Thursday, January 18, 2007

Nestlé puts up a transparent smokescreen

Nestlé has posted a prominent link on its website to a report by the One World Trust.

Nestlé states:

Global accountability - Nestlé rates positively

British-based NGO One World Trust has rated Nestlé 3rd-highest out of 10 transnational corporations measured for its 2006 Global Accountability Report. Nestlé scored 5th-highest in transparency of all the 30 organizations rated, which were 10 from each sector: Intergovernmental Organizations, International NGOs and Transnational Corporations. Read more here on the OWT website.

As you might expect, Nestlé's boast needs some investigation. It is in fact a smokescreen. Transparent only in that if you look a bit more closely you can see right through it.

The full report is on the One World Trust website. This is a fascinating document and a serious attempt to improve transparency amongst organisations. We should perhaps not be too surprised that its findings are being spun so shamelessly by Nestlé, however disappointing that may be.

Download the report and you will find that though Nestlé is third rated of 10 TNCs for having policies that guide its social and environmental impact, Nestlé gained its position with a mark of just 52%. The leading company had 80%. Having policies does not, of course, mean they are followed, as we know all too well from monitoring the outputs of Nestlé systems when it comes to baby foods. We see forest-loads of booklets and leaflets on what Nestlé claims it does and evidence strewn around the world of what it really does. Policies, it seems, are there for public relations purposes. Behind the scenes and on the ground the story is different.

Similarly, 5th position on transparency capabilities is little over 50%. This rating is based on having policies in place and systems to ensure they are followed. If this was a score in a test at a job interview Nestlé would have failed.

The report highlights which of the 30 corporations, intergovernmental organisations and international nongovernmental organisations that scored 50% or more in 3 out of the 4 areas assessed. Nestlé isn't there amongst the 8 that made the grade. Overall, it's not even amongst the best of a bad bunch.

Look a little closer at the ranking on the actual policies and you will see that Nestlé is actually rated 0% out of 100% for the quality of its information disclosure policy. Credit where credit is due, of course. One cheer for Nestlé for having a policy even if it does get a big fat 0% for its quality.

Nestlé also scores poorly - though better than some - on its response to internal and external complaints, not even managing 50% overall. Even this score gives a false impression. The report explains:

Pfizer policy for handling complaints from internal stakeholders is the most developed of the ten TNCs, while Nestlé’s is the least developed. Nestlé’s low score is due to the fact that their policy on handling complaints from internal stakeholders applies only in relation to one product: incidents of potential non-compliance with the International Code of Marketing of Breast Milk Substitutes. This is open to companies in the group and all agents and distributors who market Infant Formula in developing countries under trade marks owned by the Nestlé Group.

So Nestlé gained points for its so-called Ombudsman for reports of violations of the International Code, yet there is no evidence of any action from this Ombudsman as far as we are aware. We did write to the office of the Ombudsman when the post was launched amongst much fanfare by Nestlé, but never received a reply. Does it really exist? And why are complaints limited to the marketing of infant formula, when the International Code and subsequent Resolutions apply to all breastmilk substitutes. And why only developing countries when the Code and Resolutions apply to all countries? Well, because the system, if it does exist, is not very good is the answer.

No doubt Nestlé gets credit for replying to some of the complaints registered by Baby Milk Action and our partners in the International Baby Food Action Network (IBFAN). This does belie the fact that the responses we receive are pretty much useless other than for exposing Nestlé's lack of concern for infant health. Generally letters either deny the evidence or use Nestlé's discredited interpretation of the marketing requirements to justify continued malpractice. Transparent by some measures, but does nothing to stop unnecessary death and suffering of infants except in those instances were campaign pressure has forced a change of policy (such as on the marketing of complementary foods from too early an age).

Nestlé may well claim it is being transparent in flagging up the Global Accountability report on its website. Yet it is really putting up a smokescreen.

The full report can be downloaded from the One World Trust website.

Two important points to make.

Firstly, Nestlé does better than many companies and other organisations in producing so many reports. Other companies and organisations should do better in reporting. Yet Nestlé's reports are so highly flawed as to be worse than useless as we have documented repeatedly (see, for example, Nestlé PR Machine Exposed, and our newsletter item on Nestlé Latin America Corporate Social Responsibility report). Its reports are there to divert attention from harmful activities and to try to persuade policy makers to accept self-regulation for corporations instead of legislation.

Secondly, the One World Trust invites people to: "Help us build a picture of Nestlé's accountability by posting facts, figures, linked resources, or your views and experiences as a stakeholder."

So please do. Leave your information on the website. It will be helpful to those following Nestlé's link to the site, particularly if they do not have the time to look through the full 68-page report.

Here's the comment I left earlier:

Independent monitoring of Nestlé's baby food marketing activities finds it to be responsible for more violations of World Health Assembly standards than any other company. Aggressive marketing contributes to the unnecessary death and suffering of infants around the world. According to UNICEF: "Improved breastfeeding practices and reduction of artificial feeding could save an estimated 1.5 million children a year." As the worst of the baby food companies, Nestlé is the target of an international boycott and is one of the four most boycotted companies on the planet. See and


Anonymous said...

hi again, thanks for enabling comments for non-google-accountholders as well!

as said, i'm a swiss citicen and nestle is about the one firm whose products i do boycot 100%. partly for quite selfish reasons, cause their products aren't exactly healthy (not even their health food stuff) and imho also not delicious either. but the main reason was after having visited peru in '83 seeing how they're dominating the local food market at prices absolutely lethal for local salaries. which was enough reason for me without even having checked on the baby milk part at all.

so kudos and keep up the good work! obviously doing a good job, considering the various pr-offensives like the one this post is about ...


Anonymous said...

Thanks mike for this posting and for interpreting the results of the 2006 Global Accountability Report exactly as they should be: an assessment of the extent to which organisations have the capabilities – policies and systems – at headquarters or the global office to foster accountability; not a measure of how accountable organisations are in practice.

As you note though, the issue of how policy translate into action is absolutely key. Nestle might make worthy commitments on paper, but do these translate into concrete practice? The Index team at the One World Trust are currently grappling with this issue and are developing a number of ways of assessing accountability in practice both at the global office and field levels and will be publishing a series of practice supplements to the 2006 Global Accountability Report later this year. We are also aiming to identify partner organisations that would use the Global Accountability Framework and methodology to undertake country-level assessments on how accountability commitments made in policies at the global level translate in the field at national levels.

We’ve also just completed accountability profiles for each of the 30 assessed organisations- including Nestle. These detail how each of the 30 organisations scored in the four dimensions of accountability - transparency, participation, evaluation, and complaints and response - and highlight some general areas that require improvement. You can download them here: Organisations

If you have any experience with engaging with any of the assessed organisations, please do take the time to note them down in the resources and comments part of the organisation’s profile. This will help build a more complete picture of their accountability.