Wednesday, March 14, 2007

Nestle generosity to good causes demands payback

I while back I promised to write a blog about 'partnerships' sought by Nestlé with good causes. See:

I am prompted to address some of the issues now by two things going on (amongst the many others) at the moment.

Firstly, we are informed that Oona King, former MP and campaigner against poverty, has been on the radio apparently praising Nestlé! Why? Because Nestlé is sponsoring a charity known as Make Space, which provides support to after school clubs and other initiatives for young people.

We have been contacted in the past by people running clubs who have joined the Make Space network and then been upset to find their club linked to Nestlé. For example there was a deal where Nestlé provided PR services for Make Space groups, meaning it issued a press release on behalf of the club. In doing so they took the opportunity to add a Nestlé logo and a quote from the Chief Executive, giving the impression that their involvement in the club was far greater than just sending out the press release.

The intiative Oona King is involved in is apparently a Make Space Youth Review. Which may well be a great thing, but becomes an issue for us when it Nestlé gains kudos for supporting children, while continuing with business as usual. Nestlé features prominently on the website operated by 4children (which used to be known as Kids' Club Network).

It is, of course, kudos Nestlé’s wishes to buy. The Chief Executive himself has said that giving to charity can only be excused if it will benefit shareholders, so nobody should have illusions as to where Nestlé is coming from. That was his message to business leaders in Boston last year, as reported in the Boston Herald.

"Companies shouldn't feel obligated to 'give back' to the community, because they haven't taken anything away, the Austrian-born chief of the world's largest food company told local executives yesterday. In a stunning broadside to corporate citizenship as Bostonians have come to know it, Peter Brabeck-Letmathe - head of Nestle S.A. - said companies should only pursue charitable endeavors with an underlying intention of making money for investors."

You now need to pay for the full report on that website, so also see

There is a clear link between Nestlé’s support for good causes and the boycott. Nestlé is the most boycotted company in the UK and one of the four most boycotted on the planet. See

It tries desperate measures to reverse that situation, employing an anti-boycott team, producing many expensive but dishonest publications and even running an anti-boycott advertisement. The anti-boycott team now runs away from debates with Baby Milk Action having lost so many. We expose the dishonesty of its publications and claims. See:

And we challenged its anti-boycott advertisement before the UK Advertising Standards Authority. See:

In 1999 the ASA upheld all of our complaints. As the marketing press reported at the time Nestlé was effectively ‘branded a liar’ for claiming to market infant formula ‘ethically and responsibly’. One magazine, Marketing Week, asked Marjorie Thompson of Saatchi and Saatchi what Nestlé should do. It reported, that, in part:

"She suggests the way to counteract the bad publicity is to go on the offensive by using advertising showing the benefits of Nestlé's financial contributions to charities, such as Kids Club Network which provides after-school care for children."

Shortly afterwards, Nestlé announced £1 million of support for four charities. One of them was Kids Club Network. In other words, its windfall came as a direct result of Nestlé wanting to divert attention from the fact its claims on the baby milk issue were untrue and proven to be untrue through one of the longest ever investigations conducted by the ASA. See our press release from the time:

Let me just pause here as it is probably necessary to say that I am not anti-business, I am simply asking for other organisations to show solidarity with mothers and infants around the world in refusing to be part of Nestlé’s Public Relations (PR) campaign.

My background is in engineering and in industry. One of the things I did when working in the car industry was to go into local schools to talk about being an engineer and my employer gave me time off to do so. While my employer gained a bit of kudos and attention to its name - and teachers should always consider the implications of this - it is also a fact that businesses are made up of people and people are part of their community.

I also have friends who own or run businesses. If you want to do something to help your community then it is understandable if you want to use your business to also further that end. But you also need to respect there are times when it is more appropriate to do things in an individual capacity than a business capacity.

Now to the second event that prompted me to think of the relationships between businesses and good causes today. Friday is Red Nose Day, which is something peculiarly British. The basic idea is you wear a red nose like a clown and do something stupid to raise money for charity. Many workplaces - including where I have worked - will have employees coming in fancy dress, accepting a bit of messing about can be accommodated in the year of making money. If you haven’t thought of doing something already, take a quick look at the site and come up with something! Your workplace is part of your community. Businesses are made up of people. Sticking on a red nose when you are at work is a good way to remind ourselves of this (as is campaigning to have non-Nestlé products in vending machines and cafeteria).

Various retailers sell the red noses and other stuff that helps to raise funds for the work of the charity in Africa. (Incidently, the business 'partners' gain publicity on the website, ‘cos there is still the bottom line to think of, right?)

On a more local scale, I’ve just been to the local community college to pick up some information on evening classes. The brochure is full of advertising from local businesses. Partly because they want to reach local people, but also because many of those in control of the cheque book want to support something local. Great. I wanted the information in the brochure and much of the advertising I see is useful. I do buy things! You can also bet that if there was something inappropriate, illegal or unethical in an advertisement, then I would be doing something about it. A desire for funding - and a free brochure - should never blind is to other considerations.

There needs to be clarity when charities or other non-profit organisations receive funding from a company. What is the relationship? Is it helping out good causes, with little fanfare, or is someone like Mr. Brabeck there calculating how it serves his investors and builds up a reservoir of good will for the next time corporate malpractice is in the media spotlight?

