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. 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). It has been reported today that Nestle will launch its Fairtrade Partners Blend this week - see Nestlé plans to enter lucrative UK fair trade coffee market - report. 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 Nestle factory, who was assassinated last week, as trade unionists from Colombia gather in Switzerland (information in French and German) to present evidence of Nestle's links to paramilitaries who have been terrorising activists and a Halloween campaign is launched against Nestle 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. 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. If Nestlé captured 100% of the current global Fair Trade coffee market using its massive global marketing budget of over US$10 billion per year, this would still only represent 3% of Nestlé's green coffee purchase. In other words if existing Fair Trade companies lost all their business to Nestlé (or Nestlé doubled the market without taking sales from other companies), 97% of Nestlé coffee would still be outside the Fair Trade system (note 5). 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 every hospital, clinic and school. 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 survey of campaign supporters this afternoon 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." For analysis of the views of our supporters click here. Other comments John Hilary, Campaigns and Policy Director at War on Want (contact press officer, John Coventry 0207 6201111 or 07905 397084), issued a statement saying: "The fair trade movement was set up to challenge the practices of companies like Nestlé, which have traditionally amassed huge profits by paying their suppliers rock bottom prices. Nestlé still opposes any expansion of fair trade beyond the niche market it currently enjoys, arguing in its recent coffee report against the mainstreaming of fair trade principles. How can such a company deserve the fair trade mark?" 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." 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." Bama Athreya, International Labor Rights Fund, which has entered into litigation against Nestle over its relationship with cocoa suppliers who it is alleged use child labour and abuse workers (contact: +1 202 347-4100 ext. 106): "Nestle 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. Nestle 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. Nestle 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 Nestle's 2005 coffee report, the global Fair Trade coffee market is 25,000 tonnes. Nestle compares this to the 110,000 tonnes it buys direct. The 110,000 tonnes represents 14% of Nestle's green coffee purchase, according to the report. Therefore, 25,000 tonnes, the entire global Fair Trade market would represent just 3.2% of Nestle's coffee business. 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.