Public Eye on Davos 2004
Nestlé and the Global Compact (IBFAN) (16.01.04)
Nestlé and the Global Compact - Looking good but behaving badly!
Speech of Joo Kean Yeong, Lega Advisor, International Code Documentation Centre of the International Baby Food Action Network (IBFAN), Malaysia
International conference „The Public Eye on Davos“, 21 January 2004
The International Baby Food Action Network (IBFAN) is the oldest public health network in the world and links some 200 groups in 95 countries. IBFAN works for better child health and nutrition.
I am sure you all know a little about the International Code of Marketing of Breastmilk Substitutes and subsequent WHA Resolutions which protect breastfeeding against commercial practices such as advertising, contact with mothers, giving of samples, promotion in shops, to health-workers and in health care facilities, harmful supplies, misleading labels, etc.
IBFAN believes that breastfeeding is an essential lifeline for millions of infants. UNICEF and WHO estimate that 8 million babies die of preventable diseases. 3 million of these deaths are associated with poor feeding practices. (Source: WHO/UNICEF Press Release, March 2002). Every day, 8000 babies die from diarrhoeal disease and acute respiratory infections. If they were breastfed, they would live!
Breastmilk is a renewable and sustainable resource. It is safe and beneficial to the health and well-being of the most vulnerable unit in society: that of mother and child. And it is free.
But if all mothers breastfed, no money would be made. Breastmilk has to compete with infant formula and other breastmilk substitutes in a rapidly growing market which is estimated to be worth US$11 billion in 2001. The Code is a threat to this lucrative market. Yet, Nestlé and other large companies have promised to abide by the Code. IBFAN wants to make sure they stick to their promises. In promoting the implementation of the International Code, IBFAN puts the health of infants on the international agenda. The work we do represents one of the longest standing attempts by a citizen movement to ensure that industry is regulated in business activities which put profits before health.
The International Code Documentation Centre (ICDC) was established to support the IBFAN network in Code implementation and Code monitoring. Since the Code was adopted in 1981, Nestlé along with other baby food companies have stopped some of the more blatant marketing malpractices they were engaging it prior to the Code. But not all – not as much as they promised, and they keep inventing new ways to get around it.
The changes made by Nestlé do not outweigh the harm caused by its aggressive promotion and its persistent undermining of the Code and legislation which seek to protect infant health. Worldwide monitoring by ICDC reveals that Nestlé, more than any other company, systematically violates the International Code by promoting its products in ways which undermine breastfeeding and consequently, damage infant health.
As the world’s leading food and beverage company, Nestlé could assume a leadership role in socially responsible marketing if it so desired. The company is twice the size of its nearest competitor and holds about 40 % of the world’s infant food market. Sales of infant food constitute just 2 per cent of the company’s overall sales worldwide. An anticipated loss of sales would not have a significant impact on its overall turnover. Nestlé’s continuous Code violations seem to indicate, therefore, a lack of will rather than an economic inability to move towards more socially responsible behaviour. (See: Judith Richter, Holding Corporations Accountable, 2001 at page 119)
Nestlé declares in its corporate charter that it complies with both the letter and spirit of the International Code but evidence we received from around the world indicates otherwise.
IBFAN protested therefore against the admission of Nestlé - a known Code violator - into the Global Compact in 2002, fearing that Nestlé might use the Global Compact as implicit endorsement of its practices and for political and PR gains.
Has the Global Compact changed Nestlé’s marketing practices? Has Nestlé which made an ethical commitment to comply with UN principles kept its promise? The answer, unfortunately is NO. More and more, the compact appears to be a platform which allows Nestlé to pretend to have moral standards but continue with business as usual.
Ostensibly, the Global Compact is intended to improve corporate behaviour through the Compact’s nine core values which, in the words of Kofi Annan, the UN Secretary General, will “give a human face” to the global market.
· Let me show you the face of a Nestlé baby in 2003, a year after Nestlé entered the Global Compact. Slide of marasmic baby from the German documentary – Panorama. .
· Compare this bleak picture with these images of healthy looking babies suggesting the promising outcome of feeding infants with Nestlé products. The pictures are carefully designed to appeal to mothers and to entice them away from breastfeeding. Slide of Thai and French brochures.
