Fairtrade mark and infant health could be damaged by Nestlé application warn campaigners Press release 6 October 2005 What are your views? Please complete our on-line questionnaire. For analysis of the views of our supporters click here. For statements from campaigning groups and non-governmental organisations involved in the Fairtrade Foundation and/or baby food campaign click here. Media coverage: The Independent, The Telegraph, The Guardian, The Scotsman, Western Mail, Bloomberg, Reuters (Newzealand Stuff, Planet Ark) Forbes. Nestlé press release, Nestlé 2005 coffee report. Baby Milk Action and other leading campaigning organizations are warning of the risks of the Fairtrade Foundation awarding a Fairtrade mark to a Nestlé product. Nestlé is the UK's most boycotted company (note 1), recently found to be the world's ‘least responsible' corporation in a global internet vote (note 2). The public announcement that Nestlé will launch its Fairtrade Partners Blend was made on 7 October (see reports on the left). The World's largest food company remains with 8,500 products which are not Fairtrade. Nestlé is the target of a boycott because of its aggressive marketing of baby foods and campaigners also highlight its trade union busting activities, involvement in child labour, environmental destruction of its water bottling business, use of GM technology and other causes of concern (note 3). The announcement of the Fairtrade mark for Partners Blend comes in the same month trade unionists in the Philippines mourn the death of the leader of a protest at the Nestlé factory, who was assassinated last week, as trade unionists from Colombia gather in Switzerland (information in French and German) to present evidence of Nestlé's links to paramilitaries who have been terrorising activists and a Halloween campaign is launched against Nestlé in the US over its alleged "involvement in the trafficking, torture, and forced labor of children who cultivate and harvest cocoa beans which the companies import from Africa", over which legal action has been brought. (Follow these links for interviews with campaigners from the Philippines and from Colombia). Public statements from Nestlé, one of the world's big four coffee producers, demonstrate it is ideologically opposed to Fair Trade as anything other than a niche market and the mark, if awarded to Partners Blend, will undoubtedly be used as part of the company's public relations strategy to divert criticism, claim campaigners (note 4). While even many ethical shoppers believe the Fairtrade mark indicates a company treats all suppliers fairly, it applies only to the product bearing the mark. According to a statement from Twin Trading, the volume of coffee involved is just 0.02% of Nestle's coffee purchase. According to a researcher with the Colombian Food Workers' Union 150,000 coffee-farming families have lost their livelihoods due to Nestlé's policies and he labelled the Fairtrade product 'a big joke' (click here to hear an interview). Patti Rundall OBE, Policy Director at Baby Milk Action, which coordinates the international Nestlé boycott, launched by groups in 20 countries, said: “To give a FT mark to a company whose baby food trade systematically violates child rights on such a massive scale, contributing as it does, to the deaths of millions of children, would make an absolute mockery of what the public believes the Fairtrade Mark stands for and would show disregard for the feeling of thousands of people who've worked hard to promote the Fair Trade principles.   It would certainly bring the mark into disrepute – something the Fair Trade rules themselves don't permit." (note 6) Nestlé is singled out for boycott action because independent monitoring conducted by the International Baby Food Action Network (IBFAN) finds it to be the largest single source of violations of the World Health Organisation and UNICEF's International Code of Marketing of Breast-milk Substitutes and subsequent, relevant World Health Assembly Resolutions. As the biggest food company in the world, with a $67 billion turnover and thousands of brands, Nestlé is powerful. It dominates the baby food market and takes the lead in attempting to undermine implementation of these measures by governments. Nestlé operates in just about every country in the world, promoting its brands where it can in hospitals, clinics and schools. It is seen as inevitable that Nestlé will use the Fairtrade mark to try to cover up its bad practice and link its name to prestigious charities. When Oxfam launched a campaign in defence of coffee farmers in 2003 Nestlé shared the platform and claimed in public statements and to shareholders it was working in partnership with Oxfam while delivering virtually nothing Oxfam was calling for.  