Nestlé

Posted: December 22nd, 2022

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Nestlé

Nestlé is a Swiss multinational corporation focusing on the processing of food and drinks. Nestlé that has its headquarters in Vaud, Switzerland is the largest food firm in the world based on its revenue as well as considering other factors such as number of employees, and assets since the start of 2014 (Nestlé). Nestlé has more than 448 companies, and functions in more than 180 nations globally. Since the fusion of Farine Lactee Henri Nestle and Anglo-Swiss Milk Company in 1905 to form Nestlé, the company has improved its products overtime, and now produces a variety of products, including medical foodstuffs, coffee, baby foods, snacks, and pet foods among other products (Nestlé). The brand strives to accomplish its vision, which is to produce high quality food, and to offer most advantageous nourishment to attain psychological needs. Other than promoting health, wellness, and nutrition, products from Nestle offer buyers the essential ingredients of pleasure and taste. Equally, the company works to meet its mission, which is to produce good and quality food so that people have a longer and better life (Nestlé). Nestlé must rely on the guidance of ethical theories to overcome some of the moral issues that could interfere with its operations to achieve long-term sustainability.  

Identification of Ethical Issues

Nestlé came under the spotlight in 2010 following the release of The Dark Side of Chocolate, a documentary that highlighted on the use of child labor on cocoa firms in Ivory Coast. An international human rights group took Nestlé to court in 2005 on allegations of child labor (Andrei). The group blamed Nestlé for covering the trafficking of children from Ivory Coast, who were put into forced labor on cocoa plantations. The U.S. District Court serving the Central District of California ruled that corporations cannot be held responsible for breach of international law and rubbished the allegations. An evaluation by the Fair Labor Association discovered multiple severe violations of the firm’s supplier code (Andrei). It was discovered Nestlé had not performed checks against child abuse and labor, and had not highlighted on the many injuries caused by tools such as machetes that are utilized to harvest the cocoa pods. Jose Lopez who served as the company’s Vice President for Operations at the time said during a conversation with the Fair Labor Association that the use of child labor in its cocoa supply chain contravenes all it stands for. Lopez further said that no manufacturer getting cocoa from Cote d’Ivoire can guarantee the practice does not exist, but fighting child labor remains one of the company’s topmost priorities (Andrei). The Fair Labor Association counteracted by saying that Nestlé was aware of the conditions in the places it sourced cocoa, but did not do much to improve the situation.

The other ethical concern regards the health threats that could emanate from the company’s products. A health concern was reported in 2009 when the CDC and PFDA (Prevention and the Food and Drug Administration) warned buyers to avoid taking particular dough by Nestlé citing risk of contamination from bacteria that cause infection (Andrei). Several people according to CDC were hospitalized following contamination after consuming the product. One woman in particular suffered severe infection before the contaminated batch was completely withdrawn. The company said in a statement that the implication of one of its products as a cause of sickness in Linda Rivera was of great concern. The firm’s management further said that it has put in place stricter guidelines to test and inspect e raw materials as well as finished products to ensure they meet the required quality standards (Andrei). The 2009 incident is just a minor occurrence compared to Chinese Milk Scandal of 2008 where six infants lost their lives while about 860 were sent to hospital and diagnosed with kidney complications after some products were found to contain melamine (Andrei). The Taiwanese government announced in 2008 that some brands by Nestlé contained harmful components, which halted the their distribution to retail stores across the country. The problem developed very fast with China reporting more than 300,100 victims, creating health concerns of major food corporations operating in China (Andrei). The incident led to the execution of two people, while several others were sent behind bars, with the World Health Organization terming the incident as one of the major food safety concerns it has addressed in the recent past. Nestlé did not accept the allegations and said it employs advanced testing mechanisms to verify all its products.

Evaluating the Moral of the Ethical Issues

The use of child labor and the production of food stuff that presented significant health risk are ethical issues that are easier to understand using normative ethical theories. One of the theories that could help to understand the morality of the two ethical concerns is Jeremy Bentham and John Stuart’s utilitarianism, which determines right from wrong by considering the possible outcomes because it is a type of consequentialism (Smith 39). The proponents of utilitarianism perceive the most ethical choice as one that will yield the best outcome for most of the people (Smith 39). It is clear using child labor is likely to evoke harsh criticism from various groups, as well as contravene some of the international regulations. International Labour Organization’ Worst Forms of Child Labor Convention No. 182, for example, calls on member parties to take quick measures to forbid and erase the adverse forms of child labor that exploit the children or pose substantial harm to the safety, health, and morality (International Labour Organization). ILO describes child labor as a violation of crucial human rights and a practice that retards children’s growth and development, potentially resulting in lifelong psychological or physical harm. Other than violating legislations put in place to prevent child labor, the supporters of utilitarianism or likely to term the use of child labor as being wrong because the practices could cause psychological disturbance to the children as well as their parents. Equally, utilitarianism will term the production of foods that cause health problems as being unethical because ultimately some people suffer and would blame the food they ate. International bodies such as the Food and Agriculture Organization of the United Nations (FAO) and World Health Organization are also likely to react negatively to the production of harmful foodstuff by Nestlé. FAO, for instance, urges national legal frameworks to create structures that promote the attainment of proper food control system, including developing food laws to regulate the production, selling, and handling of consumables (FAO). The evaluation from a utilitarian perspective shows Nestlé’s failure to stop the use of child labor and its production of harmful foodstuff were unethical.