When Nestlé launched its PR offensive after the ASA ruling against its claims on baby milk marketing, it was not donations given to the charities, but contracts to promote Nescafé coffee. Nescafé is the principal target of the boycott.

The choice of charities was illuminating too. Nestlé was exposed over its impact on infants, particularly in developing countries. So as well as covering the children aspect through Kids Club Network, Nestlé covered the developing world aspect with a donation to the British Red Cross.

This became highly controversial. We know that some who had fundraised for the Red Cross became so disgusted at the link they stopped doing so.

We became even more concerned when we found the British Red Cross had defended the financial link by suggesting that the World Health Organisation (WHO) had cleared Nestlé of any wrong doing. We contacted WHO and they provided us with a written statement saying they never commented on company compliance with the baby food marketing requirements. The Red Cross had made a demonstrably untrue statement after taking Nestlé money which, at the very least, did not look good. With such an auspicious organisation undermining our work – and refusing to issue a correction even after we shared the WHO statement provided to us – we had no choice but to act.

We reported the British Red Cross to the Charity Commissioners for investigation. See:

I felt sick doing so, and still do thinking back. It was not done lightly – we agonised with our board of directors. This was the Red Cross! An organisation we had worked with on the issue of infant feeding in emergency situations. It should have been an ally in holding Nestlé to account.

Our issue is one of life and death and Nestlé exploits its links ruthlessly to try to improve its image, including using its links with the Red Cross. We had to take a stand. The Commissioners investigated and while they did not censure the Red Cross, they did revise their guidance to charities. The Red Cross conducted its own investigation, which concluded in so many words that the damage caused through association with Nestlé was hardly worth the £250,000 received.

Sadly we continue to see similar stories from the Red Cross in other parts of the world. For example, Nestlé quotes a national Red Cross as endorsing its baby food marketing activities in its book on its ‘Commitment to Africa’.

Our advice to charities is to steer clear of Nestlé and not be party to its strategy of diverting criticism from its baby food marketing malpractice. A clear message that its money is untouchable until it brings its policies and practices into line with World Health Assembly marketing requirements, made as publicly as possible, will do far more good to the sum of human well being.

When there is a link we have to speak out and assist our supporters in using opportunities to raise awareness of Nestlé malpractice. This is sometimes as distressing for our supporters as it is for us.

Macmillan Cancer Relief was one of the charities to benefit from Nestlé’s PR disaster with the ASA. The deal involved promoting Nescafé at fundraising coffee mornings. Some of our supporters also wanted to support Macmillan, and may well have had strong reasons for doing so, having been touched by cancer in some way. We suggested they take along their own coffee to the event and some leaflets on the boycott, while registering their objection with the organisers. Nestlé is not on the list of Macmillan's current corporate sponsors.

Other organisations have broken or not renewed a link with Nestlé following public concern. For example, the Perrier Award for Comedy was boycotted by celebrities, attracted demonstrations and provoked an alternative award. In 2006 a new sponsor was announced. The baby milk issue and Nestlé malpractice gained significant media coverage as a result of the controversy over several years. See:

Nestlé's sponsorship of a children's book prize is now attracting similar attention. Nestlé not only links with schools to try to improve its image and undermine the boycott, but as a means to promote its processed foods, many of which are unhealthy. Again it comes down to Mr. Brabeck's payback for investors. See:

For many charities the idea of taking Nestlé money or linking in other ways is abhorrent. Breakthrough Breast Cancer turned down a million pounds from Nestlé. See:

Nelson Mandela’s Children Fund turned down £250,000 – see:

It said in a statement to the media that it had already turned down Nestlé money:

"However given the Nestle debacle in relation to HIV/Aids infected mothers and their campaign on promoting formula milk as opposed to breast milk and the disadvantages they put out publicly regarding breast feeding, the Nelson Mandela Children's Fund declined the donation."

A clear funding policy can make things simpler. UNICEF, for example, does not accept funding from companies involved in arms, tobacco or baby milk.

We well understand the difficulties of fundraising. We often have to make difficult choices about the work we can afford to do and what we have to leave for another time. Staff hours are cut to keep the budget balanced.

Going for corporate money may solve financial difficulties and enable good work to be done – the arguments used by those who take the Nestlé shilling – but ultimately it would compromise our ability to speak out over the need for independence and care over conflicts of interest. We would rather cut back on activities. Instead of going for corporate money, we appeal to supporters to take out membership, send donations and buy merchandise. While we also spend as much time as we can spare applying for grants from appropriate charitable trusts.

Some will decide corporate funding is appropriate in their field. We have partners in the International Baby Food Action Network (IBFAN) who take corporate funding and guidelines have been developed to avoid conflicts of interest, including an outright ban on funding from any company profiting from infant feeding.

Other organisations have different standards. But some companies should be untouchable.

Nestlé, the world’s least responsible company and the one responsible for most violations of the World Health Assembly marketing requirements, is surely near the top of the list.

Funding, whether it is sponsorship or contracts to promote products, is just one aspect of what goes under the broader title of ‘partnerships’. I’ll explore some of the others another time, because we should really call these things by their true name. For a great discussion of the issues, see the Cornerhouse briefing paper by Judith Richter:

Codes in Context: TNC Regulation in an Era of Dialogues and Partnerships

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