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Wednesday
Nov182009

Nestle Answers: Auditing obscurity 

This is one of a series of posts that features Nestle’s answers to my questions that came out of the Nestle Family event. To access the other questions and answers, go to follow-up questions for Nestle and click on the questions you are interested in. Answers will be posted as they are received and analyzed.

My Questions and Nestle's Answers


Q: You indicate that you have regular audits on a worldwide basis of your marketing practices relating to infant formula. Do you have any public audit reports and/or statistics that you can share? How do your internal reports compare, for example, with the reports of IBFAN?
A: Nestlé has implemented a thorough monitoring system to ensure compliance with the WHO Code. This includes an internal WHO Code Ombudsman System that allows Nestlé employees to alert the Company on potential non-compliance with the WHO Code, regular internal audits of the Company’s subsidiaries’ formula marketing practices as well as independent external audits in case of multiple, broad scale allegations about non-compliance with the WHO Code by Nestlé. The latest Independent Assurance Statements of Nestlé’s subsidiaries’ compliance with the Code can be found at: http://www.babymilk.nestle.com/News/Past+News/

Q: Your Nestle Instructions for Implementation of the WHO International Code of Marketing of Breast-Milk Substitutes includes a Complaint Form in Annex 3. How many complaint forms are received annually? Do you have any statistics or reports on the nature and geographic location of the violations reported?
A: Formal complaints sent through the Complaint Form in Annex 3 of Nestlé Instructions are extremely rare. However, we do receive complaints through other means, such as emails, letters or calls to our consumer services. Nestlé takes allegations of non-compliance with the WHO International Code of Marketing of Breast-milk Substitutes very seriously and investigates each one of them. Nestlé wishes to learn of all concerns regarding our marketing practices for it is only then that we will be able to correct mistakes or better inform our partners, such as distributors of our products.

Nestlé has put in place an elaborate monitoring system to ensure compliance with the WHO Code. This includes regular corporate audits, an ombudsman system for employees to report suspicions of WHO Code violations, and external audits of Code compliance. However, we recognize that there are no perfect monitoring system in such complex arena as Code application and/or national legislations in so many countries. This is why if allegations are recorded, they should be sent to the company immediately so that an investigation can take place and corrections made if necessary.

For more information, please read our response to the International Baby Food Action Network (IBFAN)’s report “Breaking the Rules, Stretching the Rules” (2007): http://www.babymilk.nestle.com/NR/rdonlyres/14F9B348-0329-4DB7-8A68-2BB0A1450F2A/97053/2009NestleInvestigationofReportedNonCompliancewith.pdf

My Response


Let me start by saying that we do not know how many complaints Nestle receives via its formal complaint form or through other means "such as emails, letters or calls to our consumer services." They didn't give any numbers. Instead they pointed to limited audits conducted by Bureau Veritas and to its October 2009 response to the International Baby Food Action Network (IBFAN)’s 2007 report Breaking the Rules, Stretching the Rules.

Limited number of countries audited

The Bureau Veritas audits were conducted in three countries (Sri Lanka, Malaysia and Indonesia) in 2008 and if you scroll down further you can find a further three reports done in 2005. That means Nestle has done independent audits of its practices in 6 out of around 195 countries in the world, of which 157 are considered developing countries as of October 2009.  So in the past five years, Nestle has done audits of its practices in 3% of the countries of the world or 3.8% of developing countries.

Are you impressed? I'm not.

How hard would it be to choose three countries every few years or so where you are doing well and have done some housecleaning to have an independent audit done? Even then, Baby Milk Action found that the auditors missed some significant violations.

Limited scope of audits

Both the Bureau Veritas audits and Nestle's response to the Breaking the Rules, Stretching the Rules report focused on Nestle's compliance with its own instructions on the implementation of the Code, rather than the provisions of the actual International Code of Marketing of Breast-milk Substitutes. The following comparison chart by legal experts explains where Nestle's instructions differ from the Code itself.

























































International Code and Resolutions



Nestlé Instructions
1. Applies to all countries as a minimum standard.1. Apply to a list of developing countries of Nestlé’s own invention.
2. Applies to all breastmilk substitutes, including other milk products, foods and beverages marketed to replace breastmilk.2. Apply only to infant formula and to those follow-up formula with the same brand name.
3. No idealising pictures or text in any educational materials.3. Allow for baby pictures “to enhance educational value of information”.
4. No promotion to the public or in the health care system, direct or indirect.4. Allow for company “Mother Books” and “Posters” with corporate logo to be distributed or displayed by health workers.
5. Educational material with corporate logos may only be produced in response to a request by government and must be approved. No product names allowed.5. Allow educational materials with corporate logos for use by health workers in teaching mothers about formula.
6. No donation of free formula or other breastmilk substitutes to any part of health care system.6. Allow for free formula if requested in writing by health workers.
7. There should be no display of brand names, or other names or logos closely associated with breastmilk substitutes, in the health care system.7. Allow for wristbands, feeding bottles, health cards etc. with corporate logo.
8. Promotion of breastfeeding is the responsibility of health workers who may not accept financial or material inducements as this may give rise to conflict of interests.8. Allow for “general” videos, brochures, posters, breastfeeding booklets, growth charts, etc. No brands but corporate logo allowed.
9. Samples only allowed if necessary for professional evaluation and research.9. Allow samples to introduce new formulas, new formulations and samples for new doctors.
10. Sponsorship contributions to health workers must be disclosed.10. On a case by case basis, financial support is allowed (does not mention disclosure).
11. Labels must follow preset standards. WHO does not vet or approve labels.11. Nestlé claims its labels were developed in consultation with WHO.
12. It is for governments to implement national measures. Independently of these, companies are required to ensure compliance with the International Code at every level of their business.12. Nestlé Market Managers should “encourage” introduction of national codes [voluntary unenforceable codes rather than laws].