In 1999 Saatchi and Saatchi advised Nestlé to “aggressively advertise its links with charities and good causes” precisely to offset bad publicity (Marketing Week Feb 1999) Its latest PR offensive is The Nestlé Commitment to Africa report in which Nestlé claims that it monitors its practices scrupulously and takes corrective action immediately on the tiny number of shortfalls that occur (see Nestlé's Public Relations Machine Exposed) . Mike Brady, Campaigns and Networking Coordinator, conducted a quick survey of campaign supporters using an on-line questionnaire and has analysed the first 100 responses. He said: "Nestlé will use the Fairtrade mark as it uses its other token support of good causes, to try to divert criticism of its malpractice. Its problem is there is a great deal of overlap in the community that supports the boycott and Fair Trade. In our quick survey, 90% of boycotters also buy Fairtrade products, many of them actively promoting the Fair Trade campaign. Nestlé won't have much joy in countering the boycott. Only 3% thought Nestlé was pursuing the mark because it cares about coffee growers and 93% said it was for public relations purposes. We do worry about Nestlé's impact on the Fairtrade mark, however, as 50% said they would view the Fairtrade mark differently and look more closely at other companies with products bearing the mark. Only 17% of our respondents realised the mark relates only to the one product that bears it and not the way the company deals with all suppliers. A few comments support giving the mark to any product that complies with the Fairtrade criteria regardless of the malpractice of the company involved." Baby Milk Action has asked the Fairtrade Foundation to make it much clearer what the mark does and does not signify and to remove the mark from Nestlé if it uses it to try to divert criticism from its widespread malpractice. The Fairtrade Foundation says in a Question and Answer sheet on its website posted on 7 October: "The FAIRTRADE Mark is only given to individual products and not to companies. The Mark indicates that the product Partners' Blend has complied with the internationally agreed standards for Fairtrade certification. It does not refer to any other product marketed by the company. This product has undergone exactly the same certification process as all other Fairtrade products whether marketed by multinationals or smaller companies. The FAIRTRADE Mark guarantees consumers that those producers have received a fair and stable price for their product. The Mark is not an endorsement of any company or its activities... "Of course we acknowledge that many Fairtrade supporters have other concerns about this company's practices. We also recognize that bringing about change in the behaviour of multinationals requires a variety of strategies and approaches.... "We are not asking people to change their position on the boycott of Nestlé products, which aims to change the way the company promotes breastmilk substitutes around the world. We naturally respect the right of consumers to decide which products they purchase. "While some campaign groups use boycotts as a way of achieving their aims, the Fairtrade Foundation's specific role is to engage with companies that are prepared to adopt Fairtrade standards and certification for particular products. They are different approaches, but with the same aim of winning positive change in the way business operations impact on people in developing countries. "Many people have supported both campaigns until now, and they will still be able to do so, as they can choose from 18 other Fairtrade certified instant coffee products." Click here for the full text. Nestlé will pay 8 pence per kilo extra for the beans used in Partners Blend (33 pence rather than 25 pence). A 100 gramme tin of Partners Blend will retail for £2.69, which is 40 pence more than Nescafé Gold Blend. For analysis of the views of our supporters click here. Other public statements (Note: Baby Milk Action alone is responsible for the above press release. The following are edited from public statements. Click here for full texts). Louise Richards, Chief Executive of War on Want (contact press officer, John Coventry 0207 6201111 or 07984 108027), issued a statement saying: "Coffee drinkers should be under no illusion here. The fact that one Nestlé product qualifies for the fair trade mark in no way gives the company a clean bill of health. What proportion of Nestlé's £40bn sales is passed on to its suppliers in the developing world?" Annelies Allain, Director of IBFAN's International Code Documentation Centre, said: "While we appreciate that FT marks are for products and not companies, accrediting any Nestlé product would seriously undermine the legitimacy of FT mark in the minds of consumers.  An FT mark on a Nestlé product will invariably be linked to the company.  