Memorandum submitted by Nestlé
UK Ltd
1. INTRODUCTION
1.1 Nestlé is the biggest food and
beverage company in the world, employing 253,000 people globally
and operating in every nation in the world other than North Korea.
1.2 Our first operation in the developing
world was in Brazil in 1921 and some 45% of our factories and
around half of our employees are now located in the developing
world. With some 3.4 million global business partners and their
families benefiting from their relationship with the company,
we believe our experience is unrivalled in the food supply chain
and in particular in the developing world communities which are
of interest to the Select Committee.
1.3 Nestlé recognises that the responsible
management of world-wide water resources is an absolute necessity.
Preserving both the quantity and the quality of water available
globally is not only an environmental challenge, but also one
that spans agricultural, economic, political, social, cultural
and emotional considerations.
1.4 As a leading food and beverage company,
Nestlé considers water to be a key priority for the manufacturing
of our food products and for bottled waters. To play its part
in assuring a long-term, high-quality, adequate global water supply,
Nestlé supports the sustainable use of water, strictly
controls its use in the Company's activities and strives for continuous
improvement in the management of water resources. Each year Nestlé
invests CHF 100 million (£42.27 million) on the protection
of the environment of our 500 factories, spending around 30% of
that total on water management.
2. NESTLÉ'S
WATER POLICY
2.1 We have a long-standing Water Policy
that complements our wider environmental policies and includes
the following:
(a) Water is essential for nutrition. Nestlé,
through Nestlé Waters, provides a wide range of pure, safe,
wholesome and convenient bottled waters of high quality to meet
the increasing and varied needs of consumers throughout the world.
Protection of springs and their surroundings is of primary importance
in this endeavour.
(b) Nestlé directs its world-wide
research and development network towards:
— the innovation and renovation of
its products and processes, including manufacturing methods
that minimise water consumption and waste water generation;
— scientific research conducted at the
Nestlé Product Technology Centre Water (NPTCW) that
is centred on the physiological and qualitative aspects of water.
(c) Agricultural raw materials are dependent
on water. Although, in general, Nestlé is not involved
in the production of raw materials, it supports and encourages
sustainable, environmentally sound farming methods, including
best possible practices for water use and conservation and gene
technology in this context. As a raw material for food processing,
water must satisfy both local legal requirements and internal
quality criteria.
(d) Nestlé strives to achieve optimal
performance in its manufacturing activities, including water management:
— without compromise to the safety
and quality of its products, fresh water use is reduced as much
as possible and, wherever feasible, water is reused and recycled;
— used water is treated and returned to
the environment according to local legislation; where
none exists, internal Nestlé standards are applied.
(e) The Nestlé Environmental Management
System (NEMS) ensures the continuous improvement of Nestlé's
environmental performance, including management of water resources:
objectives are established, progress is monitored, results are
checked and corrective and preventive actions are implemented.
(f) As part of its broader commitment towards
the good of the community, Nestlé:
— in co-operation with health authorities,
promotes to consumers the importance of using safe water
for food and drink preparation;
— provides education, supports initiatives
and fosters awareness on the importance of water resource
conservation among employees, governments, local communities,
schools, industry, consumers and other stakeholders.
2.2 Working with the Harvard Business School,
Nestlé SA has developed the concept of Shared Value Creation,
by which a company links its operations to generating long-term
value for both its business and for society as a whole, and defines
success in terms of both financial return and external social
and economic benefit. Ultimately, creating shared value acknowledges
both the work that corporations need to do to reduce their negative
impacts on society as well as, and more fundamentally, how they
can be part of progress on global challenges.
3. NESTLÉ
WATER AND
SANITATION PROJECTS
3.1 Over the following pages, we highlight
how operations, projects and partnerships focussed on water can
create value for society. In laying out the relevant examples,
we have attempted to follow the Select Committee's suggested format
as outlined in Press Notice 55a on Monday 24 July.
3.2 The three core aspects to sanitation:
hygiene promotion, household sanitary arrangements and sewage
treatment
The private sector can be a driver for environmental
standards as well as economic development. Nestlé's first
water treatment plant for a culinary factory was built in 1932.