That is a lot of detail and there is even more detail in the full analysis of differences between the Code and Nestle's instructions. But the important thing to note is that there are significant differences and when Nestle has independent audits done, those audits are based on its instructions, not the actual Code. When Nestle responds to Code violations pointed out by others, it rejects any violations of the actual Code that do not fit with its own interpretation of the Code.

As a result, when analyzing the violations highlighted in the Breaking the Rules, Stretching the Rules report, Nestle reported that out of the 169 violations reported, there were nine valid violations (7 in developing countries and 2 in developed countries). While I think it would be reasonable for there to be some difference in opinion in interpreting the code, 169 violations versus nine violations is a pretty big difference.  This difference is primarily due to the Nestle's limited version of the code.

The chart above does a great job of identifying where the differences are and I am not going to go into examples of all of them. However, I thought I would point out a few that came in in my investigations into Nestle's other answers.

Example: Products covered


Nestle does not include complementary foods (i.e. baby food) in its definition of breastmilk substitutes because it says they are not marketed for children under 6 months of age. That doesn't really cut it though. First, they have clearly not delivered on that promise as demonstrated in my post on Nestle's misleading or downright wrong information on when to introduce solids.  Second, by pretending that the complementary foods are not included within the scope of the WHO code Nestle can aggressively market them to mothers and include imagery (e.g. pictures of young babies) and language (descriptions of milestones baby should have met before starting solids) that suggest that they are intended for children under 6 months without saying so directly.




    Example: Countries covered


    Nestle claims that it only needs to comply with the Code (and only its version at that) in certain countries of its own choosing. However, the Code indicates that it is applicable everywhere even if individual governments have not taken specific action to adopt it. Despite that, Nestle continues to do whatever it wants in absence of strong legislation and strict penalties. Even in countries that are signatories to the Code and that have outlined their expectations of the industry, Nestle continues to ignore the Code and the wishes of the government. I clearly demonstrated that this is the case in Canada.



    Audit this and only this

    Do you think I could use this approach for my taxes? Perhaps I could get my independent accountant to prepare my tax return based on only a segment of my earnings. Do you think the accountant would agree to that? Maybe if I didn't tell him that I had other income. Would the government accept it? Maybe if I did a good job of hiding my other income. But if I was very obviously buying luxury cars, vacation homes, expensive artwork and extravagant jewelry on my supposed $20,000 per year income, someone may start asking questions.

    What about nutrition and diet? Maybe I could lose weight by convincing myself that only the food I eat on Monday, Tuesday and Wednesday matters. What I eat the rest of the week doesn't count and couldn't possibly be contributing to the extra pounds I'm carrying around or any resulting health problems I'm having.

    Or the famous quote, "I did not have sexual relations with that woman, Miss Lewinsky".

    The lies we tell ourselves may help us to sleep at night. But they do not help us to change for the better. To overcome our weaknesses. To stand on higher ground. Stop lying to yourselves Nestle. Stop hiring other people to help you craft those lies.
    « Bloganthropy: Help me support the Christmas Exchange | Main | On vaccines, safety and doublespeak »

    Reader Comments (5)

    [...] 9. You indicate that you have regular audits on a worldwide basis of your marketing practices relating to infant formula. Do you have any public audit reports and/or statistics that you can share? How do your internal reports compare, for example, with the reports of IBFAN? ANSWER HERE [...]

    Thank you for your tireless research and advocacy. We need far more mothers like you, who are willing to ask questions, listen, and see beyond the rhetoric. It's why I love your blog and and your message. Your honesty and commitment take my breath away and inspire me.

    I am so glad that I stuck out breastfeeding exclusively for these past nine months of my son's life (and I will continue to do so). Not only do I think that formula is an inferior product and formula companies unethical in their practices, but I also don't know how women can afford to add $150-400 to their grocery bill every month. That's also why I use cloth diapers.

    Anyway, I just wanted to say that I'm an avid reader of your blog. Keep it up! :)

    November 19, 2009 | Unregistered CommenterSandy

    I am continually appalled by Neste's behaviour as a company!

    November 20, 2009 | Unregistered CommenterAlina

    Thanks for the following coverage. I'm especially astonished by their exclusion of infant food, when parents (& many physicians still) routinely expect baby food to be used by 4-month-olds.

    Oh, I turned my Google ads off as well as doing the BlogHer Ads tweak. Thanks for the heads-up!

    November 22, 2009 | Unregistered CommenterLauren @ Hobo Mama

    [...] There are significant variances between the Code and Nestle’s implementation of the Code, both.... So when Nestle is talking about complying with the Code in developing countries, it is talking about something entirely different from what the Code actually says. [...]

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