The case against Nestle for not disclosing that its pet food could have been made with seafood caught using forced labor has been dismissed. This class action lawsuit was based on the California Transparency in Supply Chains Act requiring certain companies to disclose their efforts to eradicate slavery and human trafficking in their supply chains.

This case along with a slew of other cases have been coming out of the woodwork in tandem with recent news exposes on the Thai fishing industry. But do they actually force companies to improve, or is it just par for the course? I want to look into some of the pros and cons of suing Nestle because of their supply chain abuses.

Pros

More consumers are aware

With such a large company being in the news, a lot of people will hear about slavery in supply chains. Ideally, this would open the eyes of today’s consumers to the horrors that accompany cheap items and company negligence.

It holds companies responsible

Seeing that a group of consumers want to hold Nestle accountable for their supply chains is incredible! A lawsuit lets companies know that their consumers will hold them responsible for abuses. This action also indicates that people think these practices are wrong and will not tolerate them. Moreover, consumers are willing to put in a great deal of resources to ensure that these wrongdoings don’t continue. The refusal to accept the status quo is key to pushing changes in business practices and policies.

Victims receive compensation

In addition to consumers, former victims are suing Nestle as well. The plaintiffs who were forced to work on cocoa plantations say that Nestle knew about the abuses and continued to purchase from the farm. In this case, those victims should absolutely be compensated, and Nestle should be held accountable if it knowingly bought cocoa from plantations that held children as slaves. 

Cons

Companies will avoid being transparent

The Transparency in Supply Chains Act is only in effect for companies in California. There is an initiative to make this law federal, but how many companies will fight against this bill if they know that once it’s put into place, they will be facing a slew of class action suits? By suing companies who do have forced labor in their supply chains, which — let’s be honest — is almost every supply chain, we push other companies away from being transparent. If we want companies to address slavery, we must encourage them to be transparent without fear of legal proceedings so they can begin to deal with the problem.

Results in lying or denial

Along with companies not wanting to be transparent about their suppliers, there’s the possibility that they might avoid and deny the issue entirely. There are many reasons that a company would avoid the subject of forced labor in their supply chains: they simply don’t know if it exists, they don’t have the money to audit, they don’t care because it doesn’t affect their bottom line or they are afraid of being sued. While some companies have denied slavery and later come to realize the error of that statement, others will just avoid the issue by stating a code of conduct. 

In the end, we want all supply chains to be free of slave labor, and we will continue to praise those companies taking efforts to do just that. We believe that being transparent and realizing that there is an issue is a first and great step in the right direction.

Topics: Business, Forced Labor, Child Labor, News