Even when not required by local laws, the company builds its own
on-site wastewater treatment facility applying the same standards
to factories in developing countries as we would in developed
nations. In 1963 in Brazil, we installed our first effluent treatment
plant at the Aracatuba factory in Sãu Paulo, some 13 years
before any environmental protection regulations were established
in the country.
In 1992, the Bugalagrande plant in Columbia
received the Ecological Merit Prize from the environmental authorities
of Valle del Cauca. The plant's residual water treatment facility
is considered a benchmark for industry and used as a guide in
environmental education management.
Today Nestlé operates over 160 modern
waste water treatment plants at factories where municipal treatment
is unavailable or of insufficient capacity. Nestlé continues
to conduct aggressive waste minimisation activities in its factories,
and invests in state-of-the-art technologies that reduce energy
consumption during treatment. Most recent waste water plants are
in South Africa, Côte d'Ivoire, Brazil and Iran.
3.3 Financing and aid instruments for water
and sanitation
In 2003, Nestlé began a partnership with
the U.N. High Commissioner for Refugees (UNHCR) to address the
water needs of 210,000 Somali refugees and local people in Eastern
Ethiopia. The partnership was both financial and practical, including
on-going technical assistance provided by a Nestlé Waters
hydrogeologist and water resources manager.
The resulting multi-faceted water system featured
rehabilitated wells, an improved pumping and purification station
connected to a 22-km pipeline, new water taps in adjacent villages
and a new dam to capture rainfall. During 2005, the process of
handing over the long-term operation and maintenance of the system
to local water authorities began.
The strength of this partnership has been recognised
by Linda Merieau, Senior Corporate Affairs Relations Officer at
the UNHCR who said "Rather than just writing cheques, companies
like Nestlé are becoming more involved in helping deliver
on the goals of the projects themselves, with technical expertise.
We need their financial contributions, but we can also profit
from their expertise".
3.4 Water resource management
Roughly 70% of freshwater withdrawn globally
is used for agriculture. Industry accounts for 20% of the remaining
withdrawals and domestic needs account for 10%. The food and beverage
industry at large is using less than 0.2% of the total water withdrawn.
It is estimated that the global beverage industry, including producers
of beer, soft drinks and bottled water, is responsible for 0.041%
of freshwater withdrawals. In this context, Nestlé's operations
utilise less than 0.05% and Nestlé Waters 0.0009%.
Whilst these proportions are minute, the food
and beverage industry does have a unique opportunity to improve
water efficiency, primarily through its own industrial processes,
and through its supply chain of agricultural products. Between
2001 and 2005, the amount of waste water generated by our factories
was reduced by 42.4%. This was brought about through innovative
processes such as replacing freshwater intake with water that
has been recovered during the production process, and recycling
suitable water for irrigation purposes around factories.
Nescafé Partners Blend is the company's
first Fairtrade certified instant coffee product with beans being
sourced from El Salvador and Ethiopia. In Eastern Ethiopia, Nescafé
has developed a trading relationship with the Oromia Co-op Union.
In addition, along with our partners Volcafe and Mullege, we are
assisting farmers in the Yirgacheffe region.
Achievements of the project include the importation
of washing equipment from South America—a first in Ethiopia.
This equipment uses 90% less water than the old machinery. They
have been so successful that more have been ordered by the cooperative
unions using money from USAID with Nestlé providing technical
assistance for their installation. The company has also provided
clean drinking water for the local community, direct benefiting
over 5,500 people and resulting in a decrease of intestinal health
problems.
The project has eliminated 95% of the environmental
impact of the washing station on the neighbouring watercourse.
Through the installation of the new equipment there has been a
reduction of water usage by 90%, leaving more water flowing in
the nearby river. There has also been compositing of coffee pulp
and its return to farms as well as a reduction of energy use for
pumping and processing.
Nestlé investigates thoroughly any potential
negative environmental impact of its operation. In the case of
Nestlé Waters Sãu Lourenço spring and Spa
Park in Brazil, concerns were raised about the potential negative
impact of our operations there. As a result, the social and environmental
auditing firm, Bureau Veritas, assessed Nestlé Waters'
impact on Sãu Lourenço in 2005.
The audit found that pumping from 1999 and regulatory
approvals did not support allegations that exploitation of the
Primavera well negatively impacts groundwater levels in the region,
nor that Nestlé Waters Brazil's extraction activities are
on an unsustainable scale for the aquifer. This was supported
by production testing carried out by the State regulatory body.
