The case of Nestlé – a role model for global players?

One thing has to be made clear: Nestlé – the world’s largest food company – may truly be no saint in global business. In purpose of raising their profits, Nestlé showed often a ruthless line of action in matters of environmental issues or conditions of employment, especially in third world countries. One frequently mentioned example is the case of the “Pure Life” strategy in South Africa. South Africa is a country, where water resources already are limited – a lot of people don’t even have access to clean water. Nonetheless, Nestlé is systematically buying rights for the exclusive use of water sources in order to build huge bottled water manufacturing facilities. This has horrific consequences for the poorest of the local population, who can’t afford to buy the expensive bottles – which ironically are called “Pure Life”.1

But in another sector, Nestlé is actually evolving into a “prototype company”, that really seems to care for an eco-balanced production. This sector contains the use of sustainable produced palm oil especially from Indonesia. Nestlé has a leading role in the compliance with strong deforestation-free principles and in allowing independent oversight of its supply chain – also in cooperation with Greenpeace. The NGO has been complementing Nestlé’s efforts on various occasions in the past and consistently points out, that the company is making effective progress. But why is a powerful global-player like Nestlé choosing such a – at least in first view – costly and sumptuous path?

First of all a quick review on the problem of producing palm oil: the oil is extracted from palms, which are mainly growing in tropical countries, like Indonesia or Malaysia. From lipstick and food to body lotion: palm oil is used in almost 50 % of all consumer goods. Nestlé alone is using over 320.000 tons of palm oil every year, in particular for their product “Kitkat”2. Because of the enormous demand, huge areas of rainforest are cleared to make way for plantations of oil palms. Therefore the production of palm oil threatens endangered animal species and causes climate change.3

In 2010 Greenpeace ran a viral campaign named “Give the Orang Utan a break!”, blaming Nestlé for using palm oil from a supplier-company called Sinar Mas. Sinar Mas is known for the illegal and reckless cleaning of highly protectable rainforest-areas, who are inhabited by the threatened species4. The success of this campaign – a drastic video, which showed an office-worker, eating orang utan’s fingers wrapped in a Kitkat package – was matchless in history. Over 250 000 people crushed Nestlé particularly in the social-media-website Facebook. After a helpless attempt to ban the video from the net, Nestlé finally gave in and promised to cut Sinar Mas from their supplier list. Furthermore they developed an action schedule, in which they promised, that till 2015, 100% of their use of palm oil would come from sustainable palm plantations. They earned much praise for making this process transparent5.

Nestlé´s actions and consumers boycotting non-transparent products are encouraging and are rewarding companies, who improve their standards to an eco-balanced production. These sorts of campaigns – especially in often undervalued social networks – seem to be a key factor in the mind change of global players. More of them are needed6.

Anyhow, some NGOs, like Robin Wood or Watch Indonesial, still challenge the big palm oil manufactoring companies. They claim that there is nothing like a “sustainable palm oil production”. The abuse of human rights and the destruction of the environment would be intrinsically tied to any use of palm oil and companies like Nestlé would practice just a clever kind of “greenwashing” for public relation reasons. Just a ban on all imports, which contain palm oil would be more effective and in consequence this would stop finally large parts of the illegal tropical deforestation.7

Besides, a new rumour is fanning the flames of that debate. The company IOI – supplier for companies like Nestlé, Unilver or Neste Oil – is accused of destroying 7.000 hectare of rainforrest in Borneo for oil palm plantings.8

  1. Südafrika Wasser – das Erste – 4.9.2013 []
  2. Nestlé will nach Greenpeace Kampagne Urwald schützen – Greenpeace – 4.9.2013 []
  3. palm oil factsheet – RAN – 4.9.2013 []
  4. Beweise überführen Sinar Mas – Greenpeace – 4.9.2013 []
  5. deforestation and palm oil – Nestlé – 4.9.2013  []
  6. sustainable palm oil – Ethical Corp – 4.9.2013 []
  7. Forum für nachhaltiges Palmöl gegründet – EPO – 4.9.2013 []
  8. Palmöl-Mafia stoppen – Regenwald – 4.9.2013 []