Nestlé in society Creating Shared Value and meeting our commitments 2015

Nestlé in society:
Creating Shared Value
Nutrition, health
and wellness
Rural development
Water
Environmental
sustainability
Human rights
and compliance
Our
people
Investment G4-DMA, G4-HR4, Assessment G4-DMA, G4-HR9
Our achievements in 2015
In 2015, we identified 40 high risks that have all been reflected
in the list of salient issues. In addition to this list, we have also
identified opportunities for improvement, for example around
the level of awareness, skills and capacity from local
management on human rights, and our capacity to deal, in a
proactive manner, with labour-related issues in the agricultural
supply. We will continue to address these challenges in 2016,
through the roll-out of our Human Rights Due Diligence
Programme in our operations globally and the inception of the
Market Compliance Committees, and by strengthening our
resources on responsible sourcing.
Pillar 5: Impact assessment
Our approach: we assess human rights impacts in our
business activities to address them effectively.
HRIAs are an invaluable source of information about the
positive and negative impacts that our business activities may
have on people with whom we work, do business with and
interact with along our entire value chain – i.e. the rights
holders – in a specific country. We described the full
methodology that we use to conduct our HRIAs in the Talking
the Human Rights Walk publication that we released together
with the DIHR in December 2013.
HRIAs provide us with a unique opportunity to get feedback
and input from Nestlé employees, including trade union
representatives, suppliers, farmers, local communities and
other stakeholders (i.e. international organisations, local NGOs,
academics, etc.) in high-risk countries. They enable us to learn
a great deal about the challenges we face on the ground, and
to implement action plans that address any gaps between
international human rights standards and current practice
within the countries where we operate.
Our objective
By 2018 – Carry out six additional human rights impact
assessments in countries where we have significant
business operations.
Our achievements in 2015
We conduct specific HRIAs in high-risk countries, based on
the list of Countries of Concern established by FTSE4Good.
In 2015, we carried out two HRIAs, in Myanmar and China,
taking the cumulative total conducted since 2010 to 11.
Planned HRIAs in Egypt and Saudi Arabia were postponed
due to the countries’ political and security situation.
We now have a new objective to complete a further six
by 2018.
Assessing Nestlé’s potential and
actual impacts in Myanmar: the
perspective from the Danish
Institute for Human Rights
Given the country’s human rights record and ongoing conflict,
doing business in Myanmar does not come without serious
risks of having adverse impacts on human rights. Labour rights
violations, land confiscations and the lack of consultation of
communities are a few examples of human rights abuses
associated with foreign investment in Myanmar. Companies
operating in the country are expected to practice heightened
human rights due diligence.
In February 2015, Nestlé decided to carry out a HRIA with
the DIHR. Before the in-country assessment, the team
conducted thorough desk-based research to understand
relevant human rights issues for a food and beverage company
operating in Myanmar. The two-week, in-country assessment
was kicked off by a workshop on human rights and business
for the Nestlé Myanmar management team, followed by more
than 70 interviews with stakeholders to assess the potential
and actual human rights impacts of Nestlé Myanmar’s
operations. This included Nestlé Myanmar management and
staff, business partners, civil society and trade union
representatives, UN agencies and community-based
organisations, as well as coffee farmers and workers. The
assessment team looked at three areas of business activities:
• Nestlé Myanmar’s current activities, which focused on
distribution through its joint venture partner Myanmar
Distribution Group;
• Nestlé’s future activities, focusing on its packaging factory
in an industrial zone in Yangon; and
• Potential coffee-sourcing activities in two regions, Shan
State and Kayin State. Currently, Nestlé operates a
demonstration farm and conducts training for coffee
farmers in Kayin State only.
During the assessment, the team identified a number of
potential impacts on human rights common among companies
operating in a context like Myanmar. Generally, in Myanmar
there is a lack of awareness of what responsible business
means; in the local context, this is often considered as
philanthropy rather than doing no harm. Other challenges
include a lack of awareness of labour rights, including freedom
of association among company staff and employees. To
address this, Nestlé Myanmar and its joint venture partner will
take part in training on responsible business conduct in
Myanmar and will ensure an ongoing engagement with labour
rights experts.
While Nestlé currently does not source coffee and is not
directly involved in land acquisition, for future operations the
company will need to be particularly careful to make sure it is
not linked to abuses of land rights, which are widespread
throughout the country. Other risks relate to doing business in
conflict-affected regions in the country, where local
communities may like to see peace first before foreign
investors enter. To mitigate such risks, Nestlé Myanmar will
engage with organisations specialising in the nexus between
business and conflict, and will consult local communities.
Nestlé in society – Creating Shared Value and meeting our commitments 2015 234