Nestlé is to strengthen its procedures on the marketing of breast milk substitutes after commissioning an independent audit of its operations in a major third world market.
The audit in Pakistan found that Nestlé does not significantly breach the World Health organization (WHO) code on the promotion of breast milk substitutes, but said the company should draw up manuals which state the correct procedure for sales staff to follow, with check lists to ensure compliance.
Nestlé has agreed to do this, and will devise a formal assurance system run by an internal auditor reporting to the chief executive. It will additionally examine whistleblowing procedures for staff ‘who want to report what they believe to be violations by other personnel,’ and may help to set up a panel of non-governmental organizations, health professionals and manufacturers to monitor the infant formula milk market in Pakistan.
Nestlé says that it ‘carried out this external audit into our company in Pakistan because of serious allegations about its adherence to the code’. The audit was carried out by Emerging Market Economics of London, and Enterprise and Development Consulting of Islamabad, with help from Attar Husein of the London School of Economics.
It found that the WHO code was ‘embedded in the policies, structure and resource allocation of all the company’s work processes’, that it was ‘followed at every level’, and that ‘considerable time and effort’ was spent by management ‘to make sure the code is not violated’.
In general, Nestlé complied with ‘the letter and spirit’ of the code’s 28 articles. The audit identified three minor breaches of the code. In two instances, Nestlé medical delegates were found to have given health professionals gifts – a jar of coffee and some non-medical books – that breached the code’s insistence on low-cost gifts for professional use only.
The company breached a second article by not disclosing payments towards the travel costs of health professionals attending conferences, and failed to comply with a third article because one distributor had included sales of infant formula milk when calculating commissions for staff.
Auditors concluded that while ‘even one breach of the code is one too many,’ these violations were due mainly to the lack of an assurance system and formalised procedures, rather than deliberate actions.
Nestlé’s corporate affairs manager Hilary Parsons said the company had moved to correct the violations identified, and was committed to carrying out the recommendations.
‘Our managers spend a great deal of time verifying that the code is being followed, but it would be helpful for them to have a check list which would be very specific and thorough,’ she said.
Nestlé has been the subject of several consumer boycotts in recent years over allegations of inappropriate marketing of breast milk substitutes to health workers and mothers in developing countries.