If you worked for five years or more without pay, and if you were brutally beaten if you tried to run away and were caught, would you call it “cost containment” or “unethical business practice”?
I would call it “slavery”. The time for polite euphemism is over.
The world’s largest producer of food, Nestlé, is stepping up to the plate when it really matters.
The food giant has supported a landmark study conducted by the Fair Labor Association (FLA) earlier this year, in order to map out, in a comprehensive manner, the entire supply chain for chocolate.
I am not so naive to think that Nestle brass were motivated by pure altruism to engage in this study. As a video shown below will reveal, pressure from concerned individuals was beginning to mount that shone the light of media on the problem. Nestle’s reputation (translate that into “brand value”), and that of the chocolate industry in general, was at significant risk.
It is, however, the first time that a multinational chocolate manufacturer has allowed a third party to assess and articulate this complex supply chain, with the purpose to reduce or eliminate unethical labor practices.
Risks in terms of labor standards that have been identified by the FLA in this effort fall into five general categories:
- Child Labor
- Forced Labor
- Health and Safety
- Discrimination
- Compensation
“The use of child labour in our cocoa supply chain goes against everything we stand for. As 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,” said José Lopez, Nestlé’s Executive Vice President for Operations.
Even for a huge player like Nestle, it takes some guts to expose your network to a bunch strangers. But Nestle has, in my opinion, taken the high ground, and is working its vision, which can be found on its web site:
Nestlé’s mission, in the words of our founder Henri Nestlé, is to: “…positively influence the social environment in which we operate as responsible corporate citizens, with due regard for those environmental standards and societal aspirations which improve quality of life.” — Henri Nestlé, 1857.
Supply chain and logistics leaders are in a uniquely powerful position to make a big difference on this front. But we have to pay attention to that vision statement that has been collecting dust on the wall, and walk the talk. Consider this a call to action!
There is a wonderful blog that has been developed by CNN called the CNN Freedom Project. I strongly recommend that every person reading this article, and those who are concerned about stamping out slavery (and that ought to be every one of us) visit this site.
In its June 29, 2012 post, the CNN Freedom Project said:
An independent investigation into Nestlé’s cocoa supply chain has found numerous child labor violations and kickstarted an ambitious plan to eventually eradicate forced labor and child labor in its production cycle.
The study was carried out by the Fair Labor Association with Nestlé’s support.
“Our investigation of Nestlé’s cocoa supply chain represents the first time a multinational chocolate producer has allowed its procurement system to be completely traced and assessed. For too long child labor in cocoa production has been everybody’s problem and therefore nobody’s responsibility,” said FLA President Auret van Heerden.
It means Nestlé is the first chocolate-maker to comprehensively map its cocoa supply chain – and can work on identifying problems areas, training and educating workers and taking action against child labor violations.
The FLA investigation found violations of Nestlé’s own supplier code, including excessive hours and unpaid workers. It also found 72 percent of injuries were from workers using machetes.
But child labor remained the primary concern for the FLA which said there were systemic and cultural challenges to overcome in Ivory Coast.
Jose Lopez, Nestlé vice president of operations, told CNN: “There is no way, that long term, a company like ours can accept a situation like this. So it’s a matter of how fast, how well, and how many people have to participate in getting these sorts of problems behind us.
“We are determined to make real impact and hopefully also to be used as a lighthouse to show others that it’s just a matter of getting started.”
And guess what? There is going to be a cost to enforcing ethical practices. Suppliers, customers, and consumers will have to pay those costs. It will be worth the price, as marginal as those costs might be.
Here is a documentary, called the Dark Side of Chocolate, the production of which predates the FLA report by more than a year. It, and other voices, may well have been the catalysts to positive change.
The FLA-Nestle report is lengthy, but compelling. I spent most of my day on Tuesday reading it and studying the issue. In an extract from that report, published on June 29, 2012, the FLA reveals the following:
In its investigation FLA found multiple serious violations of Nestlé’s supplier code; violations which persist in many instances because there are no local laws in place to provide fair and safe working conditions. Health and safety problems are rampant, with 72 percent of reported injuries resulting from workers’ use of machetes. FLA’s investigation also found instances of discrimination due to a lack of appropriate local laws and enforcement systems, and local cultural norms. Nestlé’s labor code limits hours of work to 60 hours per week, including overtime, but workers – especially unpaid family members – often work excessive hours during the harvest. Additionally, compensation rarely provides for all of sharecroppers’ and workers’ basic needs, and there is little opportunity for workers to organize. Child labor remains the primary cause for concern; even when children do have alternatives to working on cocoa farms and attend school, they often continue to work in unsafe conditions on farms during school breaks.