Even if the product represents an insignificant part of the company's business, its PR machinery will not hesitate to use the FT mark as proof that it is an ethical company, thus turning accreditation into a form of whitewash over its poor records in social responsibility." Benedict Southworth, Director of the World Development Movement (a founder member of the Fairtrade Foundation), says in a longer statement on the WDM website: "If Nestlé really believes in FAIRTRADE coffee it will alter its business practices, lobbying strategies and radically overhaul its business to ensure that all coffee farmers get a fair return for their efforts. Until then Nestlé will remain part of the problem not the solution... “In the past Nestlé has made decisions based entirely on its bottom line ignoring the impact on small farmers in the developing world. Nestlé is one of only three multinational companies, along with Kraft General Foods and Sara Lee, that are thought to control some 85% of instant sales in developed countries. This gives these companies significant leverage in the international coffee market. But this leverage has not been used to give all coffee farmers a better deal by, for example pushing for supply control to regulate prices. Instead Nestlé and the other major coffee buyers have opposed such measures and have happily watched while coffee prices have plummeted. Further, they have reaped increased profits as the price of their processed coffee has not been reduced in tandem with the drop in world coffee prices. “WDM has asked its supporters to boycott Nestlé products since as far back as 1998 based on the company's attempts, contrary to World Health Organisation codes, to market its baby foods in developing countries, undermining breastfeeding. The addition of a FAIRTRADE coffee to their range does not change that. We ask our supporter to use their powers as consumers to choose companies that help rather than hinder attempts to end poverty." (Click here for the full text). Belinda Phipps, Chief Executive of the National Childbirth Trust, said in a public statement: "Nestlé's clever and extremely well funded marketing strategy has to be  admired. If this single new brand is awarded fair trade status the whole company is likely to be viewed as ethical  by consumers. The NCT urges everyone to remember that Nestlé's promotional activities  encourage the use of products that are detrimental to the health of babies and children all over the world and to avoid all Nestlé brands." Sharon Greene, UNISON Women's Officer, said in a public statement: "This is a cynical attempt by Nestlé to try to divert attention away from their scandalous baby-milk marketing activities in the world's poorest countries and their appalling employment practices." Julian Oram, Policy Officer at ActionAid is quoted in the Guardian saying: "Anything that leads to companies such as Nestlé having a fairer relationship with suppliers is good. But the FT mark could be used as a fig leaf to deflect attention away from some of the other issues that it has not resolved. If this is a genuine attempt to introduce fairtrade sourcing throughout all of its product lines, it's a step in the right direction and definitely welcome. But we have to bear in mind that the company might be doing this to be seen to be ethical, so it can get into places it doesn't sell in now, such as student unions and church groups. But if it's going to remain a fraction of its total coffee market, it is being done for the wrong reasons." Former Bishop of Coventry, Simon Barrington-Ward, said: "I am absolutely appalled to learn that Nestlé is even being considered for a 'Fair Trade' mark.  This must be a total nonsense.  After years of  campaigning to get Nestlé to stop promoting breast milk substitutes and receiving bland propaganda purporting to show themselves in a benevolent guise, I know how duplicitous they can be.  I would regard this new coffee as simply one more attempt to pull the wool over our eyes. They must be stopped from getting a 'Fair Trade' mark. " Bama Athreya, International Labor Rights Fund, which has entered into litigation against Nestlé over its relationship with cocoa suppliers who it is alleged use child labour and abuse workers (contact: +1 202 347-4100 ext. 106): "Nestlé needs to do far more than merely source a small percent of fairtrade coffee if the company is serious about making a change for farmers around the world. Nestlé promised to clean up child labor in its cocoa supply four years ago but the company has not yet taken the first step toward making the changes in its supply chain that would support real change. What applies to cocoa applies also to coffee. Nestlé must make real changes by making public evidence that they are able to chart their own supply chains, that they have trained their buyers and quality control specialists, who have direct contact with the farmers, on what constitute appropriate human rights practices, and the company must provide a formal, written guarantee to all farmers who have agreed to produce in accordance with such practices that they will not 'cut and run' if problems are discovered but will provide support and resources toward the development of solutions or remediation of those problems." What are your views? Please complete our on-line questionnaire. Click here to email the Fairtrade Foundation. We would appreciate being copied in on any messages you send to help us decide how to proceed. Copy to mikebrady@babymilkaction.org For further information Click here to download a briefing paper on Nestlé and Fair Trade (pdf). Baby Milk Action, Patti Rundall (Policy Director) on 07786523493 or Mike Brady (Campaigns and Networking Coordinator) on 07986 736179. Fairtrade Foundation Notes for editors The Guardian reported on 1 September 2005: "What do Nike, Coca Cola, McDonald's and Nestlé have in common? Apart from being among the world's most