IIM-Raipur-Indian Institute of Management

IIM-Raipur-Indian Institute of Management

Is it Ethical?

Is it Ethical?

Nestle drew international attention outrage many times in the African continent because of its unethical practices in the under-developed countries. The public relations scandal with the poverty stricken government of Ethiopia is one among them. Nestle asked the government to pay a whopping $6 million as a compensation to their stakes in the Ethiopian Livestock Development Company (Eldico), which it obtained through an investment in Schweisfurth, a German company. Ethiopia had nationalized Eldico and sold it for a profit. Nestle finally reached a settlement of $1.5 million with Ethiopia, the maximum the government could afford. All the more so considering that the demand was made when the country was on the verge of a potentially catastrophic famine. At the time, the United Nations was estimating 11 million Ethiopians would go hungry in the winter of 2002-2003. In Ethiopia’s case, Nestlé demanded the government of a sovereign nation in crisis to hand over millions of dollars to a company with no responsibility to the nation’s people simply because of the actions of a non-democratic government which existed 30 years ago in dealing with a company Nestlé likely hadn’t heard of at the time. Another one unethical practice which Nestle carried out in Africa was it’s sinister campaign of appointing uniformed nurses to distribute the baby formula to poor mothers for free, long enough for lactating mother’s milk to dry up. The mother and child now became entirely dependent on Nestle’s infant formula, and since most of them could not afford the formula, they gave their children an insufficient quantity of the formula. The formula also required clean water, which most mothers could not access. Nestlé’s irresponsible promotion of artificial feeding practices, displays the company’s lack of regard for the well-being of humanity and is a reiteration of its policy of putting profits before life

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