Eliminating Modern Slavery from Supply Chains: Can Nestlé Lead the Way?
| Case Code: BECG159 Case Length: 18 Pages Period: 2015 - 2018 Pub Date: 2018 Teaching Note: Available |
Price: Rs.500 Organization: Nestlé Industry: Fast Moving Consumer Goods Countries: Europe; Global Themes: Corporate Sustainability, Business Ethics, Supply Chain Management |
Abstract Case Intro 1 Case Intro 2 Excerpts
Introduction
In March 2017, a federal judge in California dismissed a long running (12-year) class action lawsuit against Nestlé SA (Nestlé) and two more companies over claims the global chocolate manufacturer facilitated the use of forced child labor in West Africa. Nestlé, one of the world's largest food processing companies, had been grappling with accusations of aiding and abetting child slavery on cocoa plantations in Ivory Coast for more than a decade.
Earlier in 2015, Nestlé surprised many by admitting that it had found forced labor in its seafood supply chain in Thailand. Magdi Batato (Batato), Executive Vice President and Head of Operations at Nestlé, self-reported that Nestle had uncovered child labor exploitation on fishing boats in Thailand that supplied its factories. He reported details of the investigation and also initiated a detailed action plan on how it intended to tackle the issue. The news generated a mixed response from industry observers. Hailing Nestlé's honesty, Brian Griffin, CEO of digital marketing agency Vero PR, said, "First of all, what Nestlé did was brave, and from a moral perspective, they did the right thing to let stakeholders know about this issue. They will feel some pain from this initially, particularly from a consumer standpoint, and it's not hard to imagine that sales of seafood products may decline. There is no question that the issue must be cleaned up, and that it must happen now. We should appreciate what Nestlé has done to bring even more attention to the issue. However, Nestlé's critics contended that the company had done this only to fend off growing criticism against it. It had admitted to slavery in seafood, a low-profit area of the company’s business, while not doing enough to tackle this problem in its lucrative chocolate business...
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