Thursday, April 03, 2008

Give and take in Nestle's bottled water business

Two news stories come together, exposing Nestlé's way of doing business. On the one hand harming communities, on the other providing support to schemes with high publicity value in the same area. We see it all the time with the issue of infant care as Nestlé pushes its baby foods while trying to push money on people who work with children.

The two news stories that dropped into my inbox this week on the same day are about water, however. Nestlé has a poor record when it comes to exploiting water resources in the face of opposition from communities. Regular readers of this blog will be familiar with the legal action prompted by a community petition in São Lourenço, Brazil, which, eventually saw Nestlé forced to stop pumping large volumes of water from the water park on which the spa town survives for its Pure Life brand of bottled water. Nestlé claimed an audit by Bureau Veritas had confirmed it had complied with Brazilian legislation, but Bureau Veritas admitted when questioned by Baby Milk Action: “our work did not constitute a legal audit as such, nor did it include a review of the on-going civil action". See:

Similar stories are found elsewhere. Nestlé is curently up for induction into the Corporate Hall of Shame not just for its baby food marketing practices, trade union busting etc. but also because of its exploitation of water, with Michigan featuring prominently. See:

Bottling water is a great business as the resource is virtually free to the company. Indeed, in the latest case in Florida, Nestlé had to pay just US$ 230 for a licence to pump water until 2018, according to a report on the website. Even this outlay was more than offset by the tax refunds of US$ 196,000 Nestlé received for opening the bottling plant with the promise of 300 jobs, which have not yet appeared. Nestlé can pump 1.5 million gallons a day and successfully challenged a move to reduce the volume. Residents have left outraged comments on the news site complaining that householders have been instructed to conserve water due to shortages.

Nestlé's new CSR report, audited by Bureau Veritas which has been so accommodating to Nestlé in the past, boasts of Nestlé's positive impact on water. Nestlé claims to have improved efficiency of water usage at its factories. If it is true, then that is welcome. But in boasting of this while hiding its negative impact and making demonstrably untrue claims about the situation in places such as Brazil, Nestlé brings CSR as a whole into disrepute as empty PR.

Similar questions need to be asked over Nestlé's use of schemes promoting water conservation, such as one announced this week in the Philippines, a country where Nestlé has a reputation to improve due to criticism of its baby food marketing and trade union busting activities.

Here is the introduction to the article in the Sun Star:

---quote begins
THE Department of Environment and Natural Resources (DENR) and Nestlé Philippines Inc. have launched a water awareness and conservation campaign called Every Drop Counts, to promote awareness that potable water is becoming increasingly scarce globally and locally, and to advocate specific practices to prevent its waste.
---quote ends

Nestlé is using its advertising budget to promote the scheme:

---quote begins
Every Drop Counts will feature tri-media advertisements by DENR and Nestlé Philippines using the latter's classic public service series Sa Mata Ng Bata as a vehicle, to remind audiences that water is an indispensable but limited resource and that they can personally take specific actions to conserve it. Sa Mata ng Bata is the value-formation public service campaign that Nestle Philippines started in the late 1980s, to call the attention of the public to the vital role of adults in forming the values of children who look up to them as role models.
---quote ends

Such activities are used to divert criticism from the negative impact that Nestlé has and are a very small business expense. Remember Nestlé's Chief Executive Officer, Peter Brabeck-Latmaté, has been clear in the past that support of good causes is only justified if it benefits shareholders. See:

This is not all about PR of course. It is also about selling more bottled water. The report on the initiative in the Philippines ends:

---quote begins
During the launch, Sager [Nestlé 'Choose Wellness' head] spoke on the key role of water as a zero-calorie nutrient in maintaining health and wellness, particularly the need for adults to drink at least eight glasses or two liters of water each day, with 2/3 of body weight consisting of water. The World Water Day Technology Exhibit, to be held for several days at Ninoy Aquino Parks and Wildlife on Quezon Boulevard near the Elliptical Circle, was also ceremonially unveiled during the launch. Underscoring the linkage between water and health, Choose Wellness, Choose Nestlé nutritionists-dietitians were on hand to provide free nutrition counseling, and sampling of Nescafe Protect, Milo, Nestle Fitnesse and Nestle Pure Life water rounded out the event.
---quote ends

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