· Here are more slides of the kind of promotional tactics Nestlé uses to persuade mothers to buy its products instead of breastfeeding their babies. Slides of assorted Nestlé Code Violations from various countries.
· Let me also show you how Nestlé wins over doctors to get medical endorsement for its products. Slides of assorted Nestlé Code Violations from various countries.
These images are the proverbial “tip of the iceberg” from the collection of Code violations ICDC received from our monitors around the world. No other company has as much of the world market as Nestlé. No other company has as many products. No other company has made so many empty promises. As a company which “firmly supports the principles of the UN Global Compact and is committed to reflecting these it in its business practices”, it sets a bad example.
The International Code has important human rights implications if TNCs are to be regarded as societal actors having duties to the community. The human rights approach has helped changed the framework and the perspective under which marketing is addressed. In this respect, IBFAN-ICDC has started to link the Code with the human rights framework so that anyone violating the spirit and aim of the International Code is cast as human rights violators.
The Global Compact is UN’s most high profile engagement with business and must be seen to support core UN principles and values, most importantly respect for human rights. The example of Nestlé shows that so long as there is no mechanism to monitor or enforce corporate adherence to the core principles of the Global Compact, world businesses are unlikely to apply agreed values and principles into their individual corporate practices.
Where Code implementation at the national level is concerned, we fear that the Global Compact will be used by Nestlé to lobby for weak voluntary agreements rather than for enforceable laws. In this respect, the Global Compact may well undermine efforts to hold corporations like Nestlé accountable.
Already at the international level, the UN Draft Norms on Responsibilities of TNCs and other Business Enterprises with Regards to Human Rights are being rejected by business to be at odds with the Global Compact and counter productive to the UN’s ongoing efforts to encourage companies to voluntarily support and observe human rights norms.
At IBFAN, we suspect that Nestlé will use it as tool to avoid having legal constraints by pretending to have moral standards. In practical terms, this means that Nestlé will continue to put infant health and lives at risk through unethical marketing methods.
So until and unless the Global Compact is dissolved or is re-evaluated, citizen movements such as ours must work on independent monitoring of the application of the Code and core principles of the Global Compact. We must identify measures to be taken against members of the Compact who are clearly not adhering to its principles. There are presently no other countervailing powers that will do this job.
International conference „The Public Eye on Davos“, 21 January 2004
The International Baby Food Action Network (IBFAN) is the oldest public health network in the world and links some 200 groups in 95 countries. IBFAN works for better child health and nutrition.
I am sure you all know a little about the International Code of Marketing of Breastmilk Substitutes and subsequent WHA Resolutions which protect breastfeeding against commercial practices such as advertising, contact with mothers, giving of samples, promotion in shops, to health-workers and in health care facilities, harmful supplies, misleading labels, etc.
IBFAN believes that breastfeeding is an essential lifeline for millions of infants. UNICEF and WHO estimate that 8 million babies die of preventable diseases. 3 million of these deaths are associated with poor feeding practices. (Source: WHO/UNICEF Press Release, March 2002). Every day, 8000 babies die from diarrhoeal disease and acute respiratory infections. If they were breastfed, they would live!
Breastmilk is a renewable and sustainable resource. It is safe and beneficial to the health and well-being of the most vulnerable unit in society: that of mother and child. And it is free.
But if all mothers breastfed, no money would be made. Breastmilk has to compete with infant formula and other breastmilk substitutes in a rapidly growing market which is estimated to be worth US$11 billion in 2001. The Code is a threat to this lucrative market. Yet, Nestlé and other large companies have promised to abide by the Code. IBFAN wants to make sure they stick to their promises. In promoting the implementation of the International Code, IBFAN puts the health of infants on the international agenda. The work we do represents one of the longest standing attempts by a citizen movement to ensure that industry is regulated in business activities which put profits before health.
The International Code Documentation Centre (ICDC) was established to support the IBFAN network in Code implementation and Code monitoring. Since the Code was adopted in 1981, Nestlé along with other baby food companies have stopped some of the more blatant marketing malpractices they were engaging it prior to the Code. But not all – not as much as they promised, and they keep inventing new ways to get around it.
