé advocated that they have never stated that infant formula is more beneficial than breast milk.
They changed their policy and added new marketing rules to ban all consumers advertising and direct sampling to mothers.
In 1988, Action for Corporation Accountability claimed that Nestlé was not respecting its own policy
in 2008, IBFAN based in Malaysia accused Nestlé among other companies to violate "the Code, or stretching the resritions, with abandon".
In view of:
ethical relativism
moral principles
human rights
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