well-known brands, they happen to be the most boycotted brands on the planet. That finding came from this week's global GMIPoll, an online opinion poll that surveyed 15,500 consumers in 17 countries. Nestlé emerges as the most the most boycotted brand in the UK because of what respondents consider its "unethical use and promotion of formula feed for babies in third world countries." Nestlé won a global internet poll for the world's 'least responsible company' coinciding with the World Economic Forum in Davos in January 2005. Nestlé received 29% of the votes. This was more than twice that of joint second Monsanto and Dow Chemicals (of Bhopal infamy), each on 14% ( click here for details ). For information on baby food marketing malpractice see the codewatch and boycott sections of this website. The Corporate Watch website has a detailed report on Nestlé. The BBC Radio 4 programme Face the Facts reported on the destruction caused by Nestlé's water bottling activities in Brazil and the US on 22 July 2005 (click here for details). Swiss church and campaigning organisations are holding a tribunal into Nestlé's trade union busting activities in Colombia and other corporate crimes on 29 and 30 October 2005 (information in German and French) . Nestlé's 2005 coffee report (click here) states: "Nestlé recognises that Fair Trade is a useful way to raise consciousness about the coffee issue and for individual consumers to express their solidarity with a group of coffee farmers in the developing world. However, if on a broad basis, coffee farmers were paid Fair Trade prices exceeding the market price the result would be to encourage those farmers to increase coffee production, further distorting the imbalance between supply and demand and, therefore, depressing prices for green coffee. Worldwide, the Fair Trade movement accounts for less than 25 000 tonnes of green coffee. Nestlé's direct purchasing accounts for 110 000 tonnes of green coffee per year. This system enables the farmer to retain a greater portion of the price paid by Nestlé, therefore improving his income." (see page 6). Note that Nestlé's claim about buying direct does not indicate it is paying a fair price for the coffee. The farmer would receive a greater portion of the price paid by Nestlé even if the company paid less than commercial market rates. According to Nestlé's 2005 coffee report, the global Fair Trade coffee market is 25,000 tonnes. Nestlé compares this to the 110,000 tonnes it buys direct. The 110,000 tonnes represents 14% of Nestlé's green coffee purchase, according to the report. Therefore, 25,000 tonnes, the entire global Fair Trade market would represent just 3.2% of Nestlé's coffee business. This suggests that Nestlé's total coffee purchase is 756,000 tonnes or 13% of the 6 million tonnes Oxfam says is produced every year by 25 million farmers. So on a pro rata basis 3,270,000 farmers are dependant on Nestlé. According to Nestlé's press release it is "working with over 200 smallholders in four Fairtrade certified co-operatives" in El Salvador and sourcing some coffee from a co-operative with an undisclosed number of farmers in Ethiopia. Even if the number of farmers amounted to 3,000 this would be less than 0.1% of Nestlé's coffee suppliers. Virtually 100% remain outside the Fairtrade system. Excerpt from FLO Trader Application Evaluation Policy 6.2.5 Bringing FLO Fairtrade into Disrepute FLO reserves the right to exclude traders that engage in behaviours that, even though are not directly related to Fairtrade transactions, are so bad that FLO's association with the trader would seriously undermine the legitimacy of FLO Fairtrade in the minds of consumers. FLO shall take into consideration any relevant information it receives regarding the trader from FLO National Members and others. To justify denial of the application, the behaviour would have to be severe and the trader has not taken any measures to rectify the situation. In some cases, this criteria may cause the applicant to take corrective and preventative action. FLO therefore takes a rehabilitative approach to traders, and will respond to any criticism of their acceptance in this manner. Therefore, where the applicant has engaged in serious and repeated; • predatory commercial practises that resulted in disadvantage to producers, • fraudulent product labelling; or • contravention of core ILO covenants o Covenant 87 Freedom of Association and Right to Organise, 1948 o Covenant 98 Right to Organise and Collective Bargaining Convention, 1949 o Covenant 100 Equal Remuneration Convention, 1951 o Covenant 111 Discrimination, 1958 o Covenant 29 Forced Labour, 1930 o Covenant 105 Abolition of Forced Labour Convention, 1957 o Covenant 138 Minimum Age Convention, 1973 o Covenant 110 Plantations Convention, 1958 o Covenant 155 Occupational Safety and Health Convention, 1981 for which it has not taken any measures to rectify, then the application may be denied. The test is intentionally made difficult in order to prevent spurious denials of trader applications.All FLO Trader Contracts shall provide that the trader shall not engage in any of the above activities that might bring FLO Fairtrade into disrepute.