Q. (24 June 2008) Is it true the Methodist Church has invested in Nestlé as it no longer has concerns about the company's marketing of baby milk?

A. No. The Methodist Conference has said concerns over Nestlé malpractice may cause some through conscience to support the boycott. The Church's Central Finance Board has invested suggesting this will enable 'engagement on this important issue'.

In its 2007 Annual Report the Central Finance Board says it met with Nestlé management and:

JACEI [the Joint Advisory Committee on Ethics in Investment] reviewed the information gained from this meeting and confirmed its previous conclusion that, although there were still issues of concern in relation to the marketing of breast milk substitutes, there were insufficient reasons to avoid Nestlé on ethical grounds. The CFB has since become a shareholder.

You can find the Central Finance Board's statement on Nestlé on its website. It includes the following:

JACEI acknowledges and respects the work of organisations such as Baby Milk Action in highlighting the scandal of inappropriate marketing of breast milk substitutes. The way in which the CFB responds to such activities is to engage with company managements and seek change from within. These approaches should be seen as complementary strategies working to achieve a common aim.

Nestlé (UK, however, posted the following information in the 'Developing World Issues' of its website (click here - let us know if this link dies):

After a boycott lasting many years and an anti Nestlé policy which has been in place for the past five years, the Methodist Conference (June 26, 2006) agreed with the Joint Advisory Committee on the Ethics of Investment (JACEI) that there is now "no compelling justification" for advising the Central Finance Board against investment in Nestlé on the basis of its involvement with breast milk substitutes.

The Conference also stated that "dialogue with Nestlé management from the perspective of a shareholder was the appropriate way forward".

This is misleading in several regards. The texts adopted by the Conference included:

1. "The Conference shares with the [Oxford] Circuit the substantial concerns regarding the promotion of breast milk substitutes..."

2. "JACEI acknowledges the continuing concern with regard to some aspects of Nestlé's interpretation of the International Code, the implementation of company guidelines and the transparency of the procedures for monitoring compliance. These concerns may cause some through conscience to maintain a consumer boycott of Nestlé products."

3. "The Joint Advisory Committee for Ethics in Investment (JACEI) has discussed with Nestlé ethical concerns across a range of issues.... there is scope to influence change through engagement...."

4. "Many would consider that these two strategies [the boycott and engagement] have complementary objectives."

Instead Conference agreed that a monitoring system should be established to evaluate Nestlé's ethical performance and a report made to Conference on the outcome of meetings "in the event of the CFB deciding to invest in Nestlé."

Nestlé's claim that The Conference agreed there is 'no compelling justification' for not investing is untrue. This quote was contained in a much criticised report prepared by JACEI. All the Conference Resolution says regarding the report is:

"The Conference receives the report of the Joint Advisory Committee on the Ethics of Investment."

The Resolution does not say The Conference agreed with, endorsed or approved the report. It simply received it.

The Methodist Church Communication Office confirmed to Baby Milk Action after the Conference:

"To receive a report does not imply that the Conference is either accepting or rejecting the report and its contents. A report is received in order that it may be discussed, either by the Conference itself or by the wider Church."

(Curiously in its 2007 annual report the Central Finance Board, having invested in Nestlé, claims the 2006 Conference endorsed the report, perhaps indicating how financial interests start to distort perceptions).

JACEI presented investing as a way to 'engage' with Nestlé. This is, of course, the opposite to the approach taken by all other ethical investment organisations that refuse to invest while their are ethical concerns and thereby gain influence and leverage to meet with company executives to encourage change.

Even without investing Church representatives were able to meet with Chairman and Chief Executive, Peter Brabeck Letmathé.

Far from having no concerns as Nestlé implies it was reported:

"The meeting impressed on the Chairman the concern of the Methodist Church."

The Central Finance Board report to the 2007 Conference entitled 'Journeying Together' informed them that:

Some groups continue a boycott of Nestlé due to allegations that the company does not comply with the International Code of Marketing of Breast Milk Substitutes. At the 2006 Methodist Conference it was resolved that once certain conditions were met, investment in Nestlé could provide an appropriate background for engagement with the company on this important issue. Since then members of JACEI have met with the Chairman/Chief Executive of Nestlé and also with other senior staff in the UK and in Switzerland. The committee members impressed on Nestlé the extent of the concern on the marketing of breastmilk substitutes felt by many Methodist people in the UK. JACEI will continue to monitor the performance of Nestlé, meet with senior executives and report to Methodist Conference.