The use of child labor to get cocoa from the West African farms and producing food items that present significant health risks could evoke ethical concerns when viewed from the perspective of ethical egoism. The normative ethical theory asserts that moral beings need to act following their self-interests. The theory holds that the actions whose results will benefit the doer can be deemed ethical, but does not require moral agents to violate the well-being and interests of others when making ethical and moral deliberations (Smith 46). Ethical egoism asserts that what a moral agent perceives as good or right, and beneficial to their self-interests could either have similar effects or detrimental to others (Smith 46). It is apparent in this case that whereas using child labor could appear as less costly the approach places much stress on the children who maybe become part of such activities due to poverty or forceful instructions. The company on its part might not really feel the pinch because it would generate more revenue on its part. The supporters of ethical egoism are also likely to term the production of harmful foodstuff as unethical because even as the company would satisfy its need for more revenue some consumers would suffer the health effects as it happened with the infants who lost their lives while many others were hospitalized.

How the Ethical Issues are Likely to Influence Stakeholders

Nestlé must consider the possible effects of the ethical concerns on its stakeholders and take quick actions towards dealing with the problems. The company engages, listens, and responds to a broad range of stakeholders while dealing with its activities. Through meaningful participation, the stakeholders help to advance and set the priorities for developing the Creating Shared Value strategy. Nestlé’s stakeholder network ranges from individuals it engages with on regular basis to those in the public sector who influence its operations. The leading stakeholders for Nestlé include academia, customers, communities, governments, intergovernmental organizations, industry and trade associations, suppliers, reporting groups and agencies, shareholders, and nongovernmental organizations (Nestlé). The yearly program of stakeholder meetings and Creating Shared Value events offer suitable opportunity to dialogue, and to build on its knowledge of essential societal issues. The close interaction between the company and its people builds the capability of its people, promotes collective action, and encourages mutual respect and trust (Nestlé). The firm also performs the yearly Nestle Stakeholder Community Survey where Key Opinion Leaders participate with the motive of knowing evolving perceptions on the firm’s problems likely to influence management practices or reputation (Nestlé). All these stakeholders are likely to suffer the effects of Nestlé’s unethical acts now and in the future if the company does not act very fast to prevent reoccurrences.  

Nestlé’s ethical violations are more likely to have substantial effects on customers and shareholders who are very important to the company. The company would experience significant challenges marketing its products if it does not convince its buyers that they are safe and not likely to develop any health concerns. The buyers would also be more attracted to the products by Nestlé if they do not get bad reports such as the use of child labor. Unfortunately, the firm would record huge loses and possibly halt its operations if the customers choose to buy from competing companies due to fear of contracting diseases or associating with an organization that is unethical. The same would happen with the shareholders who may withdraw their shares or transfer them to other foundations, something that would adversely affect normal operations.

Alternatives

The company needs to consider several alternatives to deal with the ethical concerns. A suitable way to deal with the issues would be to employ the concept of stakeholder theory, which insinuates that a business must work towards addressing the values and morals in managing the firm while considering appropriate ways of improving the weak areas (Hemmati et al. 29). The primary merit with the approach is it does not only provide insight into how to deal with the issues facing the firm, but also provides avenues to increase interaction with stakeholders. Alternatively, the company can apologize to for the past incidences and provide surety that similar incidences would never occur in future. Even though the approach could have some reputational effects on the company it would foster good relationship with stakeholders. Nestlé’s management, therefore, need to evaluate the alternatives keenly before settling on the one that would help the company overcome the ethical concerns.

Conclusion

The study elaborates how Nestlé could deal with some of the ethical concerns that it has experienced in the course of its operations. The Swiss international corporation battled a court case from 2005-2010 concerning child labor while sourcing cocoa from farms in Ivory Coast, which caused massive uproar from various groups. The company also became a victim of producing food substances that could cause adverse health effects, which led to the withdrawal of the mentioned product from shelves across international markets. Evaluating the occurrences using utilitarianism and ethical egoism shows the incidences are unethical and likely to harm the company’s operations. The company should consider employing the guidelines of stakeholder theory to know how to lead the firm towards the right direction, and possibly ask for apology for the past incidences.

Works Cited

Andrei, Mihai. “Why Nestlé is one of the most hated Companies in the World.” ZME Science, May 19, 2015. https://www.zmescience.com/science/nestle-company-pollution-children/. Accessed on 10 October, 2019.

FAO. “Food Regulations. FAO, 2019. http://www.fao.org/food/food-safety-quality/capacity-development/food-regulations/en/. Accessed on 10 October, 2019.

Hemmati, Minu; et al. Multistakeholder Processes for Governance and Sustainability: Beyond Deadlock and Conflict. Earthscan, 2002.

International Labour Organization. “International Labour Standards on Child Labour.” International Labour Organization, 2019.www.ilo.org/global/standards/subjects-covered-by-international-labour-standards/child-labour/lang–en/index.htm. Accessed on 10 October, 2019.

Smith, Tara. The Virtuous Egoist: Ayn Rand’s Normative Ethics. Cambridge University Press, 2006.