The Bureau Veritas audit "confirms that
Nestlé Waters Brazil has acted in accordance with Brazilian
legislation" and concludes that the company "has been
in constant interaction with the Federal, State and municipal
regulatory bodies over the construction of the well".
3.5 Improving health and education through
water and sanitation interventions
As well as the Nescafé Partners' Blend
example in Ethiopia, the company has a host of other examples
of health and education benefits of its work on water globally,
the longest standing of which is Project "WET", Water
Education for Teachers. Conceived in the USA in 1984 and first
sponsored by Nestlé Waters in 1992, workshops and programmes
have reached over 25 million youth and adults, teaching children
in 20 countries about water conservation. The Mexican version
of Project WET is called Encaucemos el Agua and was recognised
as part of the 4th World Water Forum in Mexico City in March 2006
where a special Children's World Water Forum gathered young people
aged 11 to 15 around the world to present local actions in water,
environment and sanitation and also take part in thematic workshops.
José Luis Calderon, Environment Educator
in the State of Aguascalientes commented that Encaucemos el
Agua "...has triggered a profound involvement of teachers
in the promotion of a water culture. It gives a structure to reaching
plans without additional burden (and) has also enabled collaboration
among state, municipal and federal authorities, which will lead
to wide coverage and systematic programmes".
Begun in 1989, LEAP gives access to clean water
for 120,000 people in South Africa, teaches rural communities
the skills to build rainwater tanks, to tap natural resources
and harvest limited water resources. A focus on health is embraced
with information on hygiene, reducing water-borne disease, and
food gardening, leading to the sale of products to generate income.
Nestlé has supported the water harvesting and food gardening
projects, as well as the establishment of a traditional healers'
nursery. This collaborative programme includes projects run by
government departments of Water, Forestry, or Environment and
enabled, providing the Kromdraai community of 8,000 people with
LEAP-built water tanks for their supply of safe drinking water
during the serious floods of 2000.
Nestlé's investments in Moga, India have
transformed the milk economy and Moga itself into a prosperous
and vibrant milk district. From a base of only 9,000 tons of fresh
milk from just 180 farmers nearly 45 years ago, the Nestlé
factory in 2004 collected 230,000 tons of fresh milk from 85,000
mostly small-scale farmers.
Working with the community on jointly identified
projects, Nestlé is also implementing other community support
initiatives, including construction of Clean Drinking Water facilities
in Moga's schools. Nestlé India invests in the drilling
of deep bore wells and constructing water tanks that store the
clean drinking water. Nestlé agricultural milk route officers
then ensure that the water tanks are cleaned and maintained and
regularly quality tested. The project is being rolled out to village
schools around other Nestlé factories in India and currently
reaches around 22,000 schoolchildren through 60 drinking water
facilities. Other similar projects exist in Paraguay, South Africa
and the Philippines.
3.6 Gender aspects of water and sanitation
issues
Ecolink is a South African NGO that assists
rural communities in some of the country's poorest communities.
Nestlé has supported the organisation for the past 20 years.
In 1993, a water management and sanitation project was funded
by Nestlé South Africa and Nestlé UK and constructed
by Ecolink in the Mpumalanga region where 80% of the population
have no access to piped water.
The project works with local communities to
identify and preserve safe water sources, develop water system
infrastructures and construct and maintain water tanks and waterless
toilets. These all contribute to the management of home trench
gardens, normally run by women, enabling them to supplement their
income. Since the Home Garden and Clean Water programme began,
105,000 women and their families have planted gardens to increase
their food supply.
4. CONCLUSION
4.1 The Nestlé Management and Leadership
Principles state very clearly that "Our investments must
be good for the countries where we operate, as well as good for
the company". Therefore, while CSR and sustainability represent
a set of useful principles and practices, Nestlé believe
that the true test of a business (particularly in the developing
world) is whether it creates value for society over the long term.
4.2 This same principle can and should be
applied to the use of water and therefore Millennium Development
Goal 7 by governments and businesses. The examples above are only
a small selection of the projects the company are involved in.
More information can be found at www.community.nestle.com and
we would be delighted to expand upon any of the evidence above
should the Committee feel it would be of interest.
October 2006
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