FLA’s recommendations target the root causes of these labor and human rights abuses, pointing out steps that should be taken not only by Nestlé, but also by farmers, cooperatives, the government of Ivory Coast and other companies that source cocoa from the region. FLA recommended that Nestlé more proactively inform every employee in its supply chain about its code, which prohibits child labor. FLA also encouraged Nestlé to ensure that all actors and individuals involved in their supply chain completely understand the labor code, have monitoring as part of their day-to-day job descriptions, and are educated and empowered especially at the farm level. The central focus of FLA’s recommendations – that comprehensive internal monitoring and remediation cover all parts of the supply chain – will allow Nestlé to identify and remediate code violations more quickly. Additionally FLA’s report revealed the continued need for Nestlé to participate in the establishment of alternative income generation activities for farmers and contribute to the development of vocational schools.
In response to FLA’s recommendations, Nestlé developed an action plan outlining three phases of improvement activities to be completed by the end of 2012, 2013 and 2016. In the short-term, Nestlé agreed to develop a clear, illustrated guide to its supplier code by October 2012. Nestlé will distribute the guide to more than 20,000 farmers participating in Nestlé’s sustainability initiative, the Nestlé Cocoa Plan. The company also agreed to conduct trainings empowering all employees who deal directly with farms to look for violations and encourage compliance with the labor code. Additionally, Nestlé agreed that its key suppliers will work with training agencies to fully incorporate the supplier code into training programs, in addition to distributing the illustrated manual and developing a workshop to explain the manual. This is an enormous undertaking, attempting to create a workforce dedicated to the protection of children and to code compliance in order to improve labor practices that are not currently enforceable by any local law.
In the near and long term, the company will develop a robust monitoring and remediation system that covers all actors in the supply chain, increase both training and the frequency of monitoring, and develop mechanisms for reporting noncompliance and grievances. Nestlé will conduct a baseline survey of child labor at two cooperatives by the end of the 2012/2013 harvesting season and 6 co-ops in the 2013/2014 season, with the goal to establish a baseline measurement of compliance at all Nestlé cocoa plan co-ops by the end of 2015.
Reaction to the study was updated by the online Brand Magazine popsop.com on July 5, 2012:
Nestlé has paid attention to the problem of child labor in cocoa-growing areas in Côte d’Ivoire and wants to prevent it by raising awareness in communities. This is a response to a report on the company’s cocoa supply chain in the West African country by the Fair Labor Association (FLA). Nestlé has developed an action plan to deal with the problem.
The FLA experts found that child labor is caused by poverty and the socio-economic situation of the farmers and their families. Nestlé does not have its own farms in Côte d’Ivoire but is “well positioned” to influence the situation positively due to the volume of cocoa beans it procures, the FLA says.
To help solving the problem of child labor, Nestlé will work more closely with its suppliers to ensure they receive special training on how to address child labor problem. Together with its partner, the International Cocoa Initiative, the company’s management inCôte d’Ivoire will prevent the new child labor initiatives. The initiative will be implemented in 40 communities covered by 2 co-operatives of cocoa farms during this year’s cocoa harvest. The company plans to include 30 more co-operatives by 2016, involving around 600 communities. The effectiveness of this model will be evaluated by the FLA over the next three years.
More than 6,000 cocoa farmers in Côte d’Ivoire have received training in 2012 as part of the Nestlé Cocoa Plan and by 2015 Nestlé aims to train a further 24,000 farmers in the country. (Read more…)
In June 2010, Nestle re-articulated its Corporate Business Principles. Its commitment to fair and ethical labor standards is evident throughout the document, which can be found at its corporate web site here. In particular, its Principle # 4 stands out as a demonstration of the company’s concern for human rights:
We fully support the United Nations Global Compact’s (UNGC) guiding principles on human rights and labour and aim to provide an example of good human rights and labour practices throughout our business activities.
We
• support and respect the protection of international human rights within our sphere of influence (UNGC Principle 1);
• make sure that we are not complicit in human rights abuses (UNGC Principle 2);
• are against all forms of exploitation of children;
• recognise privacy as a human right;
• expect each of our companies to respect and follow the local laws and regulations concerning human rights practices. Where our own principles and regulations are stricter than local legislation, the higher standard applies;
• recognise the responsibility of companies to respect human rights irrespective of the fact that governments are ultimately responsible for the establishment of a legal framework for protecting human rights within their jurisdictions.
The Fair Labor Association (FLA) is a collaborative effort of universities, civil society organizations and socially responsible companies dedicated to protecting workers’ rights around the world. They are an international organization with a dedicated staff and board, headquartered in Washington, DC, with offices in China, Switzerland and Turkey.
FLA places the onus on companies to voluntarily meet internationally recognized labor standards wherever their products are made. The FLA offers:
- A collaborative approach allowing civil society organizations, universities and socially responsible companies to sit at the same table and find effective solutions to labor issues;
- Innovative and sustainable strategies and resources to help companies improve compliance systems;
- Transparent and independent assessments, the results of which are published online; and
- A mechanism to address the most serious labor rights violations through the Third Party Complaint process.
Readers might also be interested in my posts dated April 17, 2012 titled “Slavery in the Supply Chain: The Modern Disgrace” and “Child Labour: Poison to the Ethical Supply Chain” dated June 15, 2012.
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