The CFB has since bought 6,000 shares in Nestlé (valued it its 2007 year report at just over £1 million). Baby Milk Action continues to disagree that this is in any way necessary to engage with the company on its violations of the marketing requirements. It does, in fact, put the Methodist Church in a postion of conflicts of interest as it is now profiting from Nestlé's aggressive practices.

Baby Milk Action is not surprised that Nestlé is misrepresenting what happened at Methodist Conference and using statements in the JACEI report to try to undermine efforts to hold it to account. We did warn JACEI its report would be exploited in this way.

This distortion of the facts by Nestlé is all too familiar. See Baby Milk Action's briefing paper Nestlé's Public Relations Machine Exposed and the Cornerhous briefing paper Engineering of Consent for further background.

Baby Milk Action is calling on JACEI to denounce Nestlé's misrepresentation of the position of the Methodist Conference and to revise its Statement on Nestlé to make it factually accurate.

Supporting documents

The JACEI report on Nestlé and a separate Statement on Nestlé contained factual errors and serious ommissions (click here for the documents on the Methodist Conference website). For example, they claimed that Nestlé had been responsive to the campaign and that it had stopped more serious violations. This goes in the face of evidence presented by Baby Milk Action and information provided to JACEI by health and development experts and organisations. For details see our briefing for participants in the Conference.

The JACEI report can be downloaded by clicking here. At the end of the document is the Resolution put to the Conference.

"The Conference receives the report of the Joint Advisory Committee on the Ethics of Investment."

The Resolution does not say The Conference agreed with, endorsed or approved the report. It simply received it.

The Methodist Church Communication Office has confirmed to Baby Milk Action:

"To receive a report does not imply that the Conference is either accepting or rejecting the report and its contents. A report is received in order that it may be discussed, either by the Conference itself or by the wider Church. A resolution to receive a report is commonly accompanied by other resolutions directing how discussion of it shall proceed, although this is not the case with the JACEI report."

There were four 'memorials' put to the Conference. Due to the controversy and heated debate over the JACEI report, Conference agreed to consider these memorials separately instead of en masse with all the other memorials.

Replies had been written by Conference organisers for the Conference to approve regarding each memorial. In three cases these were rejecting the memorials. In the fourth the memorial was accepted. In all cases the Conference 'overwhelmingly' accepted the replies.

The full document supplied to Baby Milk Action by the Methodist Church can be downloaded by clicking here.

The memorials are as follows:

The Oxford Circuit meeting unanimously voiced its concern over possible investment in Nestlé and asked JACEI to reconsider its advice. The reply said: "While The Conference shares with the Circuit the substantial concerns regarding the promotion of breast milk substitutes the memorial is declined." This was on the basis that: "Many would consider that these two strategies [the boycott and engagement] have complementary objectives."

Although the Church had not invested, a meeting had taken place between representatives of the Methodist Church and Nestlé Chairman and Chief Executive Officer, Peter Brabeck Letmathé. Far from having no concerns about Nestlé: "The meeting impressed on the Chairman the concern of the Methodist Church."

The Hazel Grove and Poynton Circuit meeting agreed (with no votes against) that it was: "not morally justifiable for the Methodist Church to support Nestlé in any way and accordingly urges Conference to instruct the Central Finance Board not invest in this company." The same reply as to the Oxford Circuit memorial was approved.

Birmingham Synod put forward a memorial supported by 192 of the 196 present at the meeting (with only one vote against) stating:

"The Birmingham District remains concerned about the way in which Baby Milk products are promoted in the developing world. It requests the Conference to ensure that no shares are purchased in Nestlé without a mechanism being in place to monitor annually Nestlé’s ethical performance. It requests the Conference to determine specifically who will meet each year with the senior executives of Nestlé to keep these concerns under review and requests a report to the Conference of the outcome of these meetings."