The changes made by Nestlé do not outweigh the harm caused by its aggressive promotion and its persistent undermining of the Code and legislation which seek to protect infant health. Worldwide monitoring by ICDC reveals that Nestlé, more than any other company, systematically violates the International Code by promoting its products in ways which undermine breastfeeding and consequently, damage infant health.
As the world’s leading food and beverage company, Nestlé could assume a leadership role in socially responsible marketing if it so desired. The company is twice the size of its nearest competitor and holds about 40 % of the world’s infant food market. Sales of infant food constitute just 2 per cent of the company’s overall sales worldwide. An anticipated loss of sales would not have a significant impact on its overall turnover. Nestlé’s continuous Code violations seem to indicate, therefore, a lack of will rather than an economic inability to move towards more socially responsible behaviour. (See: Judith Richter, Holding Corporations Accountable, 2001 at page 119)
Nestlé declares in its corporate charter that it complies with both the letter and spirit of the International Code but evidence we received from around the world indicates otherwise.
IBFAN protested therefore against the admission of Nestlé - a known Code violator - into the Global Compact in 2002, fearing that Nestlé might use the Global Compact as implicit endorsement of its practices and for political and PR gains.
Has the Global Compact changed Nestlé’s marketing practices? Has Nestlé which made an ethical commitment to comply with UN principles kept its promise? The answer, unfortunately is NO. More and more, the compact appears to be a platform which allows Nestlé to pretend to have moral standards but continue with business as usual.
Ostensibly, the Global Compact is intended to improve corporate behaviour through the Compact’s nine core values which, in the words of Kofi Annan, the UN Secretary General, will “give a human face” to the global market.
· Let me show you the face of a Nestlé baby in 2003, a year after Nestlé entered the Global Compact. Slide of marasmic baby from the German documentary – Panorama. .
· Compare this bleak picture with these images of healthy looking babies suggesting the promising outcome of feeding infants with Nestlé products. The pictures are carefully designed to appeal to mothers and to entice them away from breastfeeding. Slide of Thai and French brochures.
· Here are more slides of the kind of promotional tactics Nestlé uses to persuade mothers to buy its products instead of breastfeeding their babies. Slides of assorted Nestlé Code Violations from various countries.
· Let me also show you how Nestlé wins over doctors to get medical endorsement for its products. Slides of assorted Nestlé Code Violations from various countries.
These images are the proverbial “tip of the iceberg” from the collection of Code violations ICDC received from our monitors around the world. No other company has as much of the world market as Nestlé. No other company has as many products. No other company has made so many empty promises. As a company which “firmly supports the principles of the UN Global Compact and is committed to reflecting these it in its business practices”, it sets a bad example.
The International Code has important human rights implications if TNCs are to be regarded as societal actors having duties to the community. The human rights approach has helped changed the framework and the perspective under which marketing is addressed. In this respect, IBFAN-ICDC has started to link the Code with the human rights framework so that anyone violating the spirit and aim of the International Code is cast as human rights violators.
The Global Compact is UN’s most high profile engagement with business and must be seen to support core UN principles and values, most importantly respect for human rights. The example of Nestlé shows that so long as there is no mechanism to monitor or enforce corporate adherence to the core principles of the Global Compact, world businesses are unlikely to apply agreed values and principles into their individual corporate practices.
Where Code implementation at the national level is concerned, we fear that the Global Compact will be used by Nestlé to lobby for weak voluntary agreements rather than for enforceable laws. In this respect, the Global Compact may well undermine efforts to hold corporations like Nestlé accountable.
Already at the international level, the UN Draft Norms on Responsibilities of TNCs and other Business Enterprises with Regards to Human Rights are being rejected by business to be at odds with the Global Compact and counter productive to the UN’s ongoing efforts to encourage companies to voluntarily support and observe human rights norms.
At IBFAN, we suspect that Nestlé will use it as tool to avoid having legal constraints by pretending to have moral standards. In practical terms, this means that Nestlé will continue to put infant health and lives at risk through unethical marketing methods.
So until and unless the Global Compact is dissolved or is re-evaluated, citizen movements such as ours must work on independent monitoring of the application of the Code and core principles of the Global Compact. We must identify measures to be taken against members of the Compact who are clearly not adhering to its principles. There are presently no other countervailing powers that will do this job.
