The case discusses the global food processing giant Nestlé’s problems relating to modern slavery in its cocoa supply chain. The company faced allegations of using child labor in its cocoa supply chain in Ivory Coast and was also accused of failing to disclose this to customers at the point of sale. Some critics argued that Nestlé was not doing enough and was not being transparent enough in its efforts to eliminate child labor within its global cocoa supply chain. However, in a rare disclosure, Nestlé reported in 2015 that it had uncovered forced labor in its seafood supply chain in Thailand. Magdi Batato (Batato) Executive Vice President and Head of Operations at Nestlé said that the company was committed to preventing and eliminating child labor in its supply chain. Analysts wondered whether Nestlé’s admission of slavery was honest or was just an attempt to fend off child labor allegations in other parts of its business and bring consumers onside.
The case explores how modern slavery is a complex supply chain issue for Nestlé and why it needs to be addressed. Though Nestlé had implemented an action plan to combat slavery within its supply chain, the obnoxious practice still permeated West African cocoa farms, and was in fact on the rise. Nestlé had tried to maintain ethical and environmental standards within its supply chain but how well these initiatives matched up to the challenges of modern slavery was still questioned by its critics. According to them child labor in Nestlé‘s cocoa supply chain was a complex issue and gathering reliable evidence about what was happening on the ground would not only be vital, but also challenging for Batato. Given its global scale and influence, can Nestlé play a crucial role in eliminating slavery from the global cocoa supply chain? Can Batato lead the company’s ongoing commitment to tackle slavery? Can its commitment go far enough to enact change and put an end to modern slavery in the global cocoa industry? How?
This case is meant for MBA students as a part of their Corporate Sustainability/ Corporate Social Responsibility/ Business Ethics curriculum. It can also be used in the Operations Management/ Supply Chain Management curriculum. This case is designed to enable students to: 1) Understand the concept of modern slavery, its various forms, and the need for companies to address this issue; 2) Understand the relationship between modern slavery and CSR; 3) Identify the barriers to eliminating modern slavery; 4) Evaluate the actions taken by Nestlé’s to combat slavery in its supply chains and identify the challenges faced by the company in dealing with the issue; 5) Explore ways through which Nestlé can eliminate modern slavery from its cocoa